LOAN AGREEMENT
BETWEEN
ASSOCIATED COMMUNICATIONS, L.L.C.,
as the Borrower,
AND
THE TORONTO-DOMINION BANK,
as the Bank
December 24, 1996
LOAN AGREEMENT
BETWEEN
ASSOCIATED COMMUNICATIONS, L.L.C. (THE "BORROWER")
AND
THE TORONTO-DOMINION BANK (THE "BANK")
INDEX
Page
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ARTICLE 1 Definitions............................................... 1
ARTICLE 2 Loans..................................................... 16
Section 2.1 The Loans............................................. 16
Section 2.2 Manner of Borrowing and Disbursement.................. 16
Section 2.3 Interest.............................................. 17
Section 2.4 Fees.................................................. 18
Section 2.5 Mandatory Commitment Reductions....................... 18
Section 2.6 Voluntary Commitment Reductions....................... 19
Section 2.7 Prepayments and Repayments............................ 19
Section 2.8 Note; Loan Accounts................................... 20
Section 2.9 Manner of Payment..................................... 20
Section 2.10 Reimbursement......................................... 21
Section 2.11 Capital Adequacy...................................... 22
ARTICLE 3 Conditions Precedent...................................... 23
Section 3.1 Conditions Precedent to Effectiveness of
Agreement and Initial Advance......................... 23
Section 3.2 Conditions Precedent to Each Advance.................. 25
ARTICLE 4 Representations and Warranties............................ 25
Section 4.1 Representations and Warranties........................ 25
Section 4.2 Survival of Representations and Warranties,
etc................................................... 33
ARTICLE 5 General Covenants......................................... 33
Section 5.1 Preservation of Existence and Similar Matters......... 33
Section 5.2 Business; Compliance with Applicable Law.............. 34
Section 5.3 Maintenance of Properties............................. 34
Section 5.4 Accounting Methods and Financial Records.............. 34
Section 5.5 Insurance............................................. 34
Section 5.6 Payment of Taxes and Claims........................... 35
Section 5.7 Compliance with ERISA................................. 35
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Section 5.8 Visits and Inspections................................ 37
Section 5.9 Payment of Indebtedness; Loans........................ 38
Section 5.10 Use of Proceeds....................................... 38
Section 5.11 Indemnity............................................. 38
Section 5.12 Covenants Regarding Formation of Subsidiaries
and Acquisitions; Partnership, Subsidiaries........... 39
Section 5.13 Payment of Wages...................................... 40
Section 5.14 Maintenance of Licenses............................... 40
Section 5.15 Further Assurances.................................... 40
ARTICLE 6 Information Covenants..................................... 41
Section 6.1 Quarterly Financial Statements and
Information........................................... 41
Section 6.2 Annual Financial Statements and Information........... 41
Section 6.3 Performance Certificates.............................. 42
Section 6.4 Copies of Other Reports............................... 42
Section 6.5 Notice of Litigation and Other Matters................ 42
ARTICLE 7 Negative Covenants........................................ 44
Section 7.1 Indebtedness for Money Borrowed of the
Borrower and its Subsidiaries......................... 44
Section 7.2 Limitation on Liens................................... 44
Section 7.3 Amendment and Waiver.................................. 45
Section 7.4 Liquidation, Merger, or Disposition of Assets......... 45
Section 7.5 Limitation on Guaranties.............................. 45
Section 7.6 Investments and Acquisitions.......................... 46
Section 7.7 Restricted Payments and Purchases..................... 47
Section 7.8 Affiliate Transactions................................ 47
Section 7.9 ERISA Liabilities..................................... 47
Section 7.10 Limitation on Upstream Dividends by
Subsidiaries.......................................... 47
ARTICLE 8 Default................................................... 48
Section 8.1 Events of Default..................................... 48
Section 8.2 Remedies.............................................. 51
Section 8.3 Payments Subsequent to Declaration of Event
of Default............................................ 53
ARTICLE 9 Change in Circumstances Affecting LIBOR Advances.......... 54
Section 9.1 LIBOR Basis Determination Inadequate.................. 54
Section 9.2 Illegality............................................ 54
Section 9.3 Increased Costs....................................... 54
Section 9.4 Effect On Other Advances.............................. 56
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ARTICLE 10 Miscellaneous............................................. 56
Section 10.1 Notices............................................... 56
Section 10.2 Expenses.............................................. 57
Section 10.3 Waivers............................................... 58
Section 10.4 Set-Off............................................... 58
Section 10.5 Assignment............................................ 59
Section 10.6 Accounting Principles................................. 61
Section 10.7 Counterparts.......................................... 61
Section 10.8 Governing Law......................................... 61
Section 10.9 Severability.......................................... 62
Section 10.10 Interest.............................................. 62
Section 10.11 Table of Contents and Headings........................ 63
Section 10.12 Amendment and Waiver.................................. 63
Section 10.13 Entire Agreement...................................... 63
Section 10.14 Other Relationships................................... 63
Section 10.15 Directly or Indirectly................................ 63
Section 10.16 Reliance on and Survival of Various
Provisions............................................ 63
Section 10.17 Senior Debt........................................... 64
Section 10.18 Confidentiality....................................... 64
ARTICLE 11 Waiver of Jury Trial...................................... 65
Section 11.1 Waiver of Jury Trial.................................. 65
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EXHIBITS
Exhibit A - Form of Borrower Security Agreement
Exhibit B - Form of Member Guaranty
Exhibit C - Form of Member Security Agreement
Exhibit D - Form of Note
Exhibit E - Form of Request for Advance
Exhibit F - Form of Shareholder Pledge Agreement
Exhibit G - Form of Borrower's Loan Certificate
Exhibit H - Form of Member Loan Certificate
Exhibit I - Form of Assignment and Assumption Agreement
SCHEDULES
Schedule 1 - Licenses
Schedule 2 - Trademarks
Schedule 3 - Subsidiaries
Schedule 4 - Exceptions to Necessary Authorizations
Schedule 5 - Affiliate Transactions
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LOAN AGREEMENT
THIS LOAN AGREEMENT (the "Agreement"), made as of this 24th day of
December, 1996, by and between ASSOCIATED COMMUNICATIONS, L.L.C., a Delaware
limited liability company (the "Borrower"), and THE TORONTO-DOMINION BANK (the
"Bank").
ARTICLE 1
Definitions
Section 1.1 Defined Terms. The following terms when used in this Agreement
shall have the following meanings:
"Acquisition" shall mean (whether by purchase, lease, exchange, issuance
of stock or other equity or debt securities, merger, reorganization or any other
method) (a) any acquisition by the Borrower or any of its Subsidiaries of any
other Person, which Person shall then become consolidated with the Borrower or
any such Subsidiary in accordance with GAAP, (b) any acquisition by the Borrower
or any of its Subsidiaries of all or any substantial part of the assets of any
other Person, or (c) any acquisition by the Borrower or any of its Subsidiaries
of any License (whether such acquisition is from a governmental agency or any
other Person).
"Advance" shall mean amounts advanced by the Bank to the Borrower pursuant
to Article 2 hereof on the occasion of any borrowing; 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 fifteen percent (15%) 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.
"Affiliate Subordinated Debt" shall mean Indebtedness of the Borrower to
any Member or Affiliate of the Borrower which is subordinated to the Obligations
on terms and conditions acceptable to the Bank in its sole discretion.
"Agreement" shall mean this Loan Agreement, as amended, supplemented,
restated or otherwise modified from time to time.
"Agreement Date" shall mean December 24, 1996.
"Applicable Law" shall mean, in respect of any Person, all provisions of
constitutions, laws, statutes, rules, regulations, codes and orders of
governmental bodies or regulatory agencies applicable to such Person, including,
without limiting the foregoing, the Communications Act and all Environmental
Laws, and all orders, decisions, judgments and decrees of all courts and
arbitrators in proceedings or actions to which the Person in question is a party
or by which it or its properties or assets are bound.
"Applicable Margin" shall mean (i) in the case of Base Rate Advances,
1.75% and (ii) in the case of LIBOR Advances, 2.75%.
"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.
"Bank" shall mean The Toronto-Dominion Bank, its successor and assigns.
"Base Rate" shall mean, as of any date, a fluctuating interest rate per
annum equal to the higher of (a) the Prime Rate, and (b) the sum of (i) the
Federal Funds Rate, plus (ii) one-half of one percent (1/2%). The Base Rate
shall be adjusted automatically as of the opening of business on the effective
date of each change in the Prime Rate or the Federal Funds Rate, as the case may
be.
"Base Rate Advance" shall mean an Advance which the Borrower requests to
be made as a Base Rate Advance or is reborrowed as a Base Rate Advance, in
accordance with the provisions of Section 2.2 hereof, and which shall be in a
principal amount of at least $500,000, and in an integral multiple of $250,000;
except for a Base Rate Advance which is an amount equal to the unused
Commitment, which Advance may be in such amount.
"Base Rate Basis" shall mean a simple per annum interest rate equal to the
sum of (i) the Base Rate and (ii) the Applicable Margin. The Base Rate Basis
shall be adjusted automatically as of the opening of business on the effective
date of each change in the Base Rate to account for such change.
"Borrower" shall mean Associated Communications, L.L.C., a Delaware
limited liability company.
"Borrower Security Agreement" shall mean that certain Security Agreement
between the Borrower and the Bank dated as of the Agreement Date in
substantially the form of Exhibit A attached hereto.
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"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
New York, New York and London, England, as relevant to the determination to be
made or the action to be taken.
"Capital Expenditures" shall mean, in respect of any Person, expenditures
for the purchase of assets of long-term use which would be required to be
capitalized on the balance sheet of such Person in accordance with GAAP.
"Capital Stock" shall mean, as applied to any Person, any capital stock of
such Person, regardless of class or designation, and all warrants, options,
purchase rights, conversion or exchange rights, voting rights, calls or claims
of any character with respect thereto.
"Capitalized Lease Obligation" shall mean that portion of any obligation
of a Person as lessee under a lease which at the time would be required to be
capitalized on the balance sheet of such lessee in accordance with GAAP.
"Change of Control" shall mean (a) the failure of DSC and MSI to
collectively own eighty percent (80%) of the economic and voting ownership
interests of the Borrower, (b) the failure of MSI or DSC to hold at least
seventy-five percent (75%) of the economic and voting ownership interests of the
Borrower held by such Person on the Agreement Date, (c) The Associated Group,
Inc. shall cease to have the power, directly or indirectly, to elect a majority
of the voting members of the Board (as defined in the LLC Agreement) of the
Borrower, (d) any change in the direct or indirect ownership of the stock of DSC
(after giving effect to any shareholders' agreements, voting trust agreements or
similar agreements), such that ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ shall cease to Control DSC, or
(e) any change in the direct and indirect ownership of the stock of MSI (after
giving effect to any shareholders' agreements, voting trust agreements or
similar agreements).
"COBRA" shall mean Title X of the Consolidated Omnibus Budget
Reconciliation Act of 1985 and any amendments thereto.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"Collateral" shall mean any property of any kind constituting collateral
for the Obligations under any of the Security Documents.
"Commitment" shall mean the obligation of the Bank to make Loans to the
Borrower, subject to the terms and conditions hereof, up to an aggregate
principal amount not to exceed at any
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one time outstanding Fifty Million Dollars ($50,000,000), subject to reduction
as set forth in Section 2.5 hereof.
"Communications Act" shall mean the Communications Act of 1934, and any
similar or successor federal statute, and the rules and regulations of the FCC
thereunder, all as the same may be in effect from time to time.
"Control" shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person
through the ability to exercise voting power.
"Default" shall mean any Event of Default, and any of the events specified
in Section 8.1, regardless of whether there shall have occurred any passage of
time or giving of notice, or both, that would be necessary in order to
constitute such event an Event of Default.
"Default Rate" shall mean a simple per annum interest rate equal to the
sum of the otherwise applicable Interest Rate Basis plus two percent (2%), or if
no Interest Rate Basis is otherwise applicable, a simple per annum interest rate
equal to the sum of the Base Rate Basis plus two percent (2%).
"DSC" shall mean Digital Services Corporation, a Virginia corporation.
"Employee Pension Plan" shall mean any Plan which (a) is maintained by the
Borrower or any ERISA Affiliate and (b) is subject to Part 3 of Title I of
ERISA.
"Employment Agreement" shall mean that certain Employment Agreement
between the Borrower and ▇▇▇▇ ▇. ▇▇▇▇▇ dated as of August 19, 1996.
"Environmental Laws" shall mean all applicable federal, state or local
laws, statutes, rules, regulations or ordinances, codes, common law, consent
agreements to which the Borrower or any Subsidiary is a party, orders, decrees,
judgments or injunctions issued, promulgated, approved or entered thereunder
relating to the pollution or protection of the environment, including, without
limitation, those relating to releases, discharges, emissions, spills, leaching,
or disposals to air, water, land or ground water, to the withdrawal or use of
ground water, to the use, handling or disposal of polychlorinated biphenyls,
asbestos or urea formaldehyde, to the treatment, storage, disposal or management
of hazardous substances (including, without limitation, petroleum, crude oil or
any fraction thereof, or other hydrocarbons), pollutants or contaminants, to
exposure to toxic, hazardous or other
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controlled, prohibited, or regulated substances, including, without limitation,
any such provisions under the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended (42 U.S.C. ss. 9601 et seq.), or the
Resource Conservation and Recovery Act of 1976, as amended (42 U.S.C. ss. 6901
et seq.) or any environmental laws relating to public health and safety.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
in effect from time to time.
"ERISA Affiliate" shall mean any Person, including a Subsidiary or an
Affiliate of the Borrower, that is a member of any group of organizations
(within the meaning of Code Sections 414(b), 414(c), 414(m), or 414(o)) of which
the Borrower is a member.
"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.
"FCC" shall mean the Federal Communications Commission, or any other
similar or successor agency of the federal government administering the
Communications Act.
"Federal Funds Rate" shall mean, as of any date, the weighted average of
the rates on overnight federal funds transactions with the members of the
Federal Reserve System arranged by federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Bank from three (3) federal funds brokers
of recognized standing selected by the Bank.
"GAAP" shall mean, as in effect from time to time, generally accepted
accounting principles in the United States, consistently applied.
"Guaranty" or "Guaranteed," as applied to an obligation, shall mean and
include (a) a guaranty, direct or indirect, in any manner, of all or any part of
such obligation, and (b) any agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, any
reimbursement obligations as to amounts drawn down by beneficiaries of
outstanding letters of credit or capital call requirements.
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"Indebtedness" shall mean, with respect to any Person, and without
duplication, (a) all items, except items of shareholders' and partners' equity
or capital stock or surplus or general contingency or deferred tax liabilities,
which in accordance with GAAP would be included in determining total liabilities
as shown on the liability side of a balance sheet of such Person, including,
without limitation, secured non-recourse obligations of such Person, to the
extent of the higher of the book value or fair market value of the property or
asset securing such obligation (if less than the amount of such obligation), (b)
all direct or indirect obligations of any other Person secured by any Lien to
which any property or asset owned by such Person is subject, but only to the
extent of the higher of the fair market value or the book value of the property
or asset subject to such Lien (if less than the amount of such obligation) if
the obligation secured thereby shall not have been assumed, (c) to the extent
not otherwise included, all Capitalized Lease Obligations of such Person and all
obligations of such Person with respect to leases constituting part of a sale
and lease-back arrangement to the extent such lease is considered a Capitalized
Lease Obligation in accordance with GAAP, (d) all reimbursement obligations of
such Person with respect to outstanding letters of credit, (e) to the extent not
otherwise included, all obligations subject to Guaranties of such Person or its
Subsidiaries, and (f) all obligations of such Person under Interest Hedge
Agreements.
"Indebtedness for Money Borrowed" shall mean, with respect to any Person,
Indebtedness for money borrowed and Indebtedness represented by notes payable
and drafts accepted representing extensions of credit, all obligations evidenced
by bonds, debentures, notes or other similar instruments, all Indebtedness upon
which interest charges are customarily paid, all Capitalized Lease Obligations,
all reimbursement obligations with respect to outstanding letters of credit, all
Indebtedness issued or assumed as full or partial payment for property or
services (other than trade payables arising in the ordinary course of business,
but only if and so long as such accounts are payable on customary trade terms),
whether or not any such notes, drafts, obligations or Indebtedness represent
Indebtedness for money borrowed, and, without duplication, Guaranties of any of
the foregoing. For purposes of this definition, interest which is accrued but
not paid on the scheduled due date for such interest shall be deemed
Indebtedness for Money Borrowed.
"Indemnitee" shall have the meaning ascribed thereto in Section 5.11
hereof.
"Interest Hedge Agreements" shall mean the obligations of any Person
pursuant to (a) any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by
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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 or
(b) interest rate swaps, caps, floors, collars and similar agreements.
"Interest Period" shall mean in connection with any LIBOR Advance, the
term of such Advance selected by the Borrower or otherwise determined in
accordance with this Agreement. Notwithstanding the foregoing, however, (i) any
applicable Interest Period which would otherwise end on a day which is not a
Business Day shall be extended to the next succeeding Business Day unless, such
Business Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Business Day, (ii) any applicable Interest
Period which begins on a day for which there is no numerically corresponding day
in the calendar month during which such Interest Period is to end shall (subject
to clause (i) above) end on the last day of such calendar month, and (iii) the
Borrower shall not select an Interest Period which extends beyond the Maturity
Date or such earlier date as would interfere with the Borrower's repayment
obligations under Section 2.7 hereof. Interest shall be due and payable with
respect to any Advance as provided in Section 2.3 hereof.
"Interest Rate Basis" shall mean the Base Rate Basis or the LIBOR Basis,
as appropriate.
"known to the Borrower" or "to the knowledge of the Borrower" shall mean
known by or reasonably should have been known by the chief executive officer,
the chief financial officer, the general counsel, or any senior vice president
of the Borrower.
"LIBOR" shall mean, for any Interest Period, the interest rate per annum
equal to the offered rate for deposits in United States Dollars for an amount
approximately equal to the principal amount of, and for a length of time
approximately equal to the Interest Period for, the LIBOR Advance sought by the
Borrower, which rate appears on the ▇▇▇▇▇▇'▇ Screen LIBO Page (or such other
page as may replace that page in that service) at approximately 11:00 a.m.
(London time) two (2) Business Days before the first day of such Interest
Period; provided, that (i) if more than one such offered rate appears on the
▇▇▇▇▇▇'▇ Screen, LIBOR shall be the arithmetic average (rounded upward to the
nearest one-sixteenth (1/16) of one percent (1%)) of such offered rates, or (ii)
if the ▇▇▇▇▇▇'▇ Screen is not available, LIBOR shall be the average offered to
the Bank (or an affiliate thereof) by two (2) leading banks (rounded upward to
the nearest one-sixteenth (1/16) of one percent (1%)) of the interest rates per
annum at which deposits in United States Dollars for such
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Interest Period are offered to the Bank in the London eurodollar interbank
borrowing market at approximately 11:00 a.m. (London time) two (2) Business Days
before the first day of such Interest Period, in an amount approximately equal
to the principal amount of, and for a length of time approximately equal to the
Interest Period for, the LIBOR Advance sought by the Borrower.
"LIBOR Advance" shall mean an Advance which the Borrower requests to be
made as a LIBOR Advance or which is reborrowed as a LIBOR Advance, in accordance
with the provisions of Section 2.2 hereof, and which shall be in a principal
amount of at least $500,000 and in an integral multiple of $250,000, except for
a LIBOR Advance which is in an amount equal to the unused amount of the
Commitment, which Advance may be in such amount.
"LIBOR Basis" shall mean a simple per annum interest rate equal to the sum
of (a) the quotient of (i) LIBOR divided by (ii) one minus the LIBOR Reserve
Percentage, stated as a decimal, plus (b) the Applicable Margin. The LIBOR Basis
shall be rounded upward to the nearest one-hundredth of one percent (1/100%) and
shall apply to Interest Periods of one (1), two (2), three (3), and six (6)
months, and, subject to the second to the last sentence of this definition, nine
(9) and twelve (12) months, and, once determined, shall be subject to Article 10
hereof and shall remain unchanged during the applicable Interest Period. The
Borrower may not select an Interest Period for a LIBOR Advance in excess of six
(6) months unless the Bank has consented to such Interest Period.
"LIBOR Reserve Percentage" shall mean the percentage which is in effect
from time to time under Regulation D of the Board of Governors of the Federal
Reserve System, as such regulation may be amended from time to time, as the
actual requirement applicable with respect to Eurocurrency Liabilities (as that
term is defined in Regulation D).
"Licenses" shall mean any telephone, digital electronic message service,
microwave, personal communications or other license, authorization, certificate
of compliance, franchise, approval or permit, granted or issued to any Member,
the Borrower or a Subsidiary of the Borrower by the FCC which enables the
Borrower or any of the Borrower's Subsidiaries to engage in any
telecommunications business and investing in other Persons who engage in
telecommunications businesses, all of which Licenses are listed as of the
Agreement Date on Schedule 1 hereto.
"Lien" shall mean, with respect to any property, any mortgage, lien,
pledge, assignment, charge, security interest, title retention agreement, levy,
execution, seizure, attachment, garnishment or other encumbrance of any kind in
respect of such
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property, whether created by statute, contract, the common law or otherwise, and
whether or not ▇▇▇▇▇▇, vested or perfected.
"LLC Agreement" shall mean the Limited Liability Company Agreement of the
Borrower dated March 5, 1996, as amended from time to time.
"Loan Documents" shall mean this Agreement, the Note, the Security
Documents, all fee letters, all Requests for Advance, all Interest Hedge
Agreements between the Borrower, on the one hand, and the Bank on the other
hand, and all other documents and agreements executed or delivered in connection
with or contemplated by this Agreement.
"Loans" shall mean, collectively, the amounts advanced by the Bank to the
Borrower under the Commitment, not to exceed the Commitment, and evidenced by
the Note.
"Management and Services Agreement" shall mean, collectively, (a) that
certain Administration and Management Services Agreement between the Borrower
and MSI dated as of March 5, 1996, and (b) that certain Administration and
Management Services Agreement between the Borrower and DSC dated as of March 5,
1996.
"Materially Adverse Effect" shall mean (a) any material adverse effect
upon the business, assets, liabilities, financial condition, results of
operations, properties (or the transferability thereof), or business prospects
of the Borrower and its Subsidiaries on a consolidated basis, taken as a whole,
or (b) a material adverse effect upon the binding nature, validity, or
enforceability of this Agreement and the Note, or upon the ability of the
Borrower and its Subsidiaries to perform the payment obligations or other
material obligations under this Agreement or any other Loan Document, or upon
the value of the Collateral or upon the rights, benefits or interests of the
Bank in and to the Loans or the rights of the Bank 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 19, 1997, 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).
"Member Guaranty" shall mean, collectively, (a) that certain Member
Guaranty dated the Agreement Date between DSC and the Bank, substantially in the
form of Exhibit B attached hereto, and (b) that certain Member Guaranty dated
the Agreement Date between
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MSI and the Bank, substantially in the form of Exhibit B attached hereto.
"Member Security Agreement" shall mean, collectively, (a) that certain
Security Agreement dated the Agreement Date between DSC and the Bank,
substantially in the form of Exhibit C attached hereto, and (b) that certain
Security Agreement dated the Agreement Date between MSI and the Bank,
substantially in the form of Exhibit C attached hereto.
"Members" shall mean MSI and DSC.
"MSI" shall mean Microwave Services, Inc., a Delaware corporation.
"Multiemployer Plan" shall mean a multiemployer pension plan as defined in
Section 3(37) of ERISA to which the Borrower or any ERISA Affiliate is or has
been required to contribute subsequent to September 25, 1980.
"Necessary Authorizations" shall mean all approvals and licenses from, and
all filings and registrations with, any governmental or other regulatory
authority and any other applicable state or local law, regulation or other
provision, necessary in order to enable the Borrower and the Borrower's
Subsidiaries to provide telecommunication services, including, without
limitation, fixed wireless services and investing in other Persons who operate
the same businesses, but shall exclude the Licenses and all approvals, licenses,
filings and registrations under the Communications Act or with or from the FCC.
"Net Income" shall mean, for the Borrower and its Subsidiaries, on a
consolidated basis, for any period, net income determined in accordance with
GAAP.
"Net Proceeds" shall mean, with respect to any sale, transfer or other
disposition of (A) ownership interests in any of the Borrower's Subsidiaries by
the Borrower, or (B) assets by the Borrower or any of its Subsidiaries, the
aggregate amount of cash received for such assets (including, without
limitation, any payments received for non-competition covenants, consulting or
management fees in connection with such sale, and any portion of the amount
received evidenced by a promissory note or other evidence of Indebtedness issued
by the purchaser), net of (i) amounts reserved, if any, for taxes payable with
respect to any such sale (after application of any available losses, credits or
other offsets), (ii) reasonable and customary transaction costs properly
attributable to such transaction and payable by the Borrower or any of its
Subsidiaries (other than to an Affiliate) in connection with such sale, lease,
transfer or other
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disposition of assets, including, without limitation, commissions, (iii) until
actually received by the Borrower or any of its Subsidiaries, any portion of the
amount received held in escrow or evidenced by a promissory note or other
evidence of Indebtedness issued by a purchaser or non-compete agreement or
covenant or otherwise for which compensation is paid over time, (iv) reasonable
and customary amounts, if any, reserved for indemnification claims payable with
respect to any such sale, and (v) the amounts, if any, of any purchase money
debt, with respect to the assets sold, owed by the Borrower or a Subsidiary, and
repaid with the proceeds of such sale. Upon receipt by the Borrower or any of
its Subsidiaries of (A) amounts referred to in item (iii) of the preceding
sentence, or (B) if there shall occur any reduction in the reserves referred to
in items (i) and (iv) of the preceding sentence resulting in a payment to the
Borrower or its Subsidiary, such amounts shall then be deemed to be "Net
Proceeds."
"Note" shall mean that certain promissory note in the aggregate original
principal amount of $50,000,000, issued to the Bank by the Borrower,
substantially in the form of Exhibit D attached hereto, any other promissory
note issued by the Borrower to evidence the Loans pursuant to this Agreement,
and any extensions, renewals, or amendments to, or replacements of, the
foregoing.
"Obligations" shall mean all payment and performance obligations of every
kind, nature and description of the Borrower, its Subsidiaries, and any other
obligors to the Bank under this Agreement and the other Loan Documents
(including any interest, fees and other charges on the Loans or otherwise under
the Loan Documents that would accrue but for the filing of a bankruptcy action
with respect to the Borrower, whether or not a claim for such amounts is allowed
in such bankruptcy action and including Obligations to the Bank pursuant to
Section 5.11 hereof) as they may be amended from time to time, or as a result of
making the Loans, whether such obligations are direct or indirect, absolute or
contingent, due or not due, contractual or tortious, liquidated or unliquidated,
arising by operation of law or otherwise, now existing or hereafter arising.
"Payment Date" shall mean the last day of each calendar quarter for Base
Rate Advances and, subject to Section 2.3(b) hereof, the last day of each
Interest Period for LIBOR Advances.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Permitted Asset Sales" shall mean (a) sales or other dispositions of
assets by the Borrower or any Subsidiary in bona fide arms' length transactions
which do not generate, in any
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calendar year, Net Proceeds in excess of $1,000,000 in the aggregate, (b) the
disposition in the ordinary course of business of assets which are no longer
used or useful in the business of the Borrower or the Borrower's Subsidiaries,
(c) the sales, transfers or other dispositions of assets which are exchanged
for, or the Net Proceeds of which are contemporaneously used to procure or
acquire, similar assets of equal or greater value, and (d) the transfer of
assets (including cash or cash equivalents) among the Borrower and its
Subsidiaries or the transfer of assets (including cash or cash equivalents but
excluding the Licenses) between or among Subsidiaries so long as in each case,
such assets remain assets of Subsidiaries of the Borrower.
"Permitted Liens" shall mean, as applied to any Person:
(a) Any Lien in favor of the 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 in accordance with GAAP 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, landlords, laborers
and materialmen and other statutory Liens incurred in the ordinary course of
business for sums not yet due or being diligently contested in good faith, if
reserves or appropriate provisions shall have been made therefor in accordance
with GAAP;
(d) Liens incurred in the ordinary course of business in connection
with worker's compensation and unemployment insurance or other social security
obligations which are not overdue for more than sixty (60) days;
(e) Restrictions on the transfer of the Licenses or assets of the
Borrower or its Subsidiaries or any Member imposed by Applicable Law;
(f) Easements, rights-of-way, zoning restrictions and other similar
encumbrances on the use of real property and minor imperfections of title which
do not materially interfere with the ordinary conduct of the business of such
Person or the use of such property;
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(g) Purchase money security interests to the extent such security
interests secure Indebtedness permitted pursuant to Section 7.1(e)(1) hereof;
(h) Liens reflected by Uniform Commercial Code financing statements
filed in respect of Capitalized Lease Obligations permitted pursuant to Section
7.1(e)(2) hereof and true leases of the Borrower or any of its Subsidiaries; and
(i) Liens granted to secure the performance of letters of credit,
bids, tenders, contracts, leases, public or statutory obligations, surety,
customs, appeal and performance bonds, and of other similar obligations to the
extent otherwise permitted under this Agreement and not incurred in connection
with Indebtedness for Money Borrowed, the obtaining of advances or the payment
of the deferred purchase price of any property and which do not exceed $500,000
in the aggregate outstanding from time to time.
"Person" shall mean an individual, corporation, limited liability company,
association, partnership, joint venture, trust or estate, an unincorporated
organization, a government or any agency or political subdivision thereof, or
any other entity.
"Plan" shall mean an employee benefit plan within the meaning of Section
3(3) of ERISA or any other employee benefit plan maintained or contributed to by
the Borrower or any ERISA Affiliate.
"Prime Rate" shall mean, at any time, the rate of interest adopted by The
Toronto-Dominion Bank as its reference rate for the determination of interest
rates for loans of varying maturities in United States dollars to United States
residents of varying degrees of creditworthiness and being quoted at such time
by such bank as its "prime rate." The Prime Rate is not necessarily the lowest
rate of interest charged to borrowers of The Toronto-Dominion Bank.
"Reportable Event" shall mean, with respect to any Employee Pension Plan,
an event described in Section 4043(b) of ERISA, excluding, however, such events
(i) as to which the PBGC by regulation has waived the requirement of Section
4043(a) of ERISA that it be notified within thirty (30) days of the occurrence
of such event or (ii) which could not reasonably be expected to have a Material
Adverse Effect.
"Request for Advance" shall mean a certificate designated as a "Request
for Advance," signed by an Authorized Signatory of the Borrower requesting an
Advance hereunder, which shall be in substantially the form of Exhibit E
attached hereto, and shall, among other things, (i) specify the date of the
Advance, which
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shall be a Business Day, the amount of the Advance, the type of Advance (LIBOR
or Base Rate), and, with respect to LIBOR Advances, the Interest Period selected
by the Borrower, (ii) state that there shall not exist, on the date of the
requested Advance and after giving effect thereto, a Default, as of the date of
such Advance and after giving effect thereto, and (iii) provide the calculations
necessary to determine the Applicable Margin.
"Restricted Payment" shall mean 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
stock of the Borrower or such Subsidiary, as applicable, 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 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.
"Restricted Purchase" shall mean any payment (including, without
limitation, any sinking fund payment, prepayment or installment 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 or other
securities of the Borrower or any of the Borrower's Subsidiaries, including,
without limitation, any warrants or other rights or options to acquire shares of
capital stock of the Borrower or any of the Borrower's Subsidiaries or any loan,
advance, release or forgiveness of Indebtedness by the Borrower or its
Subsidiaries to any partner, shareholder or Affiliate of any such Person.
"Security Documents" shall mean the Member Security Agreement, the
Shareholder Pledge Agreement, any other agreement or instrument providing
collateral for the Obligations whether now or hereafter in existence, and any
filings, instruments, agreements, and documents related thereto or to this
Agreement, and providing the Bank with Collateral for the Obligations.
"Security Interest" shall mean all Liens in favor of the Bank created
hereunder or under any of the Security Documents to secure the Obligations.
"Shareholder Pledge Agreement" shall mean each Shareholder Pledge
Agreement between any Shareholder of the Members, on the one hand, and the Bank,
on the other hand, substantially in the form of Exhibit F attached hereto.
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"Shareholders" shall mean collectively, the shareholders, members or other
equity holders of the Members existing immediately prior to the Agreement Date
and any of their respective successors or assigns approved by the Bank.
"Subsidiary" shall mean, as applied to any Person, 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 or limited liability company of which more than fifty percent (50%)
of the outstanding partnership or member 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.
"Trademarks" shall mean all registered trademarks and pending applications
for trademarks of the Borrower and the Borrower's Subsidiaries which are more
fully described on Schedule 2 hereto.
"Upstream Dividends" shall have the meaning set forth in Section 7.10
hereof.
Section 1.2 Interpretation. Each definition of an agreement in this
Article 1 shall, unless otherwise specified, include such agreement as modified,
amended, restated or supplemented from time to time in accordance herewith, and
except where the context otherwise requires, the singular shall include the
plural and vice versa. Except where otherwise specifically restricted, reference
to a party to this Agreement or any other Loan Document includes that party and
its successors and assigns. All capitalized terms used herein which are defined
in Article 9 of the Uniform Commercial Code in effect in the State of New York
on the date hereof and which are not otherwise defined herein shall have the
same meanings herein as set forth therein.
Section 1.3 Cross References. Unless otherwise specified, references in
this Agreement and in each other Loan Document to any Article or Section are
references to such Article or Section of this Agreement or such other Loan
Document, as the case may be, and, unless otherwise specified, references in any
Article, Section or definition to any clause are references to such clause in
such Article, Section or definition.
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ARTICLE 2
Loans
Section 2.1 The Loans. The Bank agrees upon the terms and subject to the
conditions of this Agreement, to lend and re- lend to the Borrower, prior to the
Maturity Date, an amount not at any one time outstanding to exceed, in the
aggregate, the Commitment. Subject to the terms and conditions hereof, Advances
under the Commitment may be repaid and reborrowed from time to time on a
revolving basis.
Section 2.2 Manner of Borrowing and Disbursement.
(a) Choice of Interest Rate, Etc. Any Advance (i) under the
Commitment shall, at the option of the Borrower, be made as a Base Rate Advance
or a LIBOR Advance; provided, however, that at such time as there shall have
occurred and be continuing a Default hereunder, the Borrower shall not have the
right to receive a LIBOR Advance, convert an Advance to a LIBOR Advance or
continue an existing LIBOR Advance at the end of its Interest Period. Any notice
given to the Bank in connection with a requested Advance hereunder shall be
given to the Bank prior to 11:00 a.m. (New York time) in order for such Business
Day to count toward the minimum number of Business Days required.
(b) Base Rate Advances.
(i) Advances. The Borrower shall give the Bank in the case of
Base Rate Advances irrevocable prior written notice in the form of a
Request for Advance or telephonic or telecopied notice followed
immediately by a Request for Advance not later than 10:00 a.m. (New York
time) on the day of the requested Advance; provided, however, that the
Borrower's failure to confirm any telephonic or telecopied notice with a
Request for Advance shall not invalidate any notice so given if acted upon
by the Bank.
(ii) Repayments and Conversions. The Borrower may (A) repay or
prepay a Base Rate Advance at any time upon at least one (1) Business
Day's irrevocable prior written notice, or (B) upon at least three (3)
Business Days' irrevocable prior written notice, convert all or a portion
of the principal thereof as one or more LIBOR Advances. On the date
indicated by the Borrower, such Base Rate Advance shall be so repaid or,
as applicable, converted.
(c) LIBOR Advances.
(i) Advances. The Borrower shall give the Bank in the case of
LIBOR Advances at least three (3) Business
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Days' irrevocable written notice in the form of a Request for Advance, or
notice by telephone or telecopy followed immediately by a Request for
Advance; provided, however, that the failure of the Borrower to confirm
any notice by telephone or telecopy with a Request for Advance shall not
invalidate any notice so given if acted upon by the Bank. The Bank, whose
determination shall be conclusive absent manifest error, shall determine
the available LIBOR Bases and shall notify the Borrower of such LIBOR
Bases. The Borrower shall promptly notify the Bank by telecopy or by
telephone, and shall immediately confirm any such telephonic notice in
writing, of its selection of a LIBOR Basis and Interest Period for such
Advance.
(ii) Repayments and Conversions. At least three (3) Business
Days prior to each Payment Date for a LIBOR Advance, subject to Sections
2.2(a) hereof, the Borrower shall give the Bank written notice specifying
whether all or a portion of any LIBOR Advance outstanding on the Payment
Date (a) is to be continued in whole or in part as a LIBOR Advance, or (b)
is to be converted in whole or in part as one or more Base Rate Advances,
or (c) subject to Section 2.10 hereof, is to be repaid and not continued
or converted. Upon such Payment Date such LIBOR Advance will, subject to
the provisions hereof, be so continued or converted or repaid. If the
Borrower fails to give any such notice, such LIBOR Advance will be
converted to a Base Rate Advance.
(d) Disbursement. Prior to 2:00 p.m. (New York time) on the date of
an Advance hereunder, the Bank shall, subject to the satisfaction of the
conditions set forth in Article 3 hereof, disburse the amount of such Advance by
(a) transferring such amount so requested by wire transfer pursuant to the
Borrower's instructions, or (b) in the absence of such instructions, crediting
such amount so made available to the account of the Borrower maintained with the
Bank.
Section 2.3 Interest.
(a) On Base Rate Advances. Interest on each Base Rate Advance shall
be computed on the basis of a year of 365/366 days for the actual number of days
elapsed and shall be payable at the Base Rate Basis for such Advance, in arrears
on the applicable Payment Date. Interest on Base Rate Advances then outstanding
shall also be due and payable on the Maturity Date.
(b) On LIBOR Advances. Interest on each LIBOR Advance shall be
computed on the basis of a 360-day year for the actual number of days elapsed
and shall be payable at the LIBOR Basis for such Advance, in arrears on the
applicable Payment Date, and,
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in addition, if the Interest Period for a LIBOR Advance exceeds three (3)
months, interest on such LIBOR Advance shall also be due and payable in arrears
on every three-month anniversary of the beginning of such Interest Period.
Interest on LIBOR Advances then outstanding shall also be due and payable on the
Maturity Date.
(c) Interest if no Notice of Selection of Interest Rate Basis. If
the Borrower fails to give the Bank timely notice of its selection of a LIBOR
Basis, or if for any reason (other than the failure of the Bank to take any
action required of it hereunder) a determination of a LIBOR Basis for any
Advance is not timely concluded, the Base Rate Basis shall apply to such
Advance.
(d) Interest Upon Default. Immediately upon the occurrence of an
Event of Default, the outstanding principal balance of the Loans shall bear
interest at the Default Rate. Such interest shall be payable on demand by the
Bank and shall accrue until the earlier of (i) waiver or cure (including
cessation) of the applicable Event of Default, (ii) agreement by the Bank to
rescind the charging of interest at the Default Rate, or (iii) payment in full
of the Obligations.
(e) Limitation on Interest Periods. At no time may the Borrower
have, in the aggregate for all Loans outstanding, more than four (4) different
Interest Periods for LIBOR Advances at any given time during the term of this
Agreement.
(f) Interest Calculation. In calculating interest hereunder,
interest shall be calculated to, but not including, the date of payment.
Section 2.4 Fees. The Borrower agrees to pay the Bank a commitment fee on
the aggregate unborrowed balance of the Commitment, for each day from the
Agreement Date until the Maturity Date, at a rate of one-half of one percent
(1/2%) per annum, commencing with the Agreement Date. Such commitment fee shall
be computed on the basis of a year of 365/366 days for the actual number of days
elapsed, shall be payable quarterly in arrears on the last day of each calendar
quarter (with the first such payment being due and payable on March 31, 1997,
for the period from the Agreement Date through March 31, 1997), and shall be
fully earned when due, and shall be non-refundable when paid. A final payment of
any commitment fee then payable shall also be due and payable on the Maturity
Date.
Section 2.5 Mandatory Commitment Reductions.
(a) Reduction From Asset Sales. Except with respect to Permitted
Asset Sales, on the Business Day of the receipt by
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the Borrower or any Subsidiary of any Net Proceeds, the Commitment shall be
automatically and permanently reduced by an amount equal to such Net Proceeds.
(b) Reduction From Debt Issuance. On the Business Day of the receipt
by the Borrower or any Subsidiary of the Borrower of any net proceeds with
respect to any debt issuance (other than from Affiliate Subordinated Debt), the
Commitment shall be automatically and permanently reduced by an amount equal to
the net proceeds received from such debt issuance.
Section 2.6 Voluntary Commitment Reductions. The Borrower shall have the
right, at any time and from time to time after the Agreement Date and prior to
the Maturity Date, upon at least three (3) Business Days' prior written notice
to the Bank to cancel or reduce permanently all or a portion of the Commitment;
provided, however, that any such partial reduction shall be made in an amount
not less than $1,000,000 and in integral multiples of not less than $1,000,000.
As of the date of cancellation or reduction set forth in such notice, the
Commitment shall be permanently reduced to the amount stated in the Borrower's
notice for all purposes herein.
Section 2.7 Prepayments and Repayments.
(a) Repayment Prior to Payment Date. The principal amount of any
Base Rate Advance may be repaid in full or in part at any time, without penalty.
LIBOR Advances may be prepaid in full or in part prior to the applicable Payment
Date, upon two (2) Business Days' prior written notice to the Bank, provided
that the Borrower shall reimburse the Bank, on demand by the Bank, for any loss
or out-of-pocket expense incurred by the Bank in connection with such
prepayment, as set forth in Section 2.10 hereof. Any prepayment hereunder shall
be in amounts of not less than $1,000,000 and in integral multiples of $500,000
or, if less, the remaining outstanding balance of any Base Rate Advance or LIBOR
Advance.
(b) Loans in Excess of Commitment. If, at any time, the amount of
the Loans then outstanding shall exceed the Commitment, the Borrower shall, on
such date and subject to Sections 2.10 and 2.11 hereof, make a repayment of the
principal amount of the Loans in an amount equal to such excess, together with
any accrued interest and fees with respect thereto.
(c) Repayment Upon Sales of Assets. Except with respect to Permitted
Asset Sales, the Borrower shall, on the Business Day of the receipt by the
Borrower or any Subsidiary of the Borrower of any Net Proceeds, make a repayment
of principal of the Loans then outstanding in an amount equal to such Net
Proceeds.
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(d) Repayment Upon Debt Issuances. The Borrower shall, on the
Business Day of the receipt by the Borrower or any Subsidiary of the Borrower of
any net proceeds with respect to any debt issuance (other than from Affiliate
Subordinated Debt), make a repayment of principal of the Loans then outstanding
in an amount equal to the net proceeds of such debt issuance.
(e) Maturity Date. In addition to the foregoing, a final payment of
all Obligations then outstanding shall be due and payable on the Maturity Date.
Section 2.8 Note; Loan Accounts.
(a) The Loans shall be repayable in accordance with the terms and
provisions set forth herein and shall be evidenced by the Note. The Note shall
be payable to the order of the Bank and shall be issued by the Borrower to the
Bank and shall be duly executed and delivered by one or more Authorized
Signatories.
(b) The Bank may open and maintain on its books in the name of the
Borrower a loan account with respect the Loans and interest thereon. The Bank
shall debit such loan account for the principal amount 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 the Loans. The records of the
Bank with respect to the loan account shall be prima facie evidence of the Loans
and accrued interest thereon absent manifest error, but the failure of the Bank
to make any such notations or any error or mistake in such notations shall not
affect the Borrower's repayment obligations with respect to such Loans.
Section 2.9 Manner of Payment.
(a) Each payment (including any prepayment) by the Borrower on
account of the principal of or interest on the Loans, commitment fees and any
other amount owed to the Bank under this Agreement or the Note shall be made not
later than 1:00 p.m. (New York time) on the date specified for payment under
this Agreement to the Bank at the Bank's lending office, in lawful money of the
United States of America in immediately available funds. Any payment received by
the Bank after 1:00 p.m. (New York time) shall be deemed, solely for the purpose
of the calculation of interest, received on the next Business Day. Receipt by
the Bank of any payment hereunder prior to 1:00 p.m. (New York time) on any
Business Day shall be deemed to constitute receipt by the Bank on such Business
Day.
(b) Provided that (i) the Bank delivers to the Borrower on or before
the date of the first Advance hereunder (and at such other times as required
under U.S. federal tax law),
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a validly completed Internal Revenue Service Form 4224 and (ii) all of the
provisions of Section 10.5 hereof are satisfied, the Borrower agrees to pay
principal, interest, fees and all other amounts due hereunder, under the Note or
under any other Loan Document without set-off or counterclaim or any deduction
whatsoever and free and clear of all taxes, levies and withholding other than
taxes on the revenues or net income of the Bank and except as provided in
Section 2.11 hereof. If the Borrower is required by Applicable Law to deduct any
taxes from or in respect of any sum payable to the Bank hereunder, under the
Note or under any other Loan Document: (A) the sum payable hereunder or
thereunder, as applicable, shall be increased to the extent necessary to provide
that, after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.9(b)), the Bank receives an amount
equal to the sum it would have received had no such deductions been made; (B)
the Borrower shall make such deductions from such sums payable hereunder or
thereunder, as applicable, and pay the amount so deducted to the relevant taxing
authority as required by Applicable Law; and (C) the Borrower shall provide the
Bank with evidence reasonably satisfactory to the Bank that such deducted
amounts have been paid to the relevant taxing authority.
(c) Prior to the acceleration of the Loans under Section 8.2 hereof,
if some but less than all amounts due from the Borrower are received by the Bank
with respect to the Obligations, the Bank shall apply such amounts in the
following order of priority: (i) to the payment of any fees or expenses then due
and payable to the Bank; (ii) to the payment of interest then due and payable on
the Loans; (iii) to the payment of all other amounts not otherwise referred to
in this Section 2.9(c) then due and payable to the Bank hereunder or under the
Note or any other Loan Document; and (iv) to the payment of principal then due
and payable on the Loans.
(d) Subject to any contrary provisions in the definition of Interest
Period, if any payment under this Agreement or any of the other Loan Documents
is specified to be made on a day which is not a Business Day, it shall be made
on the next Business Day, and such extension of time shall in such case be
included in computing interest and fees, if any, in connection with such
payment.
Section 2.10 Reimbursement.
(a) Whenever the Bank shall sustain or incur any losses or
out-of-pocket expenses in connection with (i) failure by the Borrower to borrow
any LIBOR Advance, convert an outstanding Base Rate Advance to a LIBOR Advance
or to continue any outstanding LIBOR Advance after having given notice of its
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intention to borrow, continue or convert in accordance with Section 2.2 hereof
(whether by reason of the Borrower's election not to proceed or the
non-fulfillment of any of the conditions set forth in Article 3 hereof), or (ii)
prepayment on other than a Payment Date (or failure to prepay after giving
notice thereof) of any LIBOR Advance in whole or in part for any reason, the
Borrower agrees to pay to the Bank, upon the Bank's demand, an amount sufficient
to compensate the Bank for all such losses and out-of-pocket expenses. The Bank
shall notify the Borrower of any event occurring after the Agreement Date
entitling the Bank to such compensation as promptly as practicable. The 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 presumptively correct absent
manifest error.
(b) Losses subject to reimbursement hereunder shall include, without
limiting the generality of the foregoing, but without duplication, expenses
incurred by the Bank or any participant of the Bank permitted hereunder in
connection with the re-employment of funds prepaid, paid, repaid, not borrowed,
not converted or not paid, as the case may be, and will be payable whether the
Maturity Date is changed by virtue of an amendment hereto (unless such amendment
expressly waives such payment) or as a result of acceleration of the Obligations
and whether the Bank has a "matched funding" of such Advance.
Section 2.11 Capital Adequacy. If after the date hereof, the adoption of
any Applicable Law regarding the capital adequacy of banks or bank holding
companies, or any change in Applicable Law (whether adopted before or after the
Agreement Date) or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the Bank with any
directive regarding capital adequacy (whether or not having the force of law) of
any such governmental authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on the Bank's capital as a
consequence of its obligations hereunder with respect to the Loans and the
Commitment to a level below that which it could have achieved but for such
adoption, change or compliance (taking into consideration the Bank's policies
with respect to capital adequacy immediately before such adoption, change or
compliance and assuming that the Bank's capital was fully utilized prior to such
adoption, change or compliance) by an amount reasonably deemed by the Bank to be
material, then, upon demand by the Bank, the Borrower shall promptly pay to the
Bank such additional amounts as shall be sufficient to compensate the Bank for
such reduced return, together with interest on such amount from the fifteenth
(15th) day after the date of demand or the Maturity Date, as applicable, until
payment in full thereof at the Default
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Rate. The Bank shall notify the Borrower of any event occurring after the date
of this Agreement entitling the Bank to such compensation as promptly as
practicable. A certificate of the Bank setting forth the amount to be paid to
the Bank by the Borrower as a result of any event referred to in this paragraph
and supporting calculations in reasonable detail shall be presumptively correct
absent manifest error.
ARTICLE 3
Conditions Precedent
Section 3.1 Conditions Precedent to Effectiveness of Agreement and Initial
Advance. The obligation of the Bank to undertake the Commitment, the
effectiveness of this Agreement and the obligation of the Bank to make the
initial Advance hereunder are subject to the prior or contemporaneous
fulfillment of each of the following conditions:
(a) The Bank shall have received each of the following:
(i) this Agreement duly executed;
(ii) a duly executed Note;
(iii) duly executed Shareholder Pledge Agreements, together
with appropriate stock certificates and undated stock powers executed in
blank;
(iv) a duly executed Member Guaranty from each Member;
(v) a duly executed Member Security Agreement from each
Member;
(vi) 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;
(vii) legal opinions of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇
LLP, counsel to MSI and the Borrower, in form and substance satisfactory
to the Bank and its counsel;
(viii) legal opinions of counsel to DSC, in form and substance
satisfactory to the Bank and its counsel;
(ix) a duly executed Request for Advance for the initial
Advance;
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(x) any required consents to the closing of this Agreement or
to the execution, delivery and performance of this Agreement and the
other Loan Documents, each of which shall be in form and substance
reasonably satisfactory to the Bank;
(xi) the loan certificate of the Borrower dated as of the
Agreement Date, in substantially the form attached hereto as Exhibit G,
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 organizational document and By-laws or
operating agreement of the Borrower as in effect on the Agreement Date,
(B) certificates of good standing for the Borrower issued by the
Secretary of State or similar state official for the state of formation
of the Borrower, and (C) a true, complete and correct copy of the
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;
(xii) a loan certificate from each of the Members in
substantially the form attached hereto as Exhibit H, including a
certificate of incumbency with respect to each Authorized Signatory of
such Person, together with the following items: (A) a copy of the
Certificate/Articles of Incorporation or similar organizational document
of each such Member, certified to be true, complete and correct by the
Secretary of State from the jurisdiction of incorporation or formation of
such Member, (B) certificates of good standing for such Member, issued by
the Secretary of State or similar state official for each state in which
such Member is incorporated or qualified to do business, (C) a true,
complete and correct copy of the By-Laws or operating agreement of such
Member, as in effect on the Agreement Date, and (D) a true, complete and
correct copy of the resolutions of such Member authorizing it to execute,
deliver and perform the Loan Documents to which it is a party;
(xiii) receipt by the Bank of all fees payable to the Bank on
the Agreement Date;
(xiv) all such other documents as the Bank may reasonably
request, certified by an appropriate governmental official or an
Authorized Signatory if so requested.
(b) The Borrower shall certify to the Bank that each of the
representations and warranties in Article 4 hereof are true and correct in all
material respects as of the Agreement
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Date and that no Default or Event of Default then exists or is continuing.
Section 3.2 Conditions Precedent to Each Advance. The obligation of the
Bank to make each Advance after the Agreement Date which, if funded, would
increase the principal amount of the Loans outstanding hereunder, is subject to
the fulfillment of each of the following conditions immediately prior to or
contemporaneously with such Advance:
(a) All of the representations and warranties of the Borrower under
this Agreement and the other Loan Documents (including, without limitation, all
representations and warranties with respect to the Borrower's Subsidiaries),
which, pursuant to Section 4.2 hereof, are made at and as of the time of such
Advance, shall be true and correct at such time in all material respects, both
before and after giving effect to the application of the proceeds of such
Advance, and after giving effect to any updates to information provided to the
Bank in accordance with the terms of such representations and warranties, and no
Default or Event of Default shall then exist or be caused thereby;
(b) The Bank shall have received a duly executed Request for
Advance;
(c) With respect to any Advance relating to any Acquisition or the
formation of any Subsidiary which is permitted hereunder, the Bank shall have
received such documents and instruments relating to such Acquisition or
formation of a new Subsidiary as are described in Section 5.12 hereof or
otherwise required herein; and
(d) No Materially Adverse Effect shall have occurred.
ARTICLE 4
Representations and Warranties
Section 4.1 Representations and Warranties. The Borrower hereby agrees,
represents and warrants, upon the Agreement Date, and at all times thereafter as
required pursuant to the terms hereof, in favor of the Bank that:
(a) Organization; Ownership; Power; Qualification. The Borrower is a
limited liability company duly organized, validly existing and in good standing
under the laws of the State of Delaware. The Borrower has the power and
authority to own its properties and to carry on its business as now being and as
proposed hereafter to be conducted. Each Subsidiary is a
-25-
corporation or partnership duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or formation, as the
case may be, and has the corporate or partnership power, as the case may be, and
authority to own its properties and to carry on its business as now being and as
proposed hereafter to be conducted. The Borrower and each of the Borrower's
Subsidiaries are duly qualified, in good standing and authorized to do business
in each jurisdiction in which the character of their respective properties or
the nature of their respective businesses requires such qualification or
authorization except where failure to so qualify and be qualified would not
reasonably be expected to have a Materially Adverse Effect.
(b) Authorization; Enforceability. The Borrower has the power and
has taken all necessary action to authorize it to borrow hereunder, to execute,
deliver and perform this Agreement and each of the other Loan Documents to which
it is a party in accordance with their respective terms, and to consummate the
transactions contemplated hereby and thereby. This Agreement has been duly
executed and delivered by the Borrower and is, and each of the other Loan
Documents to which the Borrower is a party is, a legal, valid and binding
obligation of the Borrower enforceable against the Borrower in accordance with
their respective terms, subject, as to enforcement of remedies, to the following
qualifications: (i) an order of specific performance and an injunction are
discretionary remedies and, in particular, may not be available where damages
are considered an adequate remedy at law, and (ii) enforcement may be limited by
bankruptcy, insolvency, liquidation, reorganization, reconstruction and other
similar laws affecting enforcement of creditors' rights generally (insofar as
any such law relates to the bankruptcy, insolvency or similar event of the
Borrower).
(c) Subsidiaries: Authorization; Enforceability. The Borrower's
Subsidiaries' and the Borrower's direct and indirect ownership thereof as of the
Agreement Date are as set forth on Schedule 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 Borrower's Subsidiaries shown
thereon and such shares of such Subsidiaries have been duly authorized and
issued and are fully paid and nonassessable. Each Subsidiary 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 is party is a legal, valid and
binding obligation of such Subsidiary enforceable against such Subsidiary in
accordance with its terms, subject, as to enforcement of remedies, to the
-26-
following qualifications: (i) an order of specific performance and an injunction
are discretionary remedies and, in particular, may not be available where
damages are considered an adequate remedy at law, and (ii) enforcement may be
limited by bankruptcy, insolvency, liquidation, reorganization, reconstruction
and other similar laws affecting enforcement of creditors' rights generally
(insofar as any such law relates to the bankruptcy, insolvency or similar event
of any such Subsidiary). The Borrower's ownership interest in each of the
Borrower's Subsidiaries represents a direct or indirect controlling interest of
such Subsidiary for purposes of directing or causing the direction of the
management and policies of each Subsidiary.
(d) Compliance with Other Loan Documents and Contemplated
Transactions. The execution, delivery and performance, in accordance with their
respective terms, by the Borrower of this Agreement and the Note, and by the
Borrower and the Borrower's Subsidiaries of each of the other Loan Documents to
which they are respectively parties, and the consummation by the Borrower and
the Borrower's Subsidiaries, as applicable, of the transactions contemplated
hereby and thereby, do not and will not (i) require any consent or approval,
governmental or otherwise, not already obtained other than consents and
approvals that may be required from the FCC in connection with the exercise by
the Bank of certain of its rights and remedies under the Loan Documents, (ii)
violate any Applicable Law respecting the Borrower or any Subsidiary, (iii)
conflict with, result in a breach of, or constitute a default under (A) the
certificate or articles of incorporation or by-laws or partnership or limited
liability company agreements, as the case may be, as amended, of the Borrower or
of any Subsidiary (subject, in the case of the LLC Agreement, to applicable
provisions thereof in connection with any assignment or transfer of interests in
the Borrower or the exercise by the Bank of certain of its remedies under the
Loan Documents), or (B) any material indenture, agreement (subject to the
approval or consent of ▇▇▇▇ ▇. ▇▇▇▇▇ under the Employment Agreement), or other
instrument, including without limitation, the Licenses (subject to the approval
or consent of the FCC referred to in clause (i)), to which the Borrower or any
of the Borrower's 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 the Borrower's Subsidiaries, except
for Permitted Liens, except in the case of (i), (ii), (iii)(B) and (iv), to the
extent there would not be a Materially Adverse Effect.
(e) Business. The Borrower, together with its Subsidiaries, is
engaged in the management and provision of a
-27-
variety of telecommunications services, including providing fixed wireless
services.
(f) Licenses, etc. Except as provided for in Schedule 4 attached
hereto, the Licenses have been duly issued and are in full force and effect. The
Members, the Borrower and the Borrower's Subsidiaries are in compliance in all
material respects with all of the provisions thereof to the extent applicable
thereto and such that there is not an Event of Default under Section 8.1(m)
hereof. The Members, the Borrower and the Borrower's Subsidiaries have secured
all material Necessary Authorizations to conduct the Borrower's business which
it is conducting as of the Agreement Date or as of the date of any Advance, as
the case may be, and, as of such date, all such Necessary Authorizations are in
full force and effect. Except as set forth on Schedule 4 attached hereto or as
otherwise disclosed in writing to the Bank, no License nor any material
Necessary Authorization is the subject of any pending or, to the best of the
Borrower's knowledge, threatened revocation. The Licenses of the Borrower and
its Subsidiaries as of the Agreement Date are set forth on Schedule 1 hereto.
(g) Compliance with Law. The Borrower and the Borrower's
Subsidiaries are in substantial compliance with all material Applicable Law.
(h) Title to Assets. The Borrower and each of the Borrower's
Subsidiaries has good title to, or a valid leasehold interest in, all of its
assets, free and clear of any Liens, except for Permitted Liens. Except for
financing statements evidencing Permitted Liens, no financing statement under
the Uniform Commercial Code as in effect in any jurisdiction and no other filing
which names the Borrower or any of the Borrower's Subsidiaries as debtor or
which covers or purports to cover any of the assets of the Borrower or any of
the Borrower's Subsidiaries is currently effective and on file in any state or
other jurisdiction, and neither the Borrower nor any of the Borrower's
Subsidiaries has signed any such financing statement or filing or any security
agreement authorizing any secured party thereunder to file any such financing
statement or filing.
(i) Litigation. There is no action, suit, proceeding or
investigation pending against, or, to the knowledge of the Borrower, threatened
against the Borrower or any of the Borrower's Subsidiaries or any of their
respective properties, including without limitation the Licenses, in any court
or before any arbitrator of any kind or before or by any governmental body
(including without limitation the FCC) except as set forth on Schedule 4
attached hereto or which (i) calls into question the validity of this Agreement
or any other Loan Document, or (ii) except as set forth in Schedule 4 attached
hereto,
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individually or collectively involves the possibility of any judgment or
liability not fully covered by insurance (subject to applicable deductibles), as
to which, in any such case, there is a reasonable possibility of an adverse
determination and which, if determined adversely to the Borrower or any of the
Borrower's Subsidiaries, could reasonably be expected to have a Materially
Adverse Effect.
(j) Taxes. All federal, state and other tax returns of the Borrower
and each of the Borrower's Subsidiaries required by law to be filed have been
duly filed and all federal, state and other taxes, including, without
limitation, withholding taxes, assessments and other governmental charges or
levies required to be paid by the Borrower or any of the Borrower's Subsidiaries
or imposed upon the Borrower or any of the Borrower's Subsidiaries or any of
their respective properties, income, profits or assets, which are due and
payable, have been paid, except any such taxes (i) (x) the payment of which the
Borrower or any Subsidiary is diligently contesting in good faith by appropriate
proceedings, (y) for which adequate reserves to the extent required by GAAP have
been provided on the books of the Borrower or the Subsidiary involved, and (z)
as to which no Lien other than a Permitted Lien has attached and no foreclosure,
distraint, sale or similar proceedings have been commenced, or (ii) which may
result from audits not yet conducted. The charges, accruals and reserves on the
books of the Borrower and each Subsidiary in respect of taxes are, in the
judgment of the Borrower, adequate.
(k) Financial Statements. The Borrower has furnished or caused to be
furnished to the Bank the unaudited financial statements for the Borrower for
the fiscal period ended September 30, 1996, all of which have been prepared in
accordance with GAAP and present fairly in all material respects the financial
position of the Borrower on and as at such date and the results of operations
for the periods then ended (subject to normal year-end and audit adjustments and
the absence of footnotes). As of the Agreement Date, neither the Borrower nor
any of the Borrower's 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, or as
incurred in the ordinary course of business since the date of such financial
statements, and there are no material unrealized losses of the Borrower or any
of the Borrower's Subsidiaries.
(l) No Material Adverse Change. There has occurred no event since
September 30, 1996 which has or which would reasonably be expected to have a
Materially Adverse Effect, it being understood that the existence, in and of
itself, of the proceedings disclosed on Schedule 4 attached hereto shall not be
-29-
deemed an event which would reasonably be expected to have a Materially Adverse
Effect.
(m) ERISA. The Borrower and each ERISA Affiliate and each of their
respective Plans are in material compliance with ERISA and the Code and neither
the Borrower nor any of its ERISA Affiliates has incurred any material
accumulated funding deficiency with respect to any such Plan within the meaning
of ERISA or the Code which has not been corrected. The Borrower and each ERISA
Affiliate have complied in all material respects with all requirements of COBRA.
Neither the Borrower nor any of its Subsidiaries has made any promises of
retirement or other benefits to employees, except as set forth in the Plans, in
written agreements with such employees, or in the Borrower's employee handbook
and memoranda to employees. Neither the Borrower nor any of its ERISA Affiliates
has incurred any material liability to PBGC in connection with any such Plan.
The assets of each such Plan which is subject to Title IV of ERISA are
sufficient to provide for the payment of all "benefit liabilities" (within the
meaning of Section 4041 of ERISA) due under the Plan upon termination except to
the extent that any such failure to maintain sufficient assets would not result
in any Materially Adverse Effect. No Reportable Event has occurred and is
continuing with respect to any such Plan. Neither the Borrower nor any ERISA
Affiliate has engaged in any "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 such ERISA Affiliate to any material tax or penalty on
prohibited transactions imposed by ERISA Section 502 or Code Section 4975.
Neither the Borrower nor any ERISA Affiliate has withdrawn from or caused a
partial withdrawal to occur with respect to any Plan which is a Multiemployer
Plan and neither the Borrower nor any ERISA Affiliate knows, has reason to know
or has received notice that any such Plan is in reorganization (as defined in
Code Section 418 or Title IV of ERISA) (which reorganization or withdrawal could
reasonably be expected to have a Materially Adverse Effect). As of the date
hereof, neither the Borrower nor any ERISA Affiliate has any material obligation
or material liability to contribute to any Multiemployer Plan. No withdrawal
liability to any Multiemployer Plan has been or is expected to be incurred which
would result in a Materially Adverse Effect. Neither the Borrower nor any ERISA
Affiliate has engaged in any transaction which could subject it to any material
liability under Section 4096 or Section 4212 of ERISA.
(n) Compliance with Regulations G, T, U and X. Neither the Borrower
nor any of its Subsidiaries is engaged principally or as one of its important
activities in the business of extending credit for the purpose of purchasing or
carrying, and neither the Borrower nor any of its Subsidiaries owns or presently
intends to acquire, any "margin security" or "margin
-30-
stock" as defined in Regulations G, T, U, and X (12 C.F.R. Parts 207, 220, 221
and 224) of the Board of Governors of the Federal Reserve System (herein called
"margin stock"). None of the proceeds of the Loans will be used, directly or
indirectly, for the purpose of purchasing or carrying any margin stock or for
the purpose of reducing or retiring any Indebtedness which was originally
incurred to purchase or carry margin stock or for any other purpose which might
constitute this transaction a "purpose credit" within the meaning of said
Regulations G, T, U, and X. The Borrower has not taken, caused or authorized to
be taken, and will not take any action which might cause this Agreement or the
Note to violate Regulation G, T, U, or X or any other regulation of the Board of
Governors of the Federal Reserve System or to violate the Securities Exchange
Act of 1934, in each case as now in effect or as the same may hereafter be in
effect. If so requested by the Bank, the Borrower will furnish the Bank with (i)
a statement or statements in conformity with the requirements of Federal Reserve
Forms G-3 and/or U-1 referred to in Regulations G and U of said Board of
Governors and (ii) other documents evidencing its compliance with the margin
regulations, reasonably requested by the Bank. Neither the making of the Loans
nor the use of proceeds thereof will violate, or be inconsistent with, the
provisions of Regulation G, T, U, or X of said Board of Governors.
(o) Investment Company Act. Neither the Borrower nor any of its
Subsidiaries is required to register under the provisions of the Investment
Company Act of 1940, as amended, and neither the entering into or performance by
the Borrower and its Subsidiaries of this Agreement and the Loan Documents to
which they are respectively parties nor the issuance of the Note violates any
provision of such Act or requires any consent, approval or authorization of, or
registration with, the Securities and Exchange Commission or any other
governmental or public body or authority pursuant to any provisions of such Act.
(p) Governmental Regulation. Neither the Borrower nor any of the
Borrower's Subsidiaries is required to obtain any consent, approval,
authorization, permit or license which has not already been obtained from, or
effect any filing or registration which has not already been effected with, any
federal, state or local regulatory authority in connection with the performance,
in accordance with their respective terms, of this Agreement or any other Loan
Document the failure of which to obtain could have a Materially Adverse Effect.
(q) Absence of Default, Etc. The Borrower and the Borrower's
Subsidiaries are in compliance in all material respects with all of the
provisions of their respective partnership agreements, Certificates or Articles
of Incorporation or similar organizational document and By-Laws or operating
-31-
agreement, as the case may be, and no event has occurred or failed to occur
(including, without limitation, any matter which could create a Default
hereunder by cross-default) which has not been remedied or waived, the
occurrence or non-occurrence of which constitutes a Default. Except as set forth
on Schedules 4 and 5 attached hereto, neither the Borrower nor any of the
Borrower's Subsidiaries is a party to or bound by any contract or agreement
continuing after the Agreement Date, or bound by any Applicable Law, that could
reasonably be expected to have a Materially Adverse Effect or result in the loss
of any License.
(r) Accuracy and Completeness of Information. All information,
reports, prospectuses and other papers and data relating to the Borrower or any
of its Subsidiaries and furnished by or on behalf of the Borrower or any of its
Subsidiaries to the Bank were, at the time furnished, true, complete and correct
in all material respects to the extent necessary to give the Bank true and
accurate knowledge of the subject matter.
(s) Agreements with Affiliates. Except for agreements or
arrangements with Affiliates wherein the Borrower or one or more of the
Borrower's Subsidiaries provides goods or services to or receives goods or
services from such Affiliates for fair consideration or which are set forth on
Schedule 5 attached hereto, neither the Borrower nor any of the Borrower's
Subsidiaries has (i) any written agreements or binding arrangements of any kind
with any Affiliate or (ii) any management or consulting agreements of any kind
with any Affiliate.
(t) Payment of Wages. The Borrower and each of the Borrower's
Subsidiaries are in compliance with the Fair Labor Standards Act, as amended, in
all material respects, and to the knowledge of the Borrower and each of the
Borrower's Subsidiaries, such Persons have paid all minimum and overtime wages
required by law to be paid to their respective employees.
(u) Priority. The Security Interest is a valid and, to the extent
required by Applicable Law, upon the filing of appropriate financing statements,
perfected first priority security interest in the Collateral in favor of the
Bank, securing, in accordance with the terms of the Security Documents, the
Obligations, and the Collateral is subject to no Liens other than Permitted
Liens.
(v) Patents, Trademarks, etc. The Borrower and each of the
Borrower's Subsidiaries owns, possesses or has the right to use all material
licenses and rights to all material patents, Trademarks, trademark rights, trade
names, trade name rights, service marks, and copyrights, and rights with respect
thereto, necessary to conduct its business in all material respects as now
-32-
conducted, without known conflict with any patent, Trademark, trade name,
service ▇▇▇▇, license or copyright of any other Person, and in each case, with
respect to patents, Trademarks, trademark rights, trade names, trade name and
copyrights and licenses with respect thereto owned by Borrower or the Borrower's
Subsidiaries, subject to no mortgage, pledge, lien, lease, encumbrance, charge,
security interest, title retention agreement or option except for Permitted
Liens. All such licenses and rights with respect to patents, Trademarks,
trademark rights, trade names, trade name rights, service marks and copyrights
are in full force and effect, and to the extent applicable, the Borrower and the
Borrower's Subsidiaries are in compliance in all material respects with all of
the provisions thereof. No such material patent, Trademark, trademark rights,
trade names, trade name rights, service marks, copyrights or licenses is subject
to any pending (of which the Borrower has received notice) or, to the best of
the Borrower's knowledge, threatened attack or revocation.
Section 4.2 Survival of Representations and Warranties, etc. All
representations and warranties made under this Agreement and any other Loan
Document shall be deemed to be made, and shall be true and correct, at and as of
the Agreement Date and on the date of each Advance except to the extent
previously modified or waived in accordance with the terms hereof and to the
extent relating specifically to the Agreement Date or some other 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 Bank,
any investigation or inquiry by the Bank or the making of any Advance under this
Agreement.
ARTICLE 5
General Covenants
So long as any of the Obligations is outstanding and unpaid or the Bank
has an obligation to fund Advances hereunder (whether or not the conditions to
borrowing have been or can be fulfilled), and unless the Bank shall otherwise
consent in writing:
Section 5.1 Preservation of Existence and Similar Matters. The Borrower
will, and will cause each of the Borrower's Subsidiaries to:
(a) except as permitted in Section 7.4 hereof, preserve and maintain
its existence, and its material rights, franchises, licenses and
privileges in the state of its organization; and
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(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 except where
the failure to so qualify and be authorized could not reasonably be
expected to have a Materially Adverse Effect.
Section 5.2 Business; Compliance with Applicable Law. The Borrower will,
and will cause each of the Borrower's Subsidiaries to, (a) engage in the
business described in Section 4.1(e) hereof and related businesses and no
unrelated activities, and (b) comply in all material respects with the
requirements of all Applicable Law.
Section 5.3 Maintenance of Properties. The Borrower will, and will cause
each of the Borrower's Subsidiaries to, maintain or cause to be maintained in
the ordinary course of business in good repair, working order and condition
(reasonable wear and tear excepted) all properties used in their respective
businesses (whether owned or held under lease), other than obsolete equipment or
unused assets and from time to time make or cause to be made all needed and
appropriate repairs, renewals, replacements, additions, betterments and
improvements thereto.
Section 5.4 Accounting Methods and Financial Records. The Borrower will,
and will cause each of 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.
(a) The Borrower will, and will cause each of the Borrower's
Subsidiaries to:
(i) Maintain insurance including, but not limited to, public
liability coverage insurance from responsible companies in such amounts
and against such risks to the Borrower and each of the Borrower's
Subsidiaries as is prudent for similarly situated companies engaged in the
wireless telecommunications industry; and
(ii) Keep their respective assets insured against loss or
damage by fire, theft, burglary, loss in transit, explosions and hazards
by extended coverage, in amounts which are prudent for similarly situated
companies engaged
-34-
in the wireless telecommunications industry; all premiums thereon to be
paid by or on behalf of the Borrower and its Subsidiaries.
(b) In the event that the Borrower or any of the Borrower's
Subsidiaries receives the proceeds in respect of any of the assets of any of the
Borrower's Subsidiaries of any insurance maintained pursuant to Section
5.5(a)(ii) hereof in excess of $1,000,000 in any calendar year, which proceeds
are not committed to be used within twelve (12) calendar months from receipt
thereof by the Borrower or the Borrower's Subsidiaries, as the case may be, to
obtain replacement assets, the Borrower shall make a principal payment of the
Loans in an amount equal to the amount of such proceeds. Any payment hereunder
shall be deemed to be Net Proceeds and applied in accordance with, and subject
to, Section 2.7(c) hereof, and shall permanently reduce the Commitment in
accordance with Section 2.5(a) hereof.
Section 5.6 Payment of Taxes and Claims. The Borrower will, and will cause
each of the Borrower's Subsidiaries to, pay and discharge all material taxes,
including, without limitation, withholding taxes, assessments and governmental
charges or levies required to be paid by them or imposed upon them or their
income or profits or upon any properties belonging to them, prior to the date on
which penalties attach thereto, and all lawful claims for labor, materials and
supplies which, if unpaid, would reasonably be expected to become a Lien or
charge upon any of their properties; except that no such tax, assessment,
charge, levy or claim need be paid which is being diligently contested in good
faith by appropriate proceedings and for which adequate reserves to the extent
required by GAAP shall have been set aside on the appropriate books, but only so
long as such tax, assessment, charge, levy or claim does not become a Lien or
charge other than a Permitted Lien and no foreclosure, distraint, sale or
similar proceedings shall have been commenced. The Borrower will, and will cause
each of the Borrower's Subsidiaries to, timely file all material information
returns required by federal, state or local tax authorities.
Section 5.7 Compliance with ERISA.
(a) The Borrower shall, and shall cause the Borrower's Subsidiaries
to, make all contributions to any Employee Pension Plan when such contributions
are due and not incur any "accumulated funding deficiency" within the meaning of
Section 412(a) of the Code, whether or not waived, and will otherwise comply
with the requirements of the Code and ERISA with respect to the operation of all
Plans, except to the extent that the failure to so comply would not reasonably
be expected to have a Materially Adverse Effect.
-35-
(b) The Borrower shall, and shall cause the Borrower's Subsidiaries
to, comply in all respects with the requirements of COBRA with respect to any
Plans subject to the requirements thereof, except to the extent that the failure
to so comply would not reasonably be expected to have a Materially Adverse
Effect.
(c) The Borrower shall furnish to the Bank (i) within 30 days after
any officer of the Borrower obtains knowledge that (A) 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, (B) any Reportable Event with respect to which the reporting
requirement under ERISA Section 4043 has not been waived or which could result
in a Materially Adverse Effect has occurred with respect to any Employee Pension
Plan or (C) PBGC has instituted or will institute proceedings under Title IV of
ERISA to terminate any Employee Pension Plan or to appoint a trustee to
administer any Employee Pension Plan, a statement setting forth the details as
to such prohibited transaction, Reportable Event or termination or appointment
proceedings and the action which it (or any other Employee Pension Plan sponsor
if other than the Borrower) proposes to take with respect thereto, together with
a copy of the notice of such Reportable Event given to PBGC if a copy of such
notice is available to the Borrower or any of its ERISA Affiliates, (ii)
promptly after receipt thereof, a copy of any material notice the Borrower or
any of its ERISA Affiliates receives from PBGC, or the Internal Revenue Service
or the Department of Labor which sets forth or proposes any action or
determination with respect to such Plan, (iii) promptly after the filing
thereof, any annual report required to be filed pursuant to ERISA in connection
with each Plan maintained by the Borrower or any of its ERISA Affiliates,
including only the Borrower's Subsidiaries, and (iv) promptly upon the Bank's
request therefor, such additional information concerning any such Plan as may be
reasonably requested by the Bank.
(d) The Borrower will promptly notify the Bank of any material
excise taxes which have been assessed or which the Borrower or any of its ERISA
Affiliates has reason to believe may be assessed against the Borrower or any of
its ERISA Affiliates by the Internal Revenue Service or the Department of Labor
with respect to any Plan of the Borrower or its ERISA Affiliates.
(e) Within the time required for notice to the PBGC under Section
302(f)(4)(A) of ERISA, the Borrower will notify the Bank of any lien arising
under Section 302(f) of ERISA in favor of any Plan of the Borrower or its ERISA
Affiliates.
(f) The Borrower will notify the Bank within 30 days after Borrower
or any ERISA Affiliate has any material present or future obligation to make or
to contribute to a Multiemployer
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Plan, and such notification will include the projected contributions for the
next twelve months. The Borrower will notify the Bank within 30 days after the
Borrower or any ERISA Affiliate knows that any Multiemployer Plan under which
the Borrower or any such ERISA Affiliate is an employer, is in reorganization,
as defined in Code Section 418 or Title IV of ERISA, or is insolvent. The
Borrower will promptly notify the Bank of any withdrawal liability imposed upon
the Borrower or any ERISA Affiliate under ERISA Section 4201(a) with respect to
any Plan.
(g) The Borrower will not, and will not permit 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 or any of its ERISA Affiliates to any tax,
penalty, or other liabilities which would reasonably be expected to have a
Materially Adverse Effect:
(i) engage in any transaction in connection with which the
Borrower or any ERISA Affiliate could be subject to either a civil penalty
assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section
4975 of the Code;
(ii) terminate any Employee Pension Plan in a manner, or take
any other action, which would result in any liability of the Borrower or
any ERISA Affiliate to the PBGC;
(iii) fail to make full payment when due of all amounts which,
under the provisions of any Plan, the Borrower 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 the Borrower's Subsidiaries to, permit representatives of the Bank, to (i)
visit and inspect the properties of the Borrower or any of the Borrower's
Subsidiaries during business hours (which, prior to the occurrence and
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continuation of a Default shall require reasonable prior notice by the Bank),
(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 the Borrower's
Subsidiaries will also permit representatives of the Bank to discuss with their
respective accountants the Borrower's and the Borrower's Subsidiaries'
businesses, assets, liabilities, financial positions, results of operations and
business prospects.
Section 5.9 Payment of Indebtedness; Loans. Subject to any provisions
herein or in any other Loan Document, the Borrower will, and will cause each of
the Borrower's Subsidiaries to, pay any and all of their respective Indebtedness
when and as it becomes due or to the extent of trade payables of such Persons
otherwise in accordance with ordinary business practices customary for similarly
situated companies in the wireless telecommunications 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 may only use the aggregate
proceeds of all Advances directly or indirectly: (a) to fund Capital
Expenditures; (b) for working capital needs (including interest payments and
fees with respect to the Loans) and for general corporate purposes; and (c)
Acquisitions described in clause (c) of the definition of Acquisitions set forth
herein. No proceeds of Advances hereunder shall be used for the purchase or
carrying or the extension of credit for the purpose of purchasing or carrying,
any margin stock within the meaning of Regulations G, T, U, and X of the Board
of Governors of the Federal Reserve System.
Section 5.11 Indemnity. The Borrower agrees to indemnify and hold harmless
the Bank and its affiliates, employees, representatives, shareholders, officers
and directors (any of the foregoing shall be an "Indemnitee") from and against
any and all claims, liabilities, losses, damages, actions, reasonable attorneys'
fees and expenses (as such fees and expenses are incurred) and demands by any
party, including the costs of investigating and defending such claims, whether
or not the Borrower, any Subsidiary or the Person seeking indemnification is the
prevailing party (a) resulting from any breach or alleged breach by the Borrower
or any Subsidiary of the Borrower of any representation or warranty made
hereunder; or (b) otherwise arising out of (i) the Commitment or otherwise under
this Agreement, any Loan Document or any transaction contemplated hereby or
thereby, including, without limitation, the use of the proceeds of Loans
hereunder in any fashion by the Borrower or the
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performance of their respective obligations under the Loan Documents by the
Borrower or any of the Borrower's Subsidiaries, (ii) allegations of any
participation by the Bank in the affairs of the Borrower or any of its
Subsidiaries, or allegations that any of them has any joint liability with the
Borrower or any of its Subsidiaries for any reason, (iii) any claims against the
Bank by any shareholder or other investor in or lender to the Borrower or any
Subsidiary of the Borrower, by any brokers or finders or investment advisers or
investment bankers retained by the Borrower or by any other third party, arising
out of the Commitment or otherwise under this Agreement or any other Loan
Document; or (c) in connection with taxes (not including federal or state income
taxes or taxes based upon the revenues of such Persons), fees, and other charges
payable in connection with the Loans, or the execution, delivery, and
enforcement of this Agreement, the Security Documents, the other Loan Documents,
and any amendments thereto or waivers of any of the provisions thereof; unless
the Person seeking indemnification hereunder is determined in such case to have
acted with gross negligence or willful misconduct, in any case, by a final,
non-appealable judicial order and provided that the foregoing indemnification
obligation shall not apply to the extent such claims, liabilities, losses,
damages, actions or attorneys' fees result from the breach of any Loan Document
by the Person seeking indemnification. The obligations of the Borrower under
this Section 5.11 are in addition to, and shall not otherwise limit, any
liabilities which the Borrower might otherwise have in connection with any
warranties or similar obligations of the Borrower in any other Loan Document.
Section 5.12 Covenants Regarding Formation of Subsidiaries and
Acquisitions; Partnership, Subsidiaries. At the time (i) of any Acquisition by a
Subsidiary, (ii) of any Acquisition of a Person which becomes a Subsidiary,
(iii) of the formation of any new Subsidiary which is permitted under this
Agreement, or (iv) any Subsidiary of the Borrower existing on the Agreement Date
obtains any License or other authorization to provide telecommunications
services or has assets with a value in excess of $100,000, the Borrower will,
and will cause the Borrower's Subsidiaries, as appropriate, to (a) provide to
the Bank an executed security agreement for such Subsidiary in form and
substance reasonably satisfactory to the Bank which shall constitute both a
Security Document and a Loan Document for purposes of this Agreement, as well as
a loan certificate for such Subsidiary in form and substance reasonably
satisfactory to the Bank, together with appropriate attachments; (b) pledge to
the Bank all of the stock or partnership interests (or other instruments or
securities evidencing ownership) of such Subsidiary which is acquired or formed,
beneficially owned by the Borrower or any of the Borrower's Subsidiaries, as the
case may be, as additional Collateral for the Obligations to be held by
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the Bank in accordance with the terms of an extant Borrower Pledge Agreement in
form and substance reasonably satisfactory to the Bank or Subsidiary pledge
agreement in form and substance reasonably satisfactory to the Bank, or an
assignment of rights by partner in form and substance reasonably satisfactory to
the Bank, and execute and deliver to the Bank all such documentation for such
pledge as, in the reasonable opinion of the Bank, is appropriate; (c) upon
reasonable request by the Bank, provide revised financial projections for the
remainder of the fiscal year and for each subsequent year until the Maturity
Date which reflect such Acquisition or formation, certified by the Chief
Financial Officer of the Borrower, together with a statement by such Person that
no Default exists or would be caused by such Acquisition or formation, (d)
obtain all material authorizations for the execution and delivery of the
foregoing documents, and (e) all other documentation, including one or more
opinions of counsel, reasonably satisfactory to the Bank which in its reasonable
opinion is appropriate with respect to such Acquisition or the formation of such
Subsidiary. Any document, agreement or instrument executed or issued pursuant to
this Section 5.12 shall be a "Loan Document" for purposes of this Agreement.
Section 5.13 Payment of Wages. The Borrower shall and shall cause each of
the Borrower's Subsidiaries to at all times comply, in all material respects,
with the requirements of the Fair Labor Standards Act, as amended, including,
without limitation, the provisions of such Act relating to the payment of
minimum and overtime wages as the same may become due from time to time.
Section 5.14 Maintenance of Licenses. The Borrower shall and shall cause
each of the Borrower's Subsidiaries to use their respective best efforts to
maintain all Licenses to the extent required such that there will not be an
Event of Default under Section 8.1(m) hereof. As of any date during the term of
this Agreement, the Borrower shall and shall cause each of the Borrower's
Subsidiaries to (a) obtain and maintain all Necessary Authorizations required to
conduct the Borrower's or such Subsidiary's business and operations as then
conducted, and (b) maintain all Necessary Authorizations in place on the
Agreement Date to the extent that failure to maintain such Necessary
Authorization would be reasonably likely to cause a Materially Adverse Effect.
Section 5.15 Further Assurances. The Borrower will promptly cure, or cause
to be cured, defects in the creation and issuance of any of the Note and the
execution and delivery of any of the Loan Documents (including this Agreement),
resulting from any acts or failure to act by the Borrower or any of the
Borrower's Subsidiaries or any employee or officer thereof. The
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Borrower at its expense will promptly execute and deliver to the Bank, or cause
to be executed and delivered to the Bank, all such other and further documents,
agreements, and instruments in compliance with or accomplishment of the
covenants and agreements of the Borrower in the Loan Documents, including this
Agreement or to obtain any consents required in connection with the Loan
Documents and as may be reasonably requested.
ARTICLE 6
Information Covenants
So long as any of the Obligations is outstanding and unpaid or the Bank
has an obligation to fund Advances hereunder (whether or not the conditions to
borrowing have been or can be fulfilled) and unless the Bank shall otherwise
consent in writing, the Borrower will furnish or cause to be furnished to the
Bank the following:
Section 6.1 Quarterly Financial Statements and Information. Within
forty-five (45) days after the last day of each quarter of each fiscal year of
the Borrower, the balance sheet of the Borrower and the balance sheet of the
Borrower's Subsidiaries as at the end of such quarter and as of the end of the
preceding fiscal year, and the related statements of operations and the related
statements of cash flows of the Borrower and of the Borrower's Subsidiaries for
such quarter and for the elapsed portion of the year ended with the last day of
such period, which shall set forth in comparative form such figures as at the
end of and for such period and appropriate prior period and shall be certified
by the chief financial officer of the Borrower to have been prepared in
accordance with GAAP and to present fairly in all material respects the
financial position of the Borrower and the Borrower's Subsidiaries as at the end
of such period and the results of operations for such period, and for the
elapsed portion of the year ended with the last day of such period, subject only
to normal year-end and audit adjustments and the absence of footnotes.
Section 6.2 Annual Financial Statements and Information. No later than
April 30, 1997, the audited consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of 1996 and the related audited consolidated and
unaudited consolidating statements of operations for such fiscal year, the
related audited consolidated statements of cash flow and stockholders' equity
for such fiscal year, which shall be accompanied by an opinion which shall be in
scope and substance reasonably satisfactory to the Bank of independent certified
public accountants of recognized national standing reasonably acceptable to the
Bank.
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Section 6.3 Performance Certificates.
(a) Within ten (10) days following the last day of each calendar
month, a certificate of the president or chief financial officer of the Borrower
as to its financial performance in form and substance reasonably satisfactory to
the Bank, (1) stating that the signer has reviewed the terms of this Agreement
and that in the course of the performance of his or her duties, he or she would
normally have knowledge of any condition or event which would constitute a
Default and certifying that, to the best of his or her knowledge, no Default or
Event of Default has occurred as at the end of such quarter or year, as the case
may be, or, if a Default or an Event of Default has occurred, disclosing each
such Default or Event of Default and its nature, when it occurred, whether it is
continuing, and the steps being taken by the Borrower with respect to such
Default or Event of Default, (2) containing a status update with respect to all
material Necessary Authorizations being sought by the Borrower and its
Subsidiaries as of the last such certificate and on the date of such
certificate, and (3) summarizing the progress with respect to any build-out
requirements of any Licenses.
(b) No later than July 15, 1997, a certificate of the president,
chief executive officer or chief financial officer of the Borrower certifying
that to its knowledge the Borrower has satisfied the buildout requirements for
each of the Licenses set forth in Schedule 1 attached hereto.
Section 6.4 Copies of Other Reports.
(a) Promptly upon receipt thereof, copies of all management letters,
if any, submitted to the Borrower by the Borrower's independent public
accountants regarding the Borrower.
(b) Promptly upon receipt thereof, copies of any material adverse
notice or report regarding any License.
(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 the Borrower's
Subsidiaries, as the Bank may reasonably request.
(d) Promptly after the sending thereof, copies of all statements,
reports and other information which the Borrower or any of the Borrower's
Subsidiaries sends to security holders of the Borrower generally.
Section 6.5 Notice of Litigation and Other Matters. Notice specifying the
nature and status of any of the following
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events, promptly, but in any event not later than five (5) Business Days after
the occurrence of any of the following events becomes known to the Borrower:
(i) the commencement of all actions, proceedings and
investigations by or before any governmental body and all actions and
proceedings in any court or before any arbitrator against, the Borrower or
any Subsidiary, or any of their respective properties, assets or
businesses or any License which, if determined adversely to the Borrower
or such Subsidiary, could reasonably be expected to have a Materially
Adverse Effect;
(ii) any material adverse change with respect to the business,
assets, liabilities, financial position, results of operations or business
prospects of the Borrower or any Subsidiary other than changes in the
ordinary course of business which have not had and would not reasonably be
expected to have a Materially Adverse Effect;
(iii) any 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 under any material agreement other than this Agreement and the
other Loan Documents to which the Borrower or any Subsidiary is party or
by which any of their respective properties may be bound, and (B) which
could reasonably be expected to have a Materially Adverse Effect, giving
in each case the details thereof and specifying the action proposed to be
taken with respect thereto;
(iv) 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 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 or any ERISA Affiliate of the Borrower to
withdraw or partially withdraw from any Plan or to terminate any Plan; and
(v) the occurrence of any event subsequent to the Agreement
Date which, if such event had occurred prior to the Agreement Date, would
have constituted an exception to the representation and warranty in
Section 4.1(m) of this Agreement.
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ARTICLE 7
Negative Covenants
So long as any of the Obligations is outstanding and unpaid or the Bank
has an obligation to fund Advances hereunder (whether or not the conditions to
borrowing have been or can be fulfilled) and unless the Bank shall otherwise
give its prior consent in writing:
Section 7.1 Indebtedness for Money Borrowed 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 for Money Borrowed
except:
(a) the Obligations;
(b) operating accounts payable, accrued expenses and customer
advance payments incurred in the ordinary course of business and taxes,
assessments, governmental charges or similar claims;
(c) Indebtedness secured by Permitted Liens;
(d) Obligations under Interest Hedge Agreements in respect of the
Loans;
(e) Indebtedness for Money Borrowed of the Borrower or the
Borrower's Subsidiaries which does not exceed $2,000,000 in the aggregate at any
one time outstanding; provided such Indebtedness for Money Borrowed is (1)
purchase money Indebtedness of any of the Borrower's Subsidiaries that is
incurred or assumed to finance part or all of (but not more than) the purchase
price of a tangible asset in which neither the Borrower nor such Subsidiary had
at any time prior to such purchase any interest other than a security interest
or an interest as lessee under an operating lease, (2) Capitalized Lease
Obligations of any of the Borrower's Subsidiaries, or (3) reimbursement
obligations of any of the Borrower's Subsidiaries with respect to letters of
credit; and
(f) Affiliate Subordinated Debt.
Section 7.2 Limitation on Liens. The Borrower shall not, and shall not
permit any of the Borrower's 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 (including, without
limitation, transmitting or receiving equipment of any type, fiber or any other
type of interconnection media, telephone
-44-
switches of any type, Licenses, or any contract (whether in the name of the
Borrower or otherwise) pursuant to which the Borrower or any of the Borrower's
Subsidiaries provides telecommunications services), used in the business or
operations of the Borrower or any of the Borrower's Subsidiaries whether now
owned or hereafter acquired, except for Permitted Liens, and shall not, after
the Agreement Date, undertake, covenant or agree with any other Person that it
will not create, assume, incur or permit to exist or to be created, assumed,
incurred or permitted to exist any first priority lien by the Bank on any of
such assets.
Section 7.3 Amendment and Waiver. The Borrower shall not, and shall not
permit any of the Borrower's Subsidiaries to, enter into any amendment of, or
agree to or accept or consent to any waiver of any of the material provisions of
its articles or certificate of incorporation or partnership agreement or other
organizational agreement, as appropriate, or any management or service agreement
with any Member or any material employment agreement.
Section 7.4 Liquidation, Merger, or Disposition of Assets.
(a) Disposition of Assets. The Borrower shall not, and shall not
permit any of the Borrower's Subsidiaries to, at any time sell, lease, abandon,
or otherwise dispose of any assets (other than assets disposed of or leased in
the ordinary course of business) without the prior written consent of the Bank;
provided, however, that the prior written consent of the Bank shall not be
required for Permitted Asset Sales.
(b) Liquidation or Merger. The Borrower shall not, and shall not
permit any of the Borrower's 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 Subsidiaries, provided the Borrower is the surviving corporation, or
(ii) a merger between or among two or more Subsidiaries, 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, its Subsidiary is
the surviving corporation.
Section 7.5 Limitation on Guaranties. The Borrower shall not, and shall
not permit any of the Borrower's Subsidiaries to, at any time Guaranty, assume,
be obligated with respect to, or permit to be outstanding any Guaranty of, any
obligation of any other Person other than (a) a guaranty by endorsement of
negotiable instruments for collection in the ordinary course of business, or (b)
obligations under agreements of the Borrower or any of its Subsidiaries entered
into in connection with leases of
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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 other
Affiliates, or (c) Guaranties of Indebtedness incurred as permitted pursuant to
Sections 7.1(f) hereof, or (d) as may be contained in any Loan Document.
Section 7.6 Investments and Acquisitions. The Borrower shall not, and
shall not permit any of the Borrower's Subsidiaries to, directly or indirectly
make any loan or advance, or otherwise acquire for consideration evidences of
Indebtedness, capital stock or other securities of any Person or other assets or
property (other than assets or property (i) acquired in the ordinary course of
business, (ii) received in connection with a capital contribution from a Member
or (iii) received in connection with a Permitted Asset Sale), or make any
Acquisition:
(a) the Borrower and the Borrower's Subsidiaries may, directly or
through a brokerage account (i) purchase marketable, direct obligations of the
United States of America, its agencies and instrumentalities maturing within
three hundred sixty-five (365) days of the date of purchase, (ii) purchase
commercial paper issued by corporations, each of which shall have a combined net
worth of at least $100 million and each of which conducts a substantial part of
its business in the United States of America, maturing within two hundred
seventy (270) days from the date of the original issue thereof, and rated "P-2"
or better by ▇▇▇▇▇'▇ Investors Service, Inc. or "A-2" or better by Standard and
Poor's, a division of ▇▇▇▇▇▇-▇▇▇▇, Inc., and (iii) purchase repurchase
agreements, bankers' acceptances, and certificates of deposit maturing within
three hundred sixty-five (365) days of the date of purchase which are issued by,
or time deposits maintained with, a United States national or state bank the
deposits of which are insured by the Federal Deposit Insurance Corporation or
the Federal Savings and Loan Insurance Corporation and having capital, surplus
and undivided profits totaling more than $100 million and rated "A" or better by
▇▇▇▇▇'▇ Investors Service, Inc. or Standard and Poor's, a division of
▇▇▇▇▇▇-▇▇▇▇, Inc.;
(b) except that so long as no Default then exists or would be caused
thereby and subject to compliance with Section 5.12 hereof (to the extent
applicable), the Borrower or any of its Subsidiaries may make Acquisitions
during the term hereof which do not require cash payments (or transfers of
tangible assets) by the Borrower in an aggregate amount after the Agreement Date
in excess of $12,000,000; and
(c) except that so long as no Event of Default under Section 8.1(s)
hereof then exists or would be caused thereby, each of MSI and DSC may transfer
the Licenses held by such Person to the Borrower as a contribution of capital.
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Notwithstanding the foregoing, it is expressly understood and agreed that the
Borrower's performance of its obligations existing under the Employment
Agreement shall not constitute a breach or default under Section 7.6 hereof or
any other provision of any Loan Document (other than Section 8.1(a) hereof).
Section 7.7 Restricted Payments and Purchases. The Borrower shall not, and
shall not permit any of the Borrower's Subsidiaries to, directly or indirectly
declare or make any Restricted Payment or Restricted Purchase; provided,
however, that the Borrower may make payments required under the Management and
Services Agreement and the Employment Agreement.
Section 7.8 Affiliate Transactions. Except as specifically provided herein
(including, without limitation, Sections 7.4 and 7.6 hereof) and as may be
described on Schedule 5 attached hereto, the Borrower shall not, and shall not
permit any of the Borrower's 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.
Section 7.9 ERISA Liabilities. The Borrower shall not, and shall cause
each of its ERISA Affiliates not to, (i) permit the assets of any of their
respective Plans to be less than the amount necessary to provide all accrued
benefits under such Plans to the extent that any such failure to maintain
sufficient assets could reasonably be expected to result in a Materially Adverse
Effect.
Section 7.10 Limitation on Upstream Dividends by Subsidiaries. The
Borrower shall not permit any Subsidiary to enter into or agree, or otherwise
become subject, to any agreement, contract or other arrangement with any Person
pursuant to the terms of which (a) such Subsidiary is or would be prohibited
from declaring or paying any cash dividends or distributions on any class of its
stock or any partnership interests owned directly or indirectly by the Borrower
or from making any other distribution on account of any class of any such stock
or any such partnership interests (herein referred to as "Upstream Dividends")
or (b) the declaration or payment of Upstream Dividends by a Subsidiary to the
Borrower or to another Subsidiary, on an annual or cumulative basis, is or would
be otherwise limited or restricted.
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ARTICLE 8
Default
Section 8.1 Events of Default. Each of the following shall constitute an
Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
governmental or non-governmental body:
(a) Any representation or warranty made under this Agreement or any
other Loan Document shall prove to have been incorrect or misleading in any
material respect as of the time it was 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 Note or fees or other amounts payable to the Bank under any of
the Loan Documents, or any of them, when due and such Default shall not be cured
by payment in full within five (5) Business Days from the due date; or (ii) any
principal under any of the Note when due;
(c) The Borrower shall default in the performance or observance of
any agreement or covenant contained in Sections 5.2(a), 5.10, 6.1, 6.2 or
Article 7 hereof;
(d) The Borrower shall default in the performance or observance of
any other agreement or covenant contained in this Agreement not specifically
referred to elsewhere in this Section 8.1, and such default shall not be cured
within a period of thirty (30) days from the occurrence of such default;
(e) There shall occur any default in the performance or observance
of any agreement or covenant or breach in any material respect of any
representation or warranty contained in any of the Loan Documents (other than
this Agreement or as otherwise provided in Section 8.1 of this Agreement) by the
Borrower, any of its Subsidiaries, or any other obligor thereunder, which shall
not be cured within a period of thirty (30) days from the occurrence of such
default;
(f) There shall be entered and remain unstayed a decree or order for
relief in respect of the Borrower or any of the Borrower's Subsidiaries under
Title 11 of the United States Code, as now constituted or hereafter amended, or
any other applicable Federal or state bankruptcy law or other similar law, or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or
similar official of the Borrower or any of the Borrower's Subsidiaries, or of
any substantial part of their respective properties, or ordering the winding-up
or
-48-
liquidation of the affairs of the Borrower, or any of the Borrower's
Subsidiaries; or an involuntary petition shall be filed against the Borrower or
any of the Borrower's Subsidiaries, and a temporary stay entered, and (i) such
petition and stay shall not be diligently contested, or (ii) any such petition
and stay shall continue undismissed for a period of sixty (60) consecutive days;
(g) The Borrower or any of the Borrower's Subsidiaries shall file a
petition, answer or consent seeking relief under Title 11 of the United States
Code, as now constituted or hereafter amended, or any other applicable Federal
or state bankruptcy law or other similar law, or the Borrower or any of the
Borrower's Subsidiaries shall consent to the institution of proceedings
thereunder or to the filing of any such petition or to the appointment or taking
of possession of a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Borrower or any of the Borrower's
Subsidiaries or of any substantial part of their respective properties, or the
Borrower or any of the Borrower's Subsidiaries shall fail generally to pay their
respective debts as they become due or shall be adjudicated insolvent; the
Borrower shall suspend or discontinue its business; the Borrower or any of the
Borrower's Subsidiaries shall have concealed, removed any of its property with
the intent to hinder or defraud its creditors or shall have made a fraudulent or
preferential transfer under any applicable fraudulent conveyance or bankruptcy
law, or the Borrower or any of the Borrower's Subsidiaries shall take any action
in furtherance of any such action;
(h) A judgment not covered by insurance (subject to applicable
deductibles) 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, $1,000,000, 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 $1,000,000 in the aggregate, if, in any
such case, within thirty (30) days after the entry, issue or levy thereof, such
judgment, warrant or process shall not have been paid or discharged or stayed
pending appeal or removed to bond, or if, after the expiration of any such stay,
such judgment, warrant or process shall not have been paid or discharged or
removed to bond;
(i) There shall be at any time any "accumulated funding deficiency,"
as defined in ERISA or in Section 412 of the Code, with respect to any Plan
maintained by the Borrower or any ERISA Affiliate, or to which the Borrower or
any ERISA Affiliate
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has any liabilities, or any trust created thereunder to the extent that such
accumulated funding deficiency would have a Materially Adverse Effect; or, with
respect to any Plan (other than a Multiemployer Plan), a trustee shall be
appointed by a United States District Court to administer any such Plan; PBGC
shall institute proceedings to terminate any such Plan, or the Borrower or any
ERISA Affiliate shall incur any material liability to the PBGC in connection
with any such Plan; or, with respect to any Plan that is a Multiemployer Plan, a
trustee shall be appointed by a United States District Court to administer any
such Multiemployer Plan to the extent that such appointment would reasonably be
expected to have a Materially Adverse Effect; PBGC shall institute proceedings
to terminate any such Multiemployer Plan to the extent that the institution of
such proceedings would reasonably be expected to have a Materially Adverse
Effect; or the Borrower or any ERISA Affiliate shall incur any liability to PBGC
in connection with the termination of any such Plan which liability would
reasonably be expected to have a Materially Adverse Effect; or 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 ERISA Affiliate to any material tax or penalty on
"prohibited transactions" imposed by Section 502 of ERISA or Section 4975 of the
Code;
(j) There shall occur (i) any acceleration of the maturity of any
Indebtedness for Money Borrowed of the Borrower or any of the Borrower's
Subsidiaries in an aggregate principal amount exceeding $1,000,000; (ii) any
event which would permit (A) such acceleration or (B) the holder of such
Indebtedness for Money Borrowed to require the purchase or redemption of such
Indebtedness for Money Borrowed and which event has not been cured within any
applicable cure period or waived in writing prior to any declaration of an Event
of Default or acceleration of the Loans hereunder; or (iii) any material default
under any Interest Hedge Agreements which would permit the obligation of the
Borrower or any of the Borrower's Subsidiaries to make payments to the
counterparties thereunder in an amount exceeding $1,000,000 in the aggregate to
be then due and payable;
(k) The FCC shall deliver to the Borrower or any of its Subsidiaries
an order to show cause why an order of revocation should not be issued based
upon any alleged attribution of alien ownership (within the meaning of 47 U.S.C.
ss. 310(b) and any interpretation of the FCC thereunder) to the Borrower or any
of its Subsidiaries and (i) such order shall not have been rescinded within
thirty (30) days after such delivery or (ii) in the reasonable judgment of the
Bank, proceedings by or before the FCC related to such order are reasonably
likely to result in one or more orders of revocation and would constitute an
Event of Default under Section 8.1(m) hereof;
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(l) 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
its Subsidiaries or by any governmental authority having jurisdiction over the
Borrower or any of its Subsidiaries 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;
(m) One or more Licenses shall be terminated or revoked or any such
License (excluding the Excluded Licenses referred to on Schedule 1 attached
hereto) shall fail to be renewed at the stated expiration thereof without
obtaining a replacement License which in the aggregate for all such Licenses
results in a loss of ten percent (10%) or more of the aggregate spectrum
represented by the Licenses set forth in Schedule 1 attached hereto (for
purposes of such calculation, any loss of any Excluded License shall not be
included);
(n) Any termination or default of any material provision under the
Management and Services Agreement shall occur;
(o) Any Security Document shall for any reason, fail or cease
(except by reason of lapse of time) to create a valid and perfected and
first-priority Lien on or Security Interest in any portion of the Collateral
purported to be covered thereby and such failure shall not be cured within
thirty (30) days from delivery of notice of such failure to the Borrower by the
Bank;
(p) There shall occur any Change of Control;
(q) ▇▇▇▇ ▇▇▇▇▇ shall cease to be the chief executive officer of the
Borrower;
(r) There shall occur any Materially Adverse Effect; or
(s) At any time after the Borrower acquires (whether by way of
capital contribution or otherwise), any of the Licenses described on Schedule 1
attached hereto, the Bank shall fail to have a valid, first perfected security
interest in one hundred percent (100%) of the membership interests of the
Borrower.
Section 8.2 Remedies.
(a) If an Event of Default specified in Section 8.1 (other than an
Event of Default under Section 8.1(f) or
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Section 8.1(g)) shall have occurred and shall be continuing, the Bank may (i)
terminate the Commitment, and/or (ii) declare all or a portion of the principal
of and interest on the Loans and the Note and all other amounts owed to the Bank
under this Agreement, the Note and any other Loan Documents to be forthwith due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived, anything in this Agreement, the Note
or any other Loan Document to the contrary notwithstanding, and the Commitment
shall thereupon forthwith terminate.
(b) Upon the occurrence and continuance of an Event of Default
specified in Section 8.1(f) or Section 8.1(g), all principal, interest and other
amounts due hereunder and under the Note, 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 Loans outstanding
hereunder shall bear interest at the Default Rate, all without any action by the
Bank 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 Note, as provided in subsection (a) or
(b) of this Section 8.2, above, the Bank 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) Notwithstanding anything in this Agreement or in any of the Loan
Documents to the contrary, the Bank's remedies hereunder and under the Loan
Documents are subject to compliance with the Communications Act, to all
applicable rules, regulations and policies of the FCC, to the Licenses and the
Necessary Authorizations and to applicable statutes governing, and the rules and
regulations of, issuers of the Licenses and Necessary Authorizations, and the
Bank will not take any action pursuant to this Agreement and any of the Loan
Documents that will constitute or result in any assignment of a License or
Necessary Authorization or any change of control of the Borrower or any of its
Subsidiaries or any transfer of any shares of or partnership interests in the
Borrower or any of its Subsidiaries if such assignment of License or Necessary
Authorization or change of control or transfers of shares or partnership or
member interests would require under then existing law (including the written
rules and regulations promulgated by the FCC and the issuers of the Licenses and
Necessary Authorizations), the prior approval of the FCC or such other issuers,
without first obtaining such approval of the FCC and such other issuers. This
Agreement, the Loan Documents and the transactions contemplated hereby and
thereby do not and will not constitute, create, or have the
-52-
effect of constituting or creating, directly or indirectly, actual or practical
ownership of the Borrower or any of its Subsidiaries by the Bank or control,
affirmative or negative, direct or indirect, of the Borrower or any of its
Subsidiaries by the Bank, over the management or any other aspect of the
operation of the Borrower or any of its Subsidiaries, which ownership and
control remain exclusively and at all times in the Borrower and its shareholders
until such time as the Bank has complied with such law, rules, regulations and
policies.
(e) Upon acceleration of the Note, as provided in subsection (a) or
(b) of this Section 8.2, the Bank shall, subject to compliance with Applicable
Law (including, but not limited to, Section 8.2(d) hereof), 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 Bank in connection
therewith. The rights of the Bank under this Section 8.2(e) shall be subject to
its prior compliance with the Communications Act and the FCC rules and policies
promulgated thereunder and the terms and conditions of the Licenses, and the
applicable statutes governing, and the rules and regulations of, issuers of the
Licenses and the Necessary Authorizations to the extent applicable to the
exercise of such rights.
(f) The rights and remedies of the Bank hereunder shall be
cumulative, and not exclusive.
Section 8.3 Payments Subsequent to Declaration of Event of Default.
Subsequent to the acceleration of the Loans under Section 8.2 hereof, payments
and prepayments under this Agreement made to the Bank (from realization on
Collateral for the Obligations or otherwise) shall be applied by the Bank as
follows: first, to the Bank's reasonable costs and expenses, if any, incurred in
connection with the collection of such payment or prepayment, including, without
limitation, any reasonable costs incurred by it in connection with the sale or
disposition of any Collateral for the Obligations and all amounts under Section
10.2(b) and (c); second, to any fees hereunder or under any of the other Loan
Documents then due and payable; third, for the payment of any unpaid interest
which may have accrued on the Obligations; fourth, to all Loans until paid in
full (and, for purposes of this clause, obligations under Interest Hedge
Agreements with the Bank shall be paid on a pro rata basis with the Loans);
fifth, to unpaid amounts, to the payment of any other unpaid Obligations; and
sixth, to the Borrower or as otherwise required by law.
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ARTICLE 9
Change in Circumstances
Affecting LIBOR Advances
Section 9.1 LIBOR Basis Determination Inadequate. If with respect to any
proposed LIBOR Advance for any Interest Period, deposits in United States
dollars (in the applicable amount) are not being offered to the Bank in the
relevant market for such Interest Period, the Bank shall forthwith give notice
thereof to the Borrower, whereupon until the Bank notifies the Borrower that the
circumstances giving rise to such situation no longer exist, the obligations of
the Bank to make LIBOR Advances shall be suspended. The Bank shall promptly
notify the Borrower after the Bank becomes aware that circumstances set forth in
the preceding sentence no longer exist.
Section 9.2 Illegality. If after the date hereof, the adoption of any
Applicable Law, or any change in any Applicable Law (whether adopted before or
after the Agreement Date), or any change in interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by the Bank
with any directive (whether or not having the force of law) of any such
authority, central bank or comparable agency, shall make it unlawful for the
Bank to make, maintain or fund LIBOR Advances, the Bank shall forthwith give
notice thereof to the Borrower. Upon receipt of such notice, notwithstanding
anything contained in Article 2 hereof, the then outstanding principal amount of
the Bank's affected LIBOR Advance, together with accrued interest thereon, shall
automatically be converted to a Base Rate Advance on either (a) the last day of
the then current Interest Period applicable to such affected LIBOR Advances if
the Bank may lawfully continue to maintain and fund such LIBOR Advance to such
day or (b) immediately if the Bank may not lawfully continue to fund and
maintain such affected LIBOR Advances to such day.
Section 9.3 Increased Costs.
(a) If after the date hereof, the adoption of any Applicable Law, or
any change in any Applicable Law (whether adopted before or after the Agreement
Date), or any interpretation or change in interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof or compliance by the Bank with
any directive (whether or not having the force of law) of any such authority,
central bank or comparable agency:
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(1) shall subject the Bank to any tax, duty or other charge
(other than any tax, duty or other charge attributable to an assignment or
participation) with respect to its obligation to make LIBOR Advances, or
existing LIBOR Advances, or shall change the basis of taxation of payments
to the Bank of the principal of or interest on LIBOR Advances or in
respect of any other amounts due under this Agreement in respect of LIBOR
Advances or its obligation to make LIBOR Advances (except for changes in
the rate or method of calculation of tax on the overall net income of the
Bank); or
(2) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors of
the Federal Reserve System, but excluding any included in an applicable
LIBOR Reserve Percentage), special deposit, capital adequacy, assessment
or other requirement or condition against assets of, deposits with or for
the account of, or commitments or credit extended by the Bank or shall
impose on the Bank or the London interbank borrowing market any other
condition affecting its obligation to make such LIBOR Advances or existing
LIBOR Advances;
and the result of any of the foregoing is to increase the cost to the Bank of
making or maintaining any LIBOR Advances, or to reduce the amount of any sum
received or receivable by the Bank under this Agreement or under the Note with
respect thereto, then, the Borrower agrees to pay to the Bank such additional
amount or amounts as will compensate the Bank for such increased costs. The Bank
will promptly notify the Borrower of any event of which it has knowledge,
occurring after the date hereof, which will entitle the Bank to compensation
pursuant to this Section 9.3 and will designate a different lending office if
such designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the reasonable judgment of the Bank made in good
faith, be otherwise disadvantageous to the Bank.
(b) The Bank 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, the
Bank may use any reasonable averaging and attribution methods. If the Bank
demands compensation under this Section 9.3, the Borrower may at any time, upon
at least five (5) Business Days' prior notice to the Bank, prepay in full the
Bank's then outstanding LIBOR Advances, together with accrued interest thereon
to the date of prepayment, along with any reimbursement required under Section
2.10 hereof. Concurrently with prepaying such portion of
-55-
LIBOR Advances the Borrower may borrow a Base Rate Advance, or a LIBOR Advance
not so affected, from the Bank, and the Bank shall, if so requested, make such
Advance in an amount such that the outstanding principal amount of the Note
shall equal the outstanding principal amount of such Note or Note immediately
prior to such prepayment.
Section 9.4 Effect On Other Advances. If notice has been given pursuant to
Section 9.1, 9.2 or 9.3 suspending the obligation of the Bank to make LIBOR
Advances, or requiring the Bank's LIBOR Advances to be repaid or prepaid, then,
unless and until the Bank notifies the Borrower that the circumstances giving
rise to such repayment no longer apply, all amounts which would otherwise be
made by the Bank as LIBOR Advances shall, unless otherwise notified by the
Borrower, be made instead as Base Rate Advances.
ARTICLE 10
Miscellaneous
Section 10.1 Notices.
(a) Except as otherwise expressly provided herein, all notices and
other communications under this Agreement and the other Loan Documents (unless
otherwise specifically stated therein) shall be in writing and shall be deemed
to have been given three (3) Business Days after deposit in the mail, designated
as certified mail, return receipt requested, postage-prepaid, or one (1)
Business Day after being entrusted to a reputable commercial overnight delivery
service for next day delivery, or when sent on a Business Day prior to 5:00 p.m.
(New York time) or, if later, the next Business Day, by telecopy addressed to
the party to which such notice is directed at its address determined as provided
in this Section 10.1. All notices and other communications under this Agreement
shall be given to the parties hereto at the following addresses:
(i) If to the Borrower, to it at:
Associated Communications, L.L.C.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
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With copies to:
The Associated Group, Inc.
Three ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
and
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇. ▇. ▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) If to the Bank, to it at:
The Toronto-Dominion Bank
USA Division
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Communications Finance Group
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
Powell, Goldstein, ▇▇▇▇▇▇ & ▇▇▇▇▇▇
Sixteenth Floor
191 Peachtree Street, N.E.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Copies shall be provided to persons other than parties hereto only in the case
of notices under Article 8 hereof and the failure to provide such copies shall
not affect the validity of the notice given to the primary recipient.
(b) Any party hereto may change the address to which notices shall
be directed under this Section 10.1 by giving ten (10) days' written notice of
such change to the other parties.
Section 10.2 Expenses. The Borrower will promptly pay, or reimburse:
(a) all reasonable out-of-pocket expenses of the Bank in connection
with the preparation, negotiation, execution and delivery of this Agreement and
the other Loan Documents, and the
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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 Powell, Goldstein, ▇▇▇▇▇▇ &
▇▇▇▇▇▇, special counsel for the Bank; and
(b) all out-of-pocket costs and expenses of enforcement 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 Note, which in
each case shall include reasonable fees and out-of-pocket expenses of respective
counsel for, or allocated costs of in-house counsel of, the Bank .
Section 10.3 Waivers. The rights and remedies of the Bank under this
Agreement and the other Loan Documents shall be cumulative and not exclusive of
any rights or remedies which they would otherwise have. No failure or delay by
the Bank in exercising any right, shall operate as a waiver of such right. The
Bank expressly reserves the right to require strict compliance with the terms of
this Agreement in connection with any future funding of a Request for Advance.
In the event the Bank decides to fund a Request for Advance at a time when the
Borrower is not in strict compliance with the terms of this Agreement, such
decision by the Bank shall not be deemed to constitute an undertaking by the
Bank to fund any further Request for Advance or preclude the Bank from
exercising any rights available under the Loan Documents or at law or equity.
Any waiver or indulgence granted by the Bank 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 10.4 Set-Off. In addition to any rights now or hereafter granted
under Applicable Law and not by way of limitation of any such rights, upon the
occurrence of an Event of Default and during the continuation thereof, the Bank
is hereby authorized by the Borrower at any time or from time to time, without
notice to the Borrower or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, time or demand, including, but not limited to,
Indebtedness evidenced by certificates of deposit, in each case whether matured
or unmatured) and any other Indebtedness at any time held or owing by the Bank,
to or for the credit or the account of the Borrower or any of its Subsidiaries,
against and on account of Obligations and any other claims of any nature or
description arising out of or connected with this Agreement, the
-58-
Note or any other Loan Document, irrespective of whether (a) the Bank shall have
made any demand hereunder or (b) the Bank shall have declared the principal of
and interest on the Loans and other amounts due hereunder to be due and payable
as permitted by Section 8.2 and although such obligations and liabilities or any
of them shall be contingent or unmatured. The Bank, if holding deposits of the
Borrower or any of its Subsidiaries, shall exercise its set-off rights; and,
within one (1) Business Day following any such setoff, the Bank shall give
notice thereof to the Borrower.
Section 10.5 Assignment.
(a) Except as provided in Section 10.20 hereof, the Borrower may not
assign or transfer any of its rights or obligations hereunder, under the Note or
under any other Loan Document without the prior written consent of the Bank.
(b) The Bank may sell assignments or participations of forty-nine
percent (49%) (or, with the consent of the Borrower not to be unreasonably
withheld or delayed, a larger percentage) of its interest hereunder to (A) one
or more wholly-owned Affiliates of the Bank (provided that, if such Affiliate is
not a financial institution, the Bank shall be obligated to repurchase such
assignment if such Affiliate is unable to honor its obligations hereunder), or
(B) any Federal Reserve Bank as collateral security pursuant to Regulation A of
the Board of Governors of the Federal Reserve System and any Operating Circular
issued by such Federal Reserve Bank (no such assignment referred to in this
clause (B) shall relieve the Bank from its obligations hereunder).
(c) Subject to Section 10.5(b) hereof, the Bank may at any time
enter into assignment agreements or participations with one or more other banks
or other financial institutions pursuant to which the Bank may assign or
participate its interest under this Agreement and the other Loan Documents,
including, its interest in any particular Advance or portion thereof, provided,
that (1) all assignments (other than assignments described in clause (b) hereof)
shall be in minimum principal amounts of $5,000,000, and (2) all assignments
(other than assignments described in clause (b) hereof) and participations
hereunder shall be subject to the following additional terms and conditions to
the extent expressly applicable thereto:
(i) No assignment (except assignments permitted in Section
10.5(b) hereof) shall be sold so long as a Default has not occurred and is
continuing, the Borrower, which consents shall not be unreasonably
withheld or delayed;
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(ii) Any Person purchasing a participation or an assignment of
any portion of the Loans from the Bank shall be required to represent and
warrant that its purchase shall not constitute a "prohibited transaction"
(as defined in Section 4.1(m) hereof);
(iii) The Borrower and the Bank agree that assignments
permitted hereunder (including the assignment of any Advance or portion
thereof) may be made with all voting rights, and shall be made pursuant to
an Assignment and Assumption Agreement substantially in the form of
Exhibit I attached hereto;
(iv) No participation agreement shall confer any rights under
this Agreement or any other Loan Document to any purchaser thereof, or
relieve the Bank from any of its obligations under this Agreement, and all
actions hereunder shall be conducted as if no such participation had been
granted; provided, however, that any participation agreement may confer on
the participant the right to approve or disapprove decreases in the
interest rate, increases in or forgiveness of the principal amount of the
Loans participated in by such participant, decreases in fees, extensions
of the Maturity Date or other principal payment date for the Loans or of
the scheduled reduction of the Commitment and releases of Collateral or
guarantors, except for Collateral the sale or disposition of which is
permitted hereunder;
(v) The Bank agrees to provide the Borrower with prompt
written notice of any issuance of participations in or assignments of its
interests hereunder;
(vi) No assignment, participation or other transfer of any
rights hereunder or under the Note shall be effected that would result in
any interest requiring registration under the Securities Act of 1933, as
amended, or qualification under any state securities law;
(vii) No such assignment may be made to any bank or other
financial institution (x) with respect to which a receiver or conservator
(including, without limitation, the Federal Deposit Insurance Corporation,
the Resolution Trust Company or the Office of Thrift Supervision) has been
appointed or (y) that with respect to any assignee that is a bank, to the
knowledge of the assignor after due inquiry, is not "adequately
capitalized" (as such term is defined in Section 131(b)(1)(B) of the
Federal Deposit Insurance Corporation Improvement Act as in effect on the
Agreement Date); and
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(viii) The Bank shall, and shall cause any Person to whom any
portion of an Advance is assigned or participated to provide to the
Borrower on or prior to the effective date of any assignment or
participation an appropriate Internal Revenue Service form as required by
Applicable Law demonstrating that no withholding by the Borrower or the
Bank for U.S. income tax payable by the Bank, assignee or participant in
respect of amounts received by it hereunder is required. For purposes of
this Agreement, an appropriate Internal Revenue Service form shall mean
Form 1001 (Ownership Exemption or Reduced Rate Certificate of the U.S.
Department of Treasury), or Form 4224 (Exemption from Withholding of Tax
on Income Effectively Connected with the Conduct of a Trade or Business in
the United States), or any successor or related forms adopted by the
relevant U.S. taxing authorities.
(d) Except as specifically set forth in Section 10.5(c) hereof,
nothing in this Agreement or the Note, expressed or implied, is intended to or
shall confer on any Person other than the respective parties hereto and thereto
and their successors and assignees permitted hereunder and thereunder any
benefit or any legal or equitable right, remedy or other claim under this
Agreement or the Note.
(e) In the case of any participation, all amounts payable by the
Borrower under the Loan Documents shall be calculated and made in the manner and
to the parties hereto as if no such participation had been sold.
(f) The parties hereto agree (and the Bank shall require any
assignee or participant to agree) that with the exception of matters customarily
requiring unanimous lender consent, all amendments and waivers with respect to
any Loan Document shall be made with the consent or approval of lenders holding
a majority of the Loans then outstanding (or, if no Loans are outstanding, a
majority of the Commitment).
Section 10.6 Accounting Principles. All references in this Agreement to
GAAP shall be to such principles as in effect from time to time. All accounting
terms used herein without definition shall be used as defined under GAAP.
Section 10.7 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 10.8 Governing Law. This Agreement and the Note shall be construed
in accordance with and governed by the internal laws of the State of New York
applicable to agreements
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made and to be performed in New York. If any action or proceeding shall be
brought by the Bank hereunder or under any other Loan Document in order to
enforce any right or remedy under this Agreement or under any Note or any other
Loan Document, the Borrower hereby consents and will, and the Borrower will
cause each Subsidiary to, submit to the jurisdiction of any state or federal
court of competent jurisdiction sitting within the area comprising the Southern
District of New York on the date of this Agreement. The Borrower, for itself and
on behalf of its Subsidiaries, hereby agrees that service of the summons and
complaint and all other process which may be served in any such suit, action or
proceeding may be effected by mailing by registered mail a copy of such process
to the offices of the Borrower at the address given in Section 10.1 hereof and
that personal service of process shall not be required. Nothing herein shall be
construed to prohibit service of process by any other method permitted by law,
or the bringing of any suit, action or proceeding in any other jurisdiction. The
Borrower agrees that final judgment in such suit, action or proceeding shall be
conclusive and may be enforced in any other jurisdiction by suit on the judgment
or in any other manner provided by Applicable Law.
Section 10.9 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof in that jurisdiction or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 10.10 Interest.
(a) In no event shall the amount of interest due or payable
hereunder or under the Note exceed the maximum rate of interest allowed by
Applicable Law, and in the event any such payment is inadvertently made by the
Borrower or inadvertently received by the Bank, then such excess sum shall be
credited as a payment of principal, unless the Borrower shall notify the Bank,
in writing, that it elects to have such excess sum returned forthwith. It is the
express intent hereof that the Borrower not pay and the Bank not receive,
directly or indirectly in any manner whatsoever, interest in excess of that
which may legally be paid by the Borrower under Applicable Law.
(b) Notwithstanding the use by the Bank of the Base Rate and the
LIBOR Rate as reference rates for the determination of interest on the Loans,
the Bank shall be under no obligation to obtain funds from any particular source
in order to charge interest to the Borrower at interest rates related to such
reference rates.
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Section 10.11 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 10.12 Amendment and Waiver. Neither this Agreement nor any term
hereof nor any Loan Document may be amended orally, nor may any provision hereof
be waived orally, but only by an instrument in writing signed by the Bank and
the Borrower. Any amendment to any provision hereunder governing the rights,
obligations, or liabilities of the Bank may be made only by an instrument in
writing signed by such affected Person and by the Bank.
Section 10.13 Entire Agreement. Except as otherwise expressly provided
herein, this Agreement and the other documents described or contemplated herein
will embody the entire agreement and understanding among the parties hereto and
thereto and supersede all prior agreements and understandings relating to the
subject matter hereof and thereof.
Section 10.14 Other Relationships. No relationship created hereunder or
under any other Loan Document shall in any way affect the ability of the 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 10.15 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 10.16 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 Bank notwithstanding any investigation heretofore or
hereafter made by it, and (ii) shall survive the execution and delivery of the
Note and shall continue in full force and effect so long as any Note is
outstanding and unpaid. Any right to indemnification hereunder, including,
without limitation, rights pursuant to Sections 2.10, 2.11, 5.11, 9.3 and 10.2
hereof, shall survive the termination of this Agreement and the payment and
performance of all Obligations.
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Section 10.17 Senior Debt. The Obligations are secured by the Security
Documents and are intended by the parties hereto to be in parity with the
Interest Hedge Agreements and senior in right of payment to all other
Indebtedness of the Borrower except for Indebtedness secured by Permitted Liens
(to the extent such Liens are statutorily senior to the Liens securing the
Obligations).
Section 10.18 Confidentiality. The Bank 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 Bank 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 reasonably required by any proposed
syndicate member or any proposed transferee or participant in connection with
the contemplated transfer of any Note or participation therein or as required or
requested by any governmental authority or representative thereof or in
connection with the enforcement hereof or of any Loan Document or related
document or pursuant to legal process or with respect to any litigation between
or among the Borrower and the Bank; provided, however, that, as a condition to
receipt of any such information, each such Affiliate, auditor, counsel,
consultant, appraiser, professional advisor, proposed transferee or participant
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 shall give notice of such disclosure to the Borrower and
cooperate with the Borrower in any efforts to limit or restrict such disclosure.
In no event shall the Bank be obligated or required to return any materials
furnished to it by the Borrower. The foregoing provisions shall not apply to a
Bank with respect to information that (i) is or becomes generally available to
the public (other than through the Bank), (ii) is already in the possession of
the Bank on a nonconfidential basis, or (iii) comes into the possession of the
Bank in a manner not known to the Bank to involve a breach of a duty of
confidentiality owing to the Borrower.
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ARTICLE 11
Waiver of Jury Trial
Section 11.1 Waiver of Jury Trial. THE BORROWER, FOR ITSELF AND ON BEHALF
OF THE BORROWER'S SUBSIDIARIES, AND THE BANK, HEREBY AGREE TO WAIVE AND HEREBY
WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY COURT AND IN ANY ACTION OR PROCEEDING
OF ANY TYPE IN WHICH THE BORROWER, ANY OF THE BORROWER'S SUBSIDIARIES, THE BANK
OR ANY OF THEIR RESPECTIVE SUCCESSORS OR ASSIGNS IS A PARTY, AS TO ALL MATTERS
AND THINGS ARISING DIRECTLY OR INDIRECTLY OUT OF THIS AGREEMENT, THE NOTE OR THE
OTHER LOAN DOCUMENTS AND THE RELATIONS AMONG THE PARTIES LISTED IN THIS SECTION
11.1. EXCEPT AS PROHIBITED BY LAW, EACH PARTY TO THIS AGREEMENT WAIVES ANY
RIGHTS IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THIS
SECTION, ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY
DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. EACH PARTY TO THIS
AGREEMENT (i) CERTIFIES THAT NEITHER ANY REPRESENTATIVE, AGENT OR ATTORNEY OF
THE BANK HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE BANK WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (ii)
ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND EACH
OTHER LOAN DOCUMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION. THE PROVISIONS OF THIS SECTION HAVE BEEN FULLY
DISCLOSED BY AND TO THE PARTIES AND THE PROVISIONS SHALL BE SUBJECT TO NO
EXCEPTIONS. NO PARTY HAS IN ANY WAY AGREED WITH OR REPRESENTED TO ANY OTHER
PARTY THAT THE PROVISIONS OF THIS SECTION WILL NOT BE FULLY ENFORCED IN ALL
INSTANCES.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused it to be executed by their duly authorized officers, all as of the day
and year first above written.
BORROWER: ASSOCIATED COMMUNICATIONS, L.L.C., a
Delaware limited liability company
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------
Its: Chief Executive Officer
BANK:
THE TORONTO-DOMINION BANK
By:______________________________________
Its:_____________________________________
ASSOCIATED COMMUNICATIONS, LLC
LOAN AGREEMENT
Signature Page 1
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused it to be executed by their duly authorized officers, all as of the day
and year first above written.
BORROWER: ASSOCIATED COMMUNICATIONS, L.L.C., a
Delaware limited liability company
By:______________________________________
Its: Chief Executive Officer
BANK:
THE TORONTO-DOMINION BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
MGR. CR. ADMIN.
ASSOCIATED COMMUNICATIONS, LLC
LOAN AGREEMENT
Signature Page 1
