1
EXHIBIT 10.25
AMENDED AND RESTATED LOAN AGREEMENT
AMONG
MADISON TELECOMMUNICATIONS HOLDINGS INC.(THE "BORROWER");
THE TORONTO-DOMINION BANK, CANADIAN IMPERIAL BANK OF COMMERCE,
NATIONAL BANK OF CANADA AND
SUCH OTHER FINANCIAL INSTITUTIONS AS BECOME
"BANKS" HEREUNDER (COLLECTIVELY, THE "BANKS"); AND
THE TORONTO-DOMINION BANK, AS BOOKRUNNER, ARRANGER AND
ADMINISTRATION AGENT
FOR THE BANKS (THE "AGENT")
TABLE OF CONTENTS
PAGE
ARTICLE 1 DEFINITIONS.............................................................................................2
ARTICLE 2 CREDIT FACILITY........................................................................................19
SECTION 2.1 COMMITMENT............................................................................19
SECTION 2.2 UNCOLLATERALIZED PRIME RATE ADVANCES..................................................19
SECTION 2.3 COLLATERALIZED ADVANCES...............................................................20
SECTION 2.4 NOTIFICATION OF BANKS; DISBURSEMENT...................................................21
SECTION 2.5 BANKERS'ACCEPTANCES...................................................................23
SECTION 2.6 INTEREST; FEES........................................................................25
SECTION 2.7 FEES..................................................................................27
SECTION 2.8 MANDATORY COMMITMENT REDUCTIONS.......................................................27
SECTION 2.9 OPTIONAL PREPAYMENTS; COMMITMENT REDUCTIONS..........................................28
SECTION 2.10 MANDATORY REPAYMENTS..................................................................28
SECTION 2.11 EVIDENCE OF OBLIGATIONS; ACCOMMODATION ACCOUNTS.......................................29
SECTION 2.12 MANNER OF PAYMENT.....................................................................29
SECTION 2.13 REIMBURSEMENT.........................................................................30
SECTION 2.14 PRO RATA TREATMENT....................................................................31
ARTICLE 3 CONDITIONS PRECEDENT...................................................................................32
SECTION 3.1 CONDITIONS PRECEDENT TO AGREEMENT.....................................................32
SECTION 3.2 CONDITIONS PRECEDENT TO ALL ACCOMMODATIONS............................................34
ARTICLE 4 REPRESENTATIONS AND WARRANTIES.........................................................................35
SECTION 4.1 REPRESENTATIONS AND WARRANTIES........................................................35
SECTION 4.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC.......................................41
SECTION 4.3 NO REPRESENTATIONS BY BANKS...........................................................42
ARTICLE 5 GENERAL COVENANTS......................................................................................42
SECTION 5.1 PRESERVATION OF EXISTENCE AND SIMILAR MATTERS.........................................42
SECTION 5.2 BUSINESS; COMPLIANCE WITH APPLICABLE LAW..............................................42
SECTION 5.3 MAINTENANCE OF PROPERTIES.............................................................42
SECTION 5.4 ACCOUNTING METHODS AND FINANCIAL RECORDS..............................................43
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SECTION 5.5 INSURANCE.............................................................................43
SECTION 5.6 PAYMENT OF TAXES AND CLAIMS...........................................................43
SECTION 5.7 COMPLIANCE WITH ERISA.................................................................43
SECTION 5.8 VISITS AND INSPECTIONS................................................................45
SECTION 5.9 PAYMENT OF INDEBTEDNESS; ACCOMMODATIONS...............................................45
SECTION 5.10 USE OF PROCEEDS.......................................................................45
SECTION 5.11 PROTECT SECURITY INTERESTS............................................................46
SECTION 5.12 ENVIRONMENTAL AUDITS..................................................................46
SECTION 5.13 FURTHER ASSURANCES....................................................................46
ARTICLE 6 INFORMATION COVENANTS..................................................................................46
SECTION 6.1 QUARTERLY FINANCIAL STATEMENTS AND INFORMATION........................................46
SECTION 6.2 ANNUAL FINANCIAL STATEMENTS AND INFORMATION...........................................47
SECTION 6.3 PERFORMANCE CERTIFICATES..............................................................47
SECTION 6.4 COPIES OF OTHER REPORTS...............................................................48
SECTION 6.5 NOTICE OF LITIGATION AND OTHER MATTERS................................................48
SECTION 6.6 ENVIRONMENTAL REPORTING...............................................................49
ARTICLE 7 NEGATIVE COVENANTS.....................................................................................50
SECTION 7.1 INDEBTEDNESS OF THE BORROWER AND ITS SUBSIDIARIES.....................................50
SECTION 7.2 LIMITATION ON LIENS...................................................................50
SECTION 7.3 AMENDMENT AND WAIVER..................................................................51
SECTION 7.4 LIQUIDATION, MERGER, OR DISPOSITION OF ASSETS.........................................51
SECTION 7.5 LIMITATION ON GUARANTIES..............................................................51
SECTION 7.6 INVESTMENTS AND ACQUISITIONS..........................................................51
SECTION 7.7 RESTRICTED PAYMENTS AND PURCHASES.....................................................51
SECTION 7.8 LEVERAGE RATIO........................................................................52
SECTION 7.9 ANNUALIZED OPERATING CASH FLOW TO INTEREST EXPENSE....................................52
SECTION 7.10 TOTAL DEBT PER SUBSCRIBER.............................................................52
SECTION 7.11 CAPITAL EXPENDITURES..................................................................53
SECTION 7.12 MINIMUM REVENUE TEST..................................................................53
SECTION 7.13 MINIMUM UNITS IN SERVICE..............................................................54
SECTION 7.14 MINIMUM OPERATING CASH FLOW TEST......................................................54
SECTION 7.15 AFFILIATE TRANSACTIONS................................................................54
SECTION 7.16 REAL ESTATE...........................................................................55
SECTION 7.17 ERISA LIABILITIES.....................................................................55
ARTICLE 8 DEFAULT................................................................................................55
SECTION 8.1 EVENTS OF DEFAULT.....................................................................55
SECTION 8.2 REMEDIES..............................................................................57
ARTICLE 9 THE AGENT..............................................................................................58
SECTION 9.1 APPOINTMENT AND AUTHORIZATION.........................................................58
SECTION 9.2 INTEREST HOLDERS......................................................................58
SECTION 9.3 CONSULTATION WITH COUNSEL.............................................................59
SECTION 9.4 DOCUMENTS.............................................................................59
SECTION 9.5 AGENT AND AFFILIATES..................................................................59
SECTION 9.6 RESPONSIBILITY OF THE AGENT...........................................................59
SECTION 9.7 SECURITY DOCUMENTS....................................................................59
SECTION 9.8 ACTION BY THE AGENT...................................................................60
SECTION 9.9 NOTICE OF DEFAULT OR EVENT OF DEFAULT.................................................60
SECTION 9.10 RESPONSIBILITY DISCLAIMED.............................................................60
SECTION 9.11 INDEMNIFICATION.......................................................................61
SECTION 9.12 CREDIT DECISION.......................................................................61
SECTION 9.13 SUCCESSOR AGENT.......................................................................61
SECTION 9.14 DELEGATION OF DUTIES..................................................................62
SECTION 9.15 DETERMINATION BY AGENT CONCLUSIVE AND BINDING.........................................62
(ii)
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ARTICLE 10 COMPUTATIONS AND INDEMNITIES..........................................................................62
SECTION 10.1 INDEMNITY FOR CHANGE IN CIRCUMSTANCES.................................................62
SECTION 10.2 INDEMNITY FOR TRANSACTIONAL AND ENVIRONMENTAL LIABILITY...............................63
SECTION 10.3 TAXATION ON PAYMENTS..................................................................64
SECTION 10.4 JUDGMENT CURRENCY.....................................................................65
SECTION 10.5 CLAIMS FOR INCREASED COSTS AND TAXES..................................................65
ARTICLE 11 MISCELLANEOUS.........................................................................................66
SECTION 11.1 NOTICES...............................................................................66
SECTION 11.2 EXPENSES..............................................................................68
SECTION 11.3 WAIVERS...............................................................................69
SECTION 11.4 RIGHT TO COMBINE AND SET-OFF..........................................................69
SECTION 11.5 ASSIGNMENT............................................................................69
SECTION 11.6 ACCOUNTING PRINCIPLES.................................................................70
SECTION 11.7 COUNTERPARTS..........................................................................71
SECTION 11.8 GOVERNING LAW.........................................................................71
SECTION 11.9 SEVERABILITY..........................................................................71
SECTION 11.10 INTEREST..............................................................................71
SECTION 11.11 TABLE OF CONTENTS AND HEADINGS........................................................72
SECTION 11.12 AMENDMENT AND WAIVER..................................................................72
SECTION 11.13 NON-MERGER............................................................................72
SECTION 11.14 OTHER RELATIONSHIPS...................................................................73
SECTION 11.15 DIRECTLY OR INDIRECTLY................................................................73
SECTION 11.16 RELIANCE ON AND SURVIVAL OF VARIOUS PROVISIONS........................................73
SECTION 11.17 SENIOR DEBT...........................................................................73
SECTION 11.18 OBLIGATIONS SEVERAL...................................................................73
SECTION 11.19 CONFIDENTIALITY.......................................................................73
SECTION 11.20 TIME OF THE ESSENCE...................................................................74
SECTION 11.21 THIRD PARTY BENEFICIARIES.............................................................74
SECTION 11.22 ENUREMENT.............................................................................74
(iii)
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EXHIBITS
Exhibit A - Commitment Ratio
Exhibit B - Form of Accommodation Notice
Exhibit C - Form of Repayment Notice
Exhibit D - Form of Borrower's Loan Certificate
Exhibit E - Form of Subsidiary Loan Certificate
Exhibit F - Form of Performance Certificate
Exhibit G - Form of Assignment and Assumption Agreement
SCHEDULES
Schedule 1 - Licenses
Schedule 2 - Security Documents
Schedule 3 - Subsidiaries
Schedule 4 - Agreements with Affiliates
Schedule 5 - Year 2000 Plan
(iv)
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AMENDED AND RESTATED LOAN AGREEMENT
DATED the 5th day of June, 1996, as AMENDED AND RESTATED as of the 5th
day of August, 1999.
AMONG:
MADISON TELECOMMUNICATIONS HOLDINGS INC.
(the "Borrower")
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THE TORONTO-DOMINION BANK, CANADIAN IMPERIAL BANK OF
COMMERCE, NATIONAL BANK OF CANADA and such other
financial institutions as become "Banks" hereunder
(collectively, the "Banks")
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THE TORONTO-DOMINION BANK, AS BOOKRUNNER, ARRANGER
AND ADMINISTRATION AGENT
(the "Agent")
WHEREAS:
A. The Borrower, The Toronto-Dominion Bank, as a Bank, and the Agent,
entered into a loan agreement made as of the 5th day of June, 1996;
B. The loan agreement was amended pursuant to a first amendment to the
loan agreement dated as of the 18th day of April, 1997;
C. The Borrower, the Agent and the Banks wish to enter into this
Agreement to incorporate the provisions of the amendment referred to
in Recital B above, document certain additional amendments agreed upon
among them, and restate the loan agreement, all upon the terms and
conditions more particularly specified herein;
NOW THEREFORE, the parties agree as follows:
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ARTICLE 1
DEFINITIONS
For the purposes of this Agreement:
"ACCOMMODATION" shall mean (i) an Advance made by the Banks or any one
or more of them on the occasion of any Borrowing; and (ii) a Bankers'
Acceptance created by any Bank on the occasion of any Drawing.
"ACCOMMODATION NOTICE" shall mean a notice substantially in the form
of Exhibit B.
"AGENT" shall mean The Toronto-Dominion Bank, in its capacity as Agent
for the Banks or any successor Agent appointed pursuant to Section 9.13 of this
Agreement.
"AGENT'S OFFICE" shall mean the office of the Agent located at
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Dominion Bank Tower, Toronto
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇, or such other office as may be
designated pursuant to the provisions of Section 11.1 of this Agreement.
"ADVANCE" shall mean amounts advanced by the Banks to the Borrower
pursuant to Section 2.2 and Section 2.3 hereof on the occasion of any Borrowing
and shall include, as designated by the Borrower in accordance with the terms
of this Agreement, a Collateralized Advance and an Uncollateralized Prime Rate
Advance; and "Advances" shall mean more than one Advance.
"AFFILIATE" shall mean, with respect to a Person, any other Person
directly or indirectly controlling, controlled by, or under common control
with, such first Person. For purposes of this definition, "control" when used
with respect to any Person includes, without limitation, the direct or indirect
beneficial ownership of more than ten percent (10%) of the voting securities or
voting equity of such Person or the power to direct or cause the direction of
the management and policies of such Person whether by contract or otherwise.
"AGREEMENT" shall mean this Amended and Restated Loan Agreement,
together with all Exhibits and Schedules hereto.
"AGREEMENT DATE" shall mean June 5, 1996.
"ANNUALIZED OPERATING CASH FLOW" shall mean, as of any date, the
product of (a) the aggregate Operating Cash Flow for the Borrower Group on a
combined basis for the fiscal quarter end being tested or the most recently
completed fiscal quarter, as the case may be, times (b) four (4).
"APPLICABLE LAW" shall mean, in respect of any Person, all provisions
of constitutions, statutes, codes, ordinances, rules, regulations, municipal
by-laws, judicial, arbitral, administrative, ministerial, departmental or
regulatory judgments, orders, decisions, rulings or awards, policies and
guidelines of any Governmental Entity, or any provisions of the foregoing,
including general principles of common and civil law and equity, applicable to
such Person, including, without limiting the foregoing, the Licenses, and all
orders, decisions, judgments and
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decrees of all courts and arbitrators in proceedings or actions to which the
Person in question is a party or by which it is bound.
"APPLICABLE MARGIN" shall mean the interest rate or fee margin
applicable to Advances and Bankers' Acceptances, as the case may be, in each
case determined in accordance with Section 2.6(d) hereof.
"ASSETS" means, with respect to any Person, all property and assets of
such Person, both real and personal, of every kind and wheresoever situate,
whether now owned or hereafter acquired.
"AUTHORIZED SIGNATORY" shall mean such senior personnel of a Person as
may be duly authorized and designated in writing by such Person to execute
documents, agreements and instruments on behalf of such Person.
"AVAILABLE COMMITMENT" shall mean, as of any date, the greater of:
(a) the Equivalent Canadian Dollar Amount of the aggregate amount
of Permitted Collateral held on such date by the Agent
pursuant to the Deposit Agreement; and
(b) $25,500,000, but only to the extent that the Minimum
Permitted Collateral Amount is held on such date by the Agent
pursuant to the Deposit Agreement; or
(c) $28,500,000, but only to the extent that (i) the Minimum
Permitted Collateral Amount is held on such date by the Agent
pursuant to the Deposit Agreement, and (ii) as of the end of
the most recently completed fiscal quarter for which
financial statements have been delivered pursuant to Sections
6.1 or 6.2, as applicable, hereof, either (A) for the two (2)
most recently completed fiscal quarters, the Leverage Ratio
is less than 6.0 to 1, or (B) (i) the aggregate number of
Units in Service is greater than or equal to 245,000, and
(ii) Gross Revenue for the Borrower Group on a combined basis
is greater than or equal to $5,000,000;
provided, however, that the Available Commitment shall not at anytime exceed
the Commitment on such date; and provided, further, however, that from and
after the date of any event which, with respect to the Licenses, results in a
violation of the Canadian ownership and control rules promulgated under the
Radiocommunication Act (Canada), the Telecommunications Act (Canada) and any
replacement act or any regulations made under any such act, the Available
Commitment shall be as set forth in clause (a) of this definition.
"BANKERS' ACCEPTANCE" shall have the meaning set forth in Section 2.5
hereof and shall include, as designated by the Borrower in accordance with the
terms of this Agreement, a Collateralized Bankers' Acceptance and an
Uncollateralized Bankers' Acceptance.
"BANKERS' ACCEPTANCE FEE RATE" shall mean the Applicable Margin for
Bankers' Acceptances as determined in accordance with Section 2.6 (d) hereof.
"BANKERS' ACCEPTANCE PERMITTED COLLATERAL RATE" shall mean, with
respect to any Bankers' Acceptance to be purchased by a Bank pursuant to
Section 2.5(e), the sum of (a) the
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discount rate per annum based on a year of 365 days which is equivalent to the
rate quoted to the Borrower by such Bank as such Bank's Canadian Dollar
bankers' acceptance rate for bankers' acceptances having the same term to
maturity as such Bankers' Acceptance, plus (b) 0.500%.
"BANKS" shall mean those financial institutions whose names appear as
"Banks" on the signature pages to this Agreement, together with any assignees
thereof pursuant to Section 11.5 hereof; and "Bank" shall mean any one of the
foregoing Banks.
"BORROWER" shall mean Madison Telecommunications Holdings Inc., a
corporation incorporated under the laws of Canada.
"BORROWER GROUP" shall mean, collectively, the Borrower and its
Subsidiaries and PageNet Canada and its Subsidiaries.
"BORROWING" shall mean a borrowing consisting of one or more Advances.
"BUSINESS" shall have the meaning specified in Section 4.1(e) hereof.
"BUSINESS DAY" shall mean a day on which banks and foreign exchange
markets are open for the transaction of business required for this Agreement in
Toronto, Canada, as relevant to the determination to be made or the action to
be taken.
"CAPITAL EXPENDITURES" shall mean, for any Person for any period,
expenditures for the purchase of assets of long-term use which would be
required to be capitalized on the balance sheet of such Person in accordance
with GAAP; provided, however, that Capital Expenditures for any period shall be
reduced by the net book value of Units in Service sold during such period,
which had been reflected in the determination of Capital Expenditures for any
prior periods' Capital Expenditures.
"CAPITAL STOCK" shall mean, as applied to any Person, any capital
stock of such Person, regardless of class or designation, and all warrants,
options, purchase rights, conversion or exchange rights, voting rights, calls
or claims of any character with respect thereto.
"CAPITALIZED LEASE OBLIGATION" shall mean that portion of any
obligation of a Person as lessee under a lease which at the time would be
required to be capitalized on the balance sheet of such Person in accordance
with GAAP.
"CHANGE EVENT" shall mean the occurrence of any of the following
events or the existence of any of the following conditions: (a) Paging Network,
Inc. shall cease to own, directly or indirectly, (i) 33-1/3% of the voting
Capital Stock of the Borrower and (ii) 100% of the nonvoting Capital Stock of
the Borrower; or (b) except in connection with a transfer to (i) a Person
acceptable to all of the Banks acting reasonably, or (ii) Paging Network, Inc.
(or a wholly-owned Subsidiary of Paging Network, Inc.) so long as on such date
(A) the sum of the principal amount of all Advances and the Face Amount of all
Bankers' Acceptances then outstanding does not exceed the sum of (1) the
Equivalent Canadian Dollar Amount of the Permitted Collateral held by the Agent
under the Deposit Agreement on such date and (2) the Letter of Credit or (B)
such transfer is in full compliance with the Canadian ownership and control
rules promulgated under the Radiocommunication Act (Canada), the
▇
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▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ (▇▇▇▇▇▇) and any replacement act or any regulations made
under any such act, Madison Venture Corporation shall cease to own, directly or
indirectly, 66-2/3% of the voting Capital Stock of the Borrower; or (c) the
Borrower shall fail to own, directly or indirectly through one or more
wholly-owned Subsidiaries all of the issued and outstanding Capital Stock of
each of its Subsidiaries.
"CLAIM" shall mean any claim of any nature whatsoever, including any
demand, liability (whether accrued or accruing, actual or contingent),
obligation, debt, cause of action, suit, proceeding, judgment, award,
assessment and reassessment.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"COLLATERAL" shall mean any property of any kind constituting or
intended to constitute collateral for the Obligations under any of the Loan
Documents and shall include, without limitation, the Permitted Collateral.
"COLLATERALIZED ADVANCE" shall mean a Collateralized Prime Rate
Advance; provided, however, that the Borrower may not request a Collateralized
Advance (and no Collateralized Advance shall be made) if on the date of such
Collateralized Advance the sum of the Equivalent Canadian Dollar Amount of the
Permitted Collateral held under the Deposit Agreement and the Letter of Credit
does not equal or exceed the sum of the principal amount of all Collateralized
Advances and the Face Amount of all Collateralized Bankers' Acceptances then
outstanding plus the principal amount of the Collateralized Advance so
requested.
"COLLATERALIZED BANKERS' ACCEPTANCE" shall mean a Drawing which the
Borrower requests to be made as a Collateralized Bankers' Acceptance or is
continued as or converted into a Collateralized Bankers' Acceptance in
accordance with the provisions of Section 2.5 hereof; provided, however, that
the Borrower may not request a Collateralized Bankers' Acceptance (and no such
Bankers' Acceptance shall be issued) if on the date of such Drawing the sum of
the Equivalent Canadian Dollar Amount of the Permitted Collateral held pursuant
to the Deposit Agreement and the Letter of Credit does not equal or exceed the
sum of the principal amount of all Collateralized Advances and the Face Amount
of all Collateralized Bankers' Acceptances outstanding on such date plus the
Face Amount of the Collateralized Bankers' Acceptance so requested.
"COLLATERALIZED PRIME RATE ADVANCE" shall mean a Collateralized
Advance which bears interest at the Prime Rate Basis and which the Borrower
requests to be made as a Collateralized Prime Rate Advance or is continued as
or converted into a Collateralized Prime Rate Advance, in accordance with the
provisions of this Agreement, and which shall be in a principal amount of at
least $500,000 and in an integral multiple of $500,000.
"COMMITMENT" shall mean the several obligations of the Banks to make
Accommodations to the Borrower pro rata, in accordance with their respective
Commitment Ratios, in an aggregate amount of up to $28,500,000 pursuant to the
terms hereof, as such obligations may be reduced from time to time pursuant to
the terms hereof.
"COMMITMENT RATIO" shall mean, with respect to any Bank, the
percentage equivalent of the ratio which such Bank's pro rata portion of the
total Commitment bears to the aggregate
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amount of the Commitment (as each may be adjusted from time to time as provided
herein); and "Commitment Ratios" shall mean the Commitment Ratios of all of the
Banks with respect to the Commitment. As of the Restatement Date, the
Commitment Ratio of each Bank is as set forth on Exhibit A.
"DEFAULT" shall mean any Event of Default, and any of the events
specified in Section 8.1 hereof, regardless of whether there shall have
occurred any passage of time or giving of notice, or both, that would be
necessary in order to constitute such event an Event of Default.
"DEFAULT RATE" shall mean a simple per annum interest rate equal to
the sum of (a) the Prime Rate, PLUS (b) the Applicable Margin for
Uncollateralized Prime Rate Advances, PLUS (c) two percent (2%).
"DEPOSIT AGREEMENT" shall mean, collectively, that certain Deposit
Agreement dated as of April 18, 1997 between PNCHI and the Agent for the
benefit of the Banks, the Deposit Agreement dated June 5, 1996 between Madison
Venture Corporation and the Agent for the benefit of the Banks and any other
Deposit Agreement entered into by the Agent after the Restatement Date.
"DEPOSIT AGREEMENT GUARANTY" shall mean that certain Guaranty in
favour of the Agent for the benefit of the Banks, given by PNCHI on April 18,
1997.
"DOLLAR" or "$" shall mean (except where specifically designated
otherwise) lawful money of Canada.
"DRAFT" shall mean, at any time, a blank depository ▇▇▇▇ within the
meaning of the Depository Bills and Notes Act (Canada) or a ▇▇▇▇▇ ▇▇▇▇ of
exchange within the meaning of the Bills of Exchange Act (Canada) drawn by the
Borrower on a Bank and bearing such distinguishing letters and numbers as such
Bank may determine, but which at such time, except as otherwise provided
herein, has not been completed or accepted by such Bank.
"DRAWING" shall mean the creation of a Bankers' Acceptance by a Bank.
"DRAWING DATE" shall mean the requested date for a Drawing set forth
in an Accommodation Notice.
"DRAWING FEE" shall mean, with respect to each Draft drawn by the
Borrower hereunder and accepted by a Bank on any Drawing Date, an amount equal
to the Bankers' Acceptance Fee Rate multiplied by the aggregate Face Amount of
such Draft, calculated daily on the basis of the term to maturity of such Draft
and a year of 365 days.
"EMPLOYEE PENSION PLAN" shall mean any Plan subject to the minimum
funding requirement of Section 302 of ERISA or Section 412 of the Code.
"ENVIRONMENTAL AUDITOR" shall mean a qualified environmental auditor
at arm's length from the Borrower and acceptable to the Agent.
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"ENVIRONMENTAL LAWS" shall mean all Applicable Laws in force from time
to time relating to the environment, Hazardous Substances, pollution or
protection of the environment, including Laws relating to: (i) on site or
off-site contamination; (ii) occupational health and safety; (iii) chemical
substances or products; (iv) Releases of pollutants, contaminants, chemicals or
other industrial, toxic or radioactive substances or Hazardous Substances into
the environment; and (v) the manufacture, processing, distribution, use,
treatment, storage, transport or handling of Hazardous Substances.
"ENVIRONMENTAL LIABILITIES AND COSTS" shall mean all Losses and
Claims, whether known or unknown, current or potential, past, present or
future, imposed by, under or pursuant to Environmental Laws, including all
Losses and Claims related to Remedial Actions and all reasonable fees,
disbursements and expenses of counsel, experts, personnel and consultants,
where such Losses and Claims are based on, arise out of or are otherwise in
respect of: (i) the ownership or operation of the Business or any Assets
related to the Business; (ii) the conditions on, under, above or about any real
property, assets, equipment or facilities currently or previously owned, leased
or operated by the Borrower or its Subsidiaries; (iii) expenditures necessary
to cause the operations of the Business or Assets either related to the
Business or owned, leased or operated by the Borrower or its Subsidiaries to
comply materially with any and all requirements, including expenditures
necessary to effect the closure, decommissioning or rehabilitation of any of
the operations of the business or Assets either related to the Business or
owned, leased or operated by the Borrower or its Subsidiaries; (iv) the use,
generation, manufacture, refining, treatment, transportation, storage,
handling, recycling, disposal, depositing, transferring, producing or
processing of Hazardous Substances; (v) liability for personal injury or
property damage, including damages assessed for the maintenance of a public or
private nuisance; and (vi) any other matter affecting the Real Estate or other
Assets within the jurisdiction of any Governmental Entity administering any
Environmental Law.
"ENVIRONMENTAL NOTICE" shall mean any written claim, citation,
directive, request for information, statement of claim, notice of
investigation, letter or other communication from any Person given pursuant to
Environmental Laws.
"ENVIRONMENTAL PERMITS" shall mean all permits, certificates,
approvals, registrations and licenses issued by any Governmental Entity to the
Borrower, its Subsidiaries or to the Business pursuant to Environmental Laws
and relating to or required for the operation of the Business or the use of the
Real Estate or other Assets of the Borrower or its Subsidiaries.
"EQUIVALENT CANADIAN DOLLAR AMOUNT" shall mean, on any day (a) with
respect to Permitted Collateral denominated in Dollars, the principal or face
amount of such Permitted Collateral, and (b) with respect to Permitted
Collateral denominated in U.S. Dollars, the equivalent amount of Dollars
determined using the quoted spot rate at which the Agent's principal office in
Toronto offers to provide Dollars in exchange for U.S. Dollars in Toronto at
12:00 noon (Toronto time) on such day.
"EQUIVALENT U.S. DOLLAR AMOUNT" shall mean, on any day, with respect
to any amount of Dollars, the equivalent amount of U.S. Dollars determined by
using the quoted spot rate at which the Agent's principal office in Toronto
offers to provide U.S. Dollars in exchange for Dollars in Toronto at 12:00 noon
(Toronto time) on such day.
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"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as in effect from time to time.
"ERISA AFFILIATE" shall mean any Person, including a Subsidiary or an
Affiliate of the Borrower, that is treated as a single employer with the
Borrower pursuant to Section 414(b), (c), (m) or (o) of the Code.
"EVENT OF DEFAULT" shall mean any of the events specified in Section
8.1 hereof, provided that any requirement for notice or lapse of time has been
satisfied.
"FACE AMOUNT" shall mean, in respect of a Bankers' Acceptance, the
amount payable to the holder thereof on its maturity.
"FREE CASH FLOW" shall mean, with respect to any Person and its
Subsidiaries, on a consolidated basis, at the end of the most recently
completed fiscal year, as determined in accordance with GAAP, Operating Cash
Flow, less (i) the amounts actually paid during such period in respect of (A)
Interest Expense, (B) income taxes, (C) payments on any Indebtedness for Money
Borrowed falling within the definition of Total Debt (including any amounts
actually paid in connection with reductions of the Commitment pursuant to
Section 2.8 (a)), (D) Capital Expenditures, and (ii) to the extent not included
in the amounts calculated pursuant to (i) above, the amount of any automatic
reduction in the Commitment made during such fiscal year in accordance with the
provisions of Section 2.8 (a).
"GAAP" shall mean accounting principles generally accepted in Canada
as recommended in the Handbook of the Canadian Institute of Chartered
Accountants as in effect on the Restatement Date.
"GOVERNMENT LIST" shall mean a list maintained by any Governmental
Entity of sites identified for investigation or clean-up pursuant to any
Environmental Law.
"GOVERNMENTAL ENTITY" shall mean any: (i) multinational, federal,
provincial, state, municipal, local or other government, governmental or public
department, central bank, court, commission, board, bureau, agency or
instrumentality, domestic or foreign; (ii) any subdivision, agent, commission,
board, or authority of any of the foregoing; or (iii) any quasi-governmental or
private body exercising any regulatory, expropriation or taxing authority under
or for the account of any of the foregoing.
"GROSS REVENUE" shall mean, with respect to any Person and its
Subsidiaries on a consolidated basis, for the most recently completed fiscal
quarter, gross revenues determined in accordance with GAAP.
"GUARANTY" or "GUARANTEED," as applied to an obligation, shall mean
and include (a) a guaranty, direct or indirect, in any manner, of all or any
part of such obligation, and (b) any agreement, direct or indirect, contingent
or otherwise, the practical effect of which is to assure in any way the payment
or performance (or payment of damages in the event of non-performance) of all
or any part of such obligation, including, without limiting the foregoing, any
reimbursement obligations with respect to outstanding letters of credit or
capital call requirements.
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"HAZARDOUS SUBSTANCE" shall mean any Substance which is or is deemed
to be, alone or in any combination, hazardous, hazardous waste, toxic, a
pollutant, a deleterious substance, a contaminant or a source of pollution or
contamination under any Environmental Law, whether or not such Substance is
defined as hazardous under the Environmental Law.
"IMMATERIAL SITE SPECIFIC LICENSES" shall mean, at any time, the
aggregate Site Specific Licenses, the termination or cancellation of which,
without contemporaneous replacement, would not reasonably be expected to have a
Materially Adverse Effect.
"INDEBTEDNESS" shall mean, with respect to any Person, and without
duplication, (a) all items which in accordance with GAAP would be included in
determining total liabilities as shown on the liability side of a balance sheet
of such Person (except (i) items of shareholders' and partners' equity or
capital stock, (ii) items of surplus or general contingency or deferred tax
reserves incurred in the ordinary course of business, (iii) accounts incurred
and payable in the ordinary course of business, (iv) dividends payable, or (v)
deferred pension costs) (b) all direct or indirect obligations of any other
Person secured by any Lien to which any property or asset owned by such Person
is subject, whether or not the obligation secured thereby shall have been
assumed, (c) all Capitalized Lease Obligations of such Person and all
obligations of such Person with respect to leases constituting part of a sale
and lease-back arrangement, (d) all reimbursement obligations with respect to
outstanding letters of credit, bankers' acceptances or similar instruments, (e)
all obligations, contingent or otherwise, arising under Guaranties issued by
such Person, and (f) all obligations of such Person under Interest Rate Hedge
Agreements.
"INDEBTEDNESS FOR MONEY BORROWED" shall mean, with respect to any
Person, Indebtedness for money borrowed and Indebtedness represented by notes
payable and drafts accepted representing extensions of credit, all obligations
evidenced by bonds, debentures, notes or other similar instruments, all
Indebtedness upon which interest charges are customarily paid, all Capitalized
Lease Obligations, all reimbursement obligations with respect to outstanding
letters of credit, bankers' acceptances or similar instruments, all
Indebtedness issued or assumed as full or partial payment for property or
services, whether or not any such notes, drafts, obligations or Indebtedness
represent Indebtedness for money borrowed, and, without duplication, Guaranties
of any of the foregoing. For purposes of this definition, interest which is
accrued but not paid on the scheduled due date for such interest shall be
deemed Indebtedness for Money Borrowed.
"INTEREST EXPENSE" shall mean, for any Person for any period, all
interest expense (including imputed interest with respect to Capitalized Lease
Obligations) with respect to any Indebtedness for Money Borrowed of such Person
during such period pursuant to the terms of such Indebtedness for Money
Borrowed, together with all fees paid in respect of such Indebtedness for Money
Borrowed to the extent not already included in cash interest paid, all as
calculated in accordance with GAAP.
"INTEREST PERIOD" shall mean (a) in connection with any Prime Rate
Advance, the period beginning on the date such Advance is made and ending on
the last day of the calendar month in which such Advance is made, provided,
however, that if a Prime Rate Advance is made on the last day of any calendar
month, it shall have an Interest Period ending on, and its Payment Date shall
be, the last day of the following calendar month, and (b) in connection with
any Bankers'
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Acceptance, the term of such Bankers' Acceptance selected by the Borrower or
otherwise determined in accordance with this Agreement.
"INTEREST RATE HEDGE AGREEMENTS" shall mean the obligations of any
Person pursuant to any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest
on a stated notional amount in exchange for periodic payments made by such
Person calculated by applying a fixed or a floating rate of interest on the
same notional amount and shall include, without limitation, interest rate
swaps, caps, floors, collars and similar arrangements.
"KNOWN TO THE BORROWER" or "TO THE KNOWLEDGE OF THE BORROWER" shall
mean known by the executive officers of the Borrower or any Subsidiary (which
shall mean the chairman/president, the chief executive officer, the chief
financial officer, the chief operating officer, the treasurer, and any in-house
general counsel or other Persons performing like functions) or, based upon the
reasonable inquiry that an executive officer would make, should have been known
by such executive officer.
"LEASEHOLD REAL ESTATE" shall mean the land and premises of the
Borrower and its Subsidiaries held under agreement to lease or other right of
occupation.
"LETTER OF CREDIT" shall mean that certain irrevocable letter of
credit in the original principal amount of at least $3,500,000 issued in favour
of the Agent for the benefit of the Banks and all renewals thereof and
substitutions therefor, all of which shall be in form and substance
satisfactory to the Agent.
"LEVERAGE RATIO" shall mean, as of any date, the ratio of (a) Total
Debt for the Borrower Group on a combined basis to (b) Annualized Operating
Cash Flow.
"LICENSES" shall mean any radio, telephone, microwave, wireless
messaging or other license (excluding Immaterial Site Specific Licenses),
authorization, certificate of compliance or convenience, franchise, approval or
permit, granted or issued by any Governmental Entity and held by the Borrower
or any of its Subsidiaries, all of which (other than Immaterial Site Specific
Licenses) are listed as of the Restatement Date on Schedule 1 hereto.
"LIEN" shall mean, with respect to any property, any mortgage, lien,
pledge, negative pledge or other agreement not to pledge, assignment, charge,
security interest, title retention agreement, levy, execution, seizure,
attachment, garnishment or other encumbrance of any kind in respect of such
property, whether created by statute, contract, the common law or otherwise,
and whether or not ▇▇▇▇▇▇, vested or perfected.
"LOAN DOCUMENTS" shall mean this Agreement, the Security Documents,
all subordination agreements entered into by creditors of the Borrower or any
of its Subsidiaries with respect to Indebtedness for Money Borrowed of the
Borrower or any of its Subsidiaries, all legal opinions or reliance letters
issued by counsel to the Borrower or any of its Subsidiaries, all fee letters,
all Requests for Advance, all Interest Rate Hedge Agreements between the
Borrower, on the one hand, and the Agent and the Banks, or any of them, on the
other hand, and all other
15
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documents and agreements executed or delivered in connection with or
contemplated by this Agreement.
"LOSS" means any loss whatsoever, whether direct or indirect,
including expenses, costs, damages, judgments, penalties, fines, charges,
claims, demands, liabilities, loss of profits, debts, interest, any and all
legal fees and disbursements, on a solicitor and own client basis.
"MAJORITY BANKS" shall mean (i) at any time that no Accommodations are
outstanding hereunder, Banks, the total of whose Commitment Ratios equals or
exceeds sixty-six and two-thirds percent (66-2/3%) of the aggregate Commitment
Ratios of all Banks entitled to vote hereunder or (ii) at any time that there
are Accommodations outstanding hereunder, Banks the total of whose
Accommodations outstanding equals or exceeds sixty-six and two thirds percent
(66-2/3%) of the total principal amount of the Accommodations then outstanding
of all Banks hereunder (excluding from such calculation the Accommodations of
any Banks who fail to provide Accommodations as provided in Section 2.4(b)(iv)
hereof).
"MATERIALLY ADVERSE EFFECT" shall mean (a) any material adverse effect
upon the business, assets, liabilities, financial condition, results of
operations, properties, or business of the Borrower and its Subsidiaries on a
consolidated basis, or (b) except as a result of the action or inaction of the
Agent or any Bank, a material adverse effect upon the validity or
enforceability of this Agreement or any of the Loan Documents, or upon the
ability of the Borrower or any of its Subsidiaries to perform the payment
obligations or other obligations under this Agreement or any other Loan
Document, or upon the value of the Collateral or upon the rights, benefits or
interests of the Banks in and to the Accommodations or the rights of the Agent
and the Banks in the Collateral; in either case, whether resulting from any
single act, omission, situation, status, event or undertaking, or taken
together with other such acts, omissions, situations, statuses, events or
undertakings.
"MATURITY DATE" shall mean December 31, 2004, or as the case may be,
such earlier date as payment of the Obligations shall be due (whether by
acceleration, reduction of the Commitment to zero or otherwise).
"MINIMUM PERMITTED COLLATERAL AMOUNT" shall mean, as of any date
$17,500,000 (or the Equivalent U.S. Dollar Amount).
"MULTIEMPLOYER PLAN" shall mean an Employee Pension Plan which is a
"multiemployer plan" within the meaning set forth in Section 4001(a)(3) of
ERISA.
"NECESSARY AUTHORIZATIONS" shall mean all approvals and licenses from,
and all filings and registrations with, any Governmental Entity or other
regulatory authority, including, without limiting the foregoing, the Licenses
and all approvals, licenses, filings and registrations under Applicable Law,
necessary in order to enable the Borrower and its Subsidiaries to own,
construct, maintain, and operate wireless messaging systems currently being
constructed, maintained or operated and to invest in other Persons who own,
construct, maintain, and operate wireless messaging systems.
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"NET INCOME" shall mean, for any Person and its Subsidiaries on a
consolidated basis, for any period, net income determined in accordance with
GAAP for such Person and its Subsidiaries.
"NETWORK AND EQUIPMENT AGREEMENT" shall mean that certain Network
Co-ordination and Equipment Supply Agreement dated as of October 28, 1994
between PageNet and Madison Telecommunications Inc., as amended by Amendment
No. 1 dated as of October 26, 1995.
"OBLIGATIONS" shall mean all payment and performance obligations of
every kind, nature and description of the Borrower, its Subsidiaries, and any
other obligors to the Banks or the Agent, or any of them, under this Agreement
and the other Loan Documents (including any interest, fees and other charges on
the Accommodations or otherwise under the Loan Documents that would accrue but
for the filing of a bankruptcy action with respect to the Borrower or any of
its Subsidiaries, whether or not such claim is allowed in such bankruptcy
action and including Obligations to the Agent or any of the Banks under any
Interest Rate Hedge Agreements) as they may be amended, restated or
supplemented from time to time and all extensions or renewals, or as a result
of making the Accommodations, whether such obligations are direct or indirect,
absolute or contingent, due or not due, contractual or tortious, liquidated or
unliquidated, arising by operation of Applicable Law or otherwise, now existing
or hereafter arising.
"OPERATING CASH FLOW" shall mean, with respect to any Person and its
Subsidiaries, on a consolidated basis, at the end of the most recently
completed fiscal quarter, as determined in accordance with GAAP, the sum of (a)
Net Income for such period (after eliminating any extraordinary gains and
losses, including gains and losses from the sale of assets), plus (b) to the
extent deducted in determining Net Income, the sum of the following for such
period: (i) depreciation and amortization expense, (ii) Interest Expense and
(iii) income tax expense and (iv) all other non-cash items which will not
require cash payment in the future. Operating Cash Flow attributable to any
acquisition will be included in the determination of Operating Cash Flow as if
the Assets so acquired had been acquired on the first day of such fiscal
period, and the operating results of any acquired Assets for that portion of
any fiscal period in which they were not owned by the Borrower or any of its
Subsidiaries shall be determined by reference to financial information prepared
by the prior owners thereof, subject to such adjustments as the Agent may
reasonably require. Operating Cash Flow attributable to any assets disposed of
will be excluded in the determination of Operating Cash Flow as if the Assets
so disposed of had been disposed of on the first day of such fiscal quarter.
"PAGENET" shall mean Paging Network, Inc., a corporation incorporated
under the laws of the State of Delaware.
"PAGENET CANADA" shall mean Paging Network of Canada Inc., a Canada
corporation.
"PAGENET CANADA AGREEMENT" shall mean that certain Amended and
Restated Loan Agreement dated as of even date herewith by and among Paging
Network of Canada Inc., the Banks and the Agent.
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"PAGENET CANADA OBLIGATIONS" shall mean the indebtedness, liabilities
and obligations of PageNet Canada to the Agent and the Banks under, or in
connection with, the PageNet Canada Agreement.
"PAYMENT DATE" shall mean the last day of any Interest Period.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
"PERMITTED ASSET SALE" shall mean the sale by the Borrower or any of
its Subsidiaries of all or any part of its Assets as permitted under Section
7.4 hereof.
"PERMITTED COLLATERAL" shall mean (a) the Letter of Credit (or the
proceeds thereof in Dollars if such Letter of Credit is drawn), (b) U.S.
Dollars, (c) marketable, direct obligations of the United States of America
maturing within ninety (90) days of the date of purchase, or (d) other
collateral acceptable to the Banks at any time and from time to time held by or
on deposit with the Agent pursuant to the Deposit Agreement as collateral for
the Deposit Agreement Guaranty.
"PERMITTED INVESTMENTS" shall mean: (a) negotiable instruments or
securities in bearer or registered form which are not held for more than 30
days and which evidence: (i) obligations of or guaranteed by the Government of
Canada so long as they have the Permitted Rating; (ii) obligations of or
guaranteed by a province or municipality of Canada so long as they have the
Permitted Rating; (iii) deposits or bankers' acceptances issued or accepted by
any Schedule I Canadian chartered bank so long as they have the Permitted
Rating; (iv) commercial paper of Canadian corporations or other Canadian
issuers so long as it has the Permitted Rating; (v) other similar negotiable
instruments or securities which are issued or guaranteed by Persons which have
the Permitted Rating; or (b) demand deposits in any Schedule I Canadian
chartered bank so long as they have the Permitted Rating or (c) investments in
any wholly-owned Subsidiary of the Borrower so long as the corresponding debt
instruments, if any, are pledged to the Agent as security for the Obligations.
"PERMITTED LIENS" shall mean, as applied to any Person:
(a) Any Lien in favour of the Agent or any Bank given to secure
the Obligations;
(b) (i) Liens on real estate or other property for taxes,
assessments, governmental charges or levies not yet
delinquent and (ii) Liens for taxes, assessments, judgments,
governmental charges or levies or claims the non-payment of
which is being diligently contested in good faith by
appropriate proceedings and for which adequate reserves have
been set aside on such Person's books, but only so long as no
foreclosure, distraint, sale or similar proceedings have been
commenced with respect thereto;
(c) Liens of carriers, warehousemen, mechanics, labourers and
materialmen incurred in the ordinary course of business for
sums not yet more than sixty (60) days past due or being
diligently contested in good faith, if adequate reserves
shall have been set aside on such Person's books, but only so
long as no foreclosure, distraint, sale or similar
proceedings have been commenced with respect thereto;
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(d) Liens incurred in the ordinary course of business in
connection with worker's compensation and unemployment
insurance;
(e) Restrictions on the transfer of the Licenses or assets of the
Borrower or its Subsidiaries imposed by any of the Licenses
as presently in effect;
(f) Easements, rights-of-way, and other similar encumbrances on
the use of real property which do not materially interfere
with the ordinary conduct of the business of such Person or
the use of such property;
(g) The reservations, limitations, provisos and conditions, if
any, expressed in any original grants of real property from
the Crown;
(h) Purchase money security interests to the extent incurred in
connection with the acquisition of any property or assets by
the Borrower or any of its Subsidiaries permitted hereunder;
provided, that
(1) such Lien shall attach only to the property or asset
acquired in such transaction and shall not extend to
or cover any other assets or properties of the
Borrower or any of its Subsidiaries;
(2) the Indebtedness secured or covered by such Lien
shall not exceed the cost of the asset or property
acquired and shall not be increased; and
(3) all such Indebtedness secured or covered by such
Liens shall not exceed $500,000 in the aggregate at
anytime outstanding;
(i) Undetermined and inchoate Liens, rights of distress and
charges incurred in the ordinary course of business which
have not been filed or exercised or which relate to
obligations not due or payable, or if due or payable, the
validity of which is being contested diligently and in good
faith by appropriate proceedings, but only so long as no
foreclosure, distraint, sale or similar proceedings have been
commenced with respect thereto;
(j) Title defects or irregularities in respect of real property
which are of a minor nature and which in the aggregate do not
materially impair the use of such property for the purpose
for which it is used or the conduct of the business of such
Person;
(k) The rights reserved to or vested in any Governmental Entity
by the terms of any lease, License, franchise, grant or
permit or by any statutory provision, to terminate any such
lease, license, franchise, grant or permit, or to require
annual or other payments as a condition to the continuance
thereof; and
(l) Any Liens resulting from the deposit of cash or securities in
connection with contracts, tenders or expropriation
proceedings, or to secure surety or appeal
19
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bonds, costs of litigation when required by law and public,
statutory and other like obligations incurred in the ordinary
course of business.
"PERMITTED RATING" shall mean, with respect to any Permitted
Investment, a rating for short-term indebtedness of R-1 (Middle) or better from
Dominion Bond Rating Service Limited or A-1+ from CBRS Inc. or a rating for
long-term indebtedness of A (High) or better from Dominion Bond Rating Service
Limited or A (High) from CBRS Inc.
"PERSON" shall mean an individual, corporation, limited liability
company, association, partnership, joint venture, trust or estate, an
unincorporated organization, any Governmental Entity or other entity.
"PLAN" shall mean an employee benefit plan within the meaning of
Section 3(3) of ERISA.
"PNCHI" shall mean Paging Network Canadian Holdings, Inc., a
corporation incorporated under the laws of the State of Delaware.
"PRIME RATE" shall mean, for any particular day, a per annum interest
rate equal to the higher of (a) the variable rate of interest per annum,
calculated on the basis of a year of 365 days or 366 days (in the case of a
leap year), equal to the rate of interest per annum established and reported by
The Toronto-Dominion Bank to the Bank of Canada for such day as the variable
rate of interest per annum for determination of interest rates that The
Toronto-Dominion Bank charges to its customers of varying degrees of
creditworthiness in Canada for Canadian Dollar loans made by it in Canada, and
(b) the sum of the simple average of the rates per annum for Canadian Dollar
bankers' acceptances having a term of 30 days that appears on the Reuters
Screen CDOR Page as of 10:00 a.m. (Toronto time) for such day plus one percent
(1%). The Prime Rate is not necessarily the lowest rate of interest charged to
customers of The Toronto-Dominion Bank.
"PRIME RATE ADVANCE" shall mean a Collateralized Prime Rate Advance or
an Uncollateralized Prime Rate Advance.
"PRIME RATE BASIS" shall mean a simple interest rate equal to the sum
of (i) the Prime Rate and (ii) the Applicable Margin for Prime Rate Advances
which are Collateralized Advances or Uncollateralized Prime Rate Advances, as
the case may be. The Prime Rate Basis shall be adjusted automatically as of the
opening of business on the effective date of each change in the Prime Rate to
account for such change, and shall also be changed to reflect changes in the
Applicable Margin for Prime Rate Advances in accordance with Section 2.6 (d).
"REAL ESTATE" shall mean the real estate of the Borrower and its
Subsidiaries held in fee simple (or an interest analogous to a fee simple
interest as it relates to real estate situate in the Province of Quebec).
"RELEASE" when used as a verb includes release, spill, leak, emit,
deposit, discharge, ▇▇▇▇▇, migrate or dispose into the environment and
"Release" when used as a noun has a correlative meaning.
20
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"REMEDIAL ACTION" shall mean any action, whether voluntary or
compelled, that is reasonably necessary to: (i) clean up, remove, treat or in
any other way deal with Hazardous Substances in the environment; (ii) prevent
any Release of Hazardous Substances where such Release would violate any
Environmental Laws or would endanger or threaten to endanger public health or
welfare or the environment; or (iii) perform remedial studies, investigations,
restoration and post-remedial studies, investigations and monitoring on, about
or in connection with the business or any of the Real Estate or other Assets
(including the Collateral).
"REPAYMENT NOTICE" means a notice substantially in the form of Exhibit
C.
"REPORTABLE EVENT" shall mean, with respect to any Employee Pension
Plan subject to Title IV of ERISA, an event described in Section 4043(b) of
ERISA as to which the requirement of advance notice has not been waived or an
event described in Sections 2615.11, 2615.12, 2615.13, 2615.15 or 2615.19 of
PBGC regulations.
"RESTATEMENT DATE" shall mean August 5, 1999.
"RESTRICTED PAYMENT" shall mean (a) any direct or indirect
distribution, dividend or other payment to any Person (other than to the
Borrower or any wholly-owned Subsidiary of the Borrower) on account of any
general or limited partnership interest in, or shares of Capital Stock or other
securities of, the Borrower or any of its Subsidiaries (other than dividends
payable solely in the Capital Stock of such Person and stock splits),
including, without limitation, any direct or indirect distribution, dividend or
other payment to any Person (other than to the Borrower or any wholly-owned
Subsidiary of the Borrower) on account of any warrants or other rights or
options to acquire shares of Capital Stock of the Borrower or any of its
Subsidiaries; (b) any payment of principal of, or interest on, or payment into
a sinking fund for the retirement of, or any defeasance of subordinated debt;
(c) any payment of principal of, or interest on, Indebtedness referred to in
Section 7.1 (g) hereof; and (d) any management, consulting or similar fees, or
any interest thereon, payable by the Borrower or any of its Subsidiaries to any
partner, shareholder or Affiliate of any such Person.
"RESTRICTED PURCHASE" shall mean any payment (including, without
limitation, any sinking fund payment, prepayment or instalment payment) on
account of the purchase, redemption or other acquisition or retirement of any
general or limited partnership interest in, or shares of Capital Stock of or
other securities or subordinated debt of the Borrower or any of the Borrower's
Subsidiaries (other than to the Borrower or any wholly-owned Subsidiary of the
Borrower), including, without limitation, any warrants or other rights or
options to acquire shares of Capital Stock of the Borrower or of any of the
Borrower's Subsidiaries or any loan, advance, release or forgiveness of
Indebtedness by the Borrower or any of its Subsidiaries to any partner,
shareholder or Affiliate of any such Person.
"SALES AND DISTRIBUTION AGREEMENT" shall mean that certain Sales and
Distribution Agreement dated as of October 28, 1994 between Paging Network of
Canada Inc. and Madison Telecommunications Inc. as amended by Amendment No. 1
dated as of October 26, 1995.
"SECURITY DOCUMENTS" means those agreements and other documents in
favour of the Agent for the benefit of itself and the Banks described in
Schedule 2, as such documents may be
21
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amended or supplemented from time to time, and any other agreement or
instrument which may from time to time be held by the Agent for the benefit of
itself and the Banks, or by the Banks themselves, as security for all or any
portion of the Obligations.
"SECURITY INTEREST" shall mean all Liens in favour of the Agent, for
the benefit of itself and the Banks, or in favour of the Banks themselves,
created or intended to be created hereunder or under any of the Security
Documents to secure the Obligations.
"SITE SPECIFIC LICENSES" shall mean all licenses or other
authorizations granted in respect of the use of specific transmitter locations
pursuant to the Licenses listed on Schedule 1.
"SUBSIDIARY" shall mean, as applied to any Person, (a) any corporation
of which more than fifty percent (50%) of the outstanding stock (other than
directors' qualifying shares) having ordinary voting power to elect a majority
of its board of directors, regardless of the existence at the time of a right
of the holders of any class or classes of securities of such corporation to
exercise such voting power by reason of the happening of any contingency, or
any partnership of which more than fifty percent (50%) of the outstanding
partnership interests, is at the time owned directly or indirectly by such
Person, or by one or more Subsidiaries of such Person, or by such Person and
one or more Subsidiaries of such Person, or (b) any other entity which is
directly or indirectly controlled or capable under the current facts of being
controlled by such Person, or by one or more Subsidiaries of such Person, or by
such Person and one or more Subsidiaries of such Person. The Subsidiaries of
the Borrower as of the Restatement Date are set forth on Schedule 3 attached
hereto.
"SUBSTANCE" shall mean any substance, waste, liquid, gaseous or solid
matter, fuel, micro-organism, sound, vibration, ray, heat, odour, radiation,
energy vector, plasma, and organic or inorganic matter.
"TAXES" shall mean all taxes imposed by any Governmental Entity,
including income, profits, real property, personal property, goods and
services, sales, transfer, purchase, stumpage, registration, capital, excise,
payroll, unemployment, disability, employee's income withholding, social
security or withholding.
"THIRD PARTIES" shall mean third party suppliers and others on whom
the operations of the business of the Borrower and/or its Subsidiaries is
partly dependent for ordinary course operations which may affect the Borrower's
or its Subsidiaries' ability to be Year 2000 Ready at and after January 1,
2000.
"THIRD PARTY FACTORS" shall mean those factors beyond the control of
the Borrower or its Subsidiaries and within the control of Third Parties.
"TOTAL DEBT" shall mean, as of any date with respect of any Person and
its Subsidiaries on a consolidated basis, the difference between (a) the
aggregate amount of Indebtedness for Money Borrowed, determined in accordance
with GAAP, minus (b) the aggregate of: (i) the aggregate principal amount of
Collateralized Advances and Face Amount of Collateralized Bankers' Acceptances
outstanding on such date, and (ii) the aggregate amount of Indebtedness
permitted to be incurred in accordance with Section 7.1 (g) hereof outstanding
on such date.
22
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"TOTAL SUBSCRIBERS" shall mean, as of any date, the aggregate number
of subscribers for the Units in Service of the Borrower Group on a combined
basis.
"TRANSPONDER LEASE AGREEMENT" shall mean any agreement by and between
the Borrower or any of its Subsidiaries and any other Person for the license,
lease or other agreement to use telecommunications satellites in the operation
of the business of the Borrower or such Subsidiaries and any other agreement
related thereto.
"U.S. DOLLARS" and "U.S. $" shall mean lawful money of the United
States of America.
"UNCOLLATERALIZED BANKERS' ACCEPTANCE" shall mean a Drawing which the
Borrower requests to be made as an Uncollateralized Bankers' Acceptance or is
continued as or converted into an Uncollateralized Bankers' Acceptance in
accordance with the provisions of Section 2.5 hereof.
"UNCOLLATERALIZED PORTION OF THE COMMITMENT" shall mean, as of any
date, that portion of the Available Commitment in excess of the Minimum
Permitted Collateral Amount.
"UNCOLLATERALIZED PRIME RATE ADVANCE" shall mean an Uncollateralized
Prime Rate Advance which bears interest at the Prime Rate Basis and which the
Borrower requests to be made as an Uncollateralized Prime Rate Advance or is
continued or converted as an Uncollateralized Prime Rate Advance, in accordance
with the provisions of this Agreement, and which shall be in a principal amount
of at least $500,000 and in an integral multiple of $500,000.
"UNITS IN SERVICE" shall mean, as of any date, for the Borrower Group
on a combined basis, the aggregate number of wireless messaging units that are
operating pursuant to valid and binding agreements with customers, in respect
of which the customer is obligated to make payments at regular intervals in
amounts consistent with standard industry practice, where the customer is
delinquent less than sixty (60) days (unless the amount for such customer which
is delinquent sixty (60) days or more constitutes less than thirty-five (35)
percent of such customer's current monthly billing), except for governmental or
corporate customers delinquent less than ninety (90) days that (a) have been
serviced by such Person for at least six (6) months and have a consistent prior
payment history and in which the customer has made a payment within the last
forty-five (45) days equal to or greater than the amount of the current monthly
billing for such customer, or (b) have a regular history of paying on their
accounts amounts equal to or greater than the amount of the current monthly
billing for such customer and whose total account receivable is (i) no older
and (ii) no greater in dollar amount, than such account receivable was on the
date ninety (90) days prior.
"YEAR 2000 READY" shall mean that, except as would not have
individually or in the aggregate, a Materially Adverse Effect, the Year 2000
Systems used or relied upon by the Borrower or its Subsidiaries will function
accurately and without material delay or interruption at all times before, on
and after January 1, 2000 (including through February 29, 2000), without any
change in the operations of such Year 2000 Systems associated with the advent
of 2000 or the 21st century.
"YEAR 2000 PLAN" shall mean the plan of the Borrower to ensure that
the Year 2000 Systems are Year 2000 Ready in the form delivered to the Agent
prior to the date hereof.
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"YEAR 2000 SYSTEMS" shall mean all computer hardware, software and
files (including all operating systems, application software and related
supporting data) and files owned, used, sold, leased or licensed by the
Borrower or its Subsidiaries in connection with the operation of its business
and all process controls, environmental controls, communications systems and
any other support systems or equipment owned, used, sold, leased or licensed by
the Borrower or its Subsidiaries, in the operation of its business which
employs, stores or processes date/time information in electronic form.
Each definition of an agreement in this Article 1 shall include such
agreement as modified, amended or supplemented from time to time in accordance
herewith.
ARTICLE 2
CREDIT FACILITY
SECTION 2.1 COMMITMENT
The Banks agree, severally, in accordance with their respective
Commitment Ratios and not jointly, upon the terms and subject to the conditions
of this Agreement, to make available to the Borrower such Accommodations as may
be requested by the Borrower, prior to the Maturity Date, in an amount not
exceeding, in the aggregate, the Available Commitment. Each of the Banks shall,
on the terms and conditions of this Agreement, make its pro rata share of
Advances, and Bankers' Acceptances on the occasion of any Borrowing or Drawing,
as applicable, available to the Borrower under the Commitment. All Advances and
Bankers' Acceptances requested hereunder shall be made available to the
Borrower in accordance with Sections 2.2, 2.3 and 2.5 hereof, respectively. Any
notice given to the Agent in connection with a requested Accommodation
hereunder shall be given to the Agent prior to 12:00 noon (Toronto time) in the
case of Advances and 1:00 p.m. (Toronto time) in the case of Bankers'
Acceptances in order for such Business Day to count toward the minimum number
of Business Days required.
SECTION 2.2 UNCOLLATERALIZED PRIME RATE ADVANCES.
(a) CHOICE OF INTEREST RATE, ETC. Any Uncollateralized Prime Rate
Advance shall be made as an Uncollateralized Prime Rate Advance.
(b) MANNER OF BORROWING.
(i) UNCOLLATERALIZED PRIME RATE ADVANCES. The Borrower
shall give the Agent irrevocable written notice no
later than 12:00 noon (Toronto time) at least one
(1) Business Day prior to the date of any requested
Uncollateralized Prime Rate Advance in the form of
an Accommodation Notice, or telephonic notice
followed immediately by an Accommodation Notice;
provided, however, that the Borrower's failure to
confirm any telephonic notice with an Accommodation
Notice shall not invalidate any notice so given if
acted upon by the Agent. Upon receipt of such notice
from the Borrower, the Agent shall promptly notify
each Bank in writing of the contents thereof.
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(ii) CONVERSIONS OF UNCOLLATERALIZED PRIME RATE ADVANCES.
On any Business Day, the Borrower may, subject to
the provisions of this Agreement, convert the
outstanding principal amount of an Uncollateralized
Prime Rate Advance, in whole or in part, to (A)
Bankers' Acceptances, by giving an Accommodation
Notice in accordance with Section 2.5 hereof
(including in accordance with the period for notice
set forth in Section 2.5(b) hereof), and (B)
Collateralized Prime Rate Advances by giving the
Accommodation Notice in accordance with Section 2.3
(b) hereof (including in accordance with the period
for notice set forth in Section 2.3 (b) hereof). The
Borrower may convert the Uncollateralized Prime Rate
Advance on any Business Day. If the Uncollateralized
Prime Rate Advance to be converted cannot be
converted to an aggregate Face Amount of Bankers'
Acceptances in an amount which may be drawn as
Bankers' Acceptances under this Agreement, then the
amount which cannot be so converted, subject to the
other terms and conditions of this Agreement, shall
thereafter continue to be outstanding as an
Uncollateralized Prime Rate Advance. When any
Uncollateralized Prime Rate Advances are to be
converted, in whole or in part, to Bankers'
Acceptances, the Borrower shall repay and there
shall become due and payable on the Drawing Date,
the principal amount of such Uncollateralized Prime
Rate Advances which are to be so converted. Upon
such Payment Date such Uncollateralized Prime Rate
Advance will, subject to the provisions hereof, be
so repaid and, as applicable, reborrowed.
SECTION 2.3 COLLATERALIZED ADVANCES.
(a) CHOICE OF INTEREST RATE, ETC. Any Collateralized Advance shall be
made as a Collateralized Prime Rate Advance.
(b) COLLATERALIZED PRIME RATE ADVANCES.
(i) ADVANCES. The Borrower shall give the Agent
irrevocable written notice not later than 12:00 noon
(Toronto time) at least one (1) Business Day prior
to the date of any requested Collateralized Prime
Rate Advance in the form of an Accommodation Notice,
or telephonic notice followed immediately by an
Accommodation Notice; provided, however, that the
Borrower's failure to confirm any telephonic notice
with an Accommodation Notice shall not invalidate
any notice so given if acted upon by the Agent. Upon
receipt of such notice from the Borrower, the Agent
shall promptly notify each Bank in writing of the
contents thereof.
(ii) CONVERSIONS OF COLLATERALIZED PRIME RATE ADVANCES.
On any Business Day, the Borrower may, subject to
the provisions of this Agreement, convert the
outstanding principal amount of a Collateralized
Prime Rate Advance, in whole or in part, to (A)
Bankers' Acceptances, by giving an Accommodation
Notice in accordance with Section 2.5 hereof
(including
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in accordance with the period for notice set forth
in Section 2.5(b) hereof), and (C) Uncollateralized
Prime Rate Advances by giving the Accommodation
Notice in accordance with Section 2.2(b) hereof
(including in accordance with the period for notice
set forth in Section 2.2(b) hereof). In the case of
any such conversion, the Borrower shall notify the
Agent of the amount of any Collateralized Prime Rate
Advance to be converted. The Borrower may convert a
Collateralized Prime Rate Advance on any Business
Day. If the Collateralized Prime Rate Advance to be
converted to Bankers' Acceptances cannot be
converted to an aggregate Face Amount of Bankers'
Acceptances in an amount which may be drawn as
Bankers' Acceptances under this Agreement, then the
amount which cannot be so converted shall, subject
to the other terms and conditions of this Agreement,
thereafter continue to be outstanding as a
Collateralized Prime Rate Advance. When any
Collateralized Prime Rate Advances are to be
converted, in whole or in part, to Bankers'
Acceptances the Borrower shall repay and there shall
become due and payable on the Drawing Date, the
principal amount of such Collateralized Prime Rate
Advances which are to be so converted. Upon such
Payment Date such Collateralized Prime Rate Advance
will, subject to the provisions hereof, be so repaid
and, as applicable, reborrowed.
(c) AUTOMATIC CONVERSION OF COLLATERALIZED ADVANCES AND COLLATERALIZED
BANKERS' ACCEPTANCES. If, on any date, the sum of the principal amount of
Collateralized Advances and the Face Amount of Collateralized Bankers'
Acceptances then outstanding exceeds the sum of the Equivalent Canadian Dollar
Amount of Permitted Collateral held by the Agent pursuant to the Deposit
Agreement on such date and the Letter of Credit, (i) an amount of
Collateralized Advances up to the amount of such excess shall automatically be
converted to an Uncollateralized Prime Rate Advance, and (ii) if after such
conversions of, or adjustments to, all Collateralized Advances there remains an
excess, the Borrower shall on such date pay to the Agent for the benefit of the
Banks an amount equal to the increased Drawing Fee which would be payable for
Uncollateralized Bankers' Acceptances from such date until the Payment Date for
the Face Amount of Collateralized Bankers' Acceptances equal to such excess.
SECTION 2.4 NOTIFICATION OF BANKS; DISBURSEMENT
(a) NOTIFICATION OF BANKS. Upon receipt of an Accommodation Notice, or
a notice from the Borrower with respect to any outstanding Advance prior to the
Payment Date for such Advance, the Agent shall promptly notify each Bank in
writing of the contents thereof and the amount of such Bank's pro rata portion
of the Advance. Each Bank shall, not later than 11:00 a.m. (Toronto time) on
the date of borrowing specified in such notice, make available to the Agent at
the Agent's Office, or at such account as the Agent shall designate, the amount
of its pro rata portion of any Advance which represents an additional borrowing
hereunder in immediately available funds.
(b) DISBURSEMENT.
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(i) Prior to 2:00 p.m. (Toronto time) on the date of an
Advance hereunder, the Agent shall, subject to the
satisfaction of the conditions set forth in Article
3 hereof, disburse the amounts made available to the
Agent by the Banks in like funds by (a) transferring
the amounts so made available by wire transfer
pursuant to the Borrower's instructions, or (b) in
the absence of such instructions, crediting the
amounts so made available to the account of the
Borrower maintained with The Toronto-Dominion Bank.
(ii) Unless the Agent shall have received notice from a
Bank prior to 11:00 a.m. (Toronto time) on the date
of any Advance that such Bank will not make
available to the Agent such Bank's pro rata portion
of such Advance, the Agent may assume that such Bank
has made or will make such pro rata portion
available to the Agent on the date of such Advance
and the Agent may in its sole discretion and in
reliance upon such assumption, make available to the
Borrower on such date a corresponding amount. If and
to the extent the Bank does not make such pro rata
portion available to the Agent, such Bank agrees to
repay to the Agent on demand such corresponding
amount together with interest thereon, for each day
from the date such amount is made available to the
Borrower until the date such amount is repaid to the
Agent, at the Prime Rate.
(iii) If such Bank shall repay to the Agent such
corresponding amount, such amount so repaid shall
constitute such Bank's pro rata portion of the
applicable Advance for purposes of this Agreement.
If such Bank does not repay such corresponding
amount immediately upon the Agent's demand therefor,
the Agent shall notify the Borrower and the Borrower
shall immediately pay such corresponding amount to
the Agent, with interest at the Prime Rate. The
failure of any Bank to fund its pro rata portion of
any Advance shall not relieve any other Bank of its
obligation, if any, hereunder to fund its respective
pro rata portion of the Advance on the date of such
borrowing, but no Bank shall be responsible for any
such failure of any other Bank.
(iv) In the event that, at any time when the Borrower is
not in Default and has otherwise satisfied each of
the conditions in Article 3 hereof, a Bank for any
reason fails or refuses to fund its pro rata portion
of such Advance, then, until such time as such Bank
has funded its pro rata portion of such Advance
(which late funding shall not absolve such Bank from
any liability it may have to the Borrower), or all
other Banks have received payment in full from the
Borrower (whether by repayment or prepayment) or
otherwise of the principal and interest due in
respect of such Advance, such non-funding Bank shall
not have the right (A) to vote regarding any issue
on which voting is required or advisable under this
Agreement or any other Loan Document, and such
Bank's pro rata portion of the Accommodations shall
not be counted as outstanding for purposes of
determining "Majority Banks" hereunder, or (B) to
receive payments of
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principal, interest or fees from the Borrower, the
Administrative Agent or the other Banks in respect
of its pro rata portion of the Accommodations.
SECTION 2.5 BANKERS' ACCEPTANCES.
(a) ACCEPTANCES AND DRAFTS. The Banks agree subject to the terms and
conditions of this Agreement to create acceptances ("Bankers' Acceptances") by
accepting Drafts of the Borrower under the Available Commitment from time to
time, on any Business Day prior to the Maturity Date, which Drafts have an
aggregate Face Amount equal to such Bank's pro rata share of the total
Accommodations being made by way of Bankers' Acceptances, except that, if the
fact amount of a Bankers' Acceptance would not be equal to any integral
multiple of $100,000, the fact amount shall be increased or reduced by the
Agent in its sole discretion, even if as a result of any such increase a Bank's
Commitment Ratio would be exceeded. Bankers' Acceptances shall be created by
Banks' acceptance of Drafts. Each Drawing shall be in an aggregate amount of
not less than $1,000,000 and in an integral amount of $100,000.
(b) PROCEDURE FOR DRAWING. The Borrower shall give the Agent
irrevocable written notice not later than 1:00 p.m. (Toronto time) at least two
(2) Business Days prior to the date of the proposed Drawing in the form of an
Accommodation Notice, or telephonic notice followed immediately by an
Accommodation Notice; provided, however, that the Borrower's failure to confirm
any telephonic notice with an Accommodation Notice shall not invalidate any
notice so given if acted upon by the Agent. Upon receipt of an Accommodation
Notice, the Agent shall be responsible for making all necessary arrangements
with each of the Banks with respect to the stamping of Bankers' Acceptances in
the manner contemplated in this Section 2.5. The Borrower shall not in any
Accommodation Notice select an Interest Period for a Draft which ends after the
Maturity Date or which conflicts with the repayments provided for in Sections
2.8 or 2.10(b) hereof.
(c) FORM OF DRAFTS. Each Draft presented by the Borrower for
acceptance by a Bank: (i) shall be in a Face Amount of not less than $1,000,000
and in an integral multiple of $100,000; (ii) shall be dated the date of the
Drawing; and (iii) shall mature and be payable by the Borrower on a Business
Day which occurs one (1), two (2), three (3) or six (6) months (nine (9) or
twelve (12) months subject to availability) after the Drawing Date. The
Borrower hereby renounces, and shall not claim, any days of grace for the
payment of any Bankers' Acceptances.
(d) ACCEPTANCE OF DRAFTS. Not later than 12:00 noon (Toronto time) on
the Drawing Date specified for a relevant Drawing, a Bank: (i) shall complete
one or more Drafts dated the date of such Drawing in an aggregate Face Amount
equal to such Bank's pro rata portion of the amount of such Drawing and with
the Interest Period specified by the Borrower in its Accommodation Notice; (ii)
shall accept the Drafts; and (iii) shall purchase the Bankers' Acceptance
thereby created in the manner provided in Section 2.5(e) hereof.
(e) PURCHASE OF BANKERS' ACCEPTANCES. The Borrower shall request a
quotation from the Agent of the purchase price of all Bankers' Acceptances
created hereunder on the Drawing Date for such Bankers' Acceptances. The Agent,
after consultation with the Banks, shall notify the Borrower of the purchase
price for the Bankers' Acceptance in the Face Amount and for the Interest
Period specified by the Borrower. The purchase price shall be calculated by
reference to
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a discount rate which is an arithmetic average (rounded up to the nearest
0.01%) of the discount rates of the Banks determined in accordance with normal
market practice at or about 10:00 a.m. (Toronto time) on the applicable Drawing
Date for Bankers' Acceptances of each Bank having a comparable Face Amount and
comparable maturity date as such Bankers' Acceptances. Each Bank shall purchase
all Bankers' Acceptances created by such Bank hereunder at the purchase price
quoted by such Bank to the Agent and advised by the Agent to the Borrower and
such purchase price shall be paid and satisfied by such Bank making payment to
the Agent in the amount of such purchase price less the applicable Drawing Fee.
The Agent shall disburse the amounts made available to the Agent by the Banks
in like funds by (a) transferring the amounts so made available by wire
transfer pursuant to the Borrower's instructions, or (b) in the absence of such
instructions, crediting the amounts so made available to the account of the
Borrower maintained with the Agent. Bankers' Acceptances purchased by a Bank
hereunder may be held by it for its own account until maturity or sold by it at
any time prior thereto in the relevant market therefor in Canada, in the Bank's
sole discretion.
(f) REIMBURSEMENT AT PAYMENT DATE. Subject to Section 2.5(g) hereof,
the Borrower shall pay to the Agent on behalf of a Bank in same day funds, and
there shall become due and payable at 11:00 a.m. (Toronto time) on the Payment
Date for each Bankers' Acceptance, an amount in Canadian Dollars equal to the
Face Amount of such Bankers' Acceptance accepted by such Bank. The Borrower
shall make each payment hereunder in respect of Bankers' Acceptances by deposit
of the required funds in accordance with Section 2.12 hereof. If the Borrower
fails to pay the Bank pursuant to this Section 2.5 (f), or to convert or renew
the Face Amount of such Bankers' Acceptance pursuant to Section 2.5 (g) hereof,
the unpaid amount due and payable to such Bank in respect of such Bankers'
Acceptance shall automatically be converted to a Prime Rate Advance on the
Payment Date, and shall bear interest: (i) for the first three (3) days from
the date on which such amount is converted, or until such earlier date as an
Accommodation Notice is given in accordance with Section 2.2 or Section 2.3
hereof, as the case may be, at a per annum rate of interest equal to 115% of
the Prime Rate Basis; and (ii) thereafter, at a rate per annum equal to the
Prime Rate Basis, in each case, until such amount is paid in full.
(g) RENEWAL OR CONVERSION OF BANKERS' ACCEPTANCES. For effect on the
Payment Date of a Bankers' Acceptance, the Borrower may elect: (i) to renew all
or a portion of the Face Amount of such Bankers' Acceptance by giving an
Accommodation Notice in accordance with this Section 2.5 (including in
accordance with the period for notice set forth in Section 2.5 (b) hereof); or
(ii) to have all or a portion of the Face Amount of such Bankers' Acceptance
converted to an Advance, by giving an Accommodation Notice in accordance with
Section 2.2 or Section 2.3 hereof (including in accordance with the period for
notice set forth in Section 2.2 or Section 2.3 hereof, as the case may be). If
the Bankers' Acceptance to be converted cannot be converted into an Advance in
an amount which may be outstanding as an Advance under this Agreement, then the
amount which cannot be so converted shall be repaid to the Agent on behalf of a
Bank on the date of such conversion in accordance with Section 2.5 (f) hereof.
(h) PREPAYMENTS. Except as required by Section 2.9 or Section 2.10
hereof, no repayment of Bankers' Acceptances shall be made by the Borrower to a
Bank prior to the Payment Dates of such Bankers' Acceptances as have been
created by the Borrower. If the Borrower shall prepay any Bankers' Acceptances
accepted by a Bank as required by Section 2.9
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or Section 2.10 hereof then (unless such prepayment has been rescinded or
otherwise is required to be returned by such Bank for any reason), as between
the Borrower and such Bank, such Bank shall thereafter be solely responsible
for the payment of the Face Amount of such Bankers' Acceptances as have been
created by the Borrower to the holder or holders thereof in accordance with the
terms thereof.
(i) CIRCUMSTANCES MAKING BANKERS' ACCEPTANCES UNAVAILABLE. If the
Banks or any one or more of them determine in good faith that by reason of
circumstances affecting the money market there is no market for Bankers'
Acceptances and advises the Agent and the Borrower to such effect, in writing,
then the right of the Borrower to request a Drawing shall be suspended until
the Banks determine that the circumstances causing such suspension no longer
exist and the Agent so notifies the Borrower. Any Accommodation Notice which is
outstanding at the time of such notice by the Banks or any one or more of them
shall be deemed to be an Accommodation Notice requesting a Prime Rate Advance
in the principal amount equal to the requested Face Amount in such
Accommodation Notice.
(j) DRAFT FORMS.
(i) Authorization Regarding Drafts. In order to
facilitate the issuance of Bankers' Acceptances
pursuant to this Agreement, the Borrower hereby
authorizes each of the Banks to complete, sign and
endorse Drafts on its behalf in handwritten form or
by facsimile or mechanical signature or otherwise
and, once completed, signed and endorsed to accept
them as Bankers' Acceptances under this Agreement.
Drafts so completed, signed, endorsed and negotiated
on behalf of the Borrower by the Banks shall bind
the Borrower as fully and effectively as if those
acts were performed by an authorized officer of the
Borrower.
(ii) Safekeeping of Drafts. Any executed Drafts to be
used for Bankers' Acceptances which are held by any
Bank need only be held in safekeeping with the same
degree of care as if they were that Bank's own
property and that Bank was keeping them at a place
at which they are to be held. The Borrower shall, by
written notice to the Agent, designate the Persons
authorized to give the Agent and each Bank
instructions regarding the manner in which the
Bankers' Acceptances are to be completed and the
times at which they are to be issued. Neither the
Agent nor the Banks or any of their respective
directors, officers, employees or representatives
shall be liable for any action taken or omitted to
be taken by any of them under this Section except
for their own gross negligence or wilful misconduct.
SECTION 2.6 INTEREST; FEES.
(a) INTEREST ON UNCOLLATERALIZED PRIME RATE ADVANCES. Interest on each
Uncollateralized Prime Rate Advance shall be computed daily and shall be
payable at the Prime Rate Basis for such Advance, in arrears on the applicable
Payment Date. Interest on
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Uncollateralized Prime Rate Advances then outstanding shall also be due and
payable on the Maturity Date.
(b) INTEREST ON COLLATERALIZED ADVANCES Interest on each
Collateralized Prime Rate Advance shall be computed daily and shall be payable
at the Prime Rate Basis for such Advance, in arrears on the applicable Payment
Date. Interest on Collateralized Prime Rate Advances then outstanding shall
also be due and payable on the Maturity Date.
(c) INTEREST UPON DEFAULT. Immediately upon the occurrence and during
the continuance of an Event of Default under (1) Section 8.1(b) hereof, or (2)
resulting from a failure to comply with any provision of Article 7 hereof, the
outstanding Obligations (to the extent permitted by Applicable Law) shall bear
interest at the Default Rate. Such interest shall be payable on demand by the
Majority Banks and shall accrue until the earlier of (i) waiver or cure of the
applicable Event of Default, (ii) agreement by the Majority Banks (or, if
applicable to the underlying Event of Default, all of the Banks) to rescind the
charging of interest at the Default Rate, or (iii) payment in full of the
Obligations.
(d) APPLICABLE MARGIN. With respect to any Accommodation, the
Applicable Margin shall be determined by the Agent based upon the Leverage
Ratio as of the end of the fiscal quarter most recently ended, effective as of
the fifth (5th) Business Day after the financial statements referred to in
Section 6.1 or 6.2 hereof, as the case may be, are furnished to the Agent and
each Bank for such fiscal quarter, as follows:
COLLATERALIZED UNCOLLATERALIZED
COLLATERALIZED PRIME RATE UNCOLLATERALIZED BANKERS'
BANKERS' ACCEPTANCES ADVANCES PRIME RATE ADVANCE ACCEPTANCES
LEVERAGE RATIO APPLICABLE MARGIN APPLICABLE MARGIN APPLICABLE MARGIN APPLICABLE MARGIN
---------------------------------- ----------------------- ------------------ -------------------- -------------------
A. Greater than or equal to 0.500% 0.00% 2.500% 4.000%
6.00:1
B. Greater than or equal to 0.500% 0.00% 1.500% 3.000%
4.00:1, but less than 6.00:1
C. Less than 4.00:1 0.500% 0.00% 0.500% 2.000%
Notwithstanding the foregoing, if the Borrower shall fail timely to
deliver to the Agent the financial statements required for the calculation of
the Leverage Ratio for any fiscal quarter, then commencing with the fifth (5th)
Business Day after the date such financial statements were due and continuing
through the fifth (5th) Business Day following the date of delivery thereof,
the Leverage Ratio for such period shall be conclusively presumed to be, and
the Applicable Margin shall be calculated based upon, the Leverage Ratio which
is one level greater than the Leverage Ratio in effect for the immediately
preceding fiscal quarter for which financial statements were delivered or were
due to be delivered. If, for any reason, the Leverage Ratio cannot be
calculated or determined, the Applicable Margin shall be based upon the
Leverage Ratio set forth for level A above.
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SECTION 2.7 FEES.
(a) COMMITMENT FEES. The Borrower agrees to pay each of the Banks, in
accordance with their respective Commitment Ratios, commitment fees as follows:
(i) a commitment fee on the aggregate unborrowed available balance of the
Commitment, for each day from the Restatement Date until the Maturity Date at
the rate of one percent (1.000%) per annum and (ii) a commitment fee on the
aggregate unborrowed unavailable balance of the Commitment, for each day from
the Restatement Date to the Maturity Date at the rate of three-eighths of one
percent (0.375%) per annum. Such commitment fees shall be computed daily on the
basis of a year of 365 or 366 days (in the case of a leap year), shall be
payable quarterly in arrears on the last day of each quarter, and shall be
fully earned when due and non-refundable when paid. A final payment of all
commitment fees then payable shall also be due and payable on the Maturity
Date.
(b) DRAWING FEES. Drawing Fees for Bankers' Acceptances hereunder
shall be payable in advance on the date of its respective Drawing, and shall be
fully earned when due and non-refundable when paid.
SECTION 2.8 MANDATORY COMMITMENT REDUCTIONS
(a) Commencing March 31, 2002 and at the end of each fiscal quarter
thereafter, the Uncollateralized Portion of the Commitment as in effect on
March 30, 2002, shall be automatically and permanently reduced by the amounts
set forth below:
QUARTERLY REDUCTION OF THE
UNCOLLATERALIZED PORTION OF
THE COMMITMENT IN EFFECT ON
DATES OF COMMITMENT REDUCTION MARCH 30, 2002
----------------------------------------------------- ---------------------------
March 31, 2002, June 30, 2002, September 30, 2002 and $55,000.00
December 31, 2002
March 31, 2003, June 30, 2003, September 30, 2003 and $330,000.00
December 31, 2003
March 31, 2004, June 30, 2004 and September 30, 2004 $660,000.00
December 31, 2004 remainder
(b) Commencing with the fiscal year ending December 31, 1999, and for
each fiscal year thereafter, concurrently with the delivery of the financial
statements referred to in Section 6.1 (b) in respect of the final quarter of
each such fiscal year, the Uncollateralized Portion of the Commitment as in
effect at the end of such fiscal year, shall be automatically and permanently
reduced by an amount equal to 50% of the Borrower's Free Cash Flow for the
immediately preceding fiscal year (provided that any such reduction shall be
subject to adjustment based on the financial statements delivered in accordance
with Section 6.2 . The amount of any such
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reduction of the Uncollateralized Portion of the Commitment shall be applied to
the reductions required under Section 2.8 (a) in inverse order of maturity.
The Borrower shall make a repayment of the Accommodations
outstanding under the Commitment, together with accrued interest thereon, on or
before the effective date of each reduction in the Commitment under this
Section 2.8, such that the aggregate principal amount of the Accommodations
outstanding at no time exceeds the Commitment as so reduced. In addition, any
remaining unpaid principal and interest under the Commitment shall be due and
payable in full on the Maturity Date.
SECTION 2.9 OPTIONAL PREPAYMENTS; COMMITMENT REDUCTIONS.
(a) PREPAYMENT OF ACCOMMODATIONS. The Borrower may without penalty
(but subject to Section 2.13 hereof) at any time prepay in full or in part the
principal amount of any Advance prior to the Payment Date for such Advance by
giving the Agent at least three (3) Business Days' prior written notice, of
such prepayment, such notice to be in the form of a Repayment Notice. Partial
prepayments shall be in a principal amount of not less than $1,000,000.00, and
in an integral multiple of $500,000.00.
(b) COMMITMENT REDUCTION. The Borrower may without penalty (but
subject to Section 2.13 hereof) at any time terminate or permanently reduce all
or any part of the Commitment by giving the Agent and the Banks at least three
(3) Business Days' prior written notice thereof, such notice to be in the form
of a Repayment Notice; provided, however, that any reduction shall reduce the
Commitment in a principal amount of at least $3,500,000.00 and in an integral
multiple of $500,000.00, and provided, further, that no such reduction shall be
permitted if it would require a prepayment of a Bankers' Acceptance. The
Borrower shall make any required repayment or prepayment of Accommodations
outstanding under the Commitment, plus accrued interest on such portion of the
Accommodations and any accrued fees in respect thereof, on or before the
effective date of the reduction of the Commitment, so that the principal amount
of the Accommodations outstanding after such repayment or prepayment does not
exceed the Commitment as so reduced. The Borrower shall not have any right to
rescind any termination or reduction pursuant to this Section 2.9 (b). Any
reduction of the Commitment effected pursuant to this Section 2.9 (b) shall be
applied pro rata as between the Uncollateralized Portion of the Commitment and
the remaining portion of the Commitment.
SECTION 2.10 MANDATORY REPAYMENTS
In addition to the scheduled Commitment reductions provided for in
Section 2.8 hereof, the Borrower shall repay the Obligations as follows:
(a) ACCOMMODATIONS IN EXCESS OF AVAILABLE COMMITMENT. If, at any time,
the amount of the Accommodations then outstanding under the Commitment shall
exceed the Available Commitment, the Borrower shall, on such date and subject
to Section 2.13 hereof, provide the Agent with a Repayment Notice and make a
repayment of the principal amount of the Accommodations in an amount equal to
such excess, together with any accrued interest and fees with respect thereto.
If any such repayment would require a prepayment of any Bankers' Acceptance,
the Borrower shall make an interest-bearing deposit with the Agent the Face
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Amount of such Bankers' Acceptances and hereby irrevocably authorizes and
directs the Agent to apply such payment to the Borrower's reimbursement
obligations in respect of such Drawing on the Payment Date therefor.
(b) MATURITY DATE. In addition to the foregoing, a final payment of
all Obligations then outstanding shall be due and payable on the Maturity Date.
SECTION 2.11 EVIDENCE OF OBLIGATIONS; ACCOMMODATION ACCOUNTS.
(a) The indebtedness of the Borrower in respect of all Obligations
(other than Accommodations and interest) hereunder shall be prima facie
evidenced by the account records maintained by the Agent. The failure of the
Agent to correctly record any amount or date shall not, however, affect the
obligation of the Borrower to pay amounts due hereunder to the Agent or any of
the Banks in accordance with this Agreement.
(b) Each Bank may open and maintain on its books in the name of the
Borrower a loan account with respect to its pro rata portion of the
Accommodations and interest thereon. Each Bank which opens such a loan account
shall debit such loan account for the principal amount of its pro rata portion
of each Advance made by it and accrued interest thereon, and shall credit such
loan account for each payment on account of principal of or interest on its
Accommodations. The records of a Bank with respect to the loan account
maintained by it shall be prima facie evidence of its pro rata portion of the
Accommodations and accrued interest thereon absent manifest error, but the
failure of any Bank to make any such notations or any error or mistake in such
notations shall not affect the Borrower's repayment obligations with respect to
such Accommodations.
SECTION 2.12 MANNER OF PAYMENT.
(a) Each payment (including any prepayment) by the Borrower on account
of the principal of or interest on the Accommodations, commitment fees and any
other amount owed to the Banks or the Agent or any of them under this Agreement
or the other Loan Documents shall be made not later than 1:00 p.m. (Toronto
time) on the date specified for payment under this Agreement to the Agent at
the Agent's Office, for the account of the Banks or the Agent, as the case may
be, in lawful Canadian currency in immediately available funds. Any payment
received by the Agent after 1:00 p.m. (Toronto time) shall be deemed received
on the next Business Day. Receipt by the Agent of any payment intended for any
Bank or Banks hereunder prior to 1:00 p.m. (Toronto time) on any Business Day
shall be deemed to constitute receipt by such Bank or Banks on such Business
Day. In the case of a payment for the account of a Bank, the Agent will
promptly thereafter distribute the amount so received in like funds to such
Bank. If the Agent shall not have received any payment from the Borrower as and
when due, the Agent will promptly notify the Banks accordingly.
(b) Prior to the declaration of an Event of Default under Section 8.2
hereof, if some but less than all amounts due from the Borrower are received by
the Agent with respect to the Obligations, the Agent shall distribute such
amounts in the following order of priority, all on a pro rata basis to the
Banks: (i) to the payment on a pro rata basis of any fees or expenses then due
and payable to the Agent and the Banks, or any of them; (ii) to the payment of
interest then
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due and payable on the Accommodations; (iii) to the payment of all other
amounts not otherwise referred to in this Section 2.12(b) then due and payable
to the Agent and the Banks, or any of them, hereunder or under any other Loan
Document; and (iv) to the payment of principal then due and payable on the
Accommodations.
(c) Subject to any contrary provisions in the definition of Interest
Period, if any payment under this Agreement or any of the other Loan Documents
is specified to be made on a day which is not a Business Day, it shall be made
on the next Business Day, and such extension of time shall in such case be
included in computing interest and fees, if any, in connection with such
payment.
(d) On the date of any Accommodation or the maturity thereof,
including the date of any extension or conversation of any Accommodation (the
"Transaction Date" ), the Agent shall be entitled to net amounts payable in one
currency on such Transaction Date by the Agent to a Bank against amounts
payable in the same currency on such Transaction Date by such Bank to the Agent
for the account of the Borrower. Similarly, on any Transaction Date, the
Borrower hereby authorizes each Bank to net amounts payable in one currency on
such date by such Bank to the Agent, for the account of the Borrower, against
amounts payable in the same currency on such date by the Borrower to the Agent,
for the account of such Bank, in accordance with the Agent's calculations made
in accordance with the provisions of this Agreement.
SECTION 2.13 REIMBURSEMENT.
(a) Upon the earlier of demand or the Maturity Date, the Borrower
shall pay to the Agent or the Banks such amount or amounts as will compensate
the Agent or the Banks for any loss, cost or expense incurred by them with
respect to any Bankers' Acceptance arising from any Claim, including legal fees
and disbursements, respecting the collection of amounts owing by the Borrower
hereunder in respect of such Bankers' Acceptance or the enforcement of the
Agent's or Banks' rights hereunder in respect of such Bankers' Acceptance,
including legal proceedings attempting to restrain the Agent or the Banks from
paying any amount under such Bankers' Acceptance, except for any loss, cost or
expense resulting from the gross negligence or wilful misconduct of the Agent
or such Bank, as applicable, as determined by a final, non-appealable judicial
order of a court of competent jurisdiction. Such Bank's good faith
determination of the amount of such losses or out-of-pocket expenses, as set
forth in writing and accompanied by calculations in reasonable detail
demonstrating the basis for its demand, shall be prima facie evidence of such
losses or expenses absent manifest error.
(b) Losses subject to reimbursement hereunder shall include, without
limiting the generality of the foregoing, expenses incurred by any Bank or any
participant of such Bank permitted hereunder in connection with the
re-employment of funds prepaid, paid, repaid, not borrowed, or not paid, as the
case may be, and will be payable as a result of acceleration of the
Obligations.
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SECTION 2.14 PRO RATA TREATMENT.
(a) ADVANCES. Each Advance from the Banks hereunder shall be made pro
rata on the basis of the respective Commitment Ratios of the Banks.
(b) PAYMENTS PRIOR TO DECLARATION OF EVENT OF DEFAULT. Except as
provided in Section 2.5(f) hereof and Article 10 hereof, each payment and
prepayment of principal of the Accommodations and each payment of interest on
the Accommodations, shall be made to the Banks pro rata on the basis of their
respective unpaid principal amounts outstanding hereunder immediately prior to
such payment or prepayment. If any Bank shall obtain any payment (whether
involuntary, through the exercise of any right of set-off, or otherwise) on
account of the Accommodations in excess of its pro rata share of the
Accommodations under its Commitment Ratio, such Bank shall forthwith purchase
from the other Banks such participations in the portion of the Accommodations
made by them as shall be necessary to cause such purchasing Bank to share the
excess payment rateably with each of them; provided, however, that if all or
any portion of such excess payment is thereafter recovered from such purchasing
Bank, such purchase from each Bank shall be rescinded and such Bank shall repay
to the purchasing Bank the purchase price to the extent of such recovery. The
Borrower agrees that any Bank so purchasing a participation from another Bank
pursuant to this Section 2.14(b) may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Bank were the direct creditor
of the Borrower in the amount of such participation.
(c) PAYMENTS SUBSEQUENT TO DECLARATION OF EVENT OF DEFAULT. Subsequent
to the acceleration of the Accommodations under Section 8.2 hereof, payments
and prepayments made to the Agent or the Banks or otherwise received by any of
them (from realization on Collateral for the Obligations or otherwise) on
account of the Accommodations shall be distributed as follows: first, to the
Agent's reasonable costs and expenses, if any, incurred in connection with the
collection of such payment or prepayment, including, without limitation, any
reasonable costs incurred in connection with the sale or disposition of any
Collateral for the Obligations; second, to the payment of fees then due and
payable to the Agent and the Banks and any reasonable costs and expenses, if
any, incurred by any of the Banks under Section 11.2 hereof, pro rata on the
basis of the amount of such Obligations; third, to any unpaid interest which
may have accrued on the Obligations, pro rata on the basis of the amount of
such Obligations; fourth, to any unpaid principal or the Face Amount of the
Obligations and Obligations under Interest Rate Hedge Agreements, pro rata on
the basis of the amount of such Obligations; fifth, to damages incurred by the
Agent or any Bank by reason of any breach hereof or of any other Loan Document,
pro rata on the basis of the amount of such Obligations; and sixth, upon
satisfaction in full of all remaining Obligations, to the Borrower or as
otherwise required by Applicable Law.
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ARTICLE 3
CONDITIONS PRECEDENT
SECTION 3.1 CONDITIONS PRECEDENT TO AGREEMENT
The effectiveness of this Agreement and the obligation of the
Banks to make Accommodations hereunder are subject to the prior or
contemporaneous fulfilment of each of the following conditions:
(a) The Agent and the Banks shall have completed their due diligence
investigation and examination of the Borrower's operation and affairs and shall
have determined, in their sole discretion, acting reasonably, that the results
of such investigation and examination are satisfactory, including, without
limitation, in respect of matters relating to (i) current business plans, (ii)
financial projections, and (iii) the operations of the Borrower Group on a
consolidated basis;
(b) The Agent and the Banks shall have received each of the following:
(i) the loan certificate of the Borrower dated as of the
Restatement Date, in substantially the form attached
hereto as Exhibit D, including a certificate of
incumbency with respect to each Authorized Signatory
of such Person, together with the following items:
(A) a true, complete and correct copy of the
Certificate and Articles of Incorporation and
by-laws of the Borrower as in effect on the
Restatement Date, or confirmation that there have
been no amendments to such articles and by-laws
since the Agreement Date, (B) certificates of
status, compliance or good standing for the Borrower
issued by the appropriate government officials of
the jurisdiction of incorporation of the Borrower
and for each jurisdiction in which the Borrower
carries on business, (C) a true, complete and
correct copy of the corporate resolutions of the
Borrower authorizing the Borrower to execute,
deliver and perform this Agreement and the other
Loan Documents to which it is a party and the
transactions contemplated hereby and thereby, and
(D) a true, complete and correct copy of any
shareholders' agreements or voting trust agreements
in effect with respect to the Capital Stock of the
Borrower;
(ii) a loan certificate of each Subsidiary of the
Borrower dated as of the Restatement Date, in
substantially the form attached hereto as Exhibit E,
including a certificate of incumbency with respect
to each Authorized Signatory of such Person,
together with the following items: (A) a true,
complete and correct copy of the Certificate and
Articles of Incorporation and by-laws of such Person
as in effect on the Restatement Date, or
confirmation that there have been no amendments to
such articles and by-laws since the Agreement Date,
(B) certificates of status, compliance or good
standing for such Person issued by the appropriate
government officials of the jurisdiction of
incorporation or formation, as applicable, of such
Person and for each jurisdiction in which such
Person is required to
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qualify to do business, (C) a true, complete and
correct copy of the corporate resolutions of such
Person authorizing such Person to execute, deliver
and perform the Loan Documents to which it is party
and the transactions contemplated thereby, and (D) a
true, complete and correct copy of any shareholders'
agreements or voting trust agreements in effect with
respect to the Capital Stock of such Person;
(iii) duly executed acknowledgements and confirmations
from the Borrower and any of its Affiliates that had
previously granted security in connection with this
Agreement prior to its amendment and restatement,
that such security (A) remains in full force and
effect, unamended, and (B) secures the obligations
of the Borrower under this Agreement (it being
acknowledged that no such document is required from
Paging Network, Inc. because it has been released
from any obligations it had in connection with
security it previously delivered);
(iv) evidence of the registration and continued
perfection of the Security Documents in all offices
where such registration, filing or recording is
necessary or desirable to protect any rights or
remedies of the Agent and the Banks thereunder;
(v) copies of insurance binders or certificates covering
the assets of the Borrower and its Subsidiaries, and
otherwise meeting the requirements of Section 5.5
hereof, together with copies of the underlying
insurance policies;
(vi) a legal opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, Canadian
counsel to the Borrower and its Subsidiaries,
addressed to each Bank and the Agent, and dated as
of the Restatement Date;
(vii) audited year-end financial statements of the
Borrower and its Subsidiaries on a consolidated
basis for the fiscal year ending December 31, 1998,
and unaudited financial statements for the Borrower
Group on a combined basis for the fiscal year ending
December 31, 1998 and the fiscal quarter ending
March 31, 1999, certified by (A) in the case of the
audited statements, an independent auditor
acceptable to the Agent, and (B) in the case of the
unaudited statements, the Chief Financial Officer or
the Chief Executive Officer of the Borrower;
(viii) lien search results with respect to the Borrower and
its Subsidiaries from appropriate jurisdictions; and
(ix) all such other documents as the Agent or any Bank
may reasonably request, certified by an appropriate
governmental official or an Authorized Signatory if
so requested.
(c) The Agent and the Banks shall have received evidence satisfactory
to them that all Necessary Authorizations, including any consent or
authorization of Industry Canada and all
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other necessary consents to the closing of this Agreement and the other Loan
Documents, have been obtained or made, are in full force and effect and are not
subject to any pending or, to the knowledge of the Borrower, threatened
reversal or cancellation, and the Agent and the Banks shall have received a
certificate of an Authorized Signatory so stating.
(d) The Borrower shall certify to the Agent and the Banks that each of
the representations and warranties in Article 4 hereof are true and correct as
of the Agreement Date and that no Default or Event of Default then exists or is
continuing.
(e) There shall not exist as of the Restatement Date any action, suit,
proceeding or investigation pending against, or, to the knowledge of the
Borrower, threatened against or in any manner relating adversely to, the
Borrower, any of its Subsidiaries, any of their respective properties, which,
in the judgment of the Agent, could be expected to have a Materially Adverse
Effect.
(f) No event shall have occurred and no condition shall exist which,
in the judgment of the Agent, has had or could be expected to have a Materially
Adverse Effect.
(g) The Agent and the Banks shall have received evidence satisfactory
to them of the simultaneous closing of the PageNet Canada Agreement dated as of
even date hereof.
(h) The Agent and the Banks shall have received all agreements entered
into, in connection with the Business, by PageNet and Madison Venture
Corporation and their respective Subsidiaries, which agreements shall be in
form and substance satisfactory to the Agent and the Banks and shall each be
collaterally assigned to the Agent for the benefit of the Banks.
(i) The Agent and the Banks and their counsel shall have received
payment of all fees due and payable on the Restatement Date.
SECTION 3.2 CONDITIONS PRECEDENT TO ALL ACCOMMODATIONS
The obligation of the Banks to make any Accommodation hereunder is
subject to the fulfilment of each of the following conditions immediately prior
to or contemporaneously with such Accommodation satisfactory to the Majority
Banks:
(a) All of the representations and warranties of the Borrower under
this Agreement and the other Loan Documents (including, without limitation, all
representations and warranties with respect to the Borrower's Subsidiaries),
which, pursuant to Section 4.2 hereof or otherwise, are made at and as of the
time of such Accommodation, shall be true and correct at such time in all
material respects, both before and after giving effect to the application of
the proceeds of such Accommodation, and after giving effect to any updates to
information provided to the Banks in accordance with the terms of such
representations and warranties, and no Default hereunder shall then exist or be
caused thereby;
(b) With respect to Advances which, if funded, would increase the
aggregate principal amount of Accommodations outstanding hereunder, the Agent
shall have received a duly executed Accommodation Notice;
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(c) Each of the Agent and the Banks shall have received all such other
certificates, reports, statements, opinions of counsel (if such Advance is in
connection with an acquisition) or other documents as the Agent or any Bank may
reasonably request;
(d) No event shall have occurred and no condition shall exist which
has had or which could reasonably be expected to have a Materially Adverse
Effect;
(e) No Applicable Law, proposed Applicable Law, change in any
Applicable Law, or the interpretation or enforcement of any Applicable Law
shall have been enacted (including the enactment of any Applicable Law
respecting Taxes or environmental matters or any change therein or in the
interpretation or enforcement thereof), the effect of which will be to prohibit
the Agent or any of the Banks from making such Accommodation or to increase
materially the cost thereof to the Banks.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
SECTION 4.1 REPRESENTATIONS AND WARRANTIES
To induce the Agent and each of the Banks to make Accommodations
available hereunder, the Borrower hereby agrees, represents and warrants, upon
the Restatement Date, and at all times thereafter as required pursuant to
Sections 3.2 and 4.2 hereof, in favour of the Agent and each Bank that:
(a) Organization; Ownership; Power; Qualification. The Borrower is a
corporation duly incorporated or amalgamated, as the case may be, and
organized, validly subsisting and in good standing under the laws of its
jurisdiction of incorporation. The Borrower has the corporate power and
authority to own its properties and to carry on its business as now being and
as proposed hereafter to be conducted and to borrow monies and to enter into
agreements therefor. Each Subsidiary of the Borrower is a corporation or
partnership duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation or formation, as the case may be, and
has the corporate or partnership power, as the case may be, and authority to
own its properties and to carry on its business as now being and as proposed
hereafter to be conducted. The Borrower and each of its Subsidiaries are duly
qualified, licensed or registered to carry on business as an extra-provincial
corporation in the jurisdictions in which the nature of its properties or the
business carried on by it make such qualification necessary.
(b) Authorization; Enforceability. The Borrower has the corporate
power and has taken all necessary corporate action to authorize it to obtain
Accommodations hereunder, to execute, deliver and perform this Agreement and
each of the other Loan Documents to which it is a party in accordance with
their respective terms, and to consummate the transactions contemplated hereby
and thereby. This Agreement has been duly executed and delivered by the
Borrower and is, and each of the other Loan Documents to which the Borrower is
party is, a legal, valid and binding obligation of the Borrower enforceable
against the Borrower in accordance with its terms, subject only to their
enforceability against the other parties thereto and to any limitation under
Applicable Laws relating to: (i) bankruptcy, insolvency, reorganization,
moratorium or
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creditors' rights generally; and (ii) the discretion that a court may exercise
in the granting of equitable remedies (insofar as any such law relates to the
bankruptcy, insolvency or similar event of the Borrower).
(c) Subsidiaries: Authorization; Enforceability. The Borrower's
Subsidiaries and the Borrower's direct and indirect ownership thereof as of the
Restatement Date are as set forth on Schedule 3 attached hereto, and to the
extent such Subsidiaries are corporations, the Borrower has the unrestricted
right to vote the issued and outstanding shares of the Subsidiaries shown
thereon and such shares of such Subsidiaries have been duly authorized and
issued and are fully paid and nonassessable. Each Subsidiary of the Borrower
has the corporate or partnership power and has taken all necessary corporate or
partnership action to authorize it to execute, deliver and perform each of the
Loan Documents to which it is a party in accordance with their respective terms
and to consummate the transactions contemplated by this Agreement and by such
Loan Documents. Each of the Loan Documents to which any Subsidiary of the
Borrower is party is a legal, valid and binding obligation of such Subsidiary
enforceable against such Subsidiary in accordance with its terms, subject only
to their enforceability against the other parties thereto and to any limitation
under Applicable Laws relating to: (i) bankruptcy, insolvency, reorganization,
moratorium or creditors' rights generally; and (ii) the discretion that a court
may exercise in the granting of equitable remedies (insofar as any such law
relates to the bankruptcy, insolvency or similar event of any such Subsidiary).
The Borrower's ownership interest in each of its Subsidiaries represents a
direct or indirect controlling interest of such Subsidiary for purposes of
directing or causing the direction of the management and policies of each
Subsidiary.
(d) Compliance with Other Loan Documents and Contemplated
Transactions. The execution, delivery and performance, in accordance with their
respective terms, by the Borrower of this Agreement, and by the Borrower and
its Subsidiaries of each of the other Loan Documents to which they are
respectively party, and the consummation of the transactions contemplated
hereby and thereby, do not and will not (i) require any consent or approval,
governmental or otherwise, not already obtained, (ii) violate any Applicable
Law respecting the Borrower or any Subsidiary of the Borrower, (iii) conflict
with, result in a breach of, or constitute a default under the certificate of
incorporation, constating documents or by-laws or partnership agreements, as
the case may be, as amended, of the Borrower or of any Subsidiary of the
Borrower, or under any indenture, agreement, or other instrument, including
without limitation the Licenses, to which the Borrower or any of its
Subsidiaries is a party or by which any of them or their respective properties
may be bound, or (iv) result in or require the creation or imposition of any
Lien upon or with respect to any property now owned or hereafter acquired by
the Borrower or any of its Subsidiaries, except for Permitted Liens.
(e) Business. The Borrower, together with its Subsidiaries, is engaged
solely in the business of owning, constructing, managing, operating, investing
in, wireless messaging systems and communications businesses incidental or
directly relating thereto.
(f) Licenses, etc. The Licenses have been duly issued and are in full
force and effect. The Borrower and its Subsidiaries are in compliance in all
material respects with all of the provisions thereof. The Borrower and its
Subsidiaries have secured all Necessary Authorizations and all such Necessary
Authorizations are in full force and effect. Neither any License nor any
41
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Necessary Authorization is the subject of any pending or, to the best of the
Borrower's knowledge, threatened revocation.
(g) Compliance with Law. The Borrower and its Subsidiaries are in
compliance in all material respects with all material Applicable Law,
including, without limitation, all Environmental Laws.
(h) Title to Assets. Each of the Borrower and its Subsidiaries is the
sole beneficial owner of, and has a good and marketable title to, and will be
lawfully possessed of its Assets, including the Collateral, free and clear of
all Liens, except Permitted Liens, and each of the Borrower and the
Subsidiaries has full legal right to mortgage, pledge, charge and assign to the
Agent for the benefit of itself and the Banks the Collateral to the Agent
pursuant to the Security Documents as contemplated herein. No Person has any
written or oral agreement, option, understanding or commitment, or any right or
privilege capable of becoming any agreement, option, understanding or
commitment, for the purchase from the Borrower or the Subsidiaries of any of
the Collateral.
(i) Litigation. There is no action, suit, proceeding or investigation
pending against, or, to the knowledge of the Borrower, threatened against or in
any other manner relating adversely to, the Borrower or any of its Subsidiaries
or any of their respective properties, including without limitation the
Licenses, in any court or before any arbitrator of any kind or before or by any
Governmental Entity in Canada or elsewhere, nor is there any such material
action, suit or proceeding which would prevent the Borrower from proceeding
with any Accommodations. None of the Borrower or any of its Subsidiaries is in
default with respect to any judgment, order, writ, injunction, decree or award
of any court or Governmental Entity or any arbitrator or board in Canada or
elsewhere, nor is there any judgment, order, writ, injunction, decree or award
which would prevent the Borrower from proceeding with any Accommodations. No
such action, suit, proceeding or investigation (i) calls into question the
validity of this Agreement or any other Loan Document, or (ii) individually or
collectively involves the possibility of any judgment or liability not fully
covered by insurance which, if determined adversely to the Borrower or any of
its Subsidiaries, would have a Materially Adverse Effect.
(j) Taxes. Each of the Borrower and its Subsidiaries has in a timely
manner filed all tax returns, elections, filings and reports with respect to
Taxes required by, and in accordance with, Applicable Law to be filed by it.
Each of the Borrower and its Subsidiaries has paid, or reserved in the
financial statements, all Taxes which are due and payable, and has paid all
assessments and reassessments and all other Taxes, governmental charges
penalties, interest and fines due and payable by it on or before the date
hereof. Each of the Borrower and its Subsidiaries has no liability, contingent
or otherwise, for Taxes, except Taxes not now due and payable with respect to
ordinary operations during the current fiscal period adequate provision for the
payment of which has been made. Each of the Borrower and its Subsidiaries has
paid as and when due all applicable Taxes and remitted as required by
Applicable Law all applicable Taxes and deductions and any interest or
penalties related thereto, except any such taxes (i) the payment of which the
Borrower or any Subsidiary is diligently contesting in good faith by
appropriate proceedings, (ii) for which adequate reserves to the extent
required by GAAP have been provided on the books of the Borrower or the
Subsidiary involved, and (iii) as to which no Lien
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other than a Permitted Lien has attached and no foreclosure, distraint, sale or
similar proceedings have been commenced.
(k) Financial Statements. The Borrower has furnished or caused to be
furnished to the Agent and the Banks financial information for the Borrower and
its Subsidiaries, all of which, together with other financial statements
furnished to the Banks subsequent to the Restatement Date have been prepared in
accordance with GAAP and present fairly in all material respects the financial
position of the Borrower and its Subsidiaries on a consolidated and
consolidating (unconsolidated) basis, as the case may be, on and as at such
dates and the results of operations for the periods then ended (subject, in the
case of unaudited financial statements, to normal year-end and audit
adjustments). Neither the Borrower nor any of its Subsidiaries has any material
liabilities, contingent or otherwise, other than as disclosed in the financial
statements referred to in the preceding sentence or as set forth or referred to
in this Agreement.
(l) No Material Adverse Change. Since December 31, 1998, there has
occurred no event which has had or which could reasonably be expected to have a
Materially Adverse Effect.
(m) ERISA. The Borrower and each ERISA Affiliate of the Borrower and
each of their respective Plans are in compliance with ERISA and the Code
(except for instances of non-compliance which, individually and in the
aggregate, would not have a Materially Adverse Effect) and neither the Borrower
nor any of its ERISA Affiliates has incurred any accumulated funding deficiency
with respect to any such Employee Pension Plan within the meaning of ERISA or
the Code. The Borrower and each other ERISA Affiliate have complied with all
requirements of COBRA (except for instances of non-compliance which,
individually and in the aggregate, would not have a Materially Adverse Effect).
Neither the Borrower nor any of its ERISA Affiliates has made any promises of
retirement or other benefits to employees, except as set forth in the Plans, in
written agreements with such employees, or in the Borrower's employee handbook
and memoranda to employees except for promises which, individually or in the
aggregate, would not have a Materially Adverse Effect. Neither the Borrower nor
any of its ERISA Affiliates has incurred any material liability to PBGC in
connection with any Plan. The assets of each Plan of the Borrower and its ERISA
Affiliates which is subject to Title IV of ERISA are sufficient to provide the
benefits under such Plan, the payment of which PBGC would guarantee if such
Plan were terminated, and such assets are also sufficient to provide all other
"benefit liabilities" (within the meaning of Section 4041 of ERISA) due under
the Plan upon termination. No Reportable Event has occurred and is continuing
with respect to any Plan. No Plan or trust created thereunder, or party in
interest (as defined in Section 3(14) of ERISA), or any fiduciary (as defined
in Section 3(21) of ERISA), has engaged in a non-exempt "prohibited
transaction" (as such term is defined in Section 406 of ERISA or Section 4975
of the Code) which would subject the Borrower or any of its ERISA Affiliates to
the tax or penalty on "prohibited transactions" imposed by Section 502 of ERISA
or Section 4975 of the Code, which tax or penalty, individually or in the
aggregate, would have a Materially Adverse Effect. Neither the Borrower nor any
of its ERISA Affiliates is obligated to make any contribution to a
Multiemployer Plan.
(n) No Margin Stock. The Borrower and its Subsidiaries do not own or
have any present intention of acquiring any "margin stock" as defined in
Regulation U (12 CFR Part 221, as amended) of the Board of Governors of the
Federal Reserve System (herein called "Margin
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Stock"). None of the proceeds of any Accommodation will be used, directly or
indirectly, for the purpose of purchasing or carrying any Margin Stock or
maintaining, reducing or retiring any indebtedness which was originally
incurred to purchase or carry any Margin Stock, or to extend credit to others
for the purpose of purchasing or carrying any Margin Stock, or for any other
purpose which might constitute this transaction a "purpose credit" within the
meaning of such Regulation (12 CFR Part 207, as amended). Neither the Borrower
nor any agent acting on its behalf has taken or will take any action which
might cause this Agreement or any of the Loan Documents to violate, or be
inconsistent with, Regulation G, Regulation U or Regulation X (12 CFR Part 224,
as amended) or any other regulation of the Board of Governors of the Federal
Reserve System or to violate, or be inconsistent with, the Securities Exchange
Act of 1934, as amended, in each case as in effect now or as the same may
hereafter be in effect.
(o) Governmental Regulation. Neither the Borrower nor any of its
Subsidiaries is required to obtain any consent, approval, authorization, permit
or license (excluding Immaterial Site Specific Licenses) which has not already
been obtained from, or effect any filing or registration which has not already
been effected with, any Governmental Entity in connection with the execution
and delivery of this Agreement or any other Loan Document. Neither the Borrower
nor any of its Subsidiaries is required to obtain any consent, approval,
authorization, permit or license (excluding Immaterial Site Specific Licenses)
which has not already been obtained from, or effect any filing or registration
which has not already been effected with, any Governmental Entity in connection
with the performance, in accordance with their respective terms, of this
Agreement or any other Loan Document.
(p) Absence of Default, Etc. Neither the Borrower nor any of its
Subsidiaries is subject to, or a party to, any charter or by-law restriction,
any Applicable Law, any Claim, any contract or instrument, a Lien or any other
restriction of any kind or character which would prevent the consummation of
the transactions contemplated by this Agreement or compliance by the Borrower
or such Subsidiary with the terms, conditions and provisions hereof or of any
Loan Document to which it is a party or the continued operation of the business
on or after the date hereof on substantially the same basis as operated to the
date hereof in each case. Neither the Borrower nor any of its Subsidiaries is a
party to or bound by any contract or agreement continuing after the Restatement
Date, or bound by any Applicable Law, the performance of which or the
compliance with which, as applicable, could have a Materially Adverse Effect or
result in the loss of any License.
(q) Accuracy and Completeness of Information. None of: (i) this
Agreement, (ii) any of the Loan Documents, or (iii) any certificate or
statement in writing which has been supplied by or on behalf of the Borrower or
its Subsidiaries or by any of the directors, officers or employees of the
Borrower or its Subsidiaries in connection with the transactions contemplated
hereby or by any of the Loan Documents contained any untrue statement of a
material fact, or omitted any statement of a material fact, necessary in order
to make the statements contained herein or therein not materially misleading at
the time it was furnished. There is no material fact known to the Borrower or
its Subsidiaries or any of their directors, officers or employees which the
Borrower has not disclosed to the Agent in writing and which could be expected
to have a Materially Adverse Effect.
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(r) Agreements with Affiliates. Except for (1) agreements or
arrangements set forth on Schedule 4 and (2) agreements or arrangements with
Affiliates wherein the Borrower or one or more of its Subsidiaries provides
services to such Affiliates on terms no less advantageous to the Borrower or
such Subsidiary than would be the case if such transaction had been effected
with a non-Affiliate, neither the Borrower nor any of its Subsidiaries has (i)
any agreements or arrangements of any kind with any Affiliate or (ii) any
management or consulting agreements of any kind with any Affiliate.
(s) Priority. Except as a result of the action or inaction of the
Agent or any Bank, the Security Interest is a valid and perfected first
priority security interest in the Collateral in favour of the Agent, for the
benefit of itself and the Banks, securing, in accordance with the terms of the
Security Documents, the Obligations, and the Collateral is subject to no Liens
other than Permitted Liens. The Liens created by the Security Documents are
enforceable as security for the Obligations in accordance with their terms with
respect to the Collateral subject, as to enforcement of remedies, to the
following qualifications: (i) an order of specific performance and an
injunction are discretionary remedies and, in particular, may not be available
where damages are considered an adequate remedy at law, and (ii) enforcement
may be limited by bankruptcy, insolvency, liquidation, reorganization,
reconstruction and other similar laws affecting enforcement of creditors'
rights generally (insofar as any such law relates to the bankruptcy, insolvency
or similar event of the Borrower or any of its Subsidiaries, as the case may
be).
(t) Indebtedness. Neither the Borrower nor any of its Subsidiaries has
outstanding, as of the Restatement Date, and after giving effect to the initial
Accommodations hereunder on the Restatement Date, any Indebtedness for Money
Borrowed other than the Obligations hereunder.
(u) Solvency. As of the Restatement Date after the closing of the
PageNet Canada Agreement, and after giving effect to the transactions
contemplated by the Loan Documents, the Borrower and its Subsidiaries were and
continue to be able to pay their liabilities as they become due.
(v) Books and Records. All books and records of the Borrower and its
Subsidiaries have been fully, properly and accurately kept and completed in
accordance with GAAP and there are no material inaccuracies or discrepancies of
any kind contained or reflected therein.
(w) Environmental Liabilities. Neither the Borrower nor any of its
Subsidiaries has incurred or is incurring any material liability pursuant to
any Environmental Law, including any material Environmental Liabilities and
Costs. To the best knowledge of the Borrower, there is no past or present fact,
condition or circumstance relating to the Business, or the Real Estate, the
Leasehold Real Estate and the Assets currently or formerly owned or leased by
or under the charge, management or control of the Borrower or any of its
Subsidiaries (the "Affected Properties") that could reasonably be expected to
result in any material liability or material potential liability under any
Environmental Laws. Neither the Borrower nor any of its Subsidiaries has
received an Environmental Notice pursuant to, or raising concerns in respect
of, any material liability pursuant to any Environmental Laws and to the best
of the knowledge of the Borrower, there are no reasonable grounds which would
give rise to the issuance of any Environmental Notice concerning material
liability pursuant to any Environmental Law. To the
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best knowledge of the Borrower, there are no Hazardous Substances at, in, or
under the Affected Properties at levels or concentrations in excess of levels
or concentrations set out in Environmental Laws. Neither the Borrower nor, to
the best of the knowledge of the Borrower, any of its directors or officers has
ever: (i) been convicted of any offense for non-compliance with any
Environmental Laws; (ii) been fined or otherwise penalized for non-compliance
with Environmental Laws; or (iii) settled any prosecution in respect thereof
short of conviction.
(x) Material Agreements. The Transponder Lease Agreement, the Network
and Equipment Agreement and the Sales and Distribution Agreement represent the
only material agreements of the Borrower and its Subsidiaries.
(y) Year ▇▇▇▇ ▇▇▇▇▇▇▇▇.
(i) The Borrower and its Subsidiaries have reviewed and
assessed the potential impact of the Year 2000 issue
on all areas of their critical businesses and
operations (including those areas that may be
affected by, or interfaced with, third party
suppliers and clients);
(ii) The Borrower and its Subsidiaries have prepared and
are implementing a Year 2000 Plan, the particulars
of which are appended hereto at Schedule 5, which
schedule also accurately sets out the current status
of activities under the Year 2000 Plan;
(iii) Subject to Third Party Factors, the Year 2000
Systems of the Borrower and its Subsidiaries shall
be Year 2000 Ready prior to December 31, 1999;
(iv) The cost to the Borrower (on a consolidated basis)
of completing the steps necessary for the Year 2000
Systems of the Borrower and its Subsidiaries to be
Year 2000 Complaint will not result in a Default,
and are not expected, in the reasonable opinion of
the Borrower, to have a Materially Adverse Effect on
the Borrower and its Subsidiaries, taken as a whole;
provided that this representation and warranty shall
not extend to any costs relating to steps to be
taken by Third Parties to deal effectively with
Third Party Factors; and
(v) The Borrower and its Subsidiaries have taken
reasonable commercial efforts, consistent with the
importance of succeeding therein to the continued
operation of the business of the Borrower and its
Subsidiaries in the ordinary course, to assess,
monitor and respond to the Third Party Factors in
order to minimize the impact of Third Party Factors
on the ability of the Borrower and its Subsidiaries
to have their Year 2000 Systems Year 2000 Ready
prior to December 31, 1999.
SECTION 4.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC.
All representations and warranties made under this Agreement and any
other Loan Document shall be deemed to be made, and shall be true and correct,
at and as of the Restatement Date and on the date of each Accommodation except
to the extent previously
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fulfilled in accordance with the terms hereof and to the extent relating
specifically to the Restatement Date. All representations and warranties made
under this Agreement and the other Loan Documents shall survive, and not be
waived by, the execution hereof by the Banks and the Agent, any investigation
or inquiry by any Bank or the Agent, or the making of any Advance under this
Agreement.
SECTION 4.3 NO REPRESENTATIONS BY BANKS
No representation, warranty or other statement made by the Agent or
any one or more of the Banks in respect of the Commitment or any Accommodation
made hereunder shall be binding on such Person unless made by it in writing.
ARTICLE 5
GENERAL COVENANTS
So long as any of the Obligations is outstanding and unpaid or the
Banks have any Commitment hereunder (whether or not the conditions to borrowing
have been or can be fulfilled), and unless the Majority Banks, or such greater
number of Banks as may be expressly provided herein, shall otherwise consent in
writing:
SECTION 5.1 PRESERVATION OF EXISTENCE AND SIMILAR MATTERS
The Borrower will, and will cause each of its Subsidiaries to:
(a) preserve and maintain its existence, and its material rights,
franchises, licenses and privileges in the jurisdiction of its incorporation,
including, without limiting the foregoing, the Licenses and all other Necessary
Authorizations; and
(b) qualify and remain qualified and authorized to do business in each
jurisdiction in which the character of its properties or the nature of its
business requires such qualification or authorization.
SECTION 5.2 BUSINESS; COMPLIANCE WITH APPLICABLE LAW
The Borrower will, and will cause each of its Subsidiaries to, (a)
comply in all material respects with the requirements of all material
Applicable Law, including, without limitation, all Environmental Laws, and (b)
engage solely in the Business.
SECTION 5.3 MAINTENANCE OF PROPERTIES
The Borrower will, and will cause each of its Subsidiaries to,
maintain or cause to be maintained in the ordinary course of business in good
repair, working order and condition (reasonable wear and tear excepted) all
properties used in their respective businesses (whether owned or held under
lease), other than obsolete equipment or unused assets, and from time to time
make or cause to be made all needed and appropriate repairs, renewals,
replacements, additions, betterments and improvements thereto.
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SECTION 5.4 ACCOUNTING METHODS AND FINANCIAL RECORDS
The Borrower will, and will cause each of its Subsidiaries on a
consolidated and consolidating basis to, maintain a system of accounting
established and administered in accordance with GAAP, keep adequate records and
books of account in which complete entries will be made in accordance with GAAP
and reflecting all transactions required to be reflected by GAAP, and keep
accurate and complete records of their respective properties and assets. The
Borrower and its Subsidiaries will maintain a fiscal year ending on December
31.
SECTION 5.5 INSURANCE
The Borrower will, and will cause each of its Subsidiaries to:
(a) Maintain in respect of itself, and each of its Subsidiaries, or
cause each of its Subsidiaries to maintain directly: (i) in respect of the
Collateral, adequate insurance coverage at all times with financially sound and
reputable insurers in such forms and amounts and against such risks acceptable
to the Agent and the Banks, showing the Agent as an additional named insured
and loss payee; and (ii) in respect of itself and its Assets (other than the
Collateral), adequate insurance coverage at all times with financially sound
and reputable insurers in such forms and amounts and against such risks as are
reasonable for the business operations that are carried on by it from time to
time.
(b) Require that each insurance policy provide for at least thirty
(30) days' prior written notice to the Agent of any termination of or proposed
cancellation or nonrenewal of such policy.
SECTION 5.6 PAYMENT OF TAXES AND CLAIMS
The Borrower will, and will cause each of its Subsidiaries to, pay and
discharge, before the same shall become delinquent: (i) all Taxes, assessments
and governmental charges or levies or Claims imposed upon it or upon any of its
Assets; and (ii) all lawful Claims which, if unpaid, might by Applicable Law
become a Lien upon its Assets, in each case except for any such Tax,
assessment, charge, levy or Claim which would result in a Lien which is a
Permitted Lien. The Borrower will, and will cause each of its Subsidiaries to,
timely file all information returns required by any Governmental Entity.
SECTION 5.7 COMPLIANCE WITH ERISA.
(a) The Borrower shall, and shall cause its Subsidiaries to avoid any
"accumulated funding deficiency" within the meaning of Section 412(a) of the
Code with respect to any Employee Pension Plan, whether or not waived, and will
otherwise comply in all material respects with the requirements of the Code and
ERISA with respect to the operation of all Plans.
(b) The Borrower shall furnish to the Agent and the Banks (i) within
thirty (30) days after any officer of the Borrower obtains knowledge that a
"prohibited transaction" (within the meaning of Section 406 of ERISA or Section
4975 of the Code) has occurred with respect to any Plan of the Borrower or its
ERISA Affiliates, including its Subsidiaries, which could subject the Borrower
or any of its ERISA Affiliates to the tax or penalty on "prohibited
transactions" imposed by Section 502 of ERISA or Section 4975 of the Code which
tax or penalty,
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individually or in the aggregate, would have a Materially Adverse Effect, that
any Reportable Event has occurred with respect to any Employee Pension Plan of
the Borrower or any of its ERISA Affiliates or that PBGC has instituted or will
institute proceedings under Title IV of ERISA to terminate any Employee Pension
Plan of the Borrower or any of its ERISA Affiliates or to appoint a trustee to
administer any Employee Pension Plan of the Borrower or any of its ERISA
Affiliates, a statement setting forth the details as to such prohibited
transaction, Reportable Event or termination or appointment proceedings and the
action which it (or any other Employee Pension Plan sponsor if other than the
Borrower) proposes to take with respect thereto, together with a copy of the
notice of such Reportable Event given to PBGC if a copy of such notice is
available to the Borrower, any of its Subsidiaries or any of its ERISA
Affiliates, (ii) promptly after receipt thereof, a copy of any notice the
Borrower, any of its Subsidiaries or any of its ERISA Affiliates or the sponsor
of any Plan receives from PBGC, or the Internal Revenue Service or the
Department of Labour which sets forth or proposes any action or determination
with respect to such Plan which could have a Materially Adverse Effect, (iii)
promptly upon the Agent's request therefor, any annual report filed pursuant to
ERISA in connection with each Employee Pension Plan maintained by the Borrower
or any of its ERISA Affiliates, including the Subsidiaries, and (iv) promptly
upon the Agent's request therefor, such additional information concerning any
such Employee Pension Plan as may be reasonably requested by the Agent or any
Bank.
(c) The Borrower will promptly notify the Agent and the Banks of any
excise taxes which have been assessed or which the Borrower, any of its
Subsidiaries or any of its ERISA Affiliates has reason to believe may be
assessed against the Borrower, any of its Subsidiaries or any of its ERISA
Affiliates by the Internal Revenue Service or the Department of Labour with
respect to any Plan of the Borrower or its ERISA Affiliates, including its
Subsidiaries which, individually or in the aggregate, could have a Materially
Adverse Effect.
(d) Within the time required for notice to the PBGC under Section
302(f)(4)(A) of ERISA, the Borrower will notify the Agent and the Banks of any
lien arising under Section 302(f) of ERISA in favour of any Plan of the
Borrower or its ERISA Affiliates, including its Subsidiaries.
(e) The Borrower will not, and will not permit any of its Subsidiaries
or any of its ERISA Affiliates to take any of the following actions or permit
any of the following events to occur if such action or event together with all
other such actions or events would subject the Borrower, any of its
Subsidiaries, or any of its ERISA Affiliates to any tax, penalty, or other
liabilities which would have a Materially Adverse Effect:
(i) engage in any transaction in connection with which
the Borrower or any of its Subsidiaries would be
subject to either a civil penalty assessed pursuant
to Section 502(i) of ERISA or a tax imposed by
Section 4975 of the Code;
(ii) terminate any Employee Pension Plan in a manner, or
take any other action, which would result in any
liability of the Borrower, any of its Subsidiaries
or any ERISA Affiliate to the PBGC, other than for
payment of PBGC premiums;
▇▇
- ▇▇ -
(▇▇▇) fail to make full payment when due of all amounts
which, under the provisions of any Employee Pension
Plan, the Borrower, any of its Subsidiaries or any
ERISA Affiliate is required to pay as contributions
thereto, or permit to exist any accumulated funding
deficiency within the meaning of Section 412(a) of
the Code, whether or not waived, with respect to any
Employee Pension Plan; or
(iv) permit the present value of all benefit liabilities
under all Employee Pension Plans which are subject
to Title IV of ERISA to exceed the present value of
the assets of such Plans allocable to such benefit
liabilities (within the meaning of Section 4041 of
ERISA), except as may be permitted under actuarial
funding standards adopted in accordance with Section
412 of the Code.
SECTION 5.8 VISITS AND INSPECTIONS
The Borrower will, and will cause each of its Subsidiaries to, permit
representatives of the Agent and any of the Banks, upon reasonable notice, to
(i) visit and inspect the properties of the Borrower or any of its Subsidiaries
during business hours, (ii) inspect and make extracts from and copies of their
respective books and records, and (iii) discuss with their respective principal
officers their respective businesses, assets, liabilities, financial positions,
results of operations and business prospects. The Borrower and each of its
Subsidiaries will also permit representatives of the Agent and any of the Banks
to discuss with their respective accountants the Borrower's and the Borrower's
Subsidiaries' businesses, assets, liabilities, financial positions, results of
operations and business prospects.
SECTION 5.9 PAYMENT OF INDEBTEDNESS; ACCOMMODATIONS
Subject to any provisions herein or in any other Loan Document, the
Borrower will, and will cause each of its Subsidiaries to, pay any and all of
their respective Indebtedness prior to its becoming delinquent or having any
late fees assessed or to the extent of trade payables of such Persons otherwise
in accordance with ordinary business practices customary for the wireless
messaging industry, other than amounts diligently disputed in good faith and
for which adequate reserves have been set aside in accordance with GAAP.
SECTION 5.10 USE OF PROCEEDS
The Borrower will use the aggregate proceeds of all Advances under the
Accommodations directly or indirectly:
(a) to fund Capital Expenditures associated with the Business and the
ongoing need for wireless messaging units for its Canadian wireless messaging
system;
(b) for working capital needs and other general corporate purposes of
the Borrower which do not otherwise conflict with this Section 5.10 (including,
without limitation, the payment of fees and expenses incurred in connection
with the execution and delivery of this Agreement and the other Loan Documents
and payments permitted under Section 7.7 hereof).
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No proceeds of Advances hereunder shall be used for the purchase or
carrying or the extension of credit for the purpose of purchasing or carrying,
any Margin Stock.
SECTION 5.11 PROTECT SECURITY INTERESTS
Except for the filing of renewal statements and the making of other
filings by the Agent as a secured party or assignee, at all times take all
action and supply the Agent with all information necessary to maintain the
Liens provided for under the Security Documents and confer upon the Agent the
security interests intended to be created thereby.
SECTION 5.12 ENVIRONMENTAL AUDITS
Promptly if requested by the Agent: (i) if a Default has occurred and
is continuing or the Agent or the Majority Banks have a reasonable good faith
commercial concern as to the financial condition of the Borrower, conduct
environmental audits having a scope acceptable to the Agent with respect to the
potential liability under applicable Environmental Laws of the Borrower and its
Subsidiaries, their respective Real Estate or other Assets, and the Business,
such environmental audits to be conducted by the Environmental Auditor, and
provide copies of such environmental audits to the Agent; (ii) if the Agent or
the Majority Banks have a good faith concern that there is a material
non-compliance by the Borrower or any of its Subsidiaries with Environmental
Laws, conduct such environmental audit concerning alleged material
non-compliance as the Agent or such Majority Banks may require, such audits to
be conducted by the Environmental Auditor, and provide copies of such
environmental audits to the Agent; and (iii) diligently remedy any material
non-compliance with Environmental Laws revealed by any such audit.
SECTION 5.13 FURTHER ASSURANCES
At its cost and expense, upon request of the Agent, the Borrower will
duly execute and deliver or cause to be duly executed and delivered to the
Agent such further instruments and do and cause to be done such further acts as
may be necessary or proper in the reasonable opinion of the Agent to carry out
more effectively the provisions and purposes of the Loan Documents.
ARTICLE 6
INFORMATION COVENANTS
So long as any of the Obligations is outstanding and unpaid or the
Banks have any Commitment hereunder (whether or not the conditions to borrowing
have been or can be fulfilled) and unless the Majority Banks shall otherwise
consent in writing, the Borrower will furnish or cause to be furnished to each
Bank and the Agent, at their respective offices:
SECTION 6.1 QUARTERLY FINANCIAL STATEMENTS AND INFORMATION
Within forty-five (45) days after the last day of each fiscal quarter
of the Borrower during any fiscal year:
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(a) a copy of the balance sheets of (i) the Borrower on a consolidated
and consolidating (unconsolidated) basis with its Subsidiaries, and (ii) the
Borrower Group on a combined basis, in each case as at the end of such quarter
and as of the end of the preceding fiscal year; and
(b) the related statements of operations and the related statements of
cash flows of (i) the Borrower on a consolidated basis with its Subsidiaries,
and (ii) the Borrower Group on a combined basis, in each case for such quarter
and for the elapsed portion of the year ended with the last day of such
quarter,
all of which shall set forth in comparative form such figures as at the end of
and for such quarter and appropriate prior period, shall provide consolidated
and consolidating (unconsolidated) figures with respect to any acquisitions
consummated during such quarter, and shall be certified by the chief financial
officer of the Borrower to have been prepared in accordance with GAAP and to
present fairly in all material respects the financial position of (x) the
Borrower on a consolidated and consolidating (unconsolidated) basis with its
Subsidiaries, and (y) the Borrower Group on a combined basis, in each case as
at the end of such quarter and the results of operations for such quarter, and
for the elapsed portion of the year ended with the last day of such quarter,
subject only to normal year-end and audit adjustments and the absence of
footnotes.
SECTION 6.2 ANNUAL FINANCIAL STATEMENTS AND INFORMATION
Within ninety (90) days after the end of each fiscal year of the
Borrower:
(a) a copy of the audited consolidated and consolidating
(unconsolidated) balance sheets of the Borrower and its Subsidiaries as of the
end of such fiscal year and for the previous fiscal year and the related
audited consolidated and consolidating (unconsolidated) statements of
operations for such fiscal year and for the previous fiscal year, the related
audited consolidated and consolidating (unconsolidated) statements of cash flow
and stockholders' equity for such fiscal year and for the previous fiscal year,
which shall be accompanied by an opinion of Ernst & Young or such other
independent auditor acceptable to the Agent, certified to have been prepared in
accordance with GAAP and to present fairly in all material respects the
financial position of the Borrower on a consolidated and consolidating
(unconsolidated) basis with its Subsidiaries as at the end of such fiscal year;
and
(b) for the Borrower Group on a combined basis, a balance sheet as of
the end of such fiscal year and for the previous fiscal year and the related
statement of operations for such fiscal year and for the previous fiscal year,
the related statements of cash flow and stockholders' equity for such fiscal
year and for the previous fiscal year, which may be prepared on an unaudited
basis, but must be certified by the chief financial officer of the Borrower to
have been prepared in accordance with GAAP, and to present fairly in all
material respects the financial position of the Borrower Group as at the end of
such fiscal year and the results of operations for such fiscal year, subject
only to normal year-end and audit adjustments and the absence of footnotes.
SECTION 6.3 PERFORMANCE CERTIFICATES
At the time the financial statements are furnished pursuant to Section
6.1 and Section 6.2 , a certificate of the president or chief financial officer
of the Borrower as to its financial performance, in substantially the form of
Exhibit F hereto:
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(a) setting forth as and at the end of such quarter or fiscal year, as
the case may be, the arithmetical calculations required to establish (i) any
adjustment to the Applicable Margins, as provided for in Section 2.6 (d)
hereof, and (ii) whether or not the Borrower was in compliance with the
requirements of Section 7.8 , Section 7.9 , Section 7.10 , Section 7.11 ,
Section 7.12 , Section 7.13 and Section 7.14 hereof; and
(b) stating that no Default has occurred as at the end of such quarter
or fiscal year, as the case may be, or, if a Default has occurred, disclosing
each such Default and its nature, when it occurred, whether it is continuing
and the steps being taken by the Borrower with respect to such Default.
SECTION 6.4 COPIES OF OTHER REPORTS.
(a) Promptly upon receipt thereof, copies of all material reports, if
any, submitted to the Borrower by the Borrower's independent auditors regarding
the Borrower, including, without limitation, any management report prepared in
connection with the annual audit referred to in Section 6.2 hereof.
(b) Promptly upon receipt thereof, copies of any material adverse
notice or report regarding any License from any Governmental Entity.
(c) From time to time and promptly upon each request, such data,
certificates, reports, statements, documents or further information regarding
the business, assets, liabilities, financial position, projections, results of
operations or business prospects of the Borrower or any of its Subsidiaries, as
the Agent or any Bank may reasonably request.
(d) Promptly upon request but not more frequently than annually,
certificates of insurance indicating that the requirements of Section 5.5
hereof remain satisfied for such fiscal year, together with copies of any new
or replacement insurance policies obtained during such year.
(e) Within sixty (60) days after each fiscal year end, the annual
budget for the Borrower and its Subsidiaries, including forecasts of the income
statement and a cash flow statement for such fiscal year, on a quarter by
quarter basis.
(f) Promptly after the sending thereof, copies of all statements,
reports and other information which the Borrower or any of its Subsidiaries
sends to security holders of the Borrower generally or files with the Ontario
Securities Commission or any other securities commission or stock exchange.
SECTION 6.5 NOTICE OF LITIGATION AND OTHER MATTERS
Notice specifying the nature and status of any of the following
events, promptly, but in any event not later than fifteen (15) days after the
occurrence of any of the following events becomes known to the Borrower:
(a) the commencement of all material proceedings and investigations by
or before any Governmental Entity particular to the Borrower and/or any of its
Subsidiaries and all actions and
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proceedings in any court or before any arbitrator against, or to the extent
known to the Borrower, in any other way relating materially adversely to the
Borrower or any Subsidiary of the Borrower, or any of their respective
properties, assets or businesses or any License;
(b) any material adverse change with respect to the business, assets,
liabilities, financial position, results of operations or business prospects of
the Borrower or any Subsidiary of the Borrower other than changes in the
ordinary course of business which have not had and would not reasonably be
expected to have a Materially Adverse Effect;
(c) any material amendment or change to the financial projections or
annual budget provided to the Banks by the Borrower;
(d) any Default or the occurrence or non-occurrence of any event (A)
which constitutes, or which with the passage of time or giving of notice or
both would constitute a default by the Borrower or any Subsidiary of the
Borrower under any material agreement other than this Agreement and the other
Loan Documents to which the Borrower or any Subsidiary of the Borrower is party
or by which any of their respective properties may be bound, or (B) which could
have a Materially Adverse Effect, giving in each case the details thereof and
specifying the action proposed to be taken with respect thereto; and
(e) the occurrence of any Reportable Event or a "prohibited
transaction" (as such term is defined in Section 406 of ERISA or Section 4975
of the Code) with respect to any Plan of the Borrower or any of its ERISA
Affiliates or the institution or threatened institution by PBGC of proceedings
under ERISA to terminate or to partially terminate any such Plan or the
commencement or threatened commencement of any litigation regarding any such
Plan or naming it or the trustee of any such Plan with respect to such Plan or
any action taken by the Borrower, any Subsidiary of the Borrower or any ERISA
Affiliate of the Borrower to withdraw or partially withdraw from any Plan or to
terminate any Plan, to the extent any of the foregoing would have, individually
or in the aggregate, a Materially Adverse Effect.
SECTION 6.6 ENVIRONMENTAL REPORTING
Promptly, and in any event within fifteen (15) days of becoming aware
of its existence, notify the Agent in writing of any notice or other state of
affairs (providing details of any actions taken by the Borrower in response)
which could reasonably be expected to give rise to: (i) Environmental
Liabilities and Costs of $500,000 or more; or (ii) any violation of
Environmental Laws involving the possible imposition of a fine of $500,000 or
more or the shutting down of any facility forming part of the Business for a
period in excess of 24 hours; and (iii) any facts or circumstances which could
reasonably be expected to give rise to (x) Environmental Liabilities and Costs
of $500,000 or more, or (y) any violation of Environmental Laws involving the
possible imposition of a fine of $500,000 or more or the shutting down of any
facility forming part of the Assets for a period in excess of 24 hours.
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ARTICLE 7
NEGATIVE COVENANTS
So long as any of the Obligations is outstanding and unpaid or the
Banks have any Commitment hereunder (whether or not the conditions to borrowing
have been or can be fulfilled) and unless the Majority Banks, or such greater
number of Banks as may be expressly provided herein, shall otherwise give their
prior consent in writing:
SECTION 7.1 INDEBTEDNESS OF THE BORROWER AND ITS SUBSIDIARIES
The Borrower shall not, and shall not permit any of its Subsidiaries
to, create, assume, incur or otherwise become or remain obligated in respect
of, or permit to be outstanding, any Indebtedness except:
(a) the Obligations (other than the Obligations described in Section
7.1(c) below);
(b) Indebtedness secured by Permitted Liens;
(c) obligations under Interest Rate Hedge Agreements having a notional
principal amount of not more than fifty percent (50%) of the Accommodations in
the aggregate outstanding at any time;
(d) Indebtedness of the Borrower or any of its wholly-owned
Subsidiaries to any other wholly-owned Subsidiary of the Borrower so long as
the corresponding debt instruments are pledged to the Agent as security for the
Obligations;
(e) Indebtedness of any of wholly-owned Subsidiaries of the Borrower
to the Borrower so long as the corresponding debt instruments are pledged to
the Agent as security for the Obligations;
(f) Capitalized Lease Obligations in an aggregate amount not to exceed
$500,000 at any time outstanding; and
(g) Indebtedness of the Borrower to PageNet Canada so long as (i) the
Indebtedness is not secured by any Lien, (ii) the corresponding debt
instruments are assigned to the Agent as security for the PageNet Canada
Obligations, and (iii) any such Indebtedness is fully postponed to the
Obligations. In this regard, prior to incurring any such Indebtedness, the
Agent shall receive a specific assignment of receivables from PageNet Canada,
which will include a postponement from PageNet Canada, together with any
additional documentation and opinions required by the Agent, all in form and
substance satisfactory to the Agent, in its sole discretion.
SECTION 7.2 LIMITATION ON LIENS
The Borrower shall not, and shall not permit any of its Subsidiaries
to, create, assume, incur or permit to exist or to be created, assumed,
incurred or permitted to exist, directly or indirectly, any Lien on any of its
properties or assets, whether now owned or hereafter acquired, except for
Permitted Liens.
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SECTION 7.3 AMENDMENT AND WAIVER
The Borrower shall not, and shall not permit any of its Subsidiaries
to, enter into any amendment of, or agree to or accept or consent to any waiver
of any of the provisions of its articles or certificate of incorporation or
partnership agreement or by-laws, as appropriate (other than immaterial
amendments relating to corporate governance which could not reasonably be
expected to have an adverse effect on the Agent or any Bank or any of their
rights or claims under any of the Loan Documents).
SECTION 7.4 LIQUIDATION, MERGER, OR DISPOSITION OF ASSETS.
(a) DISPOSITION OF ASSETS. The Borrower shall not, and shall not
permit any of its Subsidiaries to, at any time sell, exchange, lease, abandon,
or otherwise dispose of any Assets (other than Assets disposed of in the
ordinary course of business) without the prior written consent of all the
Banks.
(b) LIQUIDATION OR MERGER. The Borrower shall not, and shall not
permit any of its Subsidiaries to, at any time liquidate or dissolve itself (or
suffer any liquidation or dissolution) or otherwise wind up, or enter into any
merger, other than (i) a merger or consolidation among the Borrower and one or
more of its Subsidiaries, provided the Borrower is the surviving corporation,
or (ii) a merger between or among two or more Subsidiaries of the Borrower, or
(iii) in connection with an acquisition permitted hereunder effected by a
merger in which the Borrower or, in a merger in which the Borrower is not a
party, a Subsidiary of the Borrower is the surviving corporation.
SECTION 7.5 LIMITATION ON GUARANTIES
The Borrower shall not, and shall not permit any of its Subsidiaries
to, at any time Guaranty, assume, be obligated with respect to, or permit to be
outstanding any Guaranty of, any obligation of any other Person other than (a)
a guaranty by endorsement of negotiable instruments for collection in the
ordinary course of business, (b) obligations under agreements of the Borrower
or any of its Subsidiaries entered into in connection with leases of real
property or the acquisition of services, supplies and equipment in the ordinary
course of business of the Borrower or any of its Subsidiaries, or (c)
Guaranties of Indebtedness incurred as permitted pursuant to Section 7.1
hereof.
SECTION 7.6 INVESTMENTS AND ACQUISITIONS
The Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, (a) make any loan or advance, or otherwise acquire
for consideration evidences of Indebtedness, Capital Stock or other securities
of any Person or other assets or property other than (i) assets or property in
the ordinary course of business or (ii) Permitted Investments; or (b) except
with the consent of the Majority Banks, make any acquisition.
SECTION 7.7 RESTRICTED PAYMENTS AND PURCHASES
The Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, declare or make any Restricted Payment or
Restricted Purchase, except that so long as
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no Default hereunder then exists or would be caused thereby the Borrower may
make (a) distributions to Paging Network International, Inc., Paging Network
International Inc., N.V., PNCHI or Madison Venture Corporation so long as the
Leverage Ratio is below 4.00 to 1 (both before and after giving effect to such
distribution), and (b) payments of principal of any Indebtedness referred to in
Section 7.1(g) hereof.
SECTION 7.8 LEVERAGE RATIO
Commencing January 1, 2001, the Borrower shall not permit the
Leverage Ratio to exceed the ratios set forth below during the periods
indicated:
PERIOD RATIO
----------------------------------------- ------
January 1, 2001 through June 30, 2001 6.00:1
July 1, 2001 through September 30, 2001 5.00:1
October 1, 2001 through December 31, 2001 4.50:1
January 1, 2002 through March 31, 2002 4.00:1
April 1, 2002 and thereafter 3.50:1
SECTION 7.9 ANNUALIZED OPERATING CASH FLOW TO INTEREST EXPENSE.
Commencing April 1, 2000, the Borrower shall not permit the
ratio of Annualized Operating Cash Flow to Interest Expense for the Borrower
Group on a combined basis to be less than the ratios set forth below for the
periods indicated:
PERIOD RATIO
----------------------------------------- ------
April 1, 2000 through June 30, 2001 1.00:1
July 1, 2001 through June 30, 2002 1.25:1
July 1, 2002 and thereafter 1.50:1
Solely for purposes of calculating the ratio referred to in
this Section 7.9 , Interest Expense shall not include, as of any date, interest
expense relating to that portion of the Commitment that is not the
Uncollateralized Portion of the Commitment.
SECTION 7.10 TOTAL DEBT PER SUBSCRIBER.
The Borrower shall not at any time permit the Total Debt for
the Borrower Group on a combined basis divided by Total Subscribers to be
greater than or equal to $150.00.
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SECTION 7.11 CAPITAL EXPENDITURES.
The Borrower shall not permit the aggregate Capital
Expenditures for the Borrower Group on a combined basis to exceed the following
for the fiscal years indicated:
PERIOD TOTAL CAPITAL EXPENDITURES
------------------------------------- --------------------------
At December 31, 1999 $15,000,000.00
At December 31, 2000 $15,000,000.00
At December 31, 2001 $15,000,000.00
At December 31, 2002 and thereafter $10,000,000.00
No amount of unused Total Capital Expenditure availability
may be carried forward from 1998 to 1999 or subsequent fiscal years. Commencing
in 1999, to the extent not used in any fiscal year, an amount equal to the
lesser of (a) the unused Total Capital Expenditure availability (exclusive of
any carry forwards from prior periods) for such fiscal year, and (b) 15% of the
Total Capital Expenditure availability shown above (exclusive of any carry
forwards from prior periods) for such fiscal year, may be carried forward, in
whole or in part, to subsequent fiscal years until fully utilized.
SECTION 7.12 MINIMUM REVENUE TEST.
Commencing March 31, 1999 and continuing for each fiscal
quarter through the fiscal quarter ending December 31, 2001, the Borrower shall
not permit the aggregate Gross Revenue for the Borrower Group on a combined
basis to be less than the following for the fiscal quarters indicated:
QUARTER ENDING MINIMUM REVENUE
-------------- ---------------
03/31/99 $5,000,000
06/30/99 $5,000,000
09/30/99 $5,750,000
12/31/99 $6,250,000
03/31/00 $7,000,000
06/30/00 $7,000,000
09/30/00 $7,000,000
12/31/00 $7,000,000
03/31/01 $9,000,000
06/30/01 $9,000,000
09/30/01 $9,000,000
12/31/01 $9,000,000
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SECTION 7.13 MINIMUM UNITS IN SERVICE.
Commencing June 30, 1999 and continuing for each fiscal
quarter through the fiscal quarter ending December 31, 2001, the Borrower shall
not permit the minimum number of Units in Service to be less than the following
for the fiscal quarters indicated:
MINIMUM UNITS
QUARTER ENDING IN SERVICE
-------------- ----------
06/30/99 245,000
09/30/99 260,000
12/31/99 260,000
03/31/00 275,000
06/30/00 275,000
09/30/00 300,000
12/31/00 300,000
03/31/01 350,000
06/30/01 350,000
09/30/01 400,000
12/31/01 400,000
SECTION 7.14 MINIMUM OPERATING CASH FLOW TEST
Commencing September 30, 1999 and continuing for each fiscal
quarter through the fiscal quarter ending December 31, 2001, the Borrower shall
not permit the aggregate Operating Cash Flow for the Borrower Group on a
combined basis to be less than the following for the fiscal quarters indicated:
QUARTER ENDING MINIMUM OPERATING CASH FLOW
-------------- ---------------------------
09/30/99 $ 250,000
12/31/99 $ 575,000
03/31/00 $ 975,000
06/30/00 $ 975,000
09/30/00 $ 975,000
12/31/00 $ 975,000
03/31/01 $1,200,000
06/30/01 $1,200,000
09/30/01 $1,200,000
12/31/01 $1,200,000
SECTION 7.15 AFFILIATE TRANSACTIONS.
Except for those agreements described in Schedule 4 hereto, the
Borrower shall not, and shall not permit any of its Subsidiaries to, at any
time engage in any transaction with an Affiliate, or make an assignment or
other transfer of any of its properties or assets to any Affiliate, on terms
less advantageous to the Borrower or such Subsidiary than would be the case if
such transaction had been effected with a non-Affiliate.
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SECTION 7.16 REAL ESTATE
Neither the Borrower nor any of its Subsidiaries shall purchase any
Real Estate or enter into any sale/leaseback transaction.
SECTION 7.17 ERISA LIABILITIES
The Borrower shall not, and shall cause each of its ERISA Affiliates
not to enter into any Multiemployer Plan.
ARTICLE 8
DEFAULT
SECTION 8.1 EVENTS OF DEFAULT
Each of the following shall constitute an Event of Default, whatever
the reason for such event and whether it shall be voluntary or involuntary or
be effected by operation of Applicable Law or pursuant to any judgment or order
of any court or any order, rule or regulation of any Person:
(a) Any representation or warranty made under this Agreement or any
other Loan Document shall prove incorrect or misleading in any material respect
when made or deemed to be made pursuant to Section 4.2 hereof;
(b) The Borrower shall default in the payment of: (i) any interest
under any of the Loan Documents or fees or other amounts payable to the Banks
and the Agent under any of the Loan Documents, or any of them, when due and
such default is not cured within three (3) Business Days after the occurrence
thereof; or (ii) any principal under any of the Loan Documents when due;
(c) The Borrower shall default in the performance or observance of any
agreement or covenant contained in Section 5.2 or Section 5.10 or in Article 6
or Article 7 hereof; provided however, that on any date on which the aggregate
of Accommodations outstanding hereunder is less than the aggregate amount of
the Equivalent Canadian Dollar Amount of Permitted Collateral held by the Agent
pursuant to the Deposit Agreement and the Letter of Credit, the failure to
comply with Section 7.12 , Section 7.13 or Section 7.14 hereof shall not
constitute a default hereunder until any such failure has continued for a
period of two (2) consecutive complete calendar quarters;
(d) The Borrower shall default in the performance or observance of any
other agreement or covenant contained in this Agreement not specifically
referred to elsewhere in this Section 8.1 or there shall occur any default in
the performance or observance of any agreement or covenant contained in any of
the Loan Documents (other than this Agreement or as otherwise provided in
Section 8.1 of this Agreement) by the Borrower, any of its Subsidiaries, or any
other obligor thereunder, and such default shall not be cured within a period
of thirty (30) days from the date on which the Borrower becomes aware of or
receives notice of such default;
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(e) The Borrower or any of its Subsidiaries shall: (i) become
insolvent or generally not pay its debts as such debts become due; (ii) admit
in writing its inability to pay its debts generally or shall make a general
assignment for the benefit of creditors; (iii) file a notice of intention to
file a proposal under any Applicable Law relating to bankruptcy, insolvency or
reorganization or relief of debtors; (iv) have instituted against it any
proceeding, which proceeding continues undismissed or unstayed for a period of
sixty (60) consecutive days or any of the actions sought in such proceeding
(including the entry of an order for relief against it or the appointment of a
receiver, trustee, custodian or other similar official for it or for any
substantial part of its Assets) shall occur, or institute any proceeding
seeking: (A) to adjudicate it a bankrupt or insolvent; (B) any liquidation,
winding-up, reorganization, arrangement, adjustment, protection, relief or
composition of it or its debts under any Applicable Law relating to bankruptcy,
insolvency or reorganization or relief of debtors; or (C) the entry of an order
for relief or the appointment of a receiver, trustee or other similar official
for it or for any substantial part of its Assets; or (v) take any corporate
action to authorize any of the foregoing actions;
(f) A notice is sent to or received by the Borrower or any of its
Subsidiaries from any creditor with respect to the intention of such creditor
to enforce security on: (i) any of the Collateral; or (ii) any Assets of the
Borrower or any of its Subsidiaries (other than the Collateral) unless such
notice is being contested in good faith by appropriate legal proceedings and
such notice does not involve any immediate danger of the sale, forfeiture or
loss of any of the Assets of the Borrower or any of its Subsidiaries (other
than the Collateral) that are the subject of such notice;
(g) A judgment or order for the payment of money not covered by
insurance shall be entered by any court against the Borrower or any of the
Borrower's Subsidiaries for the payment of money which exceeds singly or in the
aggregate with other such judgments, $500,000, or a warrant of attachment or
execution or similar process shall be issued or levied against property of the
Borrower or any of the Borrower's Subsidiaries which, together with all other
such property of the Borrower or any of the Borrower's Subsidiaries subject to
other such process, exceeds in value $500,000 in the aggregate, and if, within
thirty (30) days after the entry, issue or levy thereof, such judgment, warrant
or process shall not have been paid or discharged or stayed pending appeal or
removed to bond, or if, commenced and not stayed, after the expiration of any
such stay, such judgment, warrant or process shall not have been paid or
discharged or removed to bond;
(h) There shall be at any time any "accumulated funding deficiency,"
as defined in ERISA or in Section 412 of the Code, with respect to any Plan
maintained by the Borrower or any ERISA Affiliate, or to which the Borrower or
any ERISA Affiliate has any liabilities, or any trust created thereunder; or a
trustee shall be appointed by a United States District Court to administer any
Employee Pension Plan; or PBGC shall institute proceedings to terminate any
Employee Pension Plan; or the Borrower or any ERISA Affiliate shall incur any
liability to PBGC in connection with the termination of any Employee Pension
Plan; or any Plan or trust created under any Plan of the Borrower or any ERISA
Affiliate shall engage in a "prohibited transaction" (as such term is defined
in Section 406 of ERISA or Section 4975 of the Code) which would subject the
Borrower or any Subsidiary to any tax or penalty on "prohibited transactions"
imposed by Section 502 of ERISA or Section 4975 of the Code;
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(i) There shall occur (i) any default which entitles the holders to
accelerate the maturity thereof under any document, instrument or agreement
relating to any Indebtedness of any member of the Borrower Group having an
aggregate principal amount exceeding $1,000,000; or (ii) any default which
entitles the holders to terminate any Interest Rate Hedge Agreement having a
notional principal amount of $1,000,000 or more;
(j) One or more Licenses shall be terminated or revoked, substantially
adversely modified or no longer available to the Borrower such that the
Borrower and its Subsidiaries are no longer able to operate the related
wireless messaging system or portions thereof and retain the revenue received
therefrom, if any, or any such License shall fail to be renewed at the stated
expiration thereof such that the Borrower and its Subsidiaries are no longer
able to operate the related wireless messaging system or portions thereof and
retain the revenue received therefrom, if any, and, in either case, there shall
be a loss of revenue of the Borrower or any of its Subsidiaries as a direct or
indirect result thereof which loss of revenues could reasonably be expected to
have a Materially Adverse Effect;
(k) Any Loan Document or any material provision thereof, shall at any
time and for any reason be declared by a court of competent jurisdiction to be
null and void, or a proceeding shall be commenced by the Borrower or any of the
Borrower's Subsidiaries or any shareholder, or by any governmental authority
having jurisdiction over the Borrower or any of the Borrower's Subsidiaries or
any shareholder, seeking to establish the invalidity or unenforceability
thereof (exclusive of questions of interpretation of any provision thereof), or
the Borrower or any of the Borrower's Subsidiaries shall deny that it has any
liability or obligation for the payment of principal or interest purported to
be created under any Loan Document;
(l) Subject only to Permitted Liens, any Security Document shall for
any reason (other than as a result of the action or inaction of the Agent or
any Bank), fail or cease to create a valid and perfected and first-priority
Lien on or Security Interest in any portion of the Collateral purported to be
covered thereby;
(m) Any Change Event shall occur or exist; or
(n) There shall occur any default by the Borrower or any Subsidiary of
the Borrower under or a cancellation of, in any case without contemporaneous
replacement, any Transponder Lease Agreement, the Network and Equipment
Agreement or the Sales and Distribution Agreement which default is not cured
within any applicable cure period and which default would be reasonably likely
to have a Materially Adverse Effect.
SECTION 8.2 REMEDIES.
(a) If an Event of Default specified in Section 8.1 hereof (other than
an Event of Default under Section 8.1(e) hereof) shall have occurred and shall
be continuing, the Agent, at the request of the Majority Banks subject to
Section 9.8(a) hereof, shall (i) terminate the Commitment, and/or (ii) declare
the principal of and interest on the Accommodations and all other amounts owed
to the Banks and the Agent under this Agreement and any other Loan Documents to
be forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived, anything in this
Agreement or any other
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Loan Document to the contrary notwithstanding, and the Commitment shall
thereupon forthwith terminate, and/or (iii) the security constituted by the
Security Documents and any other security now or hereafter held by the Agent
shall become and be enforceable.
(b) Upon the occurrence and continuance of an Event of Default
specified in Section 8.1(e) hereof, all principal, interest and other amounts
due hereunder and under the Loan Documents, and all other Obligations, shall
thereupon and concurrently therewith become due and payable and the Commitment
shall forthwith terminate and the principal amount of the Accommodations
outstanding hereunder shall bear interest at the Default Rate, all without any
action by the Agent or the Banks, or the Majority Banks, or any of them, and
without presentment, demand, protest or other notice of any kind, all of which
are expressly waived, anything in this Agreement or in the other Loan Documents
to the contrary notwithstanding.
(c) Upon acceleration of the Obligations, as provided in subsection
(a) or (b) of this Section 8.2, the Agent and the Banks shall have all of the
post-default rights granted to them, or any of them, as applicable, under the
Loan Documents and under Applicable Law.
(d) Upon acceleration of the Obligations, as provided in subsection
(a) or (b) of this Section 8.2, the Agent, upon request of the Majority Banks,
shall have the right to the appointment of a receiver for the properties and
assets of the Borrower and its Subsidiaries, and the Borrower, for itself and
on behalf of its Subsidiaries, hereby consents to such rights and such
appointment and hereby waives any objection the Borrower or any Subsidiary may
have thereto or the right to have a bond or other security posted by the Agent
on behalf of the Banks, in connection therewith.
(e) The rights and remedies of the Agent and the Banks hereunder shall
be cumulative, and not exclusive.
ARTICLE 9
THE AGENT
SECTION 9.1 APPOINTMENT AND AUTHORIZATION
Each Bank hereby irrevocably appoints and authorizes, and hereby
agrees that it will require any transferee of any of its interest in its pro
rata portion of the Accommodations irrevocably to appoint and authorize, the
Agent to take such actions as its agent on its behalf and to exercise such
powers hereunder and under the other Loan Documents as are delegated by the
terms hereof and thereof, together with such powers as are reasonably
incidental thereto. Neither the Agent nor any of its directors, officers,
employees, agents or counsel, shall be liable to the Banks for any action taken
or omitted to be taken by it or them hereunder or in connection herewith,
except for its or their own gross negligence or wilful misconduct as determined
by a final, non-appealable judicial order of a court of competent jurisdiction.
SECTION 9.2 INTEREST HOLDERS
The Agent may treat each Bank, or the Person designated in the last
notice filed with the Agent, as the holder of all of the interests of such Bank
in its pro rata portion of the
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Accommodations until written notice of transfer, signed by such Bank (or the
Person designated in the last notice filed with the Agent) and by the Person
designated in such written notice of transfer, in form and substance
satisfactory to the Agent, shall have been filed with the Agent.
SECTION 9.3 CONSULTATION WITH COUNSEL
The Agent may consult with legal counsel selected by it and shall not
be liable to the Banks for any action taken or suffered by it in good faith in
consultation with such counsel and in reasonable reliance on such
consultations.
SECTION 9.4 DOCUMENTS
The Agent shall be under no duty to examine, inquire into, or pass
upon the validity, effectiveness or genuineness of this Agreement, any other
Loan Document, or any instrument, document or communication furnished pursuant
hereto or in connection herewith, and the Agent shall be entitled to assume
that they are valid, effective and genuine, have been signed or sent by the
proper parties and are what they purport to be.
SECTION 9.5 AGENT AND AFFILIATES
With respect to the Commitment and the Accommodations, the Bank which
is the Agent shall have the same rights and powers hereunder as any other Bank
and the Agent and Affiliates of the Agent may accept deposits from, lend money
to and generally engage in any kind of business with the Borrower, any of its
Subsidiaries or any Affiliates of, or Persons doing business with, the
Borrower, as if they were not affiliated with the Agent and without any
obligation to account therefor.
SECTION 9.6 RESPONSIBILITY OF THE AGENT
The duties and obligations of the Agent under this Agreement are only
those expressly set forth in this Agreement. The Agent shall be entitled to
assume that no Default or Event of Default has occurred and is continuing
unless it has actual knowledge, or has been notified in writing by the
Borrower, of such fact, or has been notified by a Bank in writing that such
Bank considers that a Default or an Event of Default has occurred and is
continuing, and such Bank shall specify in detail the nature thereof in
writing. The Agent shall not be liable hereunder for any action taken or
omitted to be taken except for its own gross negligence or wilful misconduct as
determined by a final, non-appealable judicial order of a court of competent
jurisdiction. The Agent shall provide each Bank with copies of such documents
received from the Borrower as such Bank may reasonably request.
SECTION 9.7 SECURITY DOCUMENTS
The Agent is hereby authorized to act on behalf of the Banks, in its
own capacity and through other agents and sub-agents appointed by it, under the
Security Documents, provided that the Agent shall not agree to the release of
any Collateral, or any property encumbered by any mortgage, pledge or security
interest, except in compliance with Section 11.12 hereof.
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SECTION 9.8 ACTION BY THE AGENT.
(a) The Agent shall be entitled to use its discretion with respect to
exercising or refraining from exercising any rights which may be vested in it
by, and with respect to taking or refraining from taking any action or actions
which it may be able to take under or in respect of, this Agreement or any
other Loan Document, unless the Agent shall have been instructed by the
Majority Banks (or, where expressly required, all the Banks) to exercise or
refrain from exercising such rights or to take or refrain from taking such
action; provided that the Agent shall not exercise any rights under Section
8.2(a) of this Agreement without the request of the Majority Banks (or, where
expressly required, all the Banks) unless time is of the essence. The Agent
shall incur no liability to the Banks under or in respect of this Agreement
with respect to anything which it may do or refrain from doing in the
reasonable exercise of its judgment or which may seem to it to be necessary or
desirable in the circumstances, except for its gross negligence or wilful
misconduct as determined by a final, non-appealable judicial order of a court
of competent jurisdiction.
(b) The Agent shall not be liable to the Banks or to any Bank or the
Borrower or any of its Subsidiaries in acting or refraining from acting under
this Agreement or any other Loan Document in accordance with the instructions
of the Majority Banks (or, where expressly required, all the Banks), and any
action taken or failure to act pursuant to such instructions shall be binding
on all Banks. The Agent shall not be obligated to take any action which is
contrary to Applicable Law or which would in the Agent's reasonable opinion
subject the Agent to liability.
SECTION 9.9 NOTICE OF DEFAULT OR EVENT OF DEFAULT
In the event that the Agent or any Bank shall acquire actual
knowledge, or shall have been notified, of any Default or Event of Default, the
Agent or such Bank shall promptly notify the Banks and the Agent, as applicable
(provided failure to give such notice shall not result in any liability on the
part of such Bank or the Agent), and the Agent shall take such action and
assert such rights under this Agreement and the other Loan Documents as the
Majority Banks shall request in writing, and the Agent shall not be subject to
any liability by reason of its acting pursuant to any such request. If the
Majority Banks (or, where expressly required, all the Banks) shall fail to
request the Agent to take action or to assert rights under this Agreement or
any other Loan Documents in respect of any Default or Event of Default within
ten (10) days after their receipt of the notice of any Default or Event of
Default from the Agent or any Bank, the Agent may, but shall not be required
to, take such action and assert such rights (other than rights under Sections
8.2(a) or 11.12 of this Agreement) as it deems in its discretion to be
advisable for the protection of the Banks, except that, if the Majority Banks
have instructed the Agent not to take such action or assert such right, in no
event shall the Agent act contrary to such instructions.
SECTION 9.10 RESPONSIBILITY DISCLAIMED
The Agent shall not be under any liability or responsibility
whatsoever as Agent:
(a) To the Borrower or any other Person as a consequence of any
failure or delay in performance by or any breach by, any Bank or Banks of any
of its or their obligations under this Agreement or any of the other Loan
Documents;
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(b) To any Bank or Banks, as a consequence of any failure or delay in
performance by, or any breach by, (i) the Borrower of any of its obligations
under this Agreement or any other Loan Document, or (ii) the Borrower, any
Subsidiary of the Borrower or any other obligor under any other Loan Document;
(c) To any Bank or Banks, for any statements, representations or
warranties in this Agreement or any other Loan Document, or any information
provided pursuant to this Agreement, or any other Loan Document, or for the
validity, effectiveness, enforceability or sufficiency of this Agreement or any
other Loan Document; or
(d) To any Person for any act or omission other than that arising from
gross negligence or wilful misconduct of the Agent as determined by a final,
non-appealable judicial order of a court of competent jurisdiction.
SECTION 9.11 INDEMNIFICATION
The Banks agree to indemnify the Agent (to the extent not reimbursed
by the Borrower) pro rata according to their respective Commitment Ratios, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including fees and expenses of
experts, agents, consultants and counsel), or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against the
Agent in any way relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted by the Agent under this Agreement or
any other Loan Document, except that no Bank shall be liable to the Agent for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses, or disbursements resulting from the
gross negligence or wilful misconduct of the Agent as determined by a final,
non-appealable judicial order of a court of competent jurisdiction.
SECTION 9.12 CREDIT DECISION
Each Bank represents and warrants to each other and to the Agent that:
(a) In making its decision to enter into this Agreement and to make
its pro rata portion of the Accommodations it has independently taken whatever
steps it considers necessary to evaluate the financial condition and affairs of
the Borrower and that it has made an independent credit judgment, and that it
has not relied upon the Agent or information provided by the Agent (other than
information provided to the Agent by the Borrower and forwarded by the Agent to
the Banks); and
(b) So long as any portion of the Accommodations remains outstanding
or such Bank has an obligation to make its pro rata portion of Advances
hereunder, it will continue to make its own independent evaluation of the
Collateral and of the financial condition and affairs of the Borrower.
SECTION 9.13 SUCCESSOR AGENT
Subject to the appointment and acceptance of a successor Agent as
provided below, the Agent may resign at any time by giving fifteen (15) days
prior written notice thereof to the
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Banks and the Borrower and may be removed at any time for cause by the Majority
Banks. Upon any such resignation or removal, the Majority Banks, and prior to
the occurrence of a Default with the consent of the Borrower not to be
unreasonably withheld, shall have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed by the Majority Banks and shall
have accepted such appointment within thirty (30) days after the retiring Agent
gave notice of resignation or the Majority Banks' removal of the retiring
Agent, then the retiring Agent may, on behalf of the Banks, appoint a successor
Agent which shall be any Person organized under the laws of Canada which has
combined capital and reserves in excess of $250,000,000. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges, duties and obligations of the retiring Agent and the retiring Agent
shall be discharged from its duties and obligations hereunder and under the
other Loan Documents. After any retiring Agent's resignation or removal
hereunder as Agent the provisions of this Article shall continue in effect for
its benefit in respect of any actions taken or omitted to be taken by it while
it was acting as the Agent.
SECTION 9.14 DELEGATION OF DUTIES
The Agent may execute any of its duties under the Loan Documents by or
through agents or attorneys selected by it using reasonable care, and shall be
entitled to rely upon advice of counsel concerning all matters pertaining to
such duties.
SECTION 9.15 DETERMINATION BY AGENT CONCLUSIVE AND BINDING
Any determination to be made by the Agent on behalf of or with the
approval of the Banks or the Majority Banks under this Agreement shall be made
by the Agent in good faith and, if so made, shall be binding on the Banks,
absent manifest error.
ARTICLE 10
COMPUTATIONS AND INDEMNITIES
SECTION 10.1 INDEMNITY FOR CHANGE IN CIRCUMSTANCES
If with respect to the Banks: (a) any change in Applicable Law, or any
change in the interpretation or application by any Governmental Entity of any
Applicable Law occurring or becoming effective after the date hereof; or (b)
any compliance by the Agent or any of the Banks with any direction, request or
requirement (whether or not having the force of Applicable Law) of any
Governmental Entity made or becoming effective after the date hereof, in either
case shall have the effect of causing Loss to the Agent or any of the Banks by:
(a) increasing the cost to the Agent or any of the Banks of performing
its obligations under this Agreement or in respect of any Advance or Bankers'
Acceptance (including the costs of maintaining any capital, reserve or special
deposit requirements in connection therewith);
(b) requiring the Agent or any of the Banks to maintain or allocate
any capital or additional capital or affecting its allocation of capital in
respect of its obligations under this Agreement or in respect of any Advances
or Bankers' Acceptances;
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(c) reducing any amount payable to the Agent or any of the Banks under
this Agreement or in respect of any Advance or Bankers' Acceptance by any
amount it deems material (other than a reduction resulting from a higher rate
of income tax or other special tax relating to the Agent's or any Bank's income
in general); or
(d) causing the Agent or any of the Banks to make any payment or to
forgo any return on, or calculated by reference to, any amount received or
receivable by the Agent or any of the Banks under this Agreement in respect of
any Advance or Bankers' Acceptance;
then the Agent may give notice to the Borrower specifying the nature of the
event giving rise to such Loss and the Borrower shall, within thirty (30) days
or, if earlier, on the Maturity Date, pay such amounts as the Agent may specify
to be necessary to compensate the Agent or any of the Banks for any such Loss
incurred after the date of such notice. The Agent or any Bank claiming
compensation under this Section 10.1 shall provide the Borrower with a written
certificate setting forth the additional amount or amounts to be paid to it
hereunder and calculations therefor in reasonable detail. Such certificate
shall be presumptively correct absent manifest error. In determining such
amount, such Person may use any reasonable averaging and attribution methods
which are consistently applied to similarly situated borrowers of such Person.
SECTION 10.2 INDEMNITY FOR TRANSACTIONAL AND ENVIRONMENTAL LIABILITY
(a) The Borrower hereby agrees to indemnify, exonerate and hold the
Agent and each Bank and each of their respective officers, directors,
employees, agents and other representatives (collectively, the "Indemnified
Parties") free and harmless from and against any and all claims, demands,
actions, causes of action, suits, losses, costs (including all documentary,
recording, filing, mortgage or stamp taxes or duties), charges, liabilities and
damages, and expenses in connection therewith (irrespective of whether such
Indemnified Party is a party to the action for which such indemnification
hereunder is sought), and including reasonable legal fees and disbursements
(collectively, in this Section 10.2(a), the "Indemnified Liabilities") paid,
incurred or suffered by, or asserted against, the Indemnified Parties or any of
them or, with respect to, or as a direct or indirect result of: (i) any
transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of any Accommodation obtained hereunder; or (ii)
the execution, delivery, performance or enforcement of this Agreement or any
other Loan Document, except for such Indemnified Liabilities that a court of
competent jurisdiction determines by a final non-appealable order are on
account of the relevant Indemnified Party's gross negligence or wilful
misconduct.
(b) Without limiting the generality of the indemnity set out in
Section 10.2(a) hereof, the Borrower hereby further agrees to indemnify,
exonerate and hold the Indemnified Parties free and harmless from and against
any and all claims, demands, actions, causes of action, suits, losses, costs,
charges, liabilities and damages, and expenses in connection therewith,
including reasonable legal fees and disbursements (collectively, in this
Section 10.2(b), the "Indemnified Liabilities") paid, incurred or suffered by,
or asserted against, the Indemnified Parties or any of them for, with respect
to, or as a direct or indirect result of any Environmental Liabilities and
Costs.
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(c) All obligations provided for in this Section 10.2 shall not be
reduced or impaired by any investigation made by or on behalf of the Agent or
any of the Banks.
(d) The Borrower hereby agrees that, for the purposes of effectively
allocating the risk of loss placed on the Borrower by this Section 10.2, the
Agent and each of the Banks shall be deemed to be acting as the agent or
trustee on behalf of and for the benefit of its officers, directors and agents.
(e) If, for any reason, the obligations of the Borrower pursuant to
this Section 10.2 shall be unenforceable, the Borrower agrees to make the
maximum contribution to the payment and satisfaction of each obligation that is
permissible under Applicable Law, except to the extent that a court of
competent jurisdiction determines by a final non-appealable order such
obligations arose on account of the gross negligence or wilful misconduct of
any Indemnified Party.
SECTION 10.3 TAXATION ON PAYMENTS
The Borrower hereby agrees:
(a) that any and all payments made by the Borrower under or pursuant
to any of the Loan Documents shall be made without set-off or counterclaim and
free and clear of, and without deduction for, any and all present or future
Taxes, levies, imposts, deductions, charges, fees, duties or withholding or
other charges of any nature imposed by any taxing authority, and all
liabilities with respect thereto, imposed by any jurisdiction as a consequence
or result of any action taken by the Borrower, including the making of any
payment under or pursuant to any of the Loan Documents, excluding, in the case
of the Agent, or any Bank, taxes imposed on its income or capital taxes or
receipts and franchise taxes. If the Borrower shall be required by Law to
deduct any Taxes from or in respect of any sum payable to the Agent or any Bank
hereunder or pursuant to any of the Loan Documents, the sum payable to the
Agent or such Bank, as the case may be, shall be increased as may be necessary
so that after making all required deductions (including deductions applicable
to additional sums payable under this Section 10.3) the Agent or such Bank, as
the case may be, receives an amount equal to the sum it would have received had
no such deductions been made. If a Tax credit is received by the Agent or such
Bank for any Taxes deducted or withheld by the Borrower in accordance with this
Section 10.3(a) and in respect of which additional amounts have been paid by
the Borrower under this Section 10.3(a), then, to the extent such Tax credit is
reasonably identified by the Agent or such Bank as being related to the
additional amounts paid by the Borrower under this Section 10.3(a) and has been
received and utilized by the Agent or such Bank, the Agent or such Bank shall
pay to the Borrower an amount equal to such Tax credit; provided that such
amount shall not exceed the additional amounts paid by the Borrower to the
Agent or such Bank under this Section 10.3(a); and
(b) to indemnify and hold harmless the Agent and each Bank for the
full amount of Taxes (excluding, in the case of the Agent, or any Bank, taxes
imposed on its income or capital taxes or receipts and franchise taxes) and for
any incremental Taxes due to the Borrower's failure to remit to the Agent and
the Banks the required receipts or other required documentary evidence of
payment of such Taxes or due to the Borrower's failure to pay any Taxes
(excluding, in the case of the Agent, or any Bank, taxes imposed on its income
or capital taxes or receipts and franchise
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taxes) when due to the appropriate taxing authority (including any Taxes
imposed by any taxing authority on amounts payable under this Section 10.3)
paid by the Agent or any Bank and any liability (including penalties, interest
and expenses) arising therefrom or with respect thereto, whether or not such
Taxes were correctly or legally assessed. The Agent or any Bank shall promptly
notify the Borrower of such payment and, if such payment was made pursuant to
an incorrect or illegal assessment, shall reasonably co-operate with the
Borrower, at the expense of the Borrower, in any dispute of such assessment.
The Agent or any Bank claiming compensation under this Section 10.3 shall
provide the Borrower with a written certificate setting forth the additional
amount or amounts to be paid to it hereunder and calculations therefor in
reasonable detail. Such certificate shall be presumptively correct absent
manifest error. Payment pursuant to this indemnification shall be made within
thirty (30) days from the date the Agent or such Bank makes written demand
therefor or if earlier, on the Maturity Date.
SECTION 10.4 JUDGMENT CURRENCY
If, for the purposes of obtaining judgment in any court, it is
necessary to convert any sum due, or owing hereunder or under any other Loan
Document to the Agent or any one or more of the Banks in any currency (the
"Original Currency") into another currency (the "Other Currency"), the parties
hereto agree, to the fullest extent that they may effectively do so, that the
rate of exchange used shall be that at which in accordance with normal banking
procedures the Agent could purchase the Original Currency with the Other
Currency on the Business Day preceding that on which final judgment is granted.
The obligations of the Borrower in respect of any sum due in the
Original Currency from it to the Agent or any one or more of the Banks under
any of the Loan Documents shall, notwithstanding any judgement in any Other
Currency, be discharged only to the extent that on the Business Day following
receipt by the Agent of any sum adjudged to be so due or owing in such Other
Currency, the Agent may in accordance with normal banking procedures purchase
the Original Currency with such Other Currency. If the amount of the Original
Currency so purchased is less than the sum originally due or owing to the Agent
or any one or more of the Banks in the Original Currency, the Borrower shall,
as a separate obligation and notwithstanding any such judgement, indemnify the
Agent or such Bank against such Loss, and if the amount of the Original
Currency so purchased exceeds the sum originally due or owing to the Agent or
such Bank in the Original Currency, the Agent or such Bank shall remit such
excess to the Borrower.
SECTION 10.5 CLAIMS FOR INCREASED COSTS AND TAXES
Prior to the occurrence of a Default in the event that any Bank shall
have notified the Borrower that it is entitled to claim compensation pursuant
to Section 10.01 or 10.3 hereof (each such Bank being an "Affected Bank"), the
Borrower may designate a replacement Canadian chartered bank reasonably
acceptable to the Agent (a "Replacement Bank") to assume the Commitment and the
obligations of any such Affected Bank hereunder, and to purchase the
outstanding Accommodations of such Affected Bank and such Affected Bank's
rights hereunder and with respect thereto, without recourse upon, or warranty
by, or expense to,
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such Affected Bank, for a purchase price equal to the outstanding principal
amount of the Accommodations of such Affected Bank plus all interest accrued
and unpaid thereon and all other amounts owing to such Affected Bank hereunder
and upon such assumption and purchase by the Replacement Bank, such Replacement
Bank shall be deemed to be a "Bank" for purposes of this Agreement and such
Affected Bank shall cease to be a "Bank" for purposes of this Agreement and
shall no longer have any obligations or rights hereunder (other than any
obligations or rights which according to this Agreement shall survive the
termination of the Commitment).
ARTICLE 11
MISCELLANEOUS
SECTION 11.1 NOTICES.
(a) Except as otherwise expressly provided herein, all notices and
other communications under this Agreement and the other Loan Documents (unless
otherwise specifically stated therein) shall be in writing and shall be
personally delivered to an officer or other responsible employee of the
addressee or sent by facsimile, charges prepaid, at or to the applicable
addresses or facsimile numbers, as the case may be, set forth in this Section
11.1. Any communication which is personally delivered as aforesaid shall be
deemed to have been validly and effectively given on the date of such delivery
if such date is a Business Day and such delivery was made during normal
business hours of the recipient; otherwise, it shall be deemed to have been
validly and effectively given on the Business Day next following such date of
delivery. Any communication which is transmitted by facsimile as aforesaid
shall be deemed to have been validly and effectively given on the date of
transmission if such date is a Business Day and such transmission was made
during normal business hours of the recipient; otherwise, it shall be deemed to
have been validly and effectively given on the Business Day next following such
date of transmission. All notices and other communications under this Agreement
shall be given to the parties hereto at the following addresses:
(i) If to the Borrower, to it at:
Madison Telecommunications Holdings, Inc.
c/o Madison Venture Corporation
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
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with a copy to:
Blake, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇-▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Q.C.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Paging Network of Canada Inc.
c/o Paging Network, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Paging Network of Canada, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attn: President
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
Commerce Court West
2800 - ▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attn: ▇▇. ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
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(ii) If to the Agent, to it at:
Toronto Dominion Bank Tower, 9th Floor
Toronto ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attn: Manager, Agency
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
(iii) If to the Banks, to them at the addresses set forth
beside their names on the signature pages hereof.
(b) Each Accommodation Notice and Repayment Notice shall be
irrevocable and binding on the Borrower. With respect to any Accommodation
Notice or Repayment Notice, the Agent may act upon the basis of telephonic
notice believed by it reasonably and in good faith to be from the Borrower
prior to receipt of an Accommodation Notice or Repayment Notice. In the event
of conflict between the Agent's record of the applicable terms of any
Accommodation or repayment and such Accommodation Notice or Repayment Notice,
as the case may be, the Agent's record shall prevail.
(c) Any party hereto may change the address to which notices shall be
directed under this Section 11.1 by giving five (5) days' prior written notice
of such change to the other parties.
SECTION 11.2 EXPENSES
The Borrower will promptly pay, or reimburse:
(a) all reasonable and customary out-of-pocket expenses of the Agent
in connection with the preparation, negotiation, execution and delivery of this
Agreement and the other Loan Documents, and the transactions contemplated
hereunder and thereunder and the making of the initial Advance hereunder
(whether or not such Advance is made), including, but not limited to, the
reasonable fees and disbursements of counsel for the Agent;
(b) all reasonable and customary out-of-pocket expenses of the Agent
in connection with the restructuring and "work out" of the transactions
contemplated in this Agreement or the other Loan Documents, and the
preparation, negotiation, execution and delivery of any waiver, amendment or
consent by the Agent and the Banks, or any of them, relating to this Agreement
or the other Loan Documents, including, but not limited to, the fees and
disbursements of any experts, agents or consultants and of counsel for the
Agent; and
(c) all reasonable and customary out-of-pocket costs and expenses of
obtaining performance under this Agreement or the other Loan Documents and all
out-of-pocket costs and expenses of collection if an Event of Default occurs in
the payment of the Obligations, which in each case shall include reasonable
fees and out-of-pocket expenses of counsel for the Agent and the Banks.
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SECTION 11.3 WAIVERS
The rights and remedies of the Agent and the Banks under this
Agreement and the other Loan Documents shall be cumulative and not exclusive of
any rights or remedies which they would otherwise have. No failure or delay by
the Agent, the Majority Banks, or the Banks, or any of them, in exercising any
right, shall operate as a waiver of such right. The Agent and the Banks
expressly reserve the right to require strict compliance with the terms of this
Agreement and the other Loan Documents in connection with any future funding of
an Accommodation Notice. In the event the Banks decide to fund an Accommodation
Notice at a time when the Borrower is not in strict compliance with the terms
of this Agreement and the other Loan Documents, such decision by the Banks
shall not be deemed to constitute an undertaking by the Banks to fund any
further Accommodation Notice or preclude the Banks or the Agent from exercising
any rights available under the Loan Documents or at law or equity. Any waiver
or indulgence granted by the Agent, the Banks, or the Majority Banks, or any of
them, shall not constitute a modification of this Agreement or any other Loan
Document, except to the extent expressly provided in such waiver or indulgence,
or constitute a course of dealing at variance with the terms of this Agreement
or any other Loan Document such as to require further notice of their intent to
require strict adherence to the terms of this Agreement or any other Loan
Document in the future.
SECTION 11.4 RIGHT TO COMBINE AND SET-OFF
Upon the occurrence and during the continuance of any Event of
Default, the Agent or any one or more of the Banks is hereby authorized at any
time and from time to time, to the fullest extent permitted by Applicable Law,
to combine, set-off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by the Agent or such Bank to or for the credit or the account of the
Borrower with or against any and all of the Obligations of the Borrower now or
hereafter existing under any of the Loan Documents, irrespective of whether or
not the Agent shall have made any demand under any of the Loan Documents and
although such Obligations may be unmatured. The Agent or such Bank agrees
promptly to notify the Borrower after any such combination or set-off and
application made by the Agent or such Bank provided that the failure to give
such notice shall not affect the validity of such combination or set-off and
application. The rights of the Agent and the Banks under this Section are in
addition to other rights and remedies (including, without limitation, other
rights of combination and set-off) which the Agent or the Banks may have.
SECTION 11.5 ASSIGNMENT.
(a) The Borrower may not assign or transfer any of its rights or
obligations hereunder or under any other Loan Document without the prior
written consent of each Bank and the Agent.
(b) Any Bank may, without the consent of the Borrower grant
participations in all or any part of the Commitment to one or more Persons
(each a "Participant"). Any Bank may, with prior written notice to the Agent,
and, prior to the occurrence and continuance of a Default, with the consent of
the Borrower (which consent is not to be unreasonably withheld or delayed),
assign all or any part of its respective interest in the Commitment to one or
more Persons;
74
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provided that prior to the occurrence and continuance of a Default (i) such
Person is a resident of Canada for the purpose of the Income Tax Act (Canada)
or (ii) such assignment will not cause the Borrower to incur any increased
costs pursuant to Section 10.3 hereof (each an "Assignee").
(c) The Agent or any Bank may deliver a copy of any financial
statement or any other information relating to the prospects, business, Assets
or condition (financial or otherwise) of the Borrower or any of its
Subsidiaries which may be furnished to it under this Agreement or otherwise to
any Participant or Assignee or any prospective Participant or Assignee;
provided that each such delivery is made on the understanding that the
information contained therein is confidential in nature. For greater certainty,
the Agent shall have no obligation to communicate or have any involvement with
any Participant.
(d) Without limitation of its obligations hereunder, the Borrower
shall, at its sole cost and expense, give such certificates, acknowledgements
and other further assurances in respect of this Agreement and the Commitment as
any Bank may reasonably require in connection with any participation or
assignment pursuant to this Section.
(e) Except in the case of an Assignee which has delivered an
Assignment and Assumption Agreement substantially in the form of Exhibit G
hereto, prior to the occurrence of a Default or an Event of Default, a Bank
granting a participation or making an assignment shall act on behalf of all of
its Participants and Assignees in all dealings with the Borrower in respect
hereof.
(f) Any Bank shall deliver to the Agent an Assignment and Assumption
Agreement substantially in the form of Exhibit G hereto by which any Assignee
of such Bank assumes the obligations and agrees to be bound by all the terms
and conditions of this Agreement, all as if such Assignee had been an original
party hereto. Any such assignment and assumption shall become effective upon
the consent of the Borrower if and to the extent required pursuant to Section
11.5(b) and the receipt by the Agent of an Assignment and Assumption Agreement
executed by the assigning Bank and the Assignee. In no event shall such
assignment and assumption become effective until such date as specified in the
Assignment and Assumption Agreement (the "Effective Date") which shall be no
earlier than five Business Days following receipt of an Assignment and
Assumption Agreement by, and the payment of an administrative fee of $5,000 to,
the Agent by the assigning Bank. On the Effective Date, the assigning Bank and
the Borrower shall be mutually released from their respective obligations to
each other hereunder to the extent of such assignment and assumption and from
thenceforth have no liability or obligations to each other to such extent,
except in respect of matters which shall have arisen prior to such assignment
and assumption.
SECTION 11.6 ACCOUNTING PRINCIPLES
All accounting terms used herein without definition shall be used as
defined under GAAP. GAAP shall be applied on a basis consistent with prior
fiscal years of the Borrower.
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SECTION 11.7 COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original, but all such separate counterparts
shall together constitute but one and the same instrument.
SECTION 11.8 GOVERNING LAW
This Agreement and all Loan Documents shall be governed by and
interpreted in accordance with the Applicable Laws of the Province of Ontario
and the Applicable Laws of Canada applicable therein which apply to contracts
made and to be performed entirely in Ontario; provided that any Loan Document
stated to be governed by and interpreted in accordance with the laws of any
other jurisdiction shall be governed by and interpreted in accordance with the
laws of such jurisdiction. The parties hereby irrevocably attorn and submit to
the non-exclusive jurisdiction of the courts of Ontario with respect to any
matter arising under or related to this Agreement or any Loan Document;
provided that, with respect to any other Loan Document stated to be governed by
the laws of any other jurisdiction, the parties agree to attorn and submit to
the non-exclusive jurisdiction of the courts of such other jurisdiction. The
Borrower agrees that final judgment in such suit, action or proceeding shall be
conclusive and may be enforced in any other jurisdiction by suit on the
judgment or in any other manner provided by Applicable Law.
SECTION 11.9 SEVERABILITY
If any provision of this Agreement or any Loan Document is, or
becomes, illegal, invalid or unenforceable, such provision shall be severed
from this Agreement or such Loan Document and be ineffective to the extent of
such illegality, invalidity or unenforceability. The remaining provisions
hereof or thereof shall be unaffected by such provision and shall continue to
be valid and enforceable.
SECTION 11.10 INTEREST.
(a) For purposes of the Interest Act (Canada): (i) whenever any
interest or fee under this Agreement is calculated using a rate based on a year
of 360 or 365 days, such rate determined pursuant to such calculation, when
expressed as an annual rate, is equivalent to (x) the applicable rate based on
a year of 360 or 365 days, (y) multiplied by the actual number of days in the
calendar year in which the period for which such interest or fee is calculated
ends, and (z) divided by 360 or 365; (ii) the principle of deemed reinvestment
of interest shall not apply to any interest calculation under this Agreement;
and (iii) the rates of interest stipulated in this Agreement are intended to be
nominal rates and not effective rates or yields.
(b) Notwithstanding any provision to the contrary contained in this
Agreement, in no event shall the aggregate "interest" (as defined in Section
347 of the Criminal Code, Revised Statutes of Canada, 1985, c.46 as the same
may be amended, replaced or re-enacted from time to time) payable under this
Agreement exceed the maximum amount of interest on the "Credit advanced" (as
defined in that section) under this Agreement lawfully permitted under that
section and, if any payment, collection or demand pursuant to this Agreement in
respect of "interest" (as defined in that section) is determined to be contrary
to the provisions of that
76
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section, such payment, collection or demand shall be deemed to have been made
by mutual mistake of the Borrower and the Agent and the Banks and the amount of
such payment or collection shall be refunded to the Borrower. For purposes of
this Agreement, the effective annual rate of interest shall be determined in
accordance with generally accepted actuarial practices and principles over the
term of the Credit Facilities are outstanding on the basis of annual
compounding of the lawfully permitted rate of interest and, in the event of
dispute, a certificate of a Fellow of the Canadian Institute of Actuaries
appointed by the Agent will be conclusive for the purposes of such
determination absent manifest error.
SECTION 11.11 TABLE OF CONTENTS AND HEADINGS
The Table of Contents and the headings of the various subdivisions
used in this Agreement are for convenience only and shall not in any way modify
or amend any of the terms or provisions hereof, nor be used in connection with
the interpretation of any provision hereof.
SECTION 11.12 AMENDMENT AND WAIVER
Neither this Agreement nor any other Loan Document nor any term hereof
or thereof may be amended orally, nor may any provision hereof be waived orally
but only by an instrument in writing signed by the Majority Banks and the Agent
and, in the case of an amendment, by the Borrower, except that in the event of
(a) any increase in the amount of the Commitment, (b) any delay or extension in
the terms of repayment of the Accommodations or any mandatory reductions in the
Commitment provided in Sections 2.6 or 2.8 hereof or amend the provisions of
this Agreement dealing with the types of Accommodations available hereunder,
(c) any reduction in principal, interest or fees due hereunder (without a
corresponding payment by the Borrower in the amount of such reduction) or
postponement or subordination of the payment thereof without a corresponding
payment by the Borrower, (d) any release of any portion of the Collateral for
the Accommodations, except in connection with a merger, sale or other
disposition otherwise permitted hereunder (in which case such release shall
require no further approval by the Banks), (e) any waiver of any Default due to
the failure by the Borrower to pay any sum due to any of the Banks hereunder,
(f) any release or amendment of any Security Document except in connection with
a merger, sale or other disposition otherwise permitted hereunder (in which
case, such release or amendment shall require no further approval by the
Banks), or (g) any amendment of this Section 11.12, or the definitions of
Majority Banks or Permitted Collateral, or of any Section herein to the extent
that such Section requires action by all Banks, any amendment or waiver or
consent may be made only by an instrument in writing signed by each of the
Banks and the Agent and, in the case of an amendment, by the Borrower. Any
amendment to any provision hereunder governing the rights, obligations, or
liabilities of the Agent solely to any of the Banks may be made only by an
instrument in writing signed by the Agent and by each of the Banks.
SECTION 11.13 NON-MERGER
Except as otherwise expressly provided in this Agreement, the
covenants, representations and warranties of the parties contained in this
Agreement and the other Loan Documents shall not merge on and shall survive the
Restatement Date and the making of any Accommodation, and notwithstanding such
closing or Accommodation, or any investigation made by or on behalf
77
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of any party, shall continue in full force and effect. Neither the Restatement
Date nor the making of any Accommodation shall prejudice any right of one party
against any other party in respect of anything done or omitted hereunder or
under any of the other Loan Documents or in respect of any right to damages or
other remedies.
SECTION 11.14 OTHER RELATIONSHIPS
No relationship created hereunder or under any other Loan Document
shall in any way affect the ability of the Agent and each Bank to enter into or
maintain business relationships with the Borrower or any of its Affiliates
beyond the relationships specifically contemplated by this Agreement and the
other Loan Documents.
SECTION 11.15 DIRECTLY OR INDIRECTLY
If any provision in this Agreement refers to any action taken or to be
taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person, whether or not expressly specified in such
provision.
SECTION 11.16 RELIANCE ON AND SURVIVAL OF VARIOUS PROVISIONS
All covenants, agreements, statements, representations and warranties
made herein or in any certificate delivered pursuant hereto (i) shall be deemed
to have been relied upon by the Agent and each of the Banks notwithstanding any
investigation heretofore or hereafter made by them, and (ii) shall survive the
execution and delivery of this Agreement and shall continue in full force and
effect so long as any Obligation is outstanding and unpaid. Any right to
indemnification hereunder, including, without limitation, rights pursuant to
Sections 2.13, 10.1, 10.2, 10.3 and 11.2 hereof, shall survive the termination
of this Agreement and the payment and performance of all Obligations for a
period of three (3) years thereafter.
SECTION 11.17 SENIOR DEBT
The Obligations are secured by the Security Documents and are intended
by the parties hereto to be senior in right of payment to all other
Indebtedness of the Borrower.
SECTION 11.18 OBLIGATIONS SEVERAL
The obligations of the Agent and each of the Banks hereunder are
several, not joint.
SECTION 11.19 CONFIDENTIALITY
The Banks and the Agent shall hold all non-public, proprietary or
confidential information (which has been identified as such by the Borrower)
obtained pursuant to the requirements of this Agreement in accordance with
their customary procedures for handling confidential information of this nature
and in accordance with safe and sound banking practices; provided, however, the
Banks and the Agent may make disclosure of any such information to such of
their examiners, Affiliates, outside auditors, counsel, consultants, appraisers
and other professional advisors as may be reasonably necessary in connection
with this Agreement or as
78
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reasonably required by any proposed participant or assignee or as required or
requested by any Governmental Entity or representative thereof or in connection
with the enforcement hereof or of any other Loan Document or related document
or pursuant to legal process or with respect to any litigation between or among
the Borrower and any of the Banks or the Agent; provided, however, that, as a
condition to receipt of any such information, each such Affiliate, auditor,
counsel, consultant, appraiser, professional advisor, proposed participant or
assignee shall agree in writing to treat all such information as confidential;
and provided, further, that prior to any such disclosure to any unrelated
entity outside the ordinary course of business or pursuant to legal process,
the disclosing Bank or the Agent shall give notice of such disclosure to the
Borrower and co-operate with the Borrower in any efforts to limit or restrict
such disclosure. In no event shall any Bank be obligated or required to return
any materials furnished to it by the Borrower. The foregoing provisions shall
not apply to a Bank or the Agent with respect to information that (i) is or
becomes generally available to the public (other than through such Bank or the
Agent), (ii) is already in the possession of such Bank or the Agent on a
nonconfidential basis, or (iii) comes into the possession of such Bank or the
Agent in a manner not known to such Bank or the Agent to involve a breach of a
duty of confidentiality owing to the Borrower.
SECTION 11.20 TIME OF THE ESSENCE
Time shall be of the essence of this Agreement.
SECTION 11.21 THIRD PARTY BENEFICIARIES
Each party hereto intends that this Agreement shall not benefit or
create any right or cause of action in or on behalf of any Person, other than
the parties hereto and the Persons contemplated in Section 10.2 hereof, and no
Person, other than the parties hereto and the Persons contemplated in Section
10.2 hereof, shall be entitled to rely on the provisions hereof in any action,
suit, proceeding, hearing or other forum.
SECTION 11.22 ENUREMENT
This Agreement shall enure to the benefit of and be binding upon the
parties hereto and any Person becoming a party to this Agreement through the
procedure set out in Section 11.5 hereof. This Agreement shall be binding upon
any assigns and enure to the benefit of any permitted assigns.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused it to be executed under seal by their duly authorized officers, all as
of the day and year first above written.
BORROWER: MADISON TELECOMMUNICATIONS HOLDINGS
INC., a Canada corporation
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-----------------------------
Its: Director
--------------------
AGENT: THE TORONTO-DOMINION BANK
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
Its: Manager-Agency,
Syndicated Loans
--------------------
BANKS:
ADDRESS: THE ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇ By: ▇▇▇▇ ▇▇▇▇▇
Toronto Dominion Bank Tower -----------------------------
Toronto Dominion Centre Its: Manager
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ --------------------
By: ▇▇▇ ▇▇▇▇▇▇▇
-----------------------------
Its: Assistant Vice President
------------------------
ADDRESS: CANADIAN IMPERIAL BANK OF COMMERCE
▇▇▇ ▇▇▇ ▇▇▇▇▇▇ By: ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ -----------------------------
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Executive Director
M5J 2S8
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------
Director
ADDRESS: NATIONAL BANK OF CANADA
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ -----------------------------
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Its: Senior Manager
M5H 3S5 --------------------
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Its: Manager
--------------------
80
EXHIBIT A
COMMITMENT RATIOS
The Toronto-Dominion Bank 44.▇▇▇▇▇▇▇%
Canadian Imperial Bank of Commerce 32.▇▇▇▇▇▇▇%
National Bank of Canada 22.9357799%
81
EXHIBIT B
ACCOMMODATION NOTICE
Madison Telecommunications Holdings Inc., a Canada corporation (the
"Borrower"), acting by and through _______, the duly elected and qualified
_______________ of the Borrower, in connection with that certain Amended and
Restated Loan Agreement (as in effect on the date hereof, the "Loan
Agreement"), dated as of August 5, 1999, among the various financial
institutions which are party thereto (the "Banks"), The Toronto-Dominion Bank,
as Agent (the "Agent"), and the Borrower, hereby certifies to the Agent and the
Banks that:
1. The Borrower hereby requests an Advance as follows:
(a) Date
--------------------------
(b) Aggregate Amount of Accommodation: $
--------------------------
(c) Type and Amount of Accommodation:
(i) COLLATERALIZED PRIME RATE AMOUNT CONVERTED FROM
ADVANCE (IF APPLICABLE)
---------------------------------------- -------------------------------------- --------------------------------------
$
---------------------------------------- -------------------------------------- --------------------------------------
---------------------------------------- -------------------------------------- --------------------------------------
(ii) UNCOLLATERALIZED PRIME AMOUNT CONVERTED FROM
RATE ADVANCE (IF APPLICABLE)
---------------------------------------- -------------------------------------- --------------------------------------
$
---------------------------------------- -------------------------------------- --------------------------------------
---------------------------------------- -------------------------------------- --------------------------------------
(iii) COLLATERALIZED BANKERS' ACCEPTANCES
------------------------------- ---------------------------- ---------------------------- ----------------------------
CONVERTED FROM
FACE AMOUNT TERM IN MONTHS ROLLOVER AMOUNT (IF APPLICABLE)
------------------------------- ---------------------------- ---------------------------- ----------------------------
Cdn. $ Cdn. $
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
82
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(iv) UNCOLLATERALIZED BANKERS'ACCEPTANCES
------------------------------- ---------------------------- ---------------------------- ----------------------------
CONVERTED FROM
FACE AMOUNT TERM IN MONTHS ROLLOVER AMOUNT (IF APPLICABLE)
------------------------------- ---------------------------- ---------------------------- ----------------------------
Cdn. $ Cdn. $
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
------------------------------- ---------------------------- ---------------------------- ----------------------------
2. All of the representations and warranties of the Borrower made under
the Loan Agreement (including, without limitation, all representations and
warranties with respect to the Borrower's Subsidiaries) and the other Loan
Documents, which, pursuant to Section 4.2 of the Loan Agreement or otherwise,
are made on the date hereof, are as of the date hereof, and will be as of the
date of such Advance, true and correct in all material respects both before and
after giving effect to the application of the proceeds of the Advance in
connection with which this Accommodation Notice is given, and after giving
effect to any updates to information provided to the Banks in accordance with
the terms of the representations and warranties.
3. There does not exist, as of this date, and there will not exist after
giving effect to the Advance requested in this Accommodation Notice,any Default
under the Loan Agreement.
4. All Necessary Authorizations have been obtained or made, are in full
force and effect and are not subject to any pending or threatened reversal or
cancellation.
5. There has occurred no event having, or which could be reasonably
expected to have, a Materially Adverse Effect since December 31, 1998.
6. All other conditions precedent to the Advance requested hereby set
forth in Section 3.2 of the Loan Agreement have been satisfied.
Capitalized terms used in this Accommodation Notice and not otherwise
defined are used as defined in the Loan Agreement.
IN WITNESS WHEREOF, the Borrower, acting through an Authorized
Signatory, has signed this Accommodation Notice, as of the __ day of ____.
MADISON TELECOMMUNICATIONS
HOLDINGS INC., a Canada corporation
By:
--------------------------------------
Its:
----------------------------------
Schedule 1 - Wiring Instructions
Schedule 2 - Compliance Calculations
83
EXHIBIT C
FORM OF REPAYMENT NOTICE
[DATE]
TO: THE TORONTO-DOMINION BANK, AS BOOKRUNNER, ARRANGER AND ADMINISTRATION
AGENT
1. This Repayment Notice is delivered to you pursuant to Section o of
that certain amended and restated loan agreement made as of August 5, 1999
among the undersigned as Borrower, the Banks named therein, and you, as amended
or amended and restated from time to time (the "Loan Agreement"). All defined
terms set forth in this Repayment Notice shall have the respective meanings set
forth in the Loan Agreement.
2. We hereby give notice of a repayment as follows:
a) Date of Repayment: ________________________________________________
b) Accommodation Type: _______________________________________________
c) Principal Amount: _________________________________________________
d) Manner of Repayment (if applicable): ______________________________
3. We hereby give notice of a cancellation or permanent reduction as
follows:
(a) Date of Reduction: _______________________________________________
(b) Principal Amount: ________________________________________________
DATED this _________ day of ____________________, 19[YEAR].
MADISON TELECOMMUNICATIONS HOLDINGS INC.
By:
--------------------------------------
Its:
--------------------------------------
84
EXHIBIT D
FORM OF BORROWER'S LOAN CERTIFICATE
The undersigned, who is the [ ] of Madison Telecommunications Holdings Inc., a
Canada corporation (the "Borrower"), does hereby certify on behalf of the
Borrower that he is the duly elected and qualified [ ] of the Borrower and an
Authorized Signatory of the Borrower.
In connection with the making of certain Accommodations to the
Borrower by the Banks under that certain Amended and Restated Loan Agreement of
even date herewith (the "Loan Agreement") by and among the Borrower, The
Toronto-Dominion Bank, as bookrunner, arranger and administration agent (the
"Agent), and The Toronto-Dominion Bank, Canadian Imperial Bank of Commerce,
National Bank of Canada and such other financial institutions as become "Banks"
thereunder (collectively, the "Banks"), the undersigned hereby further
certifies to the Agent and the Banks on behalf of the Borrower that:
1. Attached hereto as Exhibit A is a true, complete, and correct copy of
the Certificate and Articles of Incorporation of the Borrower, certified by
appropriate government officials of the jurisdiction of incorporation of the
Borrower, as in full force and effect on the date hereof.
2. Attached hereto as Exhibit B is a true, complete and correct copy of
the By-Laws of the Borrower, together with all amendments thereto, as in full
force and effect on the date hereof.
3. Attached hereto as Exhibit C is a true, complete and correct copy of
the resolutions of the Board of Directors of the Borrower authorizing the
execution of the Loan Agreement, each other Loan Document to which the Borrower
is a party, and the creation and assumption, by the Borrower, of the
Obligations.
4. Attached hereto as Exhibit D are true, complete, and correct copies of
certificates of good standing for the Borrower from appropriate government
officials of the jurisdiction of incorporation of the Borrower and for each
other jurisdiction in which the Borrower carries on business. The Borrower has,
from the dates of such certificates to the date hereof, remained in good
standing under the laws of such jurisdiction.
5. Attached hereto as Exhibit E are true, complete and correct copies of
any shareholders' agreements or voting trust agreements in effect with respect
to the Capital Stock of the Borrower.
6. The following persons are the Authorized signatories of the Borrower,
each of such persons having been duly elected, and set forth opposite their
respective names below are their respective genuine signatures:
NAME SIGNATURE DATE
----------------------------------- ------------------------------------ ------------------------------------
----------------------------------- ------------------------------------ ------------------------------------
----------------------------------- ------------------------------------ ------------------------------------
----------------------------------- ------------------------------------ ------------------------------------
85
Capitalized terms used herein and not otherwise defined are used as
defined in the Loan Agreement.
IN WITNESS WHEREOF, I have signed this Certificate on the [ ] day of
1999.
MADISON TELECOMMUNICATIONS
HOLDINGS INC., a Canada corporation
By:
------------------------------
Name:
Title:
EXHIBITS:
Exhibit A - Certificate and Articles of Incorporation
Exhibit B - By-Laws
Exhibit C - Authorizing Resolutions
Exhibit D - Certificates of Good Standing
Exhibit E - Shareholder's Agreements or Voting Trust Agreements
86
EXHIBIT E
FORM OF SUBSIDIARY LOAN CERTIFICATE
The undersigned, who is the [ ] of [ ], a [corporation] [partnership)
(the "Subsidiary"), does hereby certify on behalf of the Subsidiary that he is
the duly elected and qualified [ ] of [[ ], the [ ] of] the Subsidiary and an
Authorized Signatory.
In connection with the making of certain Accommodations to Madison
Telecommunications Holdings Inc., a Canada corporation (the "Borrower") by the
Banks under that certain Amended and Restated Loan Agreement of even date
herewith (the "Loan Agreement") by and among the Borrower, The Toronto-Dominion
Bank, as bookrunner, arranger and administration agent (the "Agent), and The
Toronto-Dominion Bank, Canadian Imperial Bank of Commerce, National Bank of
Canada and such other financial institutions as become "Banks" thereunder
(collectively, the "Banks"), the undersigned hereby further certifies to the
Agent and the Banks on behalf of the Subsidiary that:
1. Attached hereto as Exhibit A is a true, complete, and correct copy of
the Certificate and Articles of Incorporation of the Subsidiary, certified by
appropriate government officials of the jurisdiction of incorporation of the
Subsidiary, as in full force and effect on the date hereof.
2. Attached hereto as Exhibit B is a true, complete and correct copy of
the By-Laws of the Subsidiary, together with all amendments thereto, as in full
force and effect on the date hereof.
3. Attached hereto as Exhibit C is a true, complete and correct copy of
the resolutions of the Board of Directors of the Subsidiary authorizing the
execution of each Loan Document to which the Subsidiary is a party.
4. Attached hereto as Exhibit D are true, complete, and correct copies of
certificates of good standing for the Subsidiary from appropriate government
officials of the jurisdiction of incorporation of the Subsidiary and for each
other jurisdiction in which the Subsidiary carries on business. The Subsidiary
has, from the dates of such certificates to the date hereof, remained in good
standing under the laws of such jurisdiction.
5. Attached hereto as Exhibit E are true, complete and correct copies of
any shareholders, agreements or voting trust agreements in effect with respect
to the Capital Stock of the Subsidiary.
6. The following persons are the Authorized Signatories of the Subsidiary,
each of such persons having been duly elected, and set forth opposite their
respective names below are their respective genuine signatures:
NAME SIGNATURE DATE
----------------------------------- ------------------------------------ ------------------------------------
----------------------------------- ------------------------------------ ------------------------------------
----------------------------------- ------------------------------------ ------------------------------------
----------------------------------- ------------------------------------ ------------------------------------
87
-2-
Capitalized terms used herein and not otherwise defined are used as
defined in the Loan Agreement.
IN WITNESS WHEREOF, I have signed this Certificate this [ ] day of [ ],
1999.
[[ ], a Canada corporation
By:
-----------------------------------
Name:
Title:
EXHIBITS:
Exhibit A - Certificate and Articles of Incorporation/Partnership
Exhibit B - By-Laws/Partnership Agreement
Exhibit C - Authorizing Resolutions
Exhibit D - Certificates of Good Standing
Exhibit E - Shareholder's Agreements or Voting Trust Agreements
88
EXHIBIT F
FORM OF PERFORMANCE CERTIFICATE
The undersigned, who is the [ ] of Madison Telecommunications Holdings
Inc., a Canada corporation (the "Borrower"), does hereby certify on behalf of
the Borrower that he is the duly elected and qualified [ ] of the Borrower and
an Authorized Signatory of the Borrower.
1. [WITH RESPECT TO QUARTERLY STATEMENTS: The accompanying unaudited
financial statements of the Borrower on a consolidated and consolidating
(unconsolidated) basis with its Subsidiaries as of [DATE] and for the quarterly
accounting period ended [DATE] are complete and correct and present fairly, in
accordance with GAAP, the financial condition of the Borrower on a consolidated
and consolidating (unconsolidated) basis with its Subsidiaries, and the results
of operations for such quarter, and for the elapsed portion of the fiscal year
ended with the last day of such quarter, in each case on the basis presented
and subject only to normal year-end adjustments and the absence of footnotes.]
[WITH RESPECT TO FISCAL YEAR STATEMENTS: The accompanying audited
financial statements of the Borrower on a consolidated and consolidating
(unconsolidated) basis with its Subsidiaries as of [DATE] and for the fiscal
year ended [DATE], and for the previous fiscal year, are complete and correct
and present fairly, in accordance with GAAP, the financial condition of the
Borrower on a consolidated and consolidating (unconsolidated) basis with its
Subsidiaries as of the end of such period, and the results of operations for
such fiscal year, and for the previous fiscal year.]
2. Attached hereto are arithmetical calculations required to establish
(i)any adjustment to the Applicable Margins, as provided for in Section 2.6(d)
of the Loan Agreement, and (ii) whether or not the Borrower was in compliance
with the requirements of the following Sections of the Loan Agreement:
(a) Section 7.8 - Leverage Ratio
(b) Section 7.9 - Annualized Operating Cash Flow to Interest Expense
(c) Section 7.10 - Total Debt Per Subscriber
(d) Section 7.11 - Capital Expenditures
(e) Section 7.12 - Minimum Revenue Test
(f) Section 7.13 - Minimum Units in Service (including a breakdown by
each category set forth in the definition of Units in service)
(g) Section 7.14 - Minimum Operating Cash Flow
3. Based on an examination sufficient to enable me to make an informed
statement, no Default exists at the end of such quarter or fiscal year, as
applicable.
89
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4. All capitalized terms not otherwise defined herein are used herein as
defined in the Loan Agreement.
Date:
-------------------------- -----------------------------------
[OFFICER]
[TITLE]
90
EXHIBIT G
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement is made and entered into as
[ ] of [ ] by and between [ ] (the "Assignor"), and [ ] (the "Assignee").
Recitals
A. Madison Telecommunications Holdings Inc., a Canada corporation (the
"Borrower"), the Assignor (together with any other Person which becomes a
`Bank' under the Loan Agreement, as such term is hereinafter defined, the
"Banks") and The Toronto Dominion Bank, as bookrunner, arranger and
administration agent (the "Agent"), are parties to a certain Amended and
Restated Loan Agreement dated as of August 5, 1999 (the "Loan Agreement").
Pursuant to the Loan Agreement, the Banks have agreed to make Accommodations to
the Borrower pro rata in an aggregate original principal amount of the
Commitment, as such amount may be reduced from time to time pursuant to the
Loan Agreement. The Assignor's pro rata portion of the Commitment is the amount
specified in Item 1 of Schedule 1 hereto (the "Assignor's Commitment"). The
aggregate principal amount of the outstanding Accommodations made by the
Assignor to the Borrower under the Commitment pursuant to the Assignor's
Commitment is specified in Item 2 of Schedule 1'hereto (the "Assignor's
Accommodations"). All capitalized terms not otherwise defined herein are used
herein as defined in the Loan Agreement.
B. The Assignor wishes to sell and assign to the Assignee, and the
Assignee wishes to purchase and assume from the Assignor, (i) the portion of the
Assignor's Commitment specified in Item 3 of Schedule 1 hereto ("Assigned
Commitment"), and (ii) the portion of the Assignor's Accommodations under the
Commitment specified in Item 4 of Schedule 1 hereto (the "Assigned
Accommodations").
The parties agree as follows:
1. Assignment. Subject to the terms and conditions set forth herein, the
Assignor hereby sells and assigns to the Assignee, and the Assignee purchases
and assumes from the Assignor, without recourse and except as provided in
Section 3(a) hereof, without representation or warranty to the Assignor, on the
date set forth above (the "Assignment Date") (a) all right, title, and interest
of the Assignor to the Assigned Accommodations and (b) all obligations of the
Assignor under the Loan Agreement with respect to the Assigned Commitment. As
full consideration for the sale of the Assigned Accommodations and the Assigned
Commitment, the Assignee shall pay to the Assignor on the Assignment Date such
amount as shall have been agreed to between the Assignor and the Assignee (the
"Purchase Price").
2. Notice. Prior written notice of the assignment made herein has been
provided to the Agent.
3. Representations and Warranties. Each of the Assignor and the Assignee
represents and warrants to the other, to the Agent and to the Borrower (a) that
(i) it has full power and legal right to execute and deliver this Agreement and
to perform the provisions of this Agreement; (ii) the execution, delivery, and
performance of this Agreement have been authorized by all necessary action,
corporate or otherwise, on its part and do not violate any provisions of its
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charter or by-laws or any contractual obligations or requirement of law binding
on it; and (iii) this Agreement constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms subject, as to
enforcement of remedies, to the following qualifications: (A) an order of
specific performance and an injunction are discretionary remedies and, in
particular, may not be available where damages are considered an adequate
remedy at law, and (B) enforcement may be limited by bankruptcy, insolvency,
liquidation, reorganization, reconstruction and other similar laws affecting
enforcement of creditors' rights generally (insofar as any such law relates to
the bankruptcy, insolvency or similar event of the Assignee or the Assignor, as
the case may be), and (b) that its purchase of the Assigned Accommodations and
the Assigned Commitment does not constitute a "prohibited transaction" as
defined in Section 4.1(m) of the Loan Agreement.
4. Condition Precedent. The obligations of the Assignor and the Assignee
hereunder shall be subject to the fulfilment of the condition that (a) the
Assignor shall have received payment in full of the Purchase Price and (b) the
Assignor and the Assignee shall have complied with other applicable provisions
of Section 11.5 of the Loan Agreement.
5. Notice of Assignment. The Assignor hereby gives notice of the
assignment and assumption of the Assigned Accommodations and the Assigned
Commitment to the Agent and hereby instructs the Borrower to make payments with
respect to the Assigned Accommodations and the Assigned Commitment directly to
the Agent for the benefit of the Assignee as provided in the Loan Agreement;
provided, however, that the Borrower and the Agent shall be entitled to continue
to deal solely and directly with the Assignor in connection with the interests
so assigned until the Agent shall have received a copy of this Assignment and
Assumption Agreement duly executed by the Assignor, the Assignee, the Agent,
and, if applicable, the Borrower, and shall have received the assignment fee
described in Section 11.5 of the Loan Agreement. From and after the Assignment
Date, the Assignee shall be deemed to be a party to the Loan Agreement and, to
the extent that rights and obligations thereunder shall have been assigned to
Assignee as provided herein, shall have the rights and obligations of a Bank
under the Loan Agreement. After the Assignment Date, and with respect to all
such amounts accrued from the Assignment Date, (a) all interest, principal,
fees, and other amounts that would otherwise be payable to the Assignor in
respect of the Assigned Accommodations and the Assigned Commitment shall be
paid to the Assignee, (b) if the Assignor receives any payment on account of
the Assigned Accommodations or the Assigned Commitment that is payable to the
Assignee, the Assignor shall promptly deliver such payment to the Assignee, and
(c) if the Assignee receives any payment in respect of Obligations of the
Borrower accrued prior to the Assignment Date, then Assignee shall pay over the
same to Assignor.
6. Independent Investigation. The Assignee acknowledges that it is
purchasing the Assigned Accommodations and the Assigned Commitment from the
Assignor without recourse and, except as provided in Section 3(a) hereof,
without representation or warranty. The Assignee further acknowledges that it
has made its own independent investigation and credit evaluation of the Borrower
in connection with its purchase of the Assigned Accommodations and the Assigned
Commitment and has received copies of all Loan Documents that it has requested.
Except for the representations or warranties set forth in Section 3(a), the
Assignee acknowledges that it is not relying on any representation or warranty
of the Assignor, expressed or implied, including without limitation, any
representation or warranty relating to the legality, validity, genuineness,
enforceability, collectibility, interest rate, repayment schedule, or accrual
status of the Assigned
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Accommodations or the Assigned Commitment, the legality, validity, genuineness,
or enforceability of the Loan Agreement, or any other Loan Document referred to
in or delivered pursuant to the Loan Agreement, or the financial condition or
creditworthiness of the Borrower. The Assignor has not acted and will not be
acting as either the representative, agent or trustee of the Assignee with
respect to matters arising out of or relating to the Loan Agreement or this
Agreement. From and after the Assignment Date, the Assignor shall have no
rights or obligations with respect to the Assigned Accommodations or the
Assigned Commitment.
7. Effective Date. This Agreement will be effective on the date that is
the later of:
(i) the date hereof; and
(ii) five Business Days following receipt of an executed copy of this
Agreement by, and the payment of an administrative fee of $5,000
to, the Agent by the Assignor.
8. Method of Payment. All payments to be made by the Assignor or the
Assignee party hereunder shall be in funds available at the place of payment
on the same day and shall be made by wire transfer to the account designated
by the party to receive payment.
9. Integration. This Agreement shall supersede any prior agreement or
understanding between the parties (other than the Loan Agreement or other Loan
Documents) as to the subject matter hereof.
10. Counterparts. This Agreement may be executed in any number of
counterparts,each of which shall be deemed to be an original and shall be
binding upon the parties, their successors and assigns.
11. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the Applicable Laws of the Province of Ontario and the
Applicable Laws of Canada applicable therein which apply to contracts to be
performed entirely in Ontario.
IN WITNESS WHEREOF, the Assignor and Assignee have executed, sealed
and delivered this Agreement as of the date first above written.
[ASSIGNOR]
By:
---------------------------------
Title:
[ASSIGNEE]
By:
---------------------------------
Title:
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The undersigned hereby acknowledge the
assignment made herein.
THE TORONTO-DOMINION BANK,
as Agent
By:
---------------------------------
Title:
MADISON TELECOMMUNICATIONS
HOLDINGS INC., a Canada corporation
By:
---------------------------------
Title:
94
SCHEDULE 1
TO
ASSIGNMENT AND ASSUMPTION AGREEMENT
RELATING TO
AMENDED AND RESTATED LOAN AGREEMENT AMONG MADISON
TELECOMMUNICATIONS HOLDINGS INC., THE TORONTO-DOMINION
BANK AND SUCH OTHER FINANCIAL INSTITUTIONS AS BECOME "BANKS"
THEREUNDER, AND THE TORONTO-DOMINION BANK, AS AGENT DATED AS OF
AUGUST 5, 1999
Item 1. Assignor's Commitment: $[ ]
Item 2. Assignor's Accommodations $[ ]
Item 3. Amount of Assigned Commitment $[ ]
Item 4. Amount of Assigned Accommodations $[ ]
Item 5. Applicable Lending Office of Assignee
and Address for Notices under the Loan
Agreement
--------------------------------
--------------------------------
--------------------------------
--------------------------------
95
Notes to Schedule 1
1. Insert the dollar amount of Assignor's Commitment under the Commitment
prior to assignment.
2. Insert the total amount of outstanding Accommodations of Assignor.
3. Insert the dollar amount of the Assignor's Commitment under the
Commitment, including the outstanding Accommodations, being assigned.
4. Insert the total amount of the outstanding Accommodations of Assignor
being assigned to Assignee.
5. Insert the name and address of the applicable lending office of the
Assignee.
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SCHEDULE 1
LICENSES
1. Industry Canada letter to Madison Telecommunications Inc. dated
October 26, 1995 re: national paging frequency 929.2875Mhz.
2. Industry Canada letter to Madison Telecommunications Inc. dated
October 27, 1995 re: 50Khz paired channel of 901.525Mhz/940.525Mhz.
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SCHEDULE 2
SECURITY DOCUMENTS
1. Debenture of the Borrower
2. Debenture Pledge Agreement of the Borrower
3. Collateral Hypothec of the Borrower
4. General Assignment of Book Debts of the Borrower
5. Securities Pledge Agreement by the Borrower with respect to the Stock
of Madison Telecommunications Inc.
6. Security from the Borrower under Section 427 of the Bank Act
7. Specific Assignment of Receivables by the Borrower
8. Guarantee of Madison Telecommunications Inc.
9. Debenture of Madison Telecommunications Inc.
10. Debenture Pledge Agreement of Madison Telecommunications Inc.
11. Collateral Hypothec of Madison Telecommunications Inc.
12. General Assignment of Book Debts of Madison Telecommunications Inc.
13. Security from Madison Telecommunications Inc. under Section 427 of the
Bank Act
14. Guarantee of Paging Network Canadian Holdings, Inc. (re: securities
pledge)
15. Securities Pledge Agreement by Paging Network Canadian Holdings, Inc.
16. Guaranty of Paging Network Canadian Holdings, Inc. (re: deposit
agreement)
17. Deposit Agreement by Paging Network Canadian Holdings, Inc.
18. Guarantee of Madison Venture Corporation
19. Deposit Agreement by Madison Venture Corporation
20. Securities Pledge Agreement by Madison Venture Corporation
21. Letter of Credit from Madison Venture Corporation
98
SCHEDULE 3
SUBSIDIARIES
Madison Telecommunications, Inc., a Canada corporation
99
SCHEDULE 4
AGREEMENTS WITH AFFILIATES
Madison Telecommunications Holdings Inc. Unanimous Shareholders' Agreement
dated as of October 28, 1994, among Madison Venture Corporation, Paging
Network, Inc. and Madison Telecommunications Holdings Inc.
Amendment No. 1 to Unanimous Shareholders' Agreement dated as of October 26,
1995, among Madison Venture Corporation, Paging Network. Canadian Holdings,
Inc., Madison Telecommunications Holdings Inc. and Paging Network, Inc.
Network Co-ordination and Equipment Supply Agreement dated October 28, 1994, by
and between Paging Network, Inc. and Madison Telecommunications Inc.
Amendment No. 1 to Network Co-ordination and Equipment Supply Agreement dated
October 26, 1995, by and between Paging. Network, Inc. and Madison
Telecommunications Inc.
Sales and Distribution Agreement dated October 28, 1994, by and between Madison
Telecommunications Inc. and Paging Network of Canada Inc.
Amendment No. 1 to Sales and Distribution Agreement dated October 26, 1995, by
and between Madison Telecommunications Inc. and Paging Network of Canada Inc.
100
SCHEDULE 5
YEAR 2000 PLAN