EXHIBIT 10.29
EXECUTION
SECOND PRIORITY LOAN AND GUARANTY AGREEMENT
DATED AS OF APRIL 5, 1999
AMONG
NORTHPOINT COMMUNICATIONS, INC.,
AS BORROWER,
NORTHPOINT COMMUNICATIONS HOLDINGS, INC.
AND
NORTHPOINT COMMUNICATIONS OF VIRGINIA, INC.,
AS GUARANTORS,
VARIOUS LENDERS,
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS L.P.,
AS JOINT LEAD ARRANGER AND SYNDICATION AGENT,
NEWCOURT COMMERCIAL FINANCE CORPORATION,
AS ADMINISTRATIVE AGENT, DOCUMENTATION AGENT AND COLLATERAL AGENT,
AND
CAPITAL SYNDICATION CORPORATION,
AS JOINT LEAD ARRANGER
SECOND PRIORITY LOAN AGREEMENT
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EXHIBITS:
EXHIBIT A-1 Notice of Borrowing
EXHIBIT A-2 Notice of Continuation/Conversion
EXHIBIT B Note
EXHIBIT C Compliance Certificate
EXHIBIT D Opinion of Credit Parties' Counsel
EXHIBIT E Assignment Agreement
EXHIBIT F Closing Date Certificate
EXHIBIT G Counterpart Agreement
EXHIBIT H Pledge and Security Agreement
EXHIBIT I Intercreditor Agreement
EXHIBIT J-1 Landlord Consent and Estoppel (Node Site)
EXHIBIT J-2 Landlord Consent and Estoppel (Collocation)
EXHIBIT K Certificate Re Non-bank Status
SCHEDULES:
SCHEDULE 3.02 Certain Disclosures
SCHEDULE 3.10(a) Governmental Authorizations and Approvals
SCHEDULE 3.10(b) Material Agreements
SCHEDULE 3.12 ERISA Matters
SCHEDULE 3.15 Insurance
SCHEDULE 3.16 Capitalization and Subsidiaries
SCHEDULE 3.17 Real Estate Assets
SCHEDULE 6.12 Debt
ANNEXES:
ANNEX A Commitment Amounts
v
SECOND PRIORITY LOAN AGREEMENT
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SECOND PRIORITY LOAN AND GUARANTY AGREEMENT
SECOND PRIORITY LOAN AND GUARANTY AGREEMENT, dated as of April 5,
1999, among NORTHPOINT COMMUNICATIONS, INC., a Delaware corporation
("BORROWER"), NORTHPOINT COMMUNICATIONS OF VIRGINIA, INC., a Virginia
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corporation ("NORTHPOINT VIRGINIA"), and NORTHPOINT COMMUNICATIONS HOLDINGS,
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INC., a Delaware corporation ("HOLDINGS"), as Guarantors, the Lenders party
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hereto from time to time ("LENDERS"), ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Partners L.P.
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("GSCP"), as a Joint Lead Arranger (in such capacity, a "JOINT LEAD ARRANGER")
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and Syndication Agent (in such capacity, a "SYNDICATION AGENT"), Newcourt
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Commercial Finance Corporation ("NEWCOURT"), as Administrative Agent (in such
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capacity, the "ADMINISTRATIVE AGENT"), as Documentation Agent (in such capacity,
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the "DOCUMENTATION AGENT") and Collateral Agent (in such capacity, the
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"COLLATERAL AGENT"), and Capital Syndication Corporation ("CSC") as a Joint Lead
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Arranger (in such capacity, a "JOINT LEAD ARRANGER").
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R E C I T A L S
- - - - - - - -
WHEREAS, Borrower has requested the Lenders to extend credit to
Borrower; and
WHEREAS, the Lenders are willing to extend such credit to Borrower
subject to, and on the terms and conditions of, this Agreement.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, Borrower, each Guarantor, the Agents and the Lenders agree as follows:
1 ARTICLE
DEFINITIONS
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2.1 SECTION Definitions. As used in this Agreement, including the preamble,
recitals, exhibits, schedules and annexes hereto, the following words and terms
shall have the meanings specified below:
"ADDITIONAL INTEREST AMOUNT" means, for any period, an amount equal to
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the difference between y) the amount of interest that would have been payable
with respect to First Priority Loans outstanding during such period if the First
Priority Applicable Margin were equal to the Second Priority Applicable Margin
and z) the amount of interest that was payable during such period with respect
to First Priority Loans pursuant to the First Priority Loan Documents.
"AFFILIATE" shall mean, with respect to a Person, any Person (other
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than any Lender) directly or indirectly controlling, controlled by or under
common control with such
1
SECOND PRIORITY LOAN AGREEMENT
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Person and any officer or shareholder of such Person, which shareholder
beneficially owns at least ten percent (10%) of the Equity Interests of such
Person. For the purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling," "controlled by", and "under
common control with"), as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management or policies of such Person, whether through the ownership of voting
securities, by agreement or otherwise; provided, however, that beneficial
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ownership of at least 10% of the Equity Interests of a Person shall be deemed to
constitute control.
"AGENTS" shall mean collectively, the Administrative Agent, the
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Collateral Agent, the Documentation Agent, the Syndication Agent and the Joint
Lead Arrangers.
"AGGREGATE AMOUNTS DUE" shall have the meaning given to such term in
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Section 11.18 hereof.
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"AGGREGATE PAYMENTS" shall have the meaning given to such term in
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Section 8.02.
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"AGREEMENT" shall mean this Second Priority Loan and Guaranty
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Agreement, dated as of April 5, 1999, as it may be amended, supplemented or
otherwise modified from time to time.
"ASSIGNMENT AGREEMENT" shall mean an assignment agreement entered into
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in connection with an assignment pursuant to Section 11.06 hereof substantially
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in the form of Exhibit E hereof.
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"BASE LIBO RATE" shall mean, with respect to each day during each
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Interest Period pertaining to a LIBOR Loan, the rate per annum determined by the
Administrative Agent to be the arithmetic mean (rounded to the nearest 1/100th
of 1%) of the offered rates for deposits in Dollars with a term comparable to
such Interest Period that appears on the Telerate British Bankers Assoc.
Interest Settlement Rates Page (as defined below) at approximately 11:00 A.M.,
London time, on the second full Business Day preceding the first day of such
Interest Period; provided, however, that if there shall at any time no longer
exists a Telerate British Bankers Assoc. Interest Settlement Rates Page, "Base
LIBO Rate" shall mean, with respect to each day during each Interest Period
pertaining to a LIBOR Loan, the rate per annum equal to the rate at which CIBC
is offered Dollar deposits at or about 10:00 A.M., New York City time, two
Business Days prior to the beginning of such Interest Period in the interbank
eurodollar market where the eurodollar and foreign currency and exchange
operations in respect of its LIBOR Loans are then being conducted for delivery
on the first day of such Interest Period for the number of days comprised
therein and in an amount comparable to the amount of its LIBOR Loan to be
outstanding during such Interest Period. "Telerate British Bankers Assoc.
Interest Settlement Rates Page" shall mean
SECOND PRIORITY LOAN AGREEMENT
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the display designated as Page 3750 on the Telerate System Incorporates Service
(or such other page as may replace such page on such service for the purpose of
displaying the rates at which Dollar deposits are offered by leading banks in
the London interbank deposit market).
"BASE RATE" shall mean the higher of (i) a rate per annum equal to
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the prime rate announced by CIBC from time to time, changing when and as such
rate changes, it being understood that such rate of interest is not necessarily
the lowest or best rate charged by CIBC to its customers, and (ii) the sum of
the Federal Funds Effective Rate plus one-half percent (0.50%) per annum.
"BASE RATE LOAN" shall mean a Loan, or portion thereof, during any
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period in which it bears interest at a rate based upon the Base Rate.
"BENEFICIARY" shall mean any Agent or any Lender.
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"BENEFIT PLAN" shall mean a defined benefit plan as defined in Section
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3(35) of ERISA (other than a Multiemployer Plan) in respect of which Borrower or
any ERISA Affiliate is, or within the immediately preceding six (6) years was,
an "employer" as defined in Section 3(5) of ERISA.
"BORROWER" shall have the meaning given to such term in the preamble
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hereto.
"BUSINESS" shall mean the business of operating and maintaining the
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Systems owned by Borrower and its Subsidiaries and all operations related
thereto or in support thereof.
"BUSINESS DAY" shall mean (a) any day not a Saturday, Sunday or legal
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holiday in the State of New York or the State of New Jersey, on which banks are
open for business in New York and New Jersey and (b) with respect to all
notices, determinations, fundings and payments in connection with the LIBO Rate
or LIBOR Loans, any day that is a Business Day pursuant to clause (a) above and
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that is also a day on which trading is carried on by and between banks in the
London interbank market.
"CAPITAL EXPENDITURES" shall mean, for any period, the aggregate of
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all expenditures of Borrower and its Subsidiaries during such period determined
on a consolidated basis that, in accordance with GAAP, are or should be included
in "purchase of property and equipment" or similar items reflected in the
consolidated statement of cash flows of Borrower and its Subsidiaries
including, in any event, the amount of any cash expenditures made with respect
to Permitted Acquisitions.
SECOND PRIORITY LOAN AGREEMENT
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"CAPITALIZATION" shall mean an amount equal to the funded equity
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capitalization and all funded Debt of Credit Parties, less the aggregate of all
amounts included in clause (ii)(F) of the definition of the term "EBITDA" since
the Closing Date.
"CAPITALIZED LEASE OBLIGATIONS" shall mean indebtedness represented by
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obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP.
"CERTIFICATE RE NON-BANK STATUS" means a certificate in the form of
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Exhibit K.
"CHANGE OF CONTROL" shall mean (i) prior to the consummation of an
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initial public offering of common stock by Holdings providing gross proceeds to
Holdings of not less than $125,000,000, the net proceeds of which are used to
make capital contributions to Borrower constituting Contributed Capital, (a)
▇▇▇▇▇▇▇ ▇. Malaga (or any replacement thereof as Lenders holding at least 66% of
the outstanding Loans may approve) shall cease to be a member of the senior
management of Holdings and Borrower, or (b) either of the Founders referred to
in clauses (iii) or (iv) of the definition thereof shall cease to own and
control any of the capital stock of Holdings owned or controlled by such Founder
as of the Closing Date; (ii) for one year after the Closing Date, either of the
Founders referred to in clauses (i) or (ii) of the definition thereof shall
cease to own and control at least 20% of the capital stock of Holdings owned and
controlled by such Founder as of the Closing Date; (iii) any Person (other than
one or more of the Founders), including a "group" (within the meaning of
Sections 13(d) and 14(d)(2) of the Securities Exchange Act) which includes such
Person, shall purchase or otherwise acquire, directly or indirectly, beneficial
ownership of securities of Holdings and, as a result of such purchase or
acquisition, any person (together with its associates and Affiliates), shall
directly or indirectly beneficially own in the aggregate securities representing
more than 30% of the combined voting power of Holdings' voting securities; (iv)
a "Change of Control" or similar event shall occur under any other Debt of a
Credit Party or (v) Holdings shall cease to own and control 100% of the
outstanding capital stock of Borrower or any of its other Subsidiaries or
Borrower shall cease to own and control 100% of the outstanding capital stock of
any of its Subsidiaries.
"CIBC" shall mean Canadian Imperial Bank of Commerce.
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"CLOSING DATE" shall mean the date on which this Agreement is executed
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and delivered by the parties hereto.
"CLOSING DATE CERTIFICATE" shall mean a certificate in the form of
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Exhibit F.
"COLLATERAL" shall mean, all property and interests in property now
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owned or hereafter acquired by any Credit Party, whether real, personal or
mixed, and whether tangi-
SECOND PRIORITY LOAN AGREEMENT
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ble or intangible, in or upon which a security interest, lien or mortgage is
granted to the Collateral Agent by any Credit Party under any of the Loan
Documents.
"COLLATERAL AGENT" shall mean Newcourt in its capacity as Collateral
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Agent under the Loan Documents and the Intercreditor Agreement and also means
any successor Collateral Agent appointed pursuant to Section 1 of the
Intercreditor Agreement.
"COLLATERAL DOCUMENTS" shall mean the Pledge and Security Agreement,
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the Intercreditor Agreement, and all other instruments or documents delivered by
any Credit Party pursuant to this Agreement or any of the other Loan Documents
in order to grant to Collateral Agent, on behalf of Lenders, a Lien on any real,
personal or mixed, or tangible or intangible, property of that Credit Party as
security for the Obligations, as any of the foregoing may be amended,
supplemented or otherwise modified from time to time.
"COMDISCO FACILITY" shall mean the Master Lease Agreement dated as of
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October 23, 1997 by and between Comdisco, Inc. and Borrower, as it may be
amended from time to time in accordance with this Agreement.
"COMMITMENT" shall mean the commitments of Lenders to lend as set
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forth in Section 2.01 hereof.
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"COMMITMENT AMOUNT" shall mean (a) as to any Lender, the Commitment
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Amount as set forth opposite such Lender's name on Annex A to this Agreement or
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in the most recent Assignment Agreement executed by such Lender and (b) as to
all Lenders, the aggregate of all Commitment Amounts, which aggregate commitment
shall be forty million dollars ($40,000,000) on the Closing Date, as such amount
may be adjusted from time to time in accordance with this Agreement.
"COMMON STOCK" shall mean with respect to any Person, all Equity
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Interests of such Person that are generally entitled to (i) vote in the election
of directors of such Person or (ii) if such Person is not a corporation, vote or
otherwise participate in the selection of the governing body, partners, managers
or others that will control the management and policies of such Person.
"COMPLIANCE CERTIFICATE" shall mean a compliance certificate in the
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form of Exhibit C attached hereto.
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"CONSOLIDATED" or "CONSOLIDATED" refers, with respect to any Person,
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to the consolidation of the accounts of such Person and its Subsidiaries, if
any, in accordance with GAAP.
SECOND PRIORITY LOAN AGREEMENT
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"CONSOLIDATED DEBT" shall mean, as of any date of determination, the
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Debt of Holdings and its Subsidiaries determined on a consolidated basis in
accordance with GAAP (and shall include, without limitation, the fully accreted
value of any discount notes issued by Holdings) less, prior to the consummation
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of an initial public offering of common stock by Holdings providing gross
proceeds to Holdings of not less than $125,000,000, the net proceeds of which
are used to make capital contributions to Borrower constituting Contributed
Capital, the amount of cash on hand and any Temporary Cash Investment in excess
of $10,000,000 held by Borrower and its Subsidiaries as of such date.
"CONTAMINANT" shall mean any pollutant, hazardous substance, toxic
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substance, hazardous waste, special waste, petroleum or petroleum derived
substance or waste, or any constituent of any such substance or waste.
"CONTRIBUTED CAPITAL" shall mean, with respect to any Person, at any
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date of determination, all capital contributed in the form of cash to such
Person, including all funded equity and all Qualified Inter company Loans.
"CONTRIBUTING GUARANTORS" shall have the meaning given to such term in
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Section 8.02 hereof.
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"COUNTERPART AGREEMENT" shall mean a counterpart agreement in the form
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of Exhibit G hereto.
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"CREDIT PARTY" shall mean each Person (other than any Agent or any
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Lender or any other representative thereof) from time to time party to a Loan
Document.
"DEBT" shall mean, with respect to any Person, (i) indebtedness for
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borrowed money, (ii) obligations evidenced by bonds, debentures, notes or other
similar instruments, (iii) obligations to pay the deferred purchase price of
property or services, excluding trade payables not more than 90 days past due
and accrued expenses incurred in the ordinary course of business, (iv)
Capitalized Lease Obligations, (v) all Guaranties of such Person, including
without limitation, all debt of any other Person secured by a Lien on property
of such Person, (vi) all reimbursement obligations, contingent or otherwise,
with respect to letters of credit or banker's acceptances issued for the account
of Borrower (other than letters of credit issued in support of ordinary trade
liabilities or workers' compensation obligations, unless and until drawn and
unreimbursed within one Business Day after such drawing), and (vii) all
indebtedness, obligations or other liabilities in respect of any Interest Rate
Agreement/1/, provided that Debt shall not include any liability for Federal,
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state, local or other
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/1/ For purposes of determining the amount of Debt associated with any Interest
Rate Agreement, such determination shall only be made as of the last day of each
calendar quarter and shall be effective until the last day of the immediately
succeeding calendar quarter.
SECOND PRIORITY LOAN AGREEMENT
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taxes, and provided, further, that the amount outstanding at any time of any
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Debt issued with original issue discount is the principal amount of such Debt
less the remaining unamortized portion of the original issue discount of such
Debt at such time as determined in conformity with GAAP, and that with respect
to any high-yield Debt, the amount thereof shall not include fees incurred in
raising such Debt or overfunded amounts set aside solely to pay interest.
Notwithstanding any other provision of the foregoing definition, any trade
payable not more than 90 days past due arising from the purchase of goods or
materials or for services obtained in the ordinary course of business shall not
be deemed to be "Debt" of Borrower for purposes of this definition. Furthermore,
guarantees of (or obligations with respect to letters of credit supporting) Debt
otherwise included in the determination of such amount shall not be included.
"DEFAULT" shall mean any event which but for the passage of time
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requirement or the giving of notice requirement, or both, would constitute an
Event of Default.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like
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account with any financial institution, including, without limitation, a bank,
savings and loan association or credit union, other than an account evidenced by
a negotiable certificate of deposit.
"DOLLARS" or "$" shall mean lawful money of the United States of
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America.
"EBITDA" shall mean, with respect to any Person, for any period, an
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amount equal to, without duplication, (i) Net Income plus (ii) the sum of the
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following, to the extent deducted in determining Net Income: (A) income and
franchise taxes, (B) interest expense, (C) amortization and depreciation
expense, including, without limitation, amortization of deferred compensation,
(D) all extraordinary non-cash losses, (E) other non-cash charges (including,
without limitation, non-cash charges incurred in connection with the valuation
of warrants) reducing Net Income and (F) to the extent deducted in determining
Net Income, Market Co-Development Costs funded by Permitted Funds, minus (iii)
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the sum of (A) interest income, (B) extraordinary gains and (C) other non-cash
items increasing Net Income, all as determined for Borrower and its Subsidiaries
on a consolidated basis and in accordance with GAAP.
"ELIGIBLE ASSIGNEE" shall mean (i) any Lender, any Affiliate of any
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Lender, and any Related Fund (any two or more Related Funds being treated as a
single Eligible Assignee for all purposes hereof) and (ii) any commercial bank,
insurance company, investment or mutual fund, finance company or other entity
that is an "accredited investor" (as defined in Regulation D under the
Securities Act) and which extends credit or buys loans as one of its businesses;
provided, no Affiliate of Borrower shall be an Eligible Assignee.
SECOND PRIORITY LOAN AGREEMENT
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"ENVIRONMENTAL LAWS" shall mean all federal, state and local laws,
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rules, regulations, ordinances, programs, permits, guidance, orders and consent
decrees or other binding determination of any Governmental Authority relating to
protection of the environment, the handling, disposal or Release of Contaminants
and occupational safety and health. Such laws and regulations include but are
not limited to the Resource Conservation and Recovery Act, 33 U.S.C. (S) 6901 et
--
seq., as amended; the Comprehensive Environmental Response, Compensation and
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Liability Act, 42 U.S.C. (S) 9601 et seq., as amended; the Toxic Substances
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Control Act, 15 U.S.C. (S) 2601 et seq., as amended; the Clean Water Act, 33
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U.S.C. (S) 1251 et seq., as amended; the Clean Air Act, 42 U.S.C. (S) 7401 et
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seq., as amended; state and federal environmental lien and environmental cleanup
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programs; the Occupational Safety and Health Act, 29 U.S.C. (S) 651 et seq.; and
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U.S. Department of Transportation regulations related to the transportation of
hazardous materials, each as from time to time hereafter in effect.
"EQUITY AFFILIATE" shall mean, as applied to any Person, any other
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Person directly or indirectly controlling, controlled by, or under direct or
indirect common control with, such Person. For purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as applied to any Person,
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.
"EQUITY INTEREST" shall mean, with respect to any Person, any and all
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shares or other equivalents (however designated) of capital stock, membership
units, partnership interests or any other participation right or other interest
in the nature of an equity interest in such Person or any option, warrant or
other security convertible into any of the foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act of
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1974, as amended from time to time.
"ERISA AFFILIATE" shall mean (i) any corporation which is a member of
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the same controlled group of corporations (within the meaning of Section 414(b)
of the IRC) as Borrower, (ii) any partnership or other trade or business
(whether or not incorporated) under common control (within the meaning of
Section 414(c) of the IRC) with Borrower and (iii) any member of the same
affiliated service group (within the meaning of Section 414(m) of the IRC) as
Borrower.
"EUROCURRENCY LIABILITIES" shall have the meaning assigned to that
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term in Regulation D of the Federal Reserve Board, as in effect from time to
time.
"EVENT OF DEFAULT" shall have the meaning given to such term in
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Article IX hereof.
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SECOND PRIORITY LOAN AGREEMENT
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"EVENT OF LOSS" shall mean, with respect to any item of Collateral,
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the actual or constructive loss of such item of Collateral or the use thereof,
due to theft, destruction, damage beyond repair or damage from any reason
whatsoever, to an extent which makes repair uneconomical, or rendition thereof
unfit for normal use, or the condemnation, confiscation or seizure of, or
requisition of title to or use of, such item of Collateral by any Governmental
Authority or any other Person, acting under or deemed to be acting under color
of any Governmental Authority.
"EXCESS OPERATING CASH FLOW" shall mean, for any period, Net Income of
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Borrower and its Subsidiaries plus non-cash interest expense, depreciation and
amortization and any other non-cash items of Borrower and its Subsidiaries
reducing Net Income, minus scheduled Principal Payments of Borrower and its
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Subsidiaries, lease payments and capital expenditures of Borrower and its
Subsidiaries (to the extent not otherwise deducted in determining Net Income),
plus or minus changes in working capital of Borrower and its Subsidiaries during
such period.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
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amended from time to time.
"FAIR SHARE CONTRIBUTION AMOUNT" shall have the meaning given to such
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term in Section 8.02.
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"FAIR SHARE" shall have the meaning given to such term in Section
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8.02.
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"FAIR SHARE SHORTFALL" shall have the meaning given to such term in
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Section 8.02.
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"FCC" shall mean the Federal Communications Commission or any
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successor commission or agency of the United States of America having
jurisdiction over Borrower or any System.
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any period, a
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fluctuating interest rate per annum equal for each day during such period to (a)
the weighted average of the rates on overnight federal funds transactions with
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 preceding
Business Day) by the Federal Reserve Bank of New York in the Composite Closing
Quotations for U.S. Government Securities; or (b) if such rate is not so
published for any day which is a Business Day, the average of the quotations at
approximately 10:30 a.m. (New York time) for such day on such transactions as
determined by the Administrative Agent from three federal funds brokers of
recognized standing selected by it.
SECOND PRIORITY AGREEMENT
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"FEDERAL RESERVE BOARD" shall mean the Board of Governors of the
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Federal Reserve System or any successor thereto.
"FINANCIALS" shall have the meaning given to such term in Section
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3.03.
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"FIRST PRIORITY APPLICABLE MARGIN" shall mean the "Applicable Margin"
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as such term is defined in the First Priority Loan Documents.
"FIRST PRIORITY LOANS" shall mean the up to $60,000,000 aggregate
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principal amount of loans made to Borrower pursuant to the First Priority Loan
Documents.
"FIRST PRIORITY LOAN DOCUMENTS" shall mean, collectively, the Loan and
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Guaranty Agreement, dated as of April 5, 1999, as it may be from time to time
amended, supplemented or otherwise modified, among Borrower, Holdings,
NorthPoint Virginia, the Lenders party thereto from time to time, GSCP, as a
Joint Lead Arranger and Syndication Agent, CIBC, as Administrative Agent,
Newcourt, as Documentation Agent and Collateral Agent, and Capital Syndication
Corporation, as a Joint Lead Arranger, together with the other "Loan Documents"
as such term is defined in such Loan and Guaranty Agreement.
"FIRST PRIORITY LOANS PREPAYMENT PREMIUM" means with respect to any
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First Priority Loans prepaid during any of the periods set forth below, the
percentage of the amount of the First Priority Loans so prepaid indicated
opposite such period:
Monthly Anniversary Percentage
After the Closing Date ----------
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7 6%
8 5%
9 4%
10 3%
11 2%
12 1%
13-24 1%
25 & thereafter 0%
SECOND PRIORITY LOAN AGREEMENT
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"FIXED CHARGES" shall mean with respect to any six-month period for
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Borrower and its Subsidiaries, the sum of the following amounts calculated on a
consolidated basis at the end of such period with respect to such period without
duplication and in accordance with GAAP: (i) scheduled principal and interest
payments with respect to Debt during such period, (ii) capital expenditures made
during such period, (iii) income tax payments payable in cash with respect to
such period, and (iv) cash dividend payments made during such period.
"FIXED CHARGE COVERAGE RATIO" shall have the meaning given to such
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term in Section 7.02(c).
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"FOUNDERS" shall mean each of (i) ▇▇▇▇▇▇▇ ▇. Malaga, (ii) ▇▇▇ ▇▇▇▇▇▇▇,
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▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇, as a group, (iii)
investment funds controlled by The Carlyle Group owning capital stock of
Holdings as of the Closing Date, as a group, and (iv) investment funds
controlled by Vulcan Ventures Incorporated owning capital stock of Holdings as
of the Closing Date, as a group.
"FUNDING DATE" shall mean the date upon which, subject to the
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satisfaction of all conditions precedent contained in Section 4.01, or the
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waiver thereof by the Agents and the Requisite Lenders, the Loans are made on or
after the Closing Date.
"FUNDING GUARANTOR" shall have the meaning given to such term in
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Section 8.02.
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"GAAP" shall mean United States generally accepted accounting
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principles in effect as of the date of determination thereof.
"GOVERNMENTAL APPROVAL" shall mean, with respect to Borrower or any of
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its Subsidiaries, any license, permit, franchise or certificate of public
convenience and necessity issued to Borrower or any of its Subsidiaries by the
FCC, any PUC or any other Governmental Authority in connection with any System.
"GOVERNMENTAL AUTHORITY" shall mean any federal, state, local or other
----------------------
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"GUARANTOR" shall mean Holdings and each direct or indirect Subsidiary
---------
of Holdings other than Borrower.
"GUARANTY" shall mean any (y) obligation, contingent or otherwise, of
--------
any Person guaranteeing any Debt of any other Person (the "PRIMARY OBLIGOR") in
---------------
any manner, whether directly or indirectly, and including any obligation of such
Person, direct or indirect,
SECOND PRIORITY LOAN AGREEMENT
------------------------------
(i) to purchase or pay (or advance or supply funds for the purchase or payment
of) such indebtedness or to purchase (or to advance or supply funds for the
purchase of) any security for the payment of such indebtedness; (ii) to purchase
property, securities or services for the purpose of assuring the owner of such
indebtedness of the payment of such indebtedness; or (iii) to maintain working
capital, equity capital or other financial statement condition of the Primary
Obligor so as to enable the Primary Obligor to pay such indebtedness and (z) any
Interest Rate Agreement.
"HOLDINGS" shall have the meaning as set forth in the preamble to this
--------
Agreement.
"INDEMNIFIED LIABILITIES" shall mean, collectively, any and all
-----------------------
liabilities, obligations, losses, damages (including natural resource damages),
penalties, actions, judgments, suits, claims (including, without limitation,
environmental claims), costs (including the costs of any investigation, study,
sampling, testing, abatement, cleanup, removal, remediation or other response
action necessary to remove, remediate, clean up or ▇▇▇▇▇ any hazardous materials
activity), expenses and disbursements of any kind or nature whatsoever
(including the reasonable fees and disbursements of counsel for Indemnitees in
connection with any investigative, administrative or judicial proceeding
commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto, and any fees or expenses
incurred by Indemnitees in enforcing this indemnity), whether direct, indirect
or consequential and whether based on any federal, state or foreign laws,
statutes, rules or regulations (including securities and commercial laws,
statutes, rules or regulations and Environmental Laws), on common law or
equitable cause or on contract or otherwise, that may be imposed on, incurred
by, or asserted against any such Indemnitee, in any manner relating to or
arising out of (i) this Agreement or any of the other Loan Documents or the
transactions contemplated hereby or thereby (including Lenders' agreement to
make Loans or the use or intended use of the proceeds thereof or the use or
intended use of any thereof, or any enforcement of any of the Loan Documents
(including any sale of, collection from, or other realization upon any of the
Collateral or the enforcement of any Guaranty)); (ii) the statements contained
in the commitment letter delivered by any Lender to Borrower with respect
thereto; or (iii) any environmental claim or any hazardous materials activity
relating to or arising from, directly or indirectly, any past or present
activity, operation, land ownership, or practice of any Credit Party or their
Affiliates.
"INDEMNITEE" shall have the meaning given to such term in Section
---------- -------
11.03 hereof.
-----
"INTERCREDITOR AGREEMENT" shall mean the Intercreditor Agreement by
-----------------------
and between Administrative Agent, Collateral Agent and Newcourt, as
Administrative Agent
SECOND PRIORITY AGREEMENT
-------------------------
under the Second Priority Loan Documents in substantially the form of Exhibit I
---------
annexed hereto to be executed and delivered pursuant to Section 4.01.
------------
"INTEREST EXPENSE" shall mean for any period, the total interest
----------------
expense (including, without limitation, interest expense attributable to
Capitalized Lease Obligations) determined on a consolidated basis, without
duplication, for Borrower and its Subsidiaries in accordance with GAAP.
"INTEREST PERIOD" shall mean, with respect to each LIBOR Loan, the
---------------
interest period applicable to such LIBOR Loan as set forth in the applicable
Notice of Borrowing or Notice of Continuation/Conversion .
"INTEREST RATE AGREEMENT" shall mean for any Person, any interest rate
-----------------------
swap agreement, interest rate cap agreement, interest rate collar agreement or
other similar agreement designed to protect the party indicated therein against
fluctuations in interest rates.
"INVESTMENT" shall mean, as applied to any Person, any direct or
----------
indirect purchase or other acquisition by that Person of securities, or of a
beneficial interest in securities, of any other Person, and any direct or
indirect loan, advance (other than deposits with financial institutions
available for withdrawal on demand, prepaid expenses, advances to employees,
officers and directors and similar items, each made or incurred in the ordinary
course of business), or capital contribution by that Person to any other Person,
including all Debt of such other Person to that Person, but excluding accounts
owed by that other Person in the ordinary course of business. Investments shall
exclude extensions of trade credit on commercially reasonable terms in
accordance with normal trade practices. The amount of any Investment shall be
determined in conformity with GAAP.
"IRC" shall mean the Internal Revenue Code of 1986, as amended from
---
time to time and any successor statutes.
"IRS" shall mean the Internal Revenue Service or any successor agency.
---
"LANDLORD CONSENT AND ESTOPPEL" shall mean (i) with respect to any
-----------------------------
node site, a consent and estoppel in the form of Exhibit J-1 annexed hereto, and
(ii) with respect to any collocation agreement, a consent and estoppel in the
form of Exhibit J-2 annexed hereto; provided that Collateral Agent may, in its
discretion eliminate or modify the provisions otherwise required to be included
in any such Landlord Consent and Estoppel.
"LEASEHOLD PROPERTY" shall mean any leasehold interest of any Credit
------------------
Party as lessee under any lease of real property, other than any such leasehold
interest designated
SECOND PRIORITY AGREEMENT
-------------------------
from time to time by Collateral Agent in its sole discretion as not being
required to be included in the Collateral.
"LENDER COUNTERPARTY INTEREST RATE AGREEMENT" shall have the meaning
-------------------------------------------
ascribed thereto in the definition of the term "Loan Documents".
"LENDING OFFICE" shall mean, with respect to a Lender or Agent, any
--------------
office, branch, subsidiary or affiliate of such Lender or the Agent.
"LIBO RATE" shall mean, with respect to each day during each Interest
---------
Period pertaining to a LIBOR Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward to the nearest 1/100th of
1%):
LIBO RATE = BASE LIBO RATE
-------------------------------
1.00 - LIBOR Reserve Percentage
"LIBOR INTEREST PAYMENT DATE" shall mean, with respect to a LIBOR
---------------------------
Loan, the last day of each Interest Period applicable to such Loan, and, if such
Interest Period has a duration of more than three months, on each day which
occurs during such Interest Period every three months from the first day of such
Interest Period.
"LIBOR INTEREST RATE DETERMINATION DATE" shall mean each date of
--------------------------------------
calculating the LIBO Rate for purposes of determining the interest rate with
respect to an Interest Period. The LIBOR Interest Rate Determination Date for
any LIBOR Loan shall be the second Business Day prior to the first day of the
related Interest Period for such LIBOR Loan.
"LIBOR LOAN" shall mean a Loan, or portion thereof, during any period
----------
in which it bears interest at a rate based upon the LIBO Rate.
"LIBOR RESERVE PERCENTAGE" shall mean for any day for any Interest
------------------------
Period the maximum reserve percentage (expressed as a decimal, rounded upward to
the next 1/100th of 1.0%) in effect on such day (whether or not applicable to
any Lender) for United States domestic banks under regulations issued from time
to time by the Federal Reserve Board for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal reserve
requirement) with respect to Eurocurrency Liabilities having a term comparable
to such Interest Period.
"LIEN" shall mean any mortgage, pledge, deed of trust, assignment,
----
lien, charge, encumbrance or security interest of any kind, or the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement, but excluding easements, rights of way or similar
encumbrances on real property which are in the
SECOND PRIORITY LOAN AGREEMENT
------------------------------
ordinary course and which do not materially affect the value, use and
insurability of title of such real property.
"LOAN" shall mean a loan made by a Lender to Borrower pursuant to
----
Section 2.01.
"LOAN DOCUMENTS" shall mean all agreements, instruments and documents,
--------------
including, without limitation, security agreements, loan agreements, notes,
guarantees, mortgages, deeds of trust, subordination agreements, pledges, powers
of attorney, consents, assignments, contracts, notices, leases, financing
statements, between Borrower, any Guarantor, any Agent or any of the Lenders and
all other written matter whether heretofore, now, or hereafter executed by or on
behalf of Borrower, any Guarantor or any other Person in connection with the
transactions contemplated hereby or by any other Loan Document and delivered to
any Agent or any of the Lenders, together with all agreements and documents
referred to therein or contemplated thereby; provided, the term "Loan Documents"
shall not include any Interest Rate Agreement unless y) such Interest Rate
Agreement is entered into by a Lender or an Affiliate thereof with the Borrower
(each, a "LENDER COUNTERPARTY INTEREST RATE AGREEMENT"), and z) Borrower and
-------------------------------------------
such Lender or Affiliate thereof have agreed that such Lender Counterparty
Interest Rate Agreement is a Loan Document.
"MARKET CO-DEVELOPMENT COSTS" means actual cash expenses incurred by
---------------------------
Borrower or any of its Subsidiaries in connection with the development of a
market; provided that y) such expenses are only incurred as a result of the
--------
development of such market in cooperation with another Person, other than an
Affiliate and z) such expenses are not included as projected expenses in the
Projections.
"MATERIAL ADVERSE EFFECT" shall mean, with respect to any Person, a
-----------------------
material adverse effect upon the business, condition (financial or otherwise),
operations, properties, or prospects of such Person, or upon the ability of such
Person to perform, or the ability of such Person to enforce any right or remedy,
under the Loan Documents.
"MAXIMUM RATE" shall have the meaning given to such term in Section
------------ -------
2.13 hereof.
----
"▇▇▇▇▇▇ ▇▇▇▇▇▇▇ BRIDGE NOTES" shall mean Senior Increasing Rate Notes
---------------------------
due July 15, 1999 issued pursuant to the Note Purchase Agreement dated as of
July 10, 1998 between NorthPoint and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Senior Funding, Inc.
"MULTIEMPLOYER PLAN" shall mean a "multiemployer plan" as defined in
------------------
Section 4001(a)(3) of ERISA which is, or within the immediately preceding six
(6) years was, contributed to by Borrower or an ERISA Affiliate.
SECOND PRIORITY LOAN AGREEMENT
------------------------------
"NET INCOME" shall mean, with respect to any Person for any period,
----------
the net income (or loss) of such Person determined in accordance with GAAP minus
-----
(ii) (a) the income of any Person (other than a Subsidiary of such Person) in
which any other Person has a joint interest, except to the extent of the amount
of dividends or other distributions actually paid to such Person or any of its
Subsidiaries by such Person during such period, (b) the income (or loss) of any
Person accrued prior to the date it becomes a Subsidiary of such Person or is
merged into or consolidated with that Person or that Person's assets are
acquired by such Person, (c) the income of any Subsidiary (other than a
Guarantor) of that Person to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary, (d) any after-tax gains or losses attributable to
asset sales or returned surplus assets of any pension plan, and (e) (to the
extent not included in clauses (a) through (d) above) any net extraordinary
gains or net non-cash extraordinary losses.
"NOTE" shall mean a promissory note of Borrower substantially in the
----
form of Exhibit B attached hereto.
---------
"NOTICE OF BORROWING" shall mean a notice substantially in the form of
-------------------
Exhibit A-1 attached hereto.
-----------
"NOTICE OF CONVERSION/CONTINUATION" shall mean a notice in
---------------------------------
substantially the form of Exhibit A-2 annexed hereto.
-----------
"OBLIGEE GUARANTOR" shall have the meaning set forth in Section 8.07
----------------- ------------
hereof.
"OBLIGATIONS" shall mean all the obligations of any Credit Party now
-----------
or hereafter existing under this Agreement or any other Loan Document to which
any Credit Party is a party, whether for principal, interest, fees, expenses,
reimbursement, indemnification or otherwise. Obligations shall include,
without limitation, all interest, charges, expenses, fees, attorneys' fees and
disbursements, and paralegals' fees which accrue after the commencement of any
case or proceeding in bankruptcy after the insolvency of, or for the liquidation
or reorganization of any Credit Party, whether or not allowed in such
proceeding.
"PAYMENT ACCOUNT" shall mean the Administrative Agent's account at
---------------
Northern Trust, Chicago, Illinois, ABA No. ▇▇▇▇▇▇▇▇▇, Account No. 86711,
attention: AT&T Capital Corporation, Capital Markets Division, reference:
NorthPoint.
"PAYMENT DATE" shall mean the last day of March, June, September, and
------------
December in each calendar year, but if any such date is not a Business Day, the
next succeeding Business Day, commencing on the first such date to occur after
the Closing Date.
SECOND PRIORITY LOAN AGREEMENT
------------------------------
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
----
and defined in ERISA.
"PERMITTED ACQUISITION" shall mean any acquisition by Borrower,
---------------------
whether by purchase, merger or otherwise (but, in any event, except in the
ordinary course of business), of any assets, or a business line or a division
of, or Equity Securities of, any Person; provided that, (i) immediately prior
to, and after giving effect to such acquisition, no Default or Event of Default
shall have occurred and be continuing or would result therefrom, (ii) all
transactions in connection therewith shall be consummated in accordance with all
applicable laws and in conformity with all applicable Governmental
Authorizations, (iii) all of the Equity Securities acquired or otherwise issued
by such Person or any newly formed Subsidiary of Borrower in connection with
such acquisition shall be owned 100% by Borrower or a Guarantor, and Borrower
shall have taken, or caused to be taken, as of the date such Person becomes a
Subsidiary of Company, each of the actions set forth in Section 5.16 hereof,
------------
(iv) Borrower and its Subsidiaries shall be in compliance with, on a pro forma
basis after giving effect to such acquisition, the provisions of Article VII
hereof, (v) Borrower shall have delivered to Administrative Agent a certificate
in the form of a Compliance Certificate evidencing such compliance with such
Section, together with all relevant financial information for such acquired
assets, (vi) any Person or assets or division as acquired in accordance herewith
shall be in the same business or lines of business in which Borrower and/or its
Subsidiaries are engaged as of the Closing Date and (vii) the aggregate amount
of cash consideration paid by Borrower and its Subsidiaries to third parties in
connection with all such acquisitions shall not exceed $17,000,000.
"PERMITTED ASSET SALE AMOUNT" means as of any date of determination
---------------------------
aggregate assets of Borrower and its Subsidiaries not in excess of the greater
of (y) assets generating 50% of positive EBITDA for Borrower and its
Subsidiaries during the most recently concluded twelve months period and (z) 50%
of the fair market value of all of the assets of Borrower and its Subsidiaries.
"PERMITTED FUNDS" shall mean the proceeds of any equity issued by
---------------
Holdings to a Person that will co-develop a market with Borrower or any of its
Subsidiaries and which are contributed as equity to Borrower for the purpose of
funding Market Co-Development Costs referred to in clause (ii)(F) of the
definition of EBITDA for the purpose of developing a market in cooperation with
such Person.
"PERMITTED HOLDINGS DEBT" shall mean unsecured Debt of Holdings in an
-----------------------
aggregate principal amount not to exceed, at any time outstanding, $175,000,000
(or in the case of Debt issued at a discount, an initial accreted value of
$175,000,000), which Debt shall not by its terms, require cash payments of
principal or interest or any mandatory redemption or other repayments (other
than in the case of a change of control or a sale of as-
SECOND PRIORITY LOAN AGREEMENT
------------------------------
sets, provided that no such repayment is required with respect to asset sales so
long as the net proceeds thereof are used to repay Debt of the Borrower and/or
its Subsidiaries) with respect thereto (whether before or after default, at
maturity, as a result of acceleration or otherwise) at any time the Total
Leverage Ratio is greater than or equal to 6.00:1.00 and which shall not be
guaranteed by Borrower or any of its Subsidiaries.
"PERMITTED LIENS" shall have the meaning set forth in Section 6.01
--------------- ------------
hereof.
"PERSON" shall mean any natural person, corporation, division of a
------
corporation, business trust, joint venture, association, company, partnership,
unincorporated organization or other legal entity, or a government or any agency
or political subdivision thereof.
"PLAN" shall mean any employee benefit plan as defined in Section 3(3)
----
of ERISA (other than a Multiemployer Plan) in respect of which Borrower or any
ERISA Affiliate is, or within the immediately preceding six (6) years was, an
"employer" as defined in Section 3(5) of ERISA.
"PLEDGE AND SECURITY AGREEMENT" shall mean the Pledge and Security
-----------------------------
Agreement substantially in the form of Exhibit H attached hereto.
---------
"PREPAYMENT PREMIUM" shall mean with respect to a Loan prepaid during
------------------
any of the periods set forth below, the percentage of the amount of the Loan
prepaid indicated opposite such period:
Monthly Anniversary Percentage
After the Closing Date ----------
----------------------
7 8%
8 7%
9 6%
10 5%
11 4%
12 3%
13-24 2%
25 & thereafter 0%
SECOND PRIORITY LOAN AGREEMENT
------------------------------
"PRINCIPAL PAYMENTS" shall mean, for any period, total required Debt
------------------
amortization (including, without limitation, the principal payments attributable
to Capitalized Leases) determined on a consolidated basis, without duplication,
for Borrower and its Subsidiaries in accordance with GAAP.
"PRO RATA SHARE" shall mean with respect to all matters relating to
--------------
any Lender, the percentage obtained by dividing (a) at any time prior to the
date on which the Loans are funded, the Commitment Amount of that Lender by the
Commitment Amount of all Lenders, and (b) on and after the date on which the
Loans are funded, the aggregate outstanding principal balance of the Loans held
by that Lender, by the aggregate outstanding principal balance of the Loans held
by all Lenders.
"PRODUCTION READY COS" shall mean a central office (i) where Borrower
--------------------
has secured either physical or virtual collocation, (ii) where equipment and
transport installation have been successfully completed, (iii) with respect to
which paid traffic is being billed and (iv) that has obtained all necessary
Governmental Approvals.
"PROJECTIONS" shall have the meaning given to such term in Section
----------- -------
3.03.
----
"PUC" shall mean any state Governmental Authority having utility or
---
telecommunications regulatory authority over Borrower or any System.
"PURCHASE DEBT" shall have the meaning given to such term in Section
------------- -------
6.12(iv).
--------
"QUALIFIED EQUITY OFFERING" shall mean one or more private or public
-------------------------
offerings of Equity Securities by Holdings providing gross proceeds to Holdings
of not less than $125,000,000, the net proceeds of which are used to make
capital contributions to Borrower constituting Contributed Capital.
"QUALIFIED INTER COMPANY LOAN" shall mean a loan to Borrower from
----------------------------
Holdings, which loan is expressly subordinated to the Obligations on terms and
conditions satisfactory to the Administrative Agent and Documentation Agent, has
a maturity date occurring on or after the annual anniversary of the Termination
Date, and requires no cash payment of principal or interest prior to the
scheduled maturity date of such Loan (other than as permitted by Section 6.04).
------------
"REAL ESTATE ASSET" shall mean, at any time of determination, any
-----------------
interest then owned by any Credit Party in any real property, including, without
limitation, all easements, rights of way, rights of occupancy, licenses and
similar rights with respect thereto.
SECOND PRIORITY LOAN AGREEMENT
------------------------------
"REGISTER" shall have the meaning given to such term in Section
-------- -------
2.03(d).
-------
"RELATED FUND" shall mean, with respect to any Lender that is an
------------
investment fund, any other investment fund that invests in commercial loans and
that is managed or advised by the same investment advisor as such Lender or by
an Affiliate of such investment advisor.
"RELEASE" shall mean any release, spill, emission, leaking, pumping,
-------
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the environment or into or out of any property, including the movement of
Contaminants through or in the air, soil, surface water, groundwater or
property.
"REMEDIAL ACTION" shall mean actions required to (1) clean up, remove,
---------------
treat or in any other way address Contaminants in the environment; (2) prevent
the Release or threat of Release or prevent or minimize the further Release of
Contaminants so they do not migrate or endanger or threaten to endanger public
health or welfare or the environment; or (3) perform preremedial studies and
investigations and postremedial monitoring and care.
"REPORTABLE EVENT" shall mean any reportable event as defined in
----------------
Section 4043 of ERISA unless the reporting requirement with respect to such
reportable event has been waived by the PBGC or other appropriate Governmental
Authority.
"REQUISITE LENDERS" shall mean (a) prior to the date on which the
-----------------
Loans are made, Lenders having at least fifty-one percent (51%) of the aggregate
Commitment Amounts of all Lenders, (b) on and after the date on which the Loans
are made Lenders holding at least fifty-one percent (51%) of the aggregate
outstanding amount of the Loans.
"SECOND PRIORITY APPLICABLE MARGIN" shall mean with respect to (i)
---------------------------------
each Loan bearing interest based upon the Base Rate, 7.0% per annum, and (ii)
each Loan bearing interest based upon the LIBO Rate, 8.0% per annum.
"SECURED PARTIES" shall have the meaning assigned to that term in the
---------------
Intercreditor Agreement.
"SILICON VALLEY FACILITY" shall mean the QuickStart Loan and Security
-----------------------
Agreement, dated October 23, 1997, between Silicon Valley Bank and Borrower.
"SOLVENT" shall mean, at any time of determination, with respect to
-------
any Person:
SECOND PRIORITY LOAN AGREEMENT
------------------------------
(i) the assets of such Person, at a fair valuation, are in excess of
the total amount of its debts (including, without limitation, contingent
liabilities); and
(ii) the present fair saleable value of its assets is greater than
its probable liability on its existing debts as such debts become absolute
and matured; and
(iii) it is then able and expects to be able to pay its debts
(including, without limitation, contingent debts and other commitments) as
they mature; and
(iv) it has capital sufficient to carry on its business as conducted
or contemplated to be conducted.
For purposes of determining whether a Person is Solvent, the amount of any
contingent liability shall be computed as the amount that, in light of all the
facts and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or mature liability.
"SUBSIDIARY" shall mean, with respect to any Person, any corporation,
----------
partnership, joint venture, association or other business entity, whether now
existing or hereafter organized or acquired, (i) in the case of a corporation,
of which more than 50% of the total voting power of the Equity Interests
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, officers or trustees thereof is held by such Person or
any of its Subsidiaries; or (ii) in the case of a partnership, joint venture,
association or other business entity, with respect to which such Person or any
of its Subsidiaries has the power to direct or cause the direction of the
management and policies of such entity by contract or otherwise or if in
accordance with GAAP such entity is consolidated with the such Person for
financial statement purposes.
"SWITCH EQUIPMENT" shall mean telecommunications switches and
----------------
associated electronics.
"SYSTEM" shall mean each data communications, telecommunications or
------
information system (including, without limitation, any voice, video
transmission, data or Internet services), and any related, ancillary or
complementary services, owned by Borrower or its Subsidiaries and all
replacements, enhancements or additions thereto.
"TAXES" shall mean any and all license, documentation, recording and
-----
registration fees, and all taxes, including, without limitation, income (other
than taxes on net income or profits and franchise taxes imposed on the Lenders
or any Agent by the United
SECOND PRIORITY LOAN AGREEMENT
------------------------------
States of America, or by the jurisdiction under the laws of which such recipient
is organized or in which its principal office is located or, in the case of any
Lender, in which its applicable Lending Office is located), gross receipts,
sales, value-added, use, excise, personal property (tangible and intangible),
real estate and stamp, documentary, transfer or recording taxes, levies,
imposts, deductions, duties, assessments, fees, charges, and withholdings of any
nature whatsoever, whether or not presently in existence, together with any
penalties, fines, additions to tax, or interest thereon, imposed by any taxing
authority or other Governmental Authority.
"TEMPORARY CASH INVESTMENTS" shall mean (i) Investments in marketable,
--------------------------
direct obligations issued or guaranteed by the United States of America, or of
any governmental agency or political subdivision thereof, maturing within 365
days of the date of purchase; (ii) Investments in certificates of deposit or
time deposits issued by a bank organized under the laws of the United States of
America or any state thereof or the District of Columbia, in each case having
capital, surplus and undivided profits totaling more than $500,000,000 and rated
at least A by Standard & Poor's Ratings Service and A-2 by ▇▇▇▇▇'▇ Investors
Service, Inc. maturing within 365 days of purchase; (iii) Investments not
exceeding 365 days in duration in money market funds that are sponsored by a
registered broker dealer or mutual fund distributor, (iv) commercial paper
issued by any Person organized under the laws of any State of the United States
of America and rated at least "Prime-1" (or the then equivalent grade) by
Moody's Investor's Service, Inc. or at least "A-1" (or the then equivalent
grade) by Standard and Poor's Ratings Group, a division of ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc., in each case with maturities of not more than 180 days from the
date of acquisition thereof; and (v) repurchase agreements entered into by
Borrower with a bank or trust company or recognized securities dealer having
combined capital and surplus of at least $50,000,000 for direct obligations
issued by or fully guaranteed by the United States of America in which a Credit
Party shall have a valid and perfected first priority security interest (subject
to no other Liens) provided that each such repurchase agreement shall have a
fair market value of at least 100% of the amount of the repurchase obligations
thereunder on the date of purchase thereof.
"TERMINATION DATE" shall mean March 31, 2004.
----------------
"TERMINATION EVENT" shall mean (i) a Reportable Event with respect to
-----------------
a Benefit Plan; (ii) the withdrawal of Borrower or any ERISA Affiliate from a
Benefit Plan during a plan year in which Borrower or such ERISA Affiliate was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA; (iii) the
imposition of an obligation on Borrower or any ERISA Affiliate under Section
4041 of ERISA to provide affected parties written notice of intent to terminate
a Benefit Plan in a distress termination described in Section 4041(c) of ERISA;
(iv) the institution by the PBGC of proceedings to terminate a Benefit Plan; (v)
the termination of, or the appointment of a trustee to administer, any Benefit
Plan
SECOND PRIORITY LOAN AGREEMENT
------------------------------
pursuant to Section 4042 of ERISA; or (vi) the partial or complete withdrawal of
Borrower or any ERISA Affiliate from a Multiemployer Plan, in each case,
provided that such event results or is reasonably likely to result in a material
liability to Borrower.
"THIRD PARTY INTERACTIVES" shall mean all Persons with whom Borrower
------------------------
exchanges data electronically in the ordinary course of business, including
without limitation, customers, suppliers, third-party vendors, subcontractors,
processors-converters, shippers and warehousemen.
"TOTAL DEBT" shall mean, as of any date of determination, the Debt of
----------
Borrower and its Subsidiaries determined on a consolidated basis in accordance
with GAAP, less, prior to the consummation of an initial public offering of
----
common stock by Holdings providing gross proceeds to Holdings of not less than
$125,000,000, the net proceeds of which are used to make capital contributions
to Borrower constituting Contributed Capital, the amount of cash on hand and any
Temporary Cash Investment in excess of $10,000,000 held by Borrower and its
Subsidiaries as of such date.
"TOTAL INTEREST AMOUNT" shall have the meaning set forth in Section
--------------------- -------
2.05(a)(ii) hereof.
-----------
"TOTAL LEVERAGE RATIO" shall mean the ratio of (i) Total Debt as of
--------------------
the last day of any fiscal quarter, to (ii) the product of (A) two (2)
multiplied by (B) EBITDA of Borrower and its Subsidiaries on a consolidated
basis, for the six month period ending on the last day of such fiscal quarter.
"VENDOR FINANCING" means Debt of Borrower owed to the provider of
----------------
Telecommunications Equipment (or an Affiliate thereof) with respect to the
purchase or acquisition of such Telecommunications Equipment by Borrower.
"VOTING STOCK" shall mean securities of any class or classes of a
------------
corporation, the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate directors (or
Persons performing similar functions).
"YEAR 2000 CORRECTIVE ACTIONS" shall mean, as to each of the Credit
----------------------------
Parties, all actions necessary to eliminate such Credit Party's Year 2000
Problems, including, without limitation, computer code enhancements and
revisions, upgrades and replacements of Year 2000 Date-Sensitive
Systems/Components, and coordination of such enhancements, revisions, upgrades
and replacements with Third Party Interactives.
"YEAR 2000 CORRECTIVE PLAN" shall mean, with respect to each of the
-------------------------
Credit Parties, a comprehensive plan to eliminate all of its Year 2000 Problems
on or before August 31, 1999, including without limitations (i) computer code
enhancements or revisions, (ii)
SECOND PRIORITY LOAN AGREEMENT
------------------------------
upgrades or replacements of Year 2000 Date-Sensitive Systems/Components, (iii)
test and validation procedures, (iv) an implementation time line and budget and
(v) designation of specific employees who will be responsible for planning,
coordinating and implementing each phase or subpart of the Year 2000 Corrective
Plan.
"YEAR 2000 DATE-SENSITIVE SYSTEM/COMPONENT" shall mean, as to any
-----------------------------------------
Person, any system software, network software, applications software, database,
computer file, embedded microchip, firmware or hardware that accepts, creates,
manipulates, sorts, sequences, calculates, compares or outputs calendar-related
data accurately; such systems and components shall include, without limitation,
mainframe computers, file server/client system, computer workstations, routers,
hubs, other network-related hardware, and other computer-related software,
firmware or hardware and information processing and delivery systems of any kind
and telecommunications systems and other communications processors, security
systems, alarms, elevators and HVAC systems.
"YEAR 2000 IMPLEMENTATION TESTING" shall mean, as to each of the
--------------------------------
Credit Parties, (i) the performance of test and validation procedures regarding
Year 2000 Corrective Actions on a unit basis and a system wide basis, (ii) the
performance of test and validation procedures regarding data exchanges among the
Credit Parties' Year 2000 Date-Sensitive Systems/Components and data exchanges
with Third Party Interactives, and (iii) the design and implementation of
additional Year 2000 Corrective Actions, the need for which has been
demonstrated by test and validation procedures.
"YEAR 2000 PROBLEMS" shall mean, with respect to each of the Credit
------------------
Parties, limitations on the capacity or readiness of any such Credit Party's
Year 2000 Date-Sensitive Systems/Components to accurately accept, create,
manipulate, sort, sequence, calculate, compare or output calendar date
information with respect to calendar year 1999 or any subsequent calendar year
beginning on or after January 1, 2000 (including leap year computations),
including, without limitation, exchanges of information among Year 2000 Date-
Sensitive Systems/Components of the Credit Parties and exchanges of information
among the Credit Parties and Year 2000 Date-Sensitive Systems/Components of
Third Party Interactives and functionality of peripheral interfaces, firmware
and embedded microchips.
1.1 SECTION ACCOUNTING TERMS. EXCEPT AS OTHERWISE EXPRESSLY
-----------------
PROVIDED HEREIN, ALL ACCOUNTING TERMS NOT OTHERWISE DEFINED HEREIN SHALL HAVE
THE MEANINGS ASSIGNED TO THEM IN CONFORMITY WITH GAAP. FINANCIAL STATEMENTS AND
OTHER INFORMATION REQUIRED TO BE DELIVERED BY CREDIT PARTIES TO LENDERS PURSUANT
TO Section 5.06 shall be prepared in accordance with GAAP as in effect at the
------------
time of such preparation. Subject to the foregoing, calculations in connection
with the definitions, covenants and other provisions hereof shall utilize
accounting principles and policies in conformity with those used to prepare the
Financials.
SECOND PRIORITY LOAN AGREEMENT
------------------------------
1.2 SECTION OTHER TERMS DEFINED IN NEW YORK UNIFORM COMMERCIAL CODE.
-------------------------------------------------------
All other terms contained in this Agreement (and which are not otherwise
specifically defined herein) shall have the meanings provided by the Uniform
Commercial Code of the State of New York (the "CODE") to the extent the same are
----
used or defined therein.
2 ARTICLE
LOANS
-----
3.1 SECTION AGREEMENT TO LEND.
-----------------
(a) Each Lender severally agrees, on the terms and conditions hereinafter
set forth, to make in a single draw-down on the Funding Date a Loan to Borrower
in the amount of such Lender's Commitment
(b) The proceeds of the Loans, together with the proceeds of up to
$15,000,000 of First Priority Loans, shall be used, on the Funding Date, to
repay the principal of, interest and prepayment fees relating to the ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Bridge Notes and the Silicon Valley Facility, and to pay all fees and
expenses incurred in connection with the Loan Documents.
(c) Loans that are repaid or prepaid may not be reborrowed.
3.2 SECTION LOANS.
-----
(a) Each Base Rate Loan shall be in a minimum principal amount of
$1,000,000 and increments of $250,000 in excess thereof. Each LIBOR Loan shall
be in a minimum principal amount of $5,000,000 and increments of $1,000,000 in
excess thereof.
(b) At any time, Loans may be subject to a number of Interest Periods no
greater than the difference between y) seven (7) Interest Periods and z) the
number of Interest Periods in effect under the First Priority Loan Documents.
3.3 SECTION PROCEDURE FOR LOAN REQUEST.
--------------------------
(a) Borrower shall deliver to Administrative Agent a Notice of Borrowing
with respect to the Loans on or before 11:00 a.m. (New York time) at least three
(3) Business Days prior to the Funding Date. The Loans made on the Funding Date
shall be Base Rate Loans and thereafter may be continued as Base Rate Loans or
converted into LIBOR Loans in the manner provided in Section 2.06 and subject to
------------
the other conditions and limitations therein set forth and set forth in this
Article II.
----------
(b) The Administrative Agent agrees, promptly upon receipt of a Notice of
Borrowing, to notify each Lender of the date and amount of the Loans proposed
thereunder and
SECOND PRIORITY LOAN AGREEMENT
------------------------------
the amount of such Lender's Pro Rata Share therein. So long as no Event of
Default has occurred and is continuing and upon fulfillment of the applicable
conditions set forth in Article IV, each such Lender severally agrees, on or
----------
before 12:00 P.M. (New York time) on the Funding Date, to pay into the Payment
Account, an amount equal to such Lender's Pro Rata Share of such Loan in dollars
and in same day funds. After the Administrative Agent's receipt of such Lender's
Loan proceeds, the Administrative Agent shall make available such proceeds to
Borrower or the Person entitled to payment thereof at the bank account(s)
specified in the Notice of Borrowing on the date specified in such Notice of
Borrowing in Dollars in immediately available funds.
(c) Unless the Administrative Agent has received written notice from a
Lender on or prior to the date of any proposed Loan that such Lender will not
make available to the Administrative Agent such Lender's Pro Rata Share of such
Loan, the Administrative Agent may, but is not obligated to, assume that such
Lender has made its Pro Rata Share of such Loan available to the Administrative
Agent on the date of such Loan in accordance with paragraph (b) above, and the
-------------
Lenders may, in reliance upon such assumption, make available to Borrower on
such date a corresponding amount. If such Pro Rata Share is not, in fact, paid
to Administrative Agent by such Lender when due, the Administrative Agent will
be entitled to recover such amount on demand from such Lender or Borrower which
received the proceeds of such Loan without set-off, counterclaim or deduction of
any kind, together with interest thereon, for each day from the date such amount
is made available to Borrower until the date such amount is repaid to the
Administrative Agent either by Borrower or such Lender, at, (1) in the case of
Borrower, the interest rate applicable to such Loan, and (2) in the case of such
Lender, the Federal Funds Effective Rate. Nothing in this Section 2.03(c) or
---------------
elsewhere in this Agreement or the other Loan Documents shall be deemed to
require Administrative Agent to advance funds on behalf of any Lender or to
relieve any Lender from its obligation to fulfill its Commitment hereunder or to
prejudice any rights that Borrower may have against any Lender as a result of
any default by such Lender hereunder. Without limiting the foregoing, with
respect to any Lender which for any reason fails to make timely payment to the
Administrative Agent of its Pro Rata Share of any Loan, the Administrative
Agent, in addition to other rights and remedies which it may have, shall be
entitled to withhold or set off from any payments due to such Lender hereunder,
an amount equal to the Pro Rata Share required to have been paid by such Lender
plus interest as described above, and to bring an action or suit against such
Lender in a court of competent jurisdiction to recover such Pro Rata Share
thereof and any related interest thereon. If such Lender shall repay to the
Administrative Agent such corresponding amount, such amount so repaid shall
constitute such Lender's applicable Pro Rata Share of such Loan for purposes of
this Agreement. If both such Lender and Borrower shall have repaid the
corresponding amount, the Administrative Agent shall promptly return to Borrower
its corresponding amount.
SECOND PRIORITY LOAN AGREEMENT
------------------------------
(d) Administrative Agent shall maintain at its principal office a register for
the recordation of the names and addresses of Lenders and the Commitment Amount
and Loans of each Lender from time to time (the "REGISTER"). The Register shall
--------
be available for inspection by Borrower or any Lender at any reasonable time and
from time to time upon reasonable prior notice. Administrative Agent shall
record in the Register the Commitment Amounts and the Loans, and each repayment
or prepayment in respect of the principal amount of the Loans, and any such
recordation shall be prima facie evidence of such matters; provided, failure to
make any such recordation, or any error in such recordation, shall not affect
any Commitment Amounts or any Obligations in respect of any Loan. Each Borrower
hereby designates Newcourt to serve as such Borrower's agent solely for purposes
of maintaining the Register as provided in this Section 2.03(d), and Borrower
---------------
hereby agrees that, to the extent Newcourt serves in such capacity, Newcourt and
its officers, directors, employees, agents and affiliates shall constitute
"Indemnitees".
SECOND PRIORITY LOAN AGREEMENT
------------------------------
3.4 SECTION THE NOTES. Borrower shall execute and deliver to each Lender a Note
---------
to evidence the Commitment of that Lender. Each Note shall be in the principal
amount of the Commitment Amount of the applicable Lender, dated the Funding
Date, stated to mature on March 31, 2004. The Note payable to a Lender shall
represent the obligation of Borrower to pay the unpaid principal amount of all
Loans (including, without limitation, all Loans deemed made pursuant to Section
2.08(c)) to Borrower by such Lender together with interest thereon as prescribed
in Section 2.05. The aggregate principal amount of all the Notes shall not
------------
exceed the aggregate Commitments of all the Lenders, plus all Loans deemed made
pursuant to Section 2.08(c)). The Administrative Agent is hereby authorized by
Borrower to record in the Register the date and amount of each Loan made to
Borrower, as applicable, and to record therein the date and amount of each
payment on each Loan made to Borrower, and such recordations shall be prima
facie evidence of the amounts owing to the Lenders with respect to the Loans in
the absence of manifest error; provided, however, that the failure of the
-------- -------
Administrative Agent to register any such information on such schedule shall not
in any manner affect the obligation of Borrower to repay the Loans made to
Borrower in accordance with the terms of this Agreement.
3.5 SECTION INTEREST ON LOANS.
-----------------
(a) General. Subject to the provisions of Sections 2.05(b), 2.06, 2.07,
------- ---------------- ---- ----
and 2.08(c):
(i) each Loan shall bear interest at the rate per annum equal to (i)
the Base Rate plus the Second Priority Applicable Margin, computed on
the basis of a 365 or 366 day year, or (ii) the LIBO Rate plus the
Second Priority Applicable Margin, computed on the basis of a 360 day
year, as selected by Borrower in the Notices of Borrowing and the
Notices of Continuation/Conversion; and
(ii) the Loans shall also bear interest in an additional amount equal
to the Additional Interest Amount (together with the interest payable
pursuant to clause (i), herein collectively referred to as the "TOTAL
-----
INTEREST AMOUNT").
---------------
(b) Default Interest. If Borrower shall default in the payment of the
----------------
principal of or interest on any Loan or any other amount becoming due hereunder
or under any of the other Loan Documents on its due date, then Borrower shall,
on demand from the Administrative Agent, thereafter pay interest on all Loans at
a rate that is four percent (4.00%) per annum above the rates of interest
otherwise payable on all the Loans from the date such
SECOND PRIORITY LOAN AGREEMENT
------------------------------
payment is due to the date such payment default is either cured or waived in
writing by the Requisite Lenders. If any other Event of Default shall occur and
be continuing and shall be declared by the Administrative Agent upon the
direction of the Requisite Lenders, then Borrower shall, on demand, thereafter
pay interest on all the Loans at a rate that is two percent (2.00%) per annum
above the rates of interest otherwise payable on the Loans from the date of the
occurrence of such Event of Default until the date such Event of Default has
been cured or waived in writing by the Requisite Lenders; provided, that if an
--------
Event of Default described in the first sentence of this clause (b) shall occur
----------
at any time that an Event of Default described in this second sentence has
occurred and is continuing, then the rate of interest described in the first
sentence of this clause (b) shall apply. After the occurrence and during the
----------
continuance of any Event of Default, Borrower shall be subject to the
limitations on borrowings of, conversions into and continuations as LIBOR Loans
set forth in Section 2.07(g).
---------------
3.6 SECTION CONVERSION OR CONTINUATION.
--------------------------
(a) Subject to the provisions of Section 2.07, Borrower shall have the
------------
option (i) to convert all or any part of its outstanding Loans, in a minimum
amount of $5,000,000 and integral multiples of $1,000,000 in excess of that
amount from Loans that are Base Rate Loans to LIBOR Loans; (ii) to convert all
or any part of its outstanding Loans from LIBOR Loans to Base Rate Loans on the
expiration of the Interest Period applicable thereto; and (iii) upon the
expiration of any Interest Period applicable to any outstanding LIBOR Loan, to
continue all of such LIBOR Loan equal to $5,000,000 and integral multiples of
$1,000,000 in excess of that amount as a LIBOR Loan or LIBOR Loan, as
applicable; provided, the minimum amounts referred to in this Section 2.06(a)
--------
shall not apply to any Loan deemed made pursuant to Section 2.08(c); and
provided, further, that no outstanding Loans may be converted into, or continued
-------- -------
as, LIBOR Loans when any Default or Event of Default referred to in Section
9.01(a) has occurred and is continuing.
(b) Whenever a Borrower elects to convert or continue Loans under this Section
-------
2.06, Borrower shall deliver to the Administrative Agent a Notice of
----
Conversion/Continuation signed by an authorized officer of Borrower (i) no later
than 10:00 a.m. (New York time) three (3) Business Days in advance of the
requested conversion date, in the case of a conversion into Base Rate Loans, and
(ii) no later than 10:00 a.m. (New York time) three (3) Business Days in advance
of the requested conversion or continuation date, in the case of a conversion
into, or continuation of, LIBOR Loans. The Notice of Conversion/Continuation
shall specify (1) the conversion or continuation date (which shall be a Business
Day) and, in the case of any continuation, the last day of the then applicable
Interest Period, (2) the amount and type of the Loans to be converted or
continued, (3) the nature of the requested conversion or continuation, and (4)
in the case of a conversion into, or continuation of, LIBOR Loans, the requested
Interest Period. Promptly after receipt of a Notice
SECOND PRIORITY LOAN AGREEMENT
------------------------------
of Conversion/Continuation pursuant to this Section 2.06(b), the Administrative
---------------
Agent shall notify the Lenders by telecopy, telephone or other similar form of
transmission, of the requested conversion or continuation. In the event that a
Borrower should fail to provide a Notice of Conversion/Continuation with respect
to any LIBOR Loans as provided above, such Loans shall, on the last day of the
Interest Period with respect to such Loans, convert to Base Rate Loans.
(c) Any Notice of Conversion/Continuation for conversion to, or
continuation of, Loans made pursuant to this Section 2.06 shall be irrevocable
------------
and the applicable Borrower shall be bound to convert or continue in accordance
therewith.
3.7 SECTION SPECIAL PROVISIONS GOVERNING LIBOR LOANS. Notwithstanding any
----------------------------------------
other provisions to the contrary contained in this Agreement, the following
provisions shall govern with respect to LIBOR Loans as to the matters covered:
(a) Amount of LIBOR Loans. Each continuation of or conversion to LIBOR
---------------------
Loans, shall be in a minimum amount of $5,000,000 and in integral multiples of
$1,000,000 in excess of that amount.
(b) Determination of Interest Period. By giving notice as set forth in
--------------------------------
Section 2.06(b), a Borrower shall have the option, subject to the other
---------------
provisions of this Section 2.07, to specify whether the Interest Period for such
------------
LIBOR Loan shall be a one, two, three or six month period. The determination of
Interest Periods shall be subject to the following provisions:
(i) In the case of immediately successive Interest Periods, each
successive Interest Period shall commence on the day on which the
preceding Interest Period expires.
(ii) If any Interest Period would otherwise expire on a day which is
not a Business Day, the Interest Period shall be extended to expire on
the next succeeding Business Day; provided, however, that if the next
-------- -------
succeeding Business Day occurs in the following calendar month, then
such Interest Period shall expire on the immediately preceding
Business Day.
(iii) Borrower may not select an Interest Period for any LIBOR Loan,
which Interest Period expires later than the maturity date of such
Loan.
(c) Determination of Interest Rate. As soon as practicable after 10:00
------------------------------
a.m. (New York time) on the LIBOR Interest Rate Determination Date, the
Administrative Agent shall
SECOND PRIORITY LOAN AGREEMENT
------------------------------
determine (which determination shall, absent manifest error, be presumptively
correct) the interest rate for the LIBOR Loans for which an interest rate is
then being determined and shall promptly give notice thereof (in writing or by
telephone confirmed in writing) to the Borrower and the Lenders. In the event
that on any LIBOR Interest Rate Determination Date the Administrative Agent
shall have determined (which determination shall, absent manifest error, be
presumptively correct and binding upon all parties) that:
(i) adequate and fair means do not exist for ascertaining the
applicable interest rates by reference to which the LIBO Rate then
being determined is to be fixed; or
(ii) Dollar deposits in the relevant amounts and for the relevant
Interest Period are not generally available to Lenders in the
eurodollar market at the LIBO Rate, then:
(A) each LIBOR Loan will automatically, on the last day of the
then existing Interest Period therefor, convert into a Base Rate Loan;
and
(B) the obligation of the Lenders to make, or to convert Loans
into, LIBOR Loans shall be suspended until the Administrative Agent
shall notify the Borrower and the Lenders that the circumstances
causing such suspension no longer exist.
(d) Illegality. Notwithstanding any other provision of this Agreement, if
----------
any Lender shall notify the Administrative Agent that the introduction of or any
change in or in the interpretation of any law or regulation after the Closing
Date makes it unlawful, or any central bank or other Governmental Authority
asserts that it is unlawful, for any Lender to perform its obligations hereunder
to make LIBOR Loans or to fund or maintain LIBOR Loans hereunder, (i) the
obligation of the Lenders to make, or to convert Loans into or to continue Loans
as, LIBOR Loans shall be suspended until the Administrative Agent shall notify
Borrower and the Lenders that the circumstances causing such suspension no
longer exist and (ii) Borrower shall on the termination of the Interest Period
then applicable thereto, or on such earlier date required by law, prepay in full
all LIBOR Loans then outstanding together with accrued interest thereon, or
convert all such LIBOR Loans into Base Rate Loans in accordance with Section
-------
2.06.
----
(e) Compensation. In addition to such amounts as are required to be paid
------------
by Borrower pursuant to the other Sections of this Article II, Borrower agrees
----------
to compensate any Lender for all losses, expenses and liabilities, including,
without limitation, any loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds
SECOND PRIORITY LOAN AGREEMENT
------------------------------
acquired by such Lender to fund or maintain such Lender's LIBOR Loans to
Borrower, which such Lender may sustain (i) if for any reason a funding of any
LIBOR Loans does not occur on a date specified therefor in a Notice of Borrowing
or Notice of Conversion/Continuation, or a successive Interest Period does not
commence after notice therefor is given pursuant to Section 2.06 as a result of
------------
any act or omission of Borrower, (ii) if any voluntary or mandatory prepayment
of any LIBOR Loans occurs for any reason on a date which is not the last
scheduled day of an Interest Period, (iii) as a consequence of any required
conversion of LIBOR Loans to Base Rate Loans as a result of any of the events
indicated in Section 2.07(d), or (iv) as a consequence of any other failure by a
---------------
Borrower to repay LIBOR Loans when required by the terms of this Agreement.
(f) Booking of LIBOR Loans. The Lenders may make, carry or transfer LIBOR
----------------------
Loans at, to, or for the account of, any of their respective branch offices or
the office of any of their respective affiliates.
(g) LIBOR Loans After Event of Default. After the occurrence of and
----------------------------------
during the continuance of any Event of Default referred to in Section 9.01(a),
Borrower may not elect to have any Loans continued as, or converted to, LIBOR
Loans after the expiration of any Interest Period then in effect for such Loans.
3.8 SECTION PAYMENTS.
--------
(a) Interest equal to the Additional Interest Amount shall be payable in
arrears on each date interest is payable with respect to the First Priority
Loans to the extent that interest is payable on such First Priority Loans on
such date.
(b) Interest on each LIBOR Loan shall be payable in arrears on each LIBOR
Interest Payment Date and, if such LIBOR Loan is paid in full other than on such
LIBOR Interest Payment date, on such other date. Interest on each Base Rate Loan
will be payable in arrears on each Payment Date and, if such Base Rate Loan is
paid in full (other than by means of a conversion to a LIBOR Loan) other than on
such Payment Date, on such other date; provided, in no event shall any amount
payable under this Section 2.08(b) include any amount payable under Section
2.08(a).
(c) Prior to the first anniversary of the Closing Date, on each date
interest is paid on the Loans or the First Priority Loans, a portion of interest
payable on the Loans equal to 2.0% per annum of the amount of the Loans and/or
First Priority Loans giving rise to such interest payment for the period during
which accrued interest is then being paid shall not be payable in cash but shall
be added (i.e., capitalized) to the aggregate principal amount of the
outstanding Loans on a pro rata basis, and shall on and after such interest
payment date (the "CAPITALIZATION DATE") constitute a Loan for all purposes
-------------------
under this Agreement; provided, that (i) any such Loans resulting from the
--------
capitalization of interest as described above shall
SECOND PRIORITY LOAN AGREEMENT
------------------------------
bear interest (y) so long as any LIBOR Loans are outstanding as of the
applicable Capitalization Date and no Interest Period is otherwise ending on
such Capitalization Date, at the rate of interest (including a proportionate
share of the Additional Interest Amount) borne by the LIBOR Loans with the
Interest Period next scheduled to expire, (and shall otherwise be treated for
all purposes under this Agreement as an addition to such LIBOR Loans) until the
date of expiration of such Interest Period and thereafter as otherwise provided
pursuant to the provisions of this Agreement and (z) otherwise at a rate of
interest as otherwise determined with respect to the Loans pursuant to the
provisions of this Agreement and (ii) the principal amount thereof shall be
repaid on or before March 31, 2004.
SECOND PRIORITY LOAN AGREEMENT
------------------------------
(d) Subject to the provisions of Sections 2.09 and 9.02, the outstanding
------------- ----
principal balance of the Loans shall be repaid in the percentages of the Loans
outstanding on the Closing Date and on the dates specified below.
Date % of Loans
-------------------------------- ---------------------
June 30, 2001 1.25
September 30, 2001 1.25
December 31, 2001 1.25
March 31, 2002 1.25
June 30, 2002 1.25
September 30, 2002 1.25
December 31, 2002 1.25
March 31, 2003 1.25
June 30, 2003 1.25
September 30, 2003 1.25
December 31, 2003 43.75
March 31, 2004 43.75
(a) After the occurrence and during the continuance of an Event of
Default, all proceeds received by Administrative Agent or Collateral Agent from
any sale of, collection from, or other realization upon all or any part of the
Collateral under any Collateral Document during the continuation of such Event
of Default shall be applied as follows:
(i) to the payment in full of all Obligations (as defined in the
First Priority Loan Documents);
SECOND PRIORITY LOAN AGREEMENT
------------------------------
(ii) to the payment of all costs and expenses of such sale,
collection or other realization, including all expenses, liabilities
and advances made or incurred by Administrative Agent, Collateral
Agent and their respective agents and counsel in connection therewith,
and all amounts for which Administrative Agent, Collateral Agent or
any Lender is entitled to indemnification under any of the Loan
Documents and all advances made by Administrative Agent or Collateral
Agent thereunder for the account of the applicable Credit Party, and
to the payment of all costs and expenses paid or incurred by
Administrative Agent or Collateral Agent in connection with the
exercise of any right or remedy under any Loan Document;
(iii) thereafter, to the payment of accrued interest and fees owed to
Agents and Lenders;
(iv) thereafter, to the extent of any excess such proceeds, to the
payment of all other Obligations then due and owing for the benefit of
the holders thereof in accordance with the terms of the Intercreditor
Agreement; and
(v) thereafter, to the extent of any excess such proceeds, to the
payment to or upon the order of such Credit Party or to whosoever may
be lawfully entitled to receive the same or as a court of competent
jurisdiction may direct.
1.2 SECTION VOLUNTARY AND MANDATORY PREPAYMENT OF LOANS.
-------------------------------------------
(a) No amount of Loans may be prepaid at any time prior to the six-month
anniversary of the Closing Date. At any time after the six-month anniversary of
the Closing Date, Borrower shall have the right upon the provision of five days'
prior written notice to the Administrative Agent, which notice, once given,
shall be irrevocable, to prepay the outstanding principal of the Base Rate Loans
in a minimum principal amount of $1,000,000 and increments of $250,000 in excess
thereof, or the outstanding principal amount of the LIBOR Loans in a minimum
principal amount of $5,000,000 and increments of $1,000,000 in excess thereof,
together in each case with accrued interest thereon, the aggregate Prepayment
Premium applicable thereto and any amount payable pursuant to Section 2.07(e).
---------------
The amount of principal so prepaid shall be applied to the remaining scheduled
Principal Payments in accordance with Section 2.10;
------------
SECOND PRIORITY LOAN AGREEMENT
------------------------------
(b) Upon the occurrence of any Event of Loss in excess of $250,000 with
respect to any item of assets of a Credit Party that is not repaired or replaced
with assets used or useful in the business of such Credit Party that have a
value at least equal to the assets to be replaced before the occurrence of the
Event of Loss (assuming that the assets to be replaced had been maintained in
the condition and repair as required by the terms and conditions hereof or of
any other Loan Document) within 180 days after the occurrence of such Event of
Loss or any Events of Loss which, in the aggregate, exceed $500,000 with respect
to any assets that are not so repaired or replaced (in each case, other than an
item of assets no longer used or useful in the business of the Credit Parties),
Borrower shall make a principal prepayment within thirty (30) days of such Event
of Loss in an amount equal to the net cash proceeds, if any, so received,
together with accrued interest thereon (but without the Prepayment Premium) with
such principal payment to be applied, pro rata, to outstanding principal balance
--- ----
of the Loans and further applied to the remaining scheduled Principal Payments
on such Loans in accordance with Section 2.10; provided, that no
------------ --------
such prepayment shall be required to be made to the extent the proceeds giving
rise to such prepayment are required to be used to prepay the First Priority
Loans under the terms of the First Priority Loan Documents.
(c) Borrower shall prepay the Loans on a pro rata basis (and such
prepayment shall be further applied to the remaining scheduled Principal
Payments in accordance with Section 2.10) in a principal amount equal to all of
------------
the net proceeds of any sales of assets of Borrower other than sales in the
ordinary course of business, which proceeds are not reinvested within one
hundred eighty (180) days after receipt thereof in productive long term assets
used or useful in the business of Borrower that have value at least equal to the
assets sold (assuming that such assets were maintained in good condition and
repair as required by the terms and conditions hereof or of any other Loan
Document), plus the applicable Prepayment Premium, within five (5) days after
the expiration of the applicable one hundred eighty (180) day period; provided,
--------
that no such prepayment shall be required to be made to the extent the proceeds
giving rise to such prepayment are required to be used to prepay the First
Priority Loans under the terms of the First Priority Loan Documents.
(d) On the first Payment Date of each year, commencing with the Payment
Date occurring on March 31, 2002, the Loans shall be prepaid on a pro rata basis
(and the amount of such prepayment (but without a Prepayment Premium) further
applied to the remaining scheduled Principal Payments on the Loans in accordance
with Section 2.10) by an amount equal to fifty percent (50%) of Excess Operating
------------
Cash Flow for the preceding fiscal year until Borrower has achieved and
maintained for at least two (2) consecutive fiscal quarters (whether before or
after March 31, 2002), a Total Leverage Ratio of less than 6:1, as determined by
reference to the financial statements delivered pursuant to Section 5.06;
------------
provided, that no such prepayment shall be required to be made to the extent the
--------
proceeds giving rise
SECOND PRIORITY LOAN AGREEMENT
------------------------------
to such prepayment are required to be used to prepay the First Priority Loans
under the terms of the First Priority Loan Documents.
(e) Upon the occurrence and during the continuance of a Default, Borrower
shall prepay the Loans on a pro rata basis (and such prepayment shall be further
applied to the remaining scheduled Principal Payments in accordance with Section
-------
2.10) in a principal amount equal to all of the net proceeds of any sales of
----
Investments permitted pursuant to Section 6.06(viii), plus the applicable
Prepayment Premium, within five (5) days after the receipt of such proceeds;
provided, that no such prepayment shall be required to be made to the extent the
--------
proceeds giving rise to such prepayment are required to be used to prepay the
First Priority Loans under the terms of the First Priority Loan Documents.
1.3 SECTION CERTAIN PROVISIONS REGARDING PREPAYMENTS.
-----------------------------------------
(a) Any prepayment of Loans shall be applied first to Base Rate Loans to
the full extent thereof before application to LIBOR Loans in each case so as to
minimize the amount of any payments required to be made by Borrower pursuant to
Section 2.07(e).
---------------
(b) Notwithstanding any provision to the contrary contained in Section
-------
2.09, no voluntary or mandatory prepayment of Loans shall be made until the six-
----
month anniversary of the Closing Date, and any proceeds otherwise required to be
used to make a mandatory prepayment prior to such date shall be delivered on the
date otherwise required to be used to prepay Loans in accordance with Section
-------
2.09 to Collateral Agent to be held in escrow, and invested in Temporary Cash
----
Investments (to the extent the Collateral Agent is able to provide or otherwise
invest in such Temporary Cash Investments), for application to prepayment of
Loans on the six-month anniversary of the Closing Date.
(c) Each voluntary and mandatory prepayment made pursuant to Section 2.09
------------
shall also be applied, on a pro rata basis, to reduce each Principal Payment
scheduled to occur after the date of such prepayment.
SECOND PRIORITY LOAN AGREEMENT
------------------------------
(d) Each voluntary and mandatory prepayment required under Section 2.09
------------
shall be allocated among the Lenders to repay their Loans on the basis of their
Pro Rata Shares.
1.4 SECTION FEES.
----
(a) COMMITMENT FEE. The Borrower shall pay to the Lenders a commitment
--------------
fee (the "COMMITMENT FEE") for the period commencing on the Effective Date and
--------------
ending on the Revolving Credit Commitment Termination Date (as such term is
defined in the First Priority Loan Agreement), computed (on the basis of the
actual number of days elapsed over a year of 360 days) at the rate of 1.00%, per
annum, on the average daily aggregate amount of unused Revolving Loan Commitment
Amounts (as such term is defined in the First Priority Loan Agreement). Such
Commitment Fee, to the extent then accrued, shall be payable on each Payment
Date.
(b) The Borrowers shall pay and be liable to the Administrative Agent for
the account of the Lenders to be allocated among the Lenders on the basis of
their Pro Rata Shares, a fee equal to the product of (y) the amount of any First
Priority Loans prepaid prior to the twenty fifth monthly anniversary of the
Closing Date times (z) the applicable First Priority Prepayment Premium, such
fee to be payable on the date of any such prepayment of the First Priority
Loans.
(c) The Borrower shall also pay the Agents and shall be liable to the
Agents, for payment of other amounts separately agreed to by Borrower and
Agents.
SECOND PRIORITY LOAN AGREEMENT
------------------------------
(d) All fees once paid shall be deemed fully earned and nonrefundable.
1.5 SECTION MANNER OF PAYMENT; SPECIAL TAX CONSIDERATIONS.
---------------------------------------------
(a) All payments by Borrower hereunder and under the Notes shall be made
to the Administrative Agent by wire transfer or other electronic payment method
to the Payment Account or to such bank account as the Administrative Agent may
designate, for the account of the Lenders in Dollars in immediately available
funds by 11:00 a.m., New York time, on the date on which such payment shall be
due. The Administrative Agent will promptly thereafter (but in no event later
than the date of receipt of such payment, if such is received at or prior to
12:00 p.m., New York time, on the date immediately following the date of receipt
of such payment, if such is received after 12:00 p.m., New York time) cause to
be distributed like funds relating to the payment of principal or interest or
other fees ratably (other than amounts payable pursuant to Section 2.14) to each
------------
Lender in accordance with its Pro Rata Share. In the event that the
Administrative Agent shall not make distributions to any Lender in accordance
with the terms of the immediately preceding sentence, the amounts required to be
so distributed by the Administrative Agent shall bear interest at then Federal
Funds Effective Rate from the date such amount was required to be distributed to
such Lender pursuant to the immediately preceding sentence until the date such
distribution is actually made to such Lender. Any such accrued interest shall be
payable by the Administrative Agent on demand. Interest in respect of any Loan
hereunder shall accrue from the day such Loan is made up to and including the
day prior to the date on which such Loan is paid in full. Payments received
after 12:00 p.m. New York time shall not be given credit until the next Business
Day, and Borrower shall be liable for interest, if any, accruing on such payment
until the next Business Day.
(1) Any and all payments by Borrower hereunder shall be made free and
clear of and without deduction for any and all Taxes. If Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under the other Loan Documents to any Lender or Administrative
Agent, (A) the sum payable shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section 2.12) such Lender or Administrative Agent
------------
receives an amount equal to the sum it would have received had no such
deductions been made, (B) Borrower shall make such deductions, and (C) Borrower
shall pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law. If a withholding tax of the United
States of America or any other Governmental Authority shall be or become
applicable (y) after the date of this Agreement, to the payments by Borrower
made to the Lending Office or any other office that a Lender may claim as its
Lending Office, or (z) after such Lender's selection and designation of any
other Lending Office, to such payments made to such other Lending Office, such
Lender shall use reasonable efforts to make, fund and maintain its Loans through
another Lending Office of
SECOND PRIORITY LOAN AGREEMENT
------------------------------
such Lender in another jurisdiction so as to reduce, but not increase, the
applicable Borrower's liability hereunder, if the making, funding or maintenance
of such Loans through such other Lending Office of such Lender does not, in the
sole and absolute judgment of such Lender, otherwise materially adversely affect
such Loans, such Lender's obligations under its Commitment or such Lender.
Notwithstanding anything to the contrary hereunder, if a Person becomes a Lender
under this Agreement pursuant to Section 11.06 hereof, Borrower shall in no
-------------
event be required to increase any payment pursuant to paragraph (b) of this
Section 2.12 by an amount that would exceed the amount of any increase that
------------
would be required to be made under paragraph (b) of this Section 2.12 to the
------------
assigning Lender.
(2) The Borrower will indemnify each Lender and each Agent and hold it
harmless for the full amount of Taxes (including, without limitation, any Taxes
imposed by any Governmental Authority on amounts payable under this Section 2.12
------------
or any other documentary taxes, assessments or charges made by any Governmental
Authority by reason of the execution and delivery of this Agreement or any other
Loan Document) paid by such Lender or such Agent (as the case may be) and any
liability (including penalties, interest, and expenses) arising therefrom or
with respect thereto. This indemnification shall be made within thirty (30) days
after the date such Lender or such Agent (as the case may be) makes written
demand therefor. A certificate as to any additional amount payable to any Lender
or Agent under this Section 2.12 submitted to Borrower and the Administrative
------------
Agent (if a Lender is so submitting) by such Lender or such Agent shall show in
reasonable detail the amount payable and the calculations used to determine such
amount. With respect to such deduction or withholding for or on account of any
Taxes and to confirm that all such Taxes have been paid to the appropriate
Governmental Authorities, the Borrower shall promptly (and in any event not
later than thirty (30) days after receipt) furnish to each Lender and each Agent
such certificates, receipts and other documents as may be required (in the
judgment of such Lender or such Agent) to establish any tax credit to which such
Lender or such Agent may be entitled.
(3) Within thirty (30) days after the date of any payment of Taxes on
amounts payable hereunder by Borrower, Borrower will furnish to the
Administrative Agent, at its address referred to in Section 11.01, the original
-------------
or a certified copy of a receipt evidencing payment thereof.
(4) Without prejudice to the survival of any other agreement of Borrower
hereunder, the agreements and obligations of Borrower contained in this Section
-------
2.12 shall survive the payment in full of principal and interest hereunder and
----
the termination of this Agreement.
(5) Each Lender that is not created or organized under the laws of the
United States of America or a political subdivision thereof shall deliver to
Borrower and the
SECOND PRIORITY LOAN AGREEMENT
------------------------------
Administrative Agent on or before the effective date hereof, or, if later, the
date on which such Lender becomes a Lender pursuant to Section 11.06 hereof, a
-------------
true and accurate certificate executed in duplicate by a duly authorized officer
of such Lender, in a form reasonably satisfactory to Borrower and the
Administrative Agent, to the effect that such Lender is capable under the
provisions of an applicable tax treaty concluded by the United States of America
(in which case the certificate shall be accompanied by two original, executed
copies of Form 1001 of the IRS (or any successor form or forms required under
the IRC or the applicable regulations promulgated thereunder)) or under Section
1442 of the IRC (in which case the certificate shall be accompanied by two
original, executed copies of Form 4224 of the IRS (or any successor form or
forms required under the IRC or the applicable regulations promulgated
thereunder)) of receiving payments of interest hereunder exempt from or at a
reduced deduction or withholding of United States federal income tax or that
such Lender is not a bank described in Section 881(c)(3)(A) of the IRC (in which
case the certificate should be accompanied by two original, executed copies of a
Certificate re Non-Bank Status, together with two original, executed copies of
Form W-8 or W-9 of the IRS (or any successor form or forms required under the
IRC or the applicable regulations promulgated thereunder)). Each such Lender
further agrees to deliver to Borrower and the Administrative Agent from time to
time a true and accurate certificate executed in duplicate by a duly authorized
officer of such Lender substantially in a form reasonably satisfactory to
Borrower and the Administrative Agent, before or promptly upon the occurrence of
any event requiring a change in the most recent certificate previously delivered
by it to Borrower and the Administrative Agent pursuant to this Section
-------
2.12(b)(5). Further, each Lender which delivers a certificate accompanied by
----------
Form 1001 of the IRS covenants and agrees to deliver to Borrower and the
Administrative Agent within fifteen (15) days prior to the first Payment Date
and every third anniversary of such date thereafter, on which this Agreement is
still in effect, another such certificate and two accurate and complete original
signed copies of Form 1001 (or any successor form or forms required under the
IRC or the applicable regulations promulgated thereunder), and each Lender that
delivers a certificate accompanied by Form 4224 of the IRS (or any successor
form or forms required under the IRC or the applicable regulations promulgated
thereunder) covenants and agrees to deliver to Borrower and the Administrative
Agent within fifteen (15) days prior to the beginning of each subsequent taxable
year of such Lender during which this Agreement is still in effect, another such
certificate and two accurate and complete original signed copies of IRS Form
4224 (or any successor form or forms required under the IRC or the applicable
regulations promulgated thereunder). Each such certificate shall certify as to
one of the following:
(ii) that such Lender is capable of receiving payments of interest
hereunder exempt from withholding of United States of America federal
income tax;
SECOND PRIORITY LOAN AGREEMENT
------------------------------
(iii) that such Lender is not capable of receiving payments of
interest hereunder exempt from withholding of United States of America
federal income tax as specified therein but is capable of recovering
the full amount of any such withholding from a source other than
Borrower and will not seek any such recovery from Borrower; or
(iv) that, as a result of the adoption of or any change in any law,
treaty, rule, regulation, guideline or determination of a Governmental
Authority or any change in the interpretation or application thereof
by a Governmental Authority after the date such Lender became a party
hereto, such Lender is not capable of receiving payments of interest
hereunder without deduction or withholding of United States of America
federal income tax as specified therein and that it is not capable of
recovering the full amount of the same from a source other than
Borrower.
Each Lender shall promptly furnish to Borrower and the Administrative Agent such
additional documents as may be reasonably required by Borrower or the
Administrative Agent to establish any exemption from or reduction of any Taxes
required to be deducted or withheld and which may be obtained without undue
expense to such Lender or at the expense of the requisite Person.
(6) For a period with respect to which a Lender has failed to provide the
Administrative Agent and Borrower with the appropriate form described in Section
-------
2.12(b)(5) (other than if such failure is due to a change in law occurring
----------
subsequent to the date on which a form originally was required to be provided),
such Lender shall not be entitled to indemnification under this Section 2.12
------------
with respect to Taxes imposed by the United States by reason of such failure;
provided, however, that should a Lender become subject to Taxes because of its
-------- -------
failure to deliver a form required hereunder, Borrower shall take such steps as
such Lender shall reasonably request, and at such Lender's expense, to assist
such Lender to recover such Taxes.
(7) If a Borrower pays any additional amount under this Section 2.12 and,
------------
as a result, any Lender, together with the Administrative Agent, subsequently,
in their sole discretion and based on their own interpretation of any relevant
laws (but acting in good faith) receive or are granted a final and non-
appealable credit against or deduction from or in respect of any tax payable by
such Lender, or obtain any other final and non-appealable relief in respect of
any tax, which in the opinion of such Lender and the Administrative Agent,
acting in good faith, is both reasonably identifiable and quantifiable by them
without requir-
SECOND PRIORITY LOAN AGREEMENT
------------------------------
ing any Lender, the Administrative Agent or their professional advisers to
expend a material amount of time or incur a material cost in so identifying or
quantifying (any of the foregoing, to the extent so reasonably identifiable and
quantifiable, being referred to as a "SAVING"), such Lender shall, to the extent
------
that it can do so without prejudice to the retention of the Saving, reimburse
Borrower promptly after such identification and quantification with the amount
of such Saving; provided, however, that any such Saving shall be reduced by
-------- -------
any costs incurred by such Lender or the Administrative Agent in obtaining such
Saving.
(8) Nothing in this Section 2.12(c) shall require any Lender to disclose
---------------
to any Person any information regarding its tax affairs or to arrange its tax
and other affairs in any particular manner.
SECOND PRIORITY LOAN AGREEMENT
------------------------------
1.2 SECTION MAXIMUM LAWFUL INTEREST RATE. Notwithstanding any provision
----------------------------
contained herein, the total liability of Borrower for payment of interest
pursuant hereto and the Notes, including any other charges or other amounts, to
the extent such charges and other amounts are deemed to be interest, shall not
exceed the maximum amount of such interest permitted by law to be charged,
collected, or received from Borrower (the "MAXIMUM RATE"). If any payments by
------------
Borrower for the account of any Lender include interest in excess of the Maximum
Rate, such Lender shall apply such excess to the reduction of the unpaid
principal amount owing by Borrower, or if none is due, such excess shall be
returned to Borrower.
1.3 SECTION FUNDING ISSUES.
--------------
(a) Increased Costs. If, due to either (i) the introduction after the
---------------
date hereof of, or any change after the date hereof in or in the interpretation
of, any applicable law, rule or regulation by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof or (ii) compliance by any Lender after the date hereof
with any final request or final directive issued after the date hereof (whether
or not having the force of law) by any such Governmental Authority, central bank
or comparable agency, and, as a result of any of the events set forth in the
above clauses (i) and (ii), (x) there shall be any increase in the cost to such
----------- ----
Lender in maintaining its Commitment under this Agreement or funding or
maintaining its Pro Rata Share of the Loans under this Agreement, or (y) any
Lender is subjected to any charge or withholding on its obligations hereunder,
or changes in the basis of taxation of payments to any Lender in connection with
any of the foregoing (except for changes in the rate of tax on overall net
income of any Lender) (collectively, "INCREASED COSTS"), then Borrower shall,
---------------
from time to time, pay, to the Administrative Agent for the benefit of such
Lender within 15 days after such Lender shall have provided notice to the
Administrative Agent (and the Administrative Agent shall have provided notice to
Borrower which the Administrative Agent shall promptly do) of such Increased
Cost, an amount sufficient to compensate such Lender for such Increased Cost, as
provided herein. A certificate setting forth in reasonable detail the
computation of the amount of such Increased Cost (which increase in cost shall
be determined by such Lender's reasonable allocation of the aggregate of such
cost increases resulting from such event), submitted to Borrower by such Lender,
shall be conclusive and binding for all purposes, absent manifest error.
(b) Increased Capital. If any Lender which is subject to minimum capital
-----------------
requirements determines that compliance by such Lender with any guideline or
request from any central bank or other Governmental Authority (whether or not
having the force of law) affects or would affect the amount of capital required
or expected to be maintained by such Lender, or any corporation controlling such
Lender, and such Lender reasonably determines that the amount of such capital is
increased by or based upon any commitment to lend here-
SECOND PRIORITY LOAN AGREEMENT
------------------------------
under or making or maintaining Loans, or other commitments of this type, then,
upon demand by such Person, Borrower agrees to, within five (5) days of such
demand, pay to such Person, from time to time as specified by such Person,
additional amounts sufficient to compensate such Person in the light of such
circumstances, to the extent that such Person reasonably determines such
increase in capital to be allocable to such Person's commitment or maintenance
of Loans hereunder. A certificate as to the amount of such increased cost,
submitted to Borrower by the applicable Person shall, absent manifest error, be
conclusive and binding on Borrower for all purposes.
(c) Replacement of Lender. If Borrower, as a result of the requirements
---------------------
of any of Section 2.12, Section 2.14(a) or Section 2.14(b), shall be required to
------------ --------------- ---------------
pay any particular Lender (an "AFFECTED LENDER") the additional amounts referred
---------------
to in such Section, which costs are not imposed by the other Lenders, and such
additional amounts are material, then Borrower shall be entitled to find a
replacement Lender, reasonably acceptable to the Administrative Agent and the
Requisite Lenders (such consent to such replacement Lender not to be
unreasonably withheld), to replace the Affected Lender. The Affected Lender and
the replacement Lender shall execute an Assignment Agreement with respect to all
of the Affected Lender's Commitments and all Loans owing to the Affected Lender
and comply with the other provisions of Section 11.06. Upon the payment by the
-------------
replacement Lender to the Affected Lender of the then outstanding principal
amount of Loans owing to the Affected Lender, together with accrued interest
thereon, and the payment by Borrower to the Affected Lender of any compensation
required with respect to LIBOR Loans pursuant to Section 2.07(e), the
---------------
replacement Lender shall succeed to all of the Affected Lender's rights and
obligations under this Agreement and the other Loan Documents.
(d) Limitation. Any demand for payment to be given by a Lender under
----------
Section 2.14 shall be effective only if given within 180 days of an officer of
such Lender having knowledge of the facts giving rise to the right to make such
demand.
SECOND PRIORITY LOAN AGREEMENT
------------------------------
1 ARTICLE
REPRESENTATIONS AND WARRANTIES
------------------------------
Each Credit Party represents and warrants to the Agents and the
Lenders that:
1.1 SECTION ORGANIZATION; POWERS.
--------------------
(a) Such Credit Party (i) is a corporation or limited liability company
duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization and (ii) is qualified to do business in the
jurisdiction in which its principal place of business is located and in every
other jurisdiction where such qualification is necessary except where a failure
to so qualify is not reasonably expected to have a Material Adverse Effect;
(b) such Credit Party has the power and authority to own its properties,
to carry on its business as now conducted; and
(c) such Credit Party has the power and the authority to enter into each
Loan Document to which it is a party and to carry out the transactions
contemplated thereby.
1.2 SECTION CORPORATE AUTHORIZATION. The execution, delivery and performance
-----------------------
of this Agreement and the other Loan Documents to which such Credit Party is a
party, and the Loans hereunder:
(a) have been duly authorized by such Credit Party's Board of Directors or
managers and, if necessary, such Credit Party's stockholders or members;
(b) (1) do not (except as disclosed in Schedule 3.02) violate (i) any
-------------
existing provision of law applicable to such Credit Party and not immaterial to
its business, (ii) such Credit Party's Certificate or Articles of Incorporation
or other organizational Documents, as the case may be, or (iii) any applicable
order of any court or other governmental agency, and (2) do not conflict with,
result in a breach of or constitute (with due notice or lapse of time or both) a
default under any indenture, agreement for borrowed money, bond, note or other
similar instrument or any other material agreement to which such Credit Party is
a party or by which such Credit Party or any of such Credit Party's property is
bound;
(c) do not result in the creation or imposition of any Lien of any nature
whatsoever upon any property or assets of such Credit Party other than the Liens
granted pursuant to this Loan Agreement or the other Loan Documents;
SECOND PRIORITY LOAN AGREEMENT
------------------------------
(d) constitute legal, valid and binding obligations of such Credit Party,
enforceable against such Credit Party in accordance with their respective terms;
and
(e) do not, as of the date of execution hereof, require any governmental
consent, filing, registration or approval other than any consent, filing,
registration or approval that have been made to the extent required by
applicable law, order, rule or regulations; provided, the failure of any such
consent or approval to be obtained or filing or registration to be made or
otherwise be effective shall not affect the validity or enforceability of the
Loan Documents or otherwise be adverse in any respect to any Agent or Lender.
1.3 SECTION FINANCIAL STATEMENTS. Borrower has furnished to the Agent and
---------------------
the Lenders the audited consolidated financial statements of Borrower and its
Subsidiaries dated as of, and covering the fiscal year ended, December 31, 1998
(the "FINANCIALS"). The Financials have been prepared in accordance with GAAP
----------
applied on a basis consistent with that of preceding periods and are complete
and correct in all material respects. As of the date of the Financials, (a) the
Financials fairly represent Borrower's and its Subsidiaries' financial position
and results of operations; and (b) there are no omissions from the Financials or
any other facts or circumstances not reflected in the Financials which are or
may be material according to GAAP. On and as of the Closing Date, the
Projections of Holdings and its Subsidiaries for the period from the first day
of fiscal year 1999 through and including the last day of fiscal year 2004 (the
"PROJECTIONS") are based on good faith estimates and assumptions made by the
-----------
management of Holdings; provided, the Projections are not to be viewed as facts
and that actual results during the period or periods covered by the Projections
may differ from such Projections and that the differences may be material;
provided further, as of the Closing Date, management of Holdings believed that
the Projections were reasonable and attainable.
1.4 SECTION NO MATERIAL ADVERSE CHANGE. Since December 31, 1998, no event or
--------------------------
change has occurred that has caused or evidences, either in any case or in the
aggregate, a Material Adverse Effect.
1.5 SECTION LITIGATION. There are no actions, suits or proceedings at law or
----------
in equity or by or before any Governmental Authority now pending or, to the
knowledge of such Credit Party, threatened, against or affecting such Credit
Party or any property or rights of such Credit Party as to which there is a
reasonable likelihood of an adverse determination and which, if adversely
determined, would individually or in the aggregate materially impair the right
of any Credit Party to carry on business substantially as now being conducted or
as presently contemplated or which is likely to result in any Material Adverse
Effect.
1.6 SECTION TAX RETURNS. Such Credit Party has filed or caused to be filed
-----------
all material Federal, state and local tax returns that are required to be filed,
which returns are
SECOND PRIORITY LOAN AGREEMENT
------------------------------
true, correct and complete in all material respects, and has paid or caused to
be paid all taxes that have become due or shown on any assessment received by it
to the extent that such taxes have become due, except such taxes the amount,
applicability or validity of which are being contested in good faith by
appropriate proceedings and with respect to which such Credit Party shall have
set aside on its books adequate reserves with respect to such taxes as are
required by GAAP.
1.7 SECTION NO DEFAULTS. Such Credit Party is not in default (i) with
-----------
respect to any judgment, writ, injunction, decree, rule or regulation of any
Governmental Authority, or (ii) in the performance, observance or fulfillment of
any of the obligations, covenants or conditions contained in any agreement or
instrument to which such Credit Party is a party or by which any of its assets
are bound except, in the case of any matter otherwise included in clause (i) or
(ii), to the extent such matter could not reasonably be expected to have a
Material Adverse Effect.
1.8 SECTION PROPERTIES. Each Credit Party has good, sufficient, legal title
----------
beneficial to (in the case of fee interests in real property), valid leasehold
interests in (in the case of leasehold interests in real or personal property),
or good and sufficient title to (in the case of all other personal property),
all of their respective properties and assets reflected in the Financials,
except for assets disposed of since the date of such financial statements in the
ordinary course of business or as otherwise permitted under Section 6.03. Except
------------
as permitted by this Agreement, all such properties and assets are free and
clear of Liens.
1.9 SECTION COLLATERAL.
(a) The execution and delivery of the Collateral Documents by Credit
Parties, together with the actions taken on or prior to the date hereof pursuant
to Section 4.01, are effective to create in favor of Collateral Agent for the
------------
benefit of Lenders, as security for the Obligations, a valid and perfected
second priority Lien on all of the Collateral, and all filings and other actions
necessary or desirable to perfect and maintain the perfection and second
priority status of such Liens have been duly made or taken and remain in full
force and effect, other than the filing of any UCC financing statements
delivered to Collateral Agent for filing (but not yet filed) and the periodic
filing of UCC continuation statements in respect of UCC financing statements
filed by or on behalf of Collateral Agent and actions necessary with respect to
perfection of security interests not governed by the Uniform Commercial Code.
(b) No authorization, approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body is required for
either the pledge or grant by any Credit Party of the Liens purported to be
created in favor of Collateral Agent pursuant to any of the Collateral Documents
or the exercise by Collateral Agent of any rights or reme-
SECOND PRIORITY LOAN AGREEMENT
------------------------------
dies in respect of any Collateral (whether specifically granted or created
pursuant to any of the Collateral Documents or created or provided for by
applicable law), except for filings or recordings contemplated by Section 4.01
------------
and except as may be required, in connection with the disposition of any
Investment Property, by laws generally affecting the offering and sale of
securities.
(c) Except with respect to any Permitted Lien and such as may have been
filed in favor of Collateral Agent as contemplated by Section 4.01, no effective
------------
UCC financing statement, fixture filing or other instrument similar in effect
covering all or any part of the Collateral is on file in any filing or recording
office.
(d) All information supplied to Collateral Agent by or on behalf of any
Credit Party with respect to any of the Collateral (in each case taken as a
whole with respect to any particular Collateral) is accurate and complete in all
material respects.
1.10 SECTION LICENSES, MATERIAL AGREEMENTS, INTELLECTUAL PROPERTY.
----------------------------------------------------
(a) Such Credit Party has obtained all approvals of any Governmental
Authority having jurisdiction over such Credit Party, which approvals are
necessary or appropriate for the construction and operation of the Systems as
are presently operating, to the extent such approvals are required to be
obtained currently. Such Governmental Approvals and approvals are listed on
Schedule 3.10(a) and constitute the only licenses, permits or franchises of any
----------------
Governmental Authority required in connection with the Systems as are presently
operating. All Governmental Approvals of such Credit Party are in full force and
effect, are duly issued in the name of, or validly assigned to, such Credit
Party and such Credit Party has the power and authority to operate thereunder.
(b) Schedule 3.10(b) accurately and completely lists all material
----------------
agreements to which such Credit Party is a party as of the Closing Date,
including, without limitation, all purchase agreements, construction contracts,
right of way or right of occupancy agreements, lease agreements, consulting,
employment, management and related agreements. All of the foregoing agreements
are valid, subsisting and in full force and effect and none of such Credit
Party, or any other parties, are in default thereunder in any material respect.
Such Credit Party has given true and complete copies of all such agreements to
the Agents and the Lenders.
(c) Such Credit Party owns or possesses all the patents, trademarks,
service marks, trade names, copyrights and licenses, and all rights with respect
to the foregoing (the "INTELLECTUAL PROPERTY"), necessary for the conduct of its
---------------------
business as presently conducted without any known conflict with the rights of
others except where such conflict is not reasonably expected to have a Material
Adverse Effect. Schedule 2.1(b) of the Pledge and Se-
---------------
SECOND PRIORITY LOAN AGREEMENT
------------------------------
curity Agreement accurately and completely lists all Intellectual Property owned
or possessed by or licensed to such Credit Party.
1.11 SECTION COMPLIANCE WITH LAWS. The operations of such Credit Party
--------------------
comply with all applicable federal, state or local laws and regulations,
including, without limitation, Environmental Laws and regulations promulgated by
the FCC and any PUC, and other telecommunications laws and regulations, except
where noncompliance is not reasonably expected to have a Material Adverse
Effect. None of the operations of such Credit Party is subject to any judicial
or administrative proceeding alleging the violation of any Environmental Laws.
None of the operations of such Credit Party is the subject of federal or state
investigation evaluating whether any Remedial Action is needed to respond to a
Release. Such Credit Party has not filed any notice under any federal or state
law indicating past or present treatment, storage or disposal of a hazardous
waste or reporting a Release. Such Credit Party has no contingent liability of
which such Credit Party has knowledge or (with the reasonable exercise of
diligence) should have knowledge other than contingent liabilities that are not
reasonably expected to have a Material Adverse Effect.
1.12 SECTION ERISA. None of such Credit Party or any ERISA Affiliate of such
------
Credit Party maintains or contributes to any Plan other than a Plan listed on
Schedule 3.12 hereto. Except as disclosed on Schedule 3.12, each Plan which is
------------- -------------
intended to be qualified under Section 401(a) of the IRC has been determined by
the IRS to be so qualified, and each trust related to any such Plan has been
determined to be exempt from federal income tax under Section 501(a) of the IRC.
Except as disclosed on Schedule 3.12, none of such Credit Party or any ERISA
-------------
Affiliate maintains or contributes to any employee welfare benefit plan within
the meaning of Section 3(1) of ERISA which provides benefits to employees after
termination of employment other than as required by Section 601 of ERISA. None
of such Credit Party or any ERISA Affiliate has breached any of the material
responsibilities, obligations or duties imposed on it by ERISA or regulations
promulgated thereunder with respect to any Plan. No Plan has incurred any
accumulated funding deficiency (as defined in Section 302(a)(2) of ERISA and
Section 412(a) of the IRC), whether waived or not waived. None of such Credit
Party or any ERISA Affiliate nor any fiduciary of any Plan which is not a
Multiemployer Plan (i) has engaged in a nonexempt "prohibited transaction"
described in Section 406 of ERISA or Section 4975 of the IRC or (ii) has taken
or failed to take any action which would constitute or result in a Termination
Event; provided that, in the case of the events described in clauses (i) and
(ii), such action, or failure to take action results in a material liability to
the Borrower. None of such Credit Party or any ERISA Affiliate has incurred any
liability to the PBGC which remains outstanding, other than the payment of
premiums, and there are no premium payments which have become due which are
unpaid. Schedule B to the most recent annual report filed with the IRS with
respect to each Plan is complete and accurate. Since the date of each such
Schedule B, there has been no adverse change in the funding status or financial
condition of the Plan relating to such Schedule B.
SECOND PRIORITY LOAN AGREEMENT
------------------------------
None of such Credit Party or any ERISA Affiliate has (i) failed to make a
required contribution or payment to a Multiemployer Plan or (ii) made a complete
or partial withdrawal under Sections 4203 or 4205 of ERISA from a Multiemployer
Plan. None of such Credit Party or any ERISA Affiliate has failed to make a
required installment or any other required payment under Section 412 of the IRC
on or before the due date for such installment or other payment. None of such
Credit Party or any ERISA Affiliate is required to provide security to a Plan
under Section 401(a)(29) of the IRC due to a Plan amendment that results in an
increase in current liability for the plan year.
1.13 SECTION INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY ACT.
----------------------------------------------------------
Such Credit Party is not an "investment company" as that term is defined in, and
is not otherwise subject to regulation under, the Investment Company Act of
1940. Such Credit Party is not a "holding company" as that term is defined in,
and is not otherwise subject to regulation under, the Public Utility Holding
Company Act of 1935.
1.14 SECTION FEDERAL RESERVE REGULATIONS. Such Credit Party is not engaged
---------------------------
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any margin stock (within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
of the United States), and no part of the proceeds of the Loans made to such
Credit Party will be used to purchase or carry any such margin stock or to
extend credit to others for the purpose of purchasing or carrying any such
margin stock or for any purpose that violates, or is inconsistent with, the
provisions of Regulation T, U or X of said Board of Governors.
1.15 SECTION INSURANCE. Schedule 3.15 contains a description of all
--------- -------------
insurance which such Credit Party maintains or has maintained on its behalf as
of the Closing Date. All of such insurance is in full force and effect.
1.16 SECTION CAPITALIZATION AND SUBSIDIARIES. As of the Closing Date, the
-------------------------------
classes of Equity Interests, number of authorized shares, number of outstanding
shares and par values or other designations of the Equity Interests or other
equity securities or beneficial interests of such Credit Party are correctly set
forth on Schedule 3.16. All the outstanding shares of Equity Interests or other
-------------
equity securities or beneficial interests of such Credit Party are duly and
validly issued, fully paid and nonassessable, and none of such issued and
outstanding shares, equity securities or beneficial interests has been issued in
violation of, or is subject to, any preemptive or subscription rights. Except as
set forth on Schedule 3.16, as of the Closing Date, there are no: (A)
-------------
outstanding shares of Equity Interests or other equity securities or beneficial
interests or other securities convertible into or exchangeable for shares of
Equity Interests or other equity securities or other beneficial interests of
such Credit Party, (B) outstanding rights of subscription, warrants, calls,
options, contracts or other agreements of any kind, issued, made or granted to
or with any Person under which such Credit Party
SECOND PRIORITY LOAN AGREEMENT
------------------------------
may be obligated to issue, sell, purchase, retire or redeem or otherwise acquire
or dispose of any shares of Equity Interests or other equity securities or
beneficial interests of such Credit Party, or (C) Subsidiaries of such Credit
Party.
1.17 SECTION REAL ESTATE ASSETS. Set forth on Schedule 3.17 is a list of all
------------------ -------------
Real Estate Assets owned as of the Closing Date by such Credit Party, together
with a street address of each such Real Estate Assets, including a description
of such properties' current use. Such Credit Party's interests in the Real
Estate Assets are sufficient in order for such Credit Party to conduct its
business and operations as conducted on the Closing Date.
1.18 SECTION SOLVENCY. After giving effect to any Loans made to such Credit
--------
Party hereunder, the disbursement of the proceeds of such Loans pursuant to such
Credit Party's instructions and the execution, delivery and performance of each
of the Loan Documents and transactions contemplated thereby, such Credit Party
is Solvent and is not contemplating either the filing of a petition by it under
any state or federal bankruptcy or insolvency laws or the liquidation of all or
a substantial portion of its property, and has no knowledge of any Person
contemplating the filing of any such petition against such Credit Party.
1.19 SECTION BROKERS, ETC. Such Credit Party has not dealt with any broker,
------------
finder, commission agent or other similar Person in connection with the Loans or
the transactions being effected contemporaneously with this Agreement, and such
Credit Party covenants and agrees to indemnify and hold harmless the Agents, and
the Lenders from and against, any broker's fee, finder's fee or commission in
connection with such transactions.
1.20 SECTION NO MATERIAL MISSTATEMENTS. Neither any report, financial
-------------------------
statement, exhibit or schedule furnished by or on behalf of such Credit Party to
any of the Agents or any Lender in connection with the negotiation of this
Agreement and the other Loan Documents or included herein or therein, nor any
other information required to be furnished pursuant to the provisions of Article
-------
V hereof, contains any material misstatement of fact or omits to state any
-
material fact necessary to make the statements therein not misleading in light
of the circumstances under which they were made.
SECOND PRIORITY LOAN AGREEMENT
------------------------------
1.21 SECTION YEAR 2000 MATTERS. Each Credit Party has made a full and
-----------------
complete assessment of the Year 2000 Problems and has a realistic and achievable
program for remediating the Year 2000 Problems on a timely basis. Based on such
assessment and program, such Credit Party does not reasonably anticipate that
Year 2000 Problems will have a Material Adverse Effect.
2 ARTICLE
CONDITIONS FOR LOANS
--------------------
3.1 SECTION CONDITIONS PRECEDENT. The obligations of each Lender to make a
--------------------
Loan hereunder are subject to the satisfaction of the following conditions:
(a) All then applicable legal matters incident to this Agreement and the
other Loan Documents shall be reasonably satisfactory to Agents.
(b) The Agents, as applicable, shall have received payment in full of the
fees set forth in their separate written agreements and all other out-of-pocket
costs and expenses of the Agents and the Lenders incurred on or prior to the
Funding Date, including, without limitation, attorneys' and paralegals' fees and
expenses and the fees and expenses incurred in connection with preparation of
the Loan Documents.
(c) The Agents shall have received the following items, in each case in
form and substance satisfactory to the Agents:
(i) the Financials and the Projections;
(ii) certificates dated the Funding Date or dated the
Closing Date and a reaffirmation of such certificate dated
the Funding Date, of the secretaries or assistant
secretaries of each of Credit Party, certifying (1) the
names and true signatures of the officers authorized to sign
each Loan Document to which such Credit Party is a party,
(2) the resolutions of the Board of Directors of such Credit
Party approving the transactions contemplated by the Loan
Documents to which each is a party, and (3) such Credit
Party's bylaws;
(iii) the written opinions of special, regulatory and local
counsel for the Credit Parties, dated the Funding Date,
addressed to the Agents and the Lenders satisfactory to (and
containing only such qualifications and limitations as are
satisfactory to) Agents, which opinions shall be
substantially in the forms set forth in Exhibit D attached
---------
hereto;
SECOND PRIORITY LOAN AGREEMENT
------------------------------
(iv) certificates of appropriate public officials dated
not more than thirty (30) days prior to the Funding Date, as
to the legal existence or qualification, and good standing
of each Credit Party from such Person's jurisdiction of
organization and from the jurisdiction in which such Person
has its principal place of business;
(v) each Credit Party's Certificate or Articles of
Incorporation or other organizational documents, as amended,
modified or supplemented on or prior to the Funding Date,
each certified to be true, correct and complete by the
Secretary of State of the state in which such Person is
organized;
(vi) an originally executed Closing Date Certificate,
together with all attachments thereto;
(vii) a completed Year 2000 questionnaire executed by
Borrower;
(viii) the Notes duly executed and delivered by Borrower;
(ix) this Agreement duly executed and delivered by the
Credit Parties;
(x) the Pledge and Security Agreement executed and
delivered by the parties thereto; and
(xi) the Intercreditor Agreement, duly executed and
delivered by each of the parties thereto.
(d) In order to create in favor of the Collateral Agent, for the benefit
of Lenders, a valid and, subject to any filing and/or recording referred to
herein, perfected second priority security interest in all of the Collateral,
Collateral Agent shall have received:
(i) certificates (which certificates shall be accompanied
by irrevocable undated stock powers, duly endorsed in blank
and otherwise satisfactory in form and substance to
Collateral Agent) representing all capital stock pledged
pursuant to the Pledge and Security Agreement, and
Acknowledgments of Pledge from each applicable issuer of
Securities pledged pursuant to the Pledge and Security
Agreement;
SECOND PRIORITY LOAN AGREEMENT
------------------------------
(ii) the results of a recent search, by a Person
satisfactory to Agents, of all effective UCC financing
statements and fixture filings and all judgment and tax lien
filings which may have been made with respect to any
personal or mixed property of any Credit Party, together
with copies of all such filings disclosed by such search,
and UCC termination statements duly executed by all
applicable Persons for filing in all applicable
jurisdictions as may be necessary to terminate any effective
UCC financing statements or fixture filings disclosed in
such search (other than any such financing statements or
fixture filings in respect of Permitted Liens;
(iii) UCC financing statements, duly executed by each
applicable Credit Party with respect to all personal and
mixed property Collateral of such Credit Party, for filing
in all jurisdictions as may be necessary or, in the opinion
of the Agents, desirable to perfect the security interests
created in such Collateral pursuant to the Collateral
Documents;
(iv) all cover sheets or other documents or instruments
required to be filed in order to create or perfect Liens in
respect of any Intellectual Property;
(v) an opinion of counsel (which counsel shall be
reasonably satisfactory to Collateral Agent) with respect to
the creation and perfection of the security interests in
favor of Collateral Agent in such Collateral and such other
matters governed by the laws of each jurisdiction in which
any Credit Party or any personal or mixed property
Collateral is located as Collateral Agent may reasonably
request, in each case in form and substance reasonably
satisfactory to Agents; and
(vi) evidence that each Credit Party shall have taken or
caused to be taken any other action, executed and delivered
or caused to be executed and delivered any other agreement,
document and instrument, and made or caused to be made any
other filing and recording (other than as set forth herein)
reasonably required by Agents.
SECOND PRIORITY LOAN AGREEMENT
------------------------------
(e) The Administrative Agent shall have received evidence satisfactory to
the Administrative Agent that no Credit Party has any Debt other than as
described in Section 6.12.
------------
(f) On the Funding Date, Borrower shall have borrowed $10,000,000 in
aggregate principal amount of First Priority Loans under the First Priority Loan
Documents.
(g) All of Borrower's Series C Convertible Preferred Equity Interests
shall have been converted into Equity Interests of Holdings with terms and
conditions identical thereto.
(h) Borrower shall have received from inception to the Closing Date, cash
equity contributions in an aggregate amount equal to at least $70,000,000.
(i) Borrower shall have delivered to Lenders, as attachments to the
Closing Date Certificate referred to in Section 4.01(c)(iv), a closing balance
sheet giving pro forma effect to the transactions contemplated hereby and by the
First Priority Loan Documents, including, without limitation, the making of any
Loans and First Priority Loans on the Funding Date, and, together with a
detailed budget for the one year period following the Closing Date.
(j) Borrower shall have provided to Administrative Agent certificates of
insurance reflecting Borrower's and its Subsidiaries' compliance with the
provisions of Section 5.04 and the applicable provisions of any other Loan
Document, including, without limitation, naming the Collateral Agent as loss
payee and/or additional insured under the applicable coverages.
(k) Borrower shall have delivered to Collateral Agent Landlord Consents
and Estoppel with respect to (x) the Borrower's premises located at ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ and (y) not less than four (4) of the premises at which a transmission
node (ATM switch center node) is located.
(l) The representations and warranties of Borrower set forth in Article
-------
III or in any other Loan Document shall be true and correct in all material
---
respects on and as of the date of such Loan with the same effect as though such
representations and warranties had been made on and as of such date, except that
any representations or warranties that relate to a specified date shall only be
reaffirmed as of such date.
(m) At the time of each such Loan, and after giving effect to such Loan,
each Credit Party shall be in compliance with all the terms and provisions set
forth herein on its part to be observed or performed, and no Event of Default or
Default shall have occurred and be continuing and no event or change shall have
occurred that shall have caused or evidenced, either singularly or in the
aggregate, a Material Adverse Effect.
SECOND PRIORITY LOAN AGREEMENT
------------------------------
(n) The Administrative Agent shall have received a Notice of Borrowing for
the Loan together with the other materials required pursuant to Section 2.03.
------------
1 ARTICLE
AFFIRMATIVE COVENANTS
---------------------
Each Credit Party covenants and agrees that so long as this Agreement
shall remain in effect, any Commitment hereunder shall be outstanding or any
Obligations hereunder or under any of the other Loan Documents are unpaid,
unless the Requisite Lenders shall have otherwise given prior written consent:
1.1 SECTION CORPORATE AND FRANCHISE EXISTENCE. Such Credit Party shall
---------------------------------
preserve and maintain its corporate or other organizational existence, rights,
franchises, licenses and privileges in its jurisdiction of its organization, and
in all other jurisdictions in which such qualification is necessary in view of
its business and operations and property and preserve, protect and keep in full
force and effect its material rights and its Governmental Approvals except where
the failure to do so would not reasonably be expected to have a Material Adverse
Effect.
1.2 SECTION COMPLIANCE WITH LAWS, ETC. Such Credit Party shall comply in
--------------------------
all material respects with all laws and regulations applicable to it, including,
without limitation, Environmental Laws, regulations promulgated by the FCC and
any PUC, and other telecommunications laws and regulations, and all material
contractual obligations applicable to it except where the failure to do so would
not reasonably be expected to have a Material Adverse Effect.
SECOND PRIORITY LOAN AGREEMENT
------------------------------
1.3 SECTION MAINTENANCE OF PROPERTIES. Such Credit Party shall at all times
-------------------------
maintain in good repair, working order and condition, excepting ordinary wear
and tear, all of its properties material to its operations and make all
appropriate repairs, replacements and renewals thereof, in each case consistent
with prudent industry practices and sound business judgment and with respect to
the maintenance of machinery and equipment, in compliance with applicable
government regulations, manufacturers' warranty request and licensing
requirements, except where the failure to do so would not reasonably be expected
to have a Material Adverse Effect.
1.4 SECTION INSURANCE.
---------
(a) Maintenance of Insurance. Such Credit Party will maintain or cause to
------------------------
be maintained, with financially sound and reputable insurers, such public
liability insurance, third party property damage insurance, business
interruption insurance and casualty insurance with respect to liabilities,
losses or damage in respect of the assets, properties and businesses of such
Credit Party and its Subsidiaries as may customarily be carried or maintained
under similar circumstances by Persons of established reputation engaged in
similar businesses, in each case in such amounts, with such deductibles,
covering such risks and otherwise on such terms and conditions as shall be
customary for such Persons, and in any event, all such insurance shall be
maintained in accordance with the terms set forth on Schedule 3.15 hereof.
Without limiting the generality of the foregoing, such Credit Party will
maintain or cause to be maintained replacement value casualty insurance on the
Collateral under such policies of insurance, with such insurance companies, in
such amounts, with such deductibles, and covering such risks as are at all times
carried or maintained under similar circumstances by Persons of established
reputation engaged in similar businesses. Each such policy of insurance shall
(i) name Collateral Agent, the other Agents and the Lenders and their respective
Affiliates as additional insureds thereunder, as their respective interests may
appear and (ii) in the case of casualty insurance policy, contain a loss payable
clause or endorsement, satisfactory in form and substance to Collateral Agent,
that names Collateral Agent for the benefit of the Lenders and the First
Priority Lenders as the sole loss payee thereunder under a standard lender loss
payee endorsement for any covered loss in excess of $500,000 and provides for at
least thirty (30) days prior written notice to Collateral Agent of any
modification or cancellation of such policy.
(b) Application of Payments. All payments in excess of $500,000 received
-----------------------
by such Credit Party from any insurance referred in Section 5.04(a) shall, at
-------
the request of Collateral Agent be promptly delivered directly to the Collateral
Agent, which amounts shall be applied by the Collateral Agent, upon request by
such Credit Party (and after receipt by Collateral Agent of such information
with respect to the application of such amounts as Collateral Agent may
reasonably request), for the purposes set forth in Section 2.09(b) unless an
Event of Default or Default shall have occurred and be continuing or such Credit
SECOND PRIORITY LOAN AGREEMENT
------------------------------
Party shall have failed to make such request within thirty (30) days after
receipt of such amounts by Collateral Agent, in which case such amounts shall be
applied in accordance with the terms of the Intercreditor Agreement.
(c) General. The Collateral Agent shall be entitled, upon reasonable
-------
advance notice, to review and/or receive copies of such Credit Party's (or other
appropriate party's) books and records regarding all insurance policies carried
and maintained with respect to each System and such Credit Party's obligations
under this Section 5.04. Notwithstanding anything to the contrary herein, no
------------
provision of this Agreement or any other Loan Document shall impose on the
Collateral Agent, the Agent or any Lender any duty or obligation to verify the
existence or adequacy of the insurance coverage maintained by such Credit Party,
nor shall the Collateral Agent or any Lender be responsible for any
representations or warranties made by or on behalf of such Credit Party to any
insurance broker, company or underwriter. The Collateral Agent, at its sole
option, may obtain such insurance if not provided by such Credit Party; in such
event, such Credit Party shall reimburse the Collateral Agent or the Agents upon
demand for the cost thereof together with interest, and such costs shall
constitute Obligations secured by the Collateral. Not later than thirty (30)
days prior to the anticipated expiration date of any insurance coverage required
hereby, Borrower shall provide to Collateral Agent certificates evidencing the
renewal of each of such insurance coverage.
1.5 SECTION OBLIGATIONS AND TAXES. Such Credit Party shall pay all of its
---------------------
indebtedness and obligations promptly and in accordance with their terms and pay
and discharge promptly all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or in respect of its property, as
such become due, as well as all lawful claims for labor, materials and supplies
or otherwise which, if unpaid, might become a Lien upon such properties or any
part thereof; provided, however, that such Credit Party shall not be required to
-------- -------
pay and discharge or to cause to be paid and discharged any such tax,
assessment, charge, levy or claim so long as the validity or amount thereof
shall be contested in good faith by appropriate proceedings diligently pursued,
there exists no material risk of forfeiture and such Credit Party shall set
aside on its books such reserves as are required by GAAP and in an amount
satisfactory to the Administrative Agent with respect to any such tax,
assessment, charge, levy or claim so contested.
1.6 SECTION FINANCIAL STATEMENTS, REPORTS, ETC. Credit Parties shall
----------------------------------
furnish to the Administrative Agent and the Lenders (except as otherwise
provided herein):
(a) as soon as available and in any event within thirty (30) days after
the end of each month occurring after the Closing Date, such financial
statements for Holdings and its Subsidiaries as Holdings or its Subsidiaries may
otherwise prepare as a matter of internal policy;
SECOND PRIORITY LOAN AGREEMENT
------------------------------
(b) as soon as available and in any event within one hundred twenty (120)
days after the end of each fiscal year of Holdings, annual consolidated and
consolidating financial statements for Holdings and its Subsidiaries, including
the balance sheets and statements of operations, income, stockholders' equity
and cash flows, for such fiscal year, prepared in accordance with GAAP, which
consolidated financial statements and other above described financial
information shall have been audited by a nationally recognized independent
certified public accounting firm satisfactory to the Administrative Agent, and
accompanied by such independent certified public accounting firm's unqualified
opinion;
(c) as soon as available and in any event within forty-five (45) days
after the end of each month and each fiscal quarter during each fiscal year of
Holdings, consolidated and consolidating unaudited balance sheets and statements
of operations for Holdings and its Subsidiaries, and consolidated and
consolidating statements of stockholders' equity and cash flows of Holdings and
its Subsidiaries, and consolidated statements of stockholders' equity and cash
flows of Holdings and its Subsidiaries as of the end of each such month or
fiscal quarter, as applicable, and for the then elapsed portion of the fiscal
year;
(d) together with the financial statements delivered pursuant to clause
------
(c) above a report thereon of PriceWaterhouseCoopers LLP or other independent
---
certified public accountants of recognized national standing selected by
Holdings and in form and substance satisfactory to Administrative Agent,
together with a written statement (which statement may contain such
qualifications as the accountants deem appropriate) by such independent
certified public accountants stating that their audit examination has included a
review of the terms of the Loan Documents, whether, in connection therewith, any
condition or event that constitutes a Default or an Event of Default has come to
their attention and, if such a condition or event has come to their attention,
specifying the nature and period of existence thereof, and that nothing has come
to their attention that causes them to believe that the information contained in
any Compliance Certificate is not correct or that the matters set forth in such
Compliance Certificate are not stated in accordance with the terms hereof;
(e) concurrently with the delivery of financial statements pursuant to
clauses (b) and (c) above, a Compliance Certificate of the chief financial
officer of Holdings setting forth the calculations contemplated in Article VII
-----------
hereof, which shall include, without limitation, a detailed calculation,
together with the basis therefor, of any amount included in clause (ii)(F) of
the definition of the term "EBITDA" as calculated for such the period for which
such financial statements are being delivered, and certifying as to the fact
that such Person has examined the provisions of this Agreement and that no Event
of Default or any Default, shall have occurred and be continuing or if such an
event has occurred, a statement explaining its nature and extent and setting
forth the steps the Credit Parties propose to take to cure such Event of
Default;
SECOND PRIORITY LOAN AGREEMENT
------------------------------
(f) not later than December 31 of each calendar year (i) consolidated and
consolidating projected annual revenue and income statements (including detailed
revenue and expense statements), balance sheets and cash flow statements for
Holdings and its Subsidiaries for the succeeding fiscal year, such statements to
be reasonably acceptable to the Administrative Agent, and (ii) an annual
operating budget presented on a monthly basis for such succeeding fiscal year;
(g) to the Administrative Agent, promptly upon their becoming available,
copies of any periodic or special Documents, statements or other information
filed by any Credit Party with the FCC, PUC or other Governmental Authority in
connection with the construction and/or operation of any System or with respect
to the transactions contemplated by any of the Loan Documents, and copies of any
material notices and other material communications from the FCC, PUC or from any
other Governmental Authority;
(h) promptly upon any officer of any Credit Party obtaining knowledge of
any condition or event which either constitutes an Event of Default or a Default
or which would result in any financial result for any fiscal year to deviate
materially and adversely from the financial results projected for such fiscal
year in the Projections, a certificate signed by an authorized officer of such
Credit Party specifying in reasonable detail the nature and period of existence
thereof and what corrective action such Credit Party has taken or proposes to
take with respect thereto;
(i) within thirty (30) days after the end of each fiscal year of such
Credit Party, a certificate signed by an authorized officer of such Credit Party
setting forth all the Real Estate Assets acquired by such Credit Party in the
preceding year;
(j) evidence of insurance complying with Section 5.04;
------------
(k) promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular reports which
Holdings files with the Securities and Exchange Commission; and
(l) promptly from time to time such other information regarding the
operations (including, without limitation, construction budgeting and System
completion), business affairs and condition (financial or otherwise) of such
Credit Party as the Administrative Agent may reasonably request.
1.7 SECTION LITIGATION AND OTHER NOTICES. Such Credit Party shall give the
----------------------------
Administrative Agent prompt written notice upon obtaining knowledge of the
following: (a) all events of default or any event that would become an event of
default upon notice or lapse of time or both under any of the terms or
provisions of any note, or of any other evidence of indebtedness or agreement or
contract governing the borrowing of money of such Credit
SECOND PRIORITY LOAN AGREEMENT
------------------------------
Party; (b) any levy, attachment, execution or other process against any of the
property or assets, real or personal, of such Credit Party; (c) the filing or
commencement of any action, suit or proceeding by or before any court or any
Governmental Authority which, if adversely determined against such Credit Party,
would likely result in a Material Adverse Effect; (d) any adverse notice, letter
or other correspondence of any kind from the FCC or the PUC relating to the
Governmental Approvals or any System; (e) any material default under any other
material license, agreement or contract to which such Credit Party is a party;
and (f) any matter, individually or in the aggregate with any other matter,
which has resulted in, or which such Credit Party believes may result in, a
Material Adverse Effect on such Credit Party.
1.8 SECTION FUTURE PROPERTIES. In the event that any Credit Party acquires
-----------------
an interest in any Real Estate Asset that the Administrative Agent reasonably
determines is material to such Credit Party's Business, and such interest has
not otherwise been made subject to the Lien of the Collateral Documents in favor
of Collateral Agent, for the benefit of Lenders, then such Credit Party,
contemporaneously with acquiring such Real Estate Asset, shall take all such
actions and execute and deliver, or cause to be executed and delivered, all such
documents, instruments, agreements, opinions and certificates as Collateral
Agent may reasonably request to establish a Lien on such Real Estate Asset in
favor of the Collateral Agent for the benefit of the Lenders; provided, that on
and after the date of consummation of a Qualified Equity Offering, Borrower
shall only by obligated under this Section 5.08 to use its best efforts to
obtain a Landlord Consent and Estoppel with respect to any premise at which a
transmission node (ATM switch center node) is located.
1.9 SECTION ERISA. Such Credit Party shall comply in all material respects
-----
with the applicable provisions of ERISA and furnish to the Agent, (i) as soon as
possible, and in any event within ten (10) days after such Credit Party or any
officer of such Credit Party knows or has reason to know that any Termination
Event has occurred, a statement of an officer of such Credit Party setting forth
details as to such Termination Event and the corrective action (if any) that
such Credit Party proposes to take with respect thereto, together with a copy of
the notice of any Reportable Event given to the PBGC, and (ii) promptly after
receipt thereof, a copy of any notice such Credit Party may receive from the
PBGC relating to the intention of the PBGC to terminate any Plan or to appoint a
trustee to administer any such Plan.
1.10 SECTION ACCESS TO PREMISES AND RECORDS. Such Credit Party shall permit
------------------------------
representatives of the Administrative Agent and each Lender to have access to
such Credit Party's books and records and to the Collateral and the premises of
such Credit Party at reasonable times upon reasonable notice (and after the
occurrence and during the continuance of any Default or Event of Default,
without notice and at any time) and to make such ex-
SECOND PRIORITY LOAN AGREEMENT
------------------------------
cerpts from such records as such representatives deem necessary and to inspect
the Collateral.
1.11 SECTION DESIGN AND CONSTRUCTION. Such Credit Party shall design,
-----------------------
construct, equip and operate its Systems in accordance with prudent industry
standards.
1.12 SECTION ENVIRONMENTAL NOTICES. If such Credit Party shall (a) receive
---------------------
written notice that any violation of any Environmental Law may have been
committed or is about to be committed by such Credit Party, (b) receive written
notice that any administrative or judicial complaint or order has been filed or
is about to be filed against such Credit Party alleging violations of any
Environmental Law or requiring such Credit Party to take any action in
connection with any Release of any Contaminant into the environment, or (c)
receive any written notice from a Governmental Authority or private party
alleging that such Credit Party may be liable or responsible for costs
associated with a response to or cleanup of a Release or any damages caused
thereby, such Credit Party shall provide the Administrative Agent with a copy of
such notice within ten (10) Business Days of such Credit Party's receipt
thereof.
1.13 SECTION AMENDMENT OF ORGANIZATIONAL DOCUMENTS. Such Credit Party shall
-------------------------------------
notify the Administrative Agent of any amendment to its Certificate or Articles
of Incorporation or other organizational Documents within ten (10) days of the
occurrence of any such event, and provide the Agent with copies of any
amendments certified by the secretary of such Credit Party and of all other
relevant documentation. Such Credit Party shall promptly deliver to the
Administrative Agent such financing statements executed by such Credit Party
which the Administrative Agent may request as a result of any such event.
1.14 SECTION FISCAL YEAR. Such Credit Party shall maintain a fiscal year
-----------
ending on December 31.
SECOND PRIORITY LOAN AGREEMENT
------------------------------
1.15 SECTION YEAR 2000 PROBLEMS. On or prior to March 31, 1999, each Credit
------------------
Party shall complete and deliver to the Agent a Year 2000 Corrective Plan. On or
prior to April 30, 1999 each Credit Party shall implement Year 2000 Corrective
Actions. On or prior to June 30, 1999 each Credit Party shall complete Year 2000
Corrective Actions and Year 2000 Implementation Testing. On or prior to August
31, 1999 each Credit Party shall eliminate all Year 2000 Problems, except where
the failure to correct the same could not reasonably be expected to have a
Material Adverse Effect, individually or in the aggregate.
1.16 SECTION FUTURE SUBSIDIARIES. In the event that any Person becomes a
-------------------
Subsidiary of Holdings, Holdings shall (i) promptly cause such Subsidiary to
become a Guarantor hereunder and a Grantor under the Pledge and Security
Agreement by executing and delivering to Administrative Agent and Collateral
Agent a Counterpart Agreement, and (ii) take all such actions and execute and
deliver, or cause to be executed and delivered, all such documents, instruments,
agreements, and certificates similar to those described in Section 4.01(d). With
---------------
respect to each such Subsidiary, Holdings shall promptly send to Administrative
Agent written notice setting forth with respect to such Person (i) the date on
which such Person became a Subsidiary of Holdings, and (ii) all of the data
required to be set forth in Schedule 3.16 with respect to all Subsidiaries of
Holdings; provided, such written notice shall be deemed to supplement Schedule
3.16 for all purposes hereof.
1.17 SECTION ACCOUNTING; MAINTENANCE OF RECORDS. Such Credit Party shall
----------------------------------
maintain a system of accounting established and administered in accordance with
GAAP. Such Credit Party shall keep and maintain, and cause each of its
Subsidiaries to keep and maintain, in all material respects, proper books of
record and account in which entries in conformity with GAAP shall be made of all
dealings and transactions in relation to their respective businesses and
activities.
1.18 SECTION FURTHER ASSURANCES. Such Credit Party agrees to do such further
------------------
acts and things and to execute and deliver to or the Administrative Agent or the
Collateral Agent such additional assignments, agreements, powers and
instruments, at such Credit Party's expense, as the Administrative Agent or the
Collateral Agent may require or deem advisable to carry into effect the purposes
of this Agreement and the other Loan Documents or to better assure and confirm
unto the Administrative Agent or the Collateral Agent its rights, powers and
remedies hereunder and thereunder.
1.19 SECTION INTEREST RATE AGREEMENTS. At all times after the date which is
------------------------
thirty (30) days after the Closing Date, Borrower shall maintain, or caused to
be maintained, in effect one or more Interest Rate Agreements for a term of not
less than two years and otherwise in form and substance reasonably satisfactory
to Agent, which Interest Rate Agreements together with the amount of fixed rate
Debt of the Credit Parties shall effectively fix the interest costs of Credit
Parties with respect to an aggregate notional principal amount of
SECOND PRIORITY LOAN AGREEMENT
------------------------------
not less than 50% of the aggregate principal amount of the Loans and First
Priority Loans outstanding from time to time to a rate not in excess of the Base
LIBO Rate as of the Closing Date plus 2.00, % per annum.
1.20 SECTION DEPOSIT ACCOUNTS. The Borrower shall, and shall cause each of
----------------
its Subsidiaries to, within 30 days of the Closing Date (a) to deliver to
Collateral Agent an agreement, satisfactory in form and substance to Collateral
Agent and executed by the financial institution at which such Deposit Account is
maintained, pursuant to which such financial institution confirms and
acknowledges Collateral Agent's security interest in, and sole dominion and
control over, such Deposit Account and waives its rights to set-off with respect
to amounts in such Deposit Account, and (b) to take all other steps necessary
or, in the opinion of Collateral Agent, desirable to ensure that Collateral
Agent has sole dominion and control over such Deposit Account; provided that if
--------
the Borrower or such Subsidiary is unable to obtain such agreement from such
financial institution the Borrower shall, or shall cause such Subsidiary to,
within 30 days after receiving a written request by Collateral Agent to do so,
transfer all amounts in the applicable Deposit Account to a Deposit Account
maintained at a financial institution from which the Borrower or such Subsidiary
has obtained such an agreement.
1.21 SECTION CERTAIN POST CLOSING OBLIGATIONS.
---------------------------------
(a) On or before the 18-month anniversary of the Closing Date, Holdings
shall cause Borrower to have received aggregate cash equity contributions and/or
Qualified Inter company Loans, since the date of its formation, of not less than
$250,000,000; provided, as used in this Section 5.21(a), the phrase "aggregate
cash equity contributions" shall not include any amount included in clause
(ii)(F) of the definition of the term of "EBITDA".
(b) In addition to the five (5) Landlord Consents and Estoppels delivered
by Borrower on the Closing Date pursuant to Section 4.01(k), within 90 days
after the Closing Date, Borrower shall obtain a Landlord Consent and Estoppel
with respect to four (4) of the premises at which as of the Closing Date a
transmission node (ATM switch center node) is located, and within 180 days after
the Closing Date, Borrower shall obtain a Landlord Consent and Estoppel with
respect to all remaining premises at which, as of the Closing Date, a
transmission node (ATM switch center node) is located; provided, however, that
on and after the date of consummation of a Qualified Equity Offering, Borrower
shall only be obligated under this clause (b) to use its best efforts to
accomplish the foregoing.
(c) Within 180 days after the Closing Date, with respect to not less than
50% of Borrower's collocation agreements in effect as of the Closing Date,
Borrower shall either (y) obtain the consents of any necessary parties to the
grant of a security interest therein in favor of Collateral Agent under the
Pledge and Security Agreement or (z) assign all rights under
SECOND PRIORITY LOAN AGREEMENT
------------------------------
such collocation agreements to a newly-created, wholly-owned Subsidiary, in each
case in a manner reasonably acceptable to the Administrative Agent and
Collateral Agent; provided that on and after the date of a Qualified Equity
--------
Offering, Borrower shall only be obligated under this clause (c) to use its best
efforts to accomplish the foregoing.
(d) Notwithstanding anything in this Agreement or in any other Loan
Document to the contrary (but subject, in any event to Sections 5.21(b) and
5.21(c)), each Credit Party shall use its best efforts to (i) obtain a Landlord
Consent and Estoppel with respect to any Leasehold Property at which a
transmission node (ATM switch center node) is located, and (ii) take the steps
set forth at Section 5.21(c)(y) or (c)(z) with respect to any collocation
agreement entered into thereby.
2 ARTICLE
NEGATIVE COVENANTS
------------------
Each Credit Party covenants and agrees with the Administrative Agent
and the Lenders that as long as this Agreement shall remain in effect, any
Commitment hereunder shall be outstanding or any Obligations hereunder or under
any of the Loan Documents shall be unpaid, unless the Requisite Lenders shall
have otherwise given prior written consent:
1.1 SECTION LIENS, ETC. Such Credit Party shall not create, incur, assume
----------
or suffer to exist, directly or indirectly, any Lien upon or with respect to any
of its properties or the Collateral, now owned or hereafter acquired, or upon
any proceeds, products, issues, income or profits therefrom except for the
following ("PERMITTED LIENS"):
---------------
(i) Liens granted pursuant to the Loan Documents;
(ii) Liens securing any Purchase Debt to the extent that
the Liens cover only the subject assets purchased with such
Purchase Debt or other assets financed by the same lender
with other Purchase Debt provided by such lender and is
limited to the amount of the purchase price of such subject
assets;
(iii) Liens securing any Vendor Financing to the extent that
the Liens cover only the subject assets purchased with such
Vendor Financing and is limited to the amount of the
purchase price of such subject assets;
(iv) Liens for taxes, assessments or governmental charges
or levies on such Credit Party's property if the same
SECOND PRIORITY LOAN AGREEMENT
------------------------------
shall not at the time be delinquent or thereafter can be
paid without penalty, or are being diligently contested in
good faith and by appropriate proceedings, which does not
entail any material danger of forfeiture and for which such
Credit Party shall have set aside reserves on its books as
required by GAAP;
(v) Liens imposed by law, such as landlord's, carrier's,
warehousemen's and mechanic's liens, which liens shall be
waived in writing to the extent waivable, and with respect
to obligations not yet due or being contested in good faith
by appropriate proceedings which does not entail any
material danger of forfeiture and in either case for which
such Credit Party shall have set aside reserves on its books
as required by GAAP;
(vi) Liens arising out of pledges or deposits under
workmen's compensation laws, unemployment insurance, old age
pensions, or other social security benefits other than any
Lien imposed by ERISA;
(vii) Liens incurred or deposits made in the ordinary
course of business to secure surety bonds provided that such
Liens shall extend only to cash collateral for such surety
bonds;
(viii) easements and rights of way and other encumbrances
arising in the ordinary course of business which do not
secure Debt and which do not materially detract from the
operation of business on, or materially impair the title to,
the properties subject to such Liens;
(ix) Liens securing the First Priority Loans on a first
priority basis as contemplated by the First Priority Loan
Documents; or
(x) Liens on cash deposits or other Temporary Cash
Investments securing Debt permitted under Section 6.12(viii)
and not in excess of 105% of the undrawn amount of the
applicable letter of credit.
SECOND PRIORITY LOAN AGREEMENT
------------------------------
1.2 SECTION USE OF PROCEEDS. Such Credit Party shall not use the proceeds of
---------------
any Loan for any purpose other than as provided in Section 2.01(d) hereof.
(a) SECTION SALE OF ASSETS, CONSOLIDATION, MERGER, ACQUISITIONS ETC. Such
----------------------------------------------
Credit Party shall not consolidate with or merge into any other Person out the
prior written consent of the with Requisite Lenders, or otherwise sell, lease,
transfer or otherwise dispose of any assets except for (i) sales of inventory in
the ordinary course of business, (ii) any sale, lease, transfer or other
disposition of assets no longer used or useful in the conduct of the Business
for the fair market value thereof not to exceed $250,000 in any fiscal year and
$1,000,000 in the aggregate during the term of this Agreement, (iii) sales of
Investments in accordance with Section 6.06(viii) hereof, and (iv) so long as no
Event of Default or Default has occurred and is continuing, sales of other
assets in an aggregate amount not to exceed the Permitted Asset Sale Amount the
proceeds of which are used to repay First Priority Loans.
(b) Such Credit Party shall not purchase or otherwise acquire all or any
portion of the assets or business of another Person, except for (i) acquisitions
of assets in the ordinary course of business and (ii) Permitted Acquisitions.
1.3 SECTION DIVIDENDS AND DISTRIBUTIONS; SALE OF EQUITY INTERESTS.
-----------------------------------------------------
(a) Such Credit Party shall not purchase, redeem or otherwise acquire any
interest of such Credit Party, declare or make or pay any dividends in any
fiscal year of such Credit Party on any class or classes of stock, return
capital of such Credit Party to its shareholders, make any other distribution on
or in respect of any shares of any class of capital stock of such Credit Party
or make other payments to any shareholder of such Credit Party in its/his/her
capacity as a shareholder, or make payments in respect of Qualified Inter
company Loans; provided, that (i) so long as no Event of Default or Default has
--------
occurred and is continuing or would result therefrom and so long as the Total
Leverage Ratio is less than 6.00:1.00, Borrower may make payments or pay
dividends to Holdings in the amount necessary to make scheduled principal and
interest payments on Permitted Holdings Debt, (ii) Borrower may make payments or
pay dividends to Holdings to pay administrative costs (including overhead,
accounting and legal fees (in each case payable to unaffiliated third parties),
regulatory expenses and filing fees and expenses and out-of-pocket costs of
permitted Debt and equity offerings, not in excess of $1,000,000 in the
aggregate in any fiscal year and (iii) the foregoing restrictions shall not
apply to any payments or dividends made by a Subsidiary of Borrower to Borrower.
(b) Such Credit Party other than Holdings shall not sell or issue any
additional Equity Interests except to Holdings or Borrower (so long as such
additional Equity Interest are pledged to the Collateral Agent as security for
the Obligations).
SECOND PRIORITY LOAN AGREEMENT
------------------------------
1.4 SECTION MANAGEMENT FEES AND PERMITTED CORPORATE OVERHEAD. Such Credit
------------------------------------------------
Party shall not pay or enter into any arrangement to pay any fee or
compensation, or reimburse expenses of, an Affiliate or any other Person for
services which are in the nature of management, corporate overhead or
administrative services (other than employment agreements and consulting
agreements in lieu of employment agreements).
1.5 SECTION INVESTMENTS. Such Credit Party shall not, directly or
-----------
indirectly, make any Investments except:
(i) Temporary Cash Investments;
(ii) Investments in certificates of deposit, repurchase
agreements, money market or other cash management accounts,
bankers acceptances and short term Eurodollar time deposits
with financial institutions having a long term deposit
rating of at least A+ from ▇▇▇▇▇'▇ Investors Service, Inc.
or Standard & Poor's Ratings Group, respectively;
(iii) Investments in commercial paper rated P1 or A1 by
▇▇▇▇▇'▇ Investors Service, Inc. or Standard & Poor's Ratings
Group respectively;
(iv) a Credit Party may own Equity Interests in another
Credit Party or any person that, after giving effect to such
Investment, becomes a Credit Party;
(v) Investments arising from asset sales otherwise
permitted by this Agreement;
(vi) Investments arising from distributions in
bankruptcy or other reorganization proceedings;
(vii) Permitted Acquisitions; and
(viii) other Investments not exceeding, in the aggregate,
the sum of (x) (1) $5,000,000, and (2) the amount of any
cash proceeds received by Borrower and its Subsidiaries with
respect to Investments made pursuant to this clause (x) in
an amount not in excess of the initial Investment; provided,
the aggregate amount of any increase pursuant to this clause
(2) shall not exceed $10,000,000, in the aggregate; plus (y)
----
50% of the amount of equity contributed to, and/or Qualified
Inter
SECOND PRIORITY LOAN AGREEMENT
------------------------------
company Loans received by, Borrower since the date of its
formation in excess of $250,000,000, but all such
Investments permitted pursuant to this clause (y) shall not
exceed $20,000,000 in the aggregate.
1.6 SECTION SUBSIDIARIES. Such Credit Party shall not create or acquire any
------------
Subsidiary except any Subsidiary the formation of which was (i) undertaken
solely to comply with the licensing requirements of a Governmental Authority and
shall otherwise comply with the applicable requirements of the definition of
"Permitted Acquisition", (ii) to effect a Permitted Acquisition or (iii) to
comply with Section 5.21(c) or 5.21(d); provided that, concurrently with such
--------
creation or acquisition such Subsidiary shall execute and deliver a Counterpart
Agreement in accordance with Section 5.16 hereof.
1.7 SECTION PERMITTED ACTIVITIES. Such Credit Party (other than Holdings)
--------------------
shall not engage in any business or activity other than the operation of its
Business as currently conducted and businesses incidental or complementary
thereto without the prior written consent of the Requisite Lenders. Holdings
shall not engage in any other activity than the ownership of the capital stock
of its Subsidiaries and the incurrence of Permitted Holdings Debt and activities
incidental thereto.
1.8 SECTION DISPOSITION OF LICENSES, ETC. Such Credit Party shall not sell,
----------------------------
assign, transfer or otherwise dispose or attempt to dispose of in any way any
Governmental Approval or any other licenses, permits or approvals except where
the same is not reasonably likely to have a Material Adverse Effect.
1.9 SECTION TRANSACTIONS WITH AFFILIATES. Such Credit Party shall
----------------------------
not directly or indirectly, enter into any transaction, including, without
limitation, leases or other agreements for the purchase or use of any goods or
services, with any Affiliate, except in the ordinary course of and pursuant to
reasonable requirements of such Credit Party's business upon fair and reasonable
terms no less favorable to such Credit Party than it would obtain in a
comparable arm's length transaction with an unaffiliated Person; provided that
--------
the foregoing shall not apply to the sale of any Equity Interests or to an
employment agreement.
1.10 SECTION ERISA. Unless the failure to comply with the following is not
-----
reasonably likely to have a Material Adverse Effect, such Credit Party shall
not:
(a) engage, or permit any ERISA Affiliate to engage, in any prohibited
transaction described in Section 406 of ERISA or 4975 of the IRC for which a
statutory or class exemption is not available or a private exemption has not
been previously obtained from the United States Department of Labor and which
may result in a material liability to the Borrower;
SECOND PRIORITY LOAN AGREEMENT
------------------------------
(b) permit to exist any accumulated funding deficiency (as defined in
Section 302 of ERISA and Section 412 of the IRC), whether or not waived;
(c) fail, or permit any ERISA Affiliate to fail, to pay timely required
contributions or annual installments due with respect to any waived funding
deficiency to any Benefit Plan;
(d) terminate, or permit any ERISA Affiliate to terminate, any Benefit
Plan which would result in any material liability of such Credit Party under
Title IV of ERISA;
(e) fail to make any contribution or payment to any Multiemployer Plan
which such Credit Party or any ERISA Affiliate may be required to make under any
agreement relating to such Multiemployer Plan, or any law pertaining thereto;
(f) amend, or permit any ERISA Affiliate to amend, a Plan resulting in an
increase in current liability for the plan year such that such Credit Party is
required to provide security to such Plan under Section 401(a)(29) of the IRC;
or
(g) fail, or permit any ERISA Affiliate to fail, to pay any required
installment under Section 412 of the IRC on or before the due date for such
installment or other payment.
1.11 SECTION DEBT. Such Credit Party shall not create or suffer to exist any
----
Debt except:
(i) the Obligations and the First Priority Loans;
(ii) other obligations arising under any Loan Documents
or any First Priority Loan Documents;
(iii) Capitalized Lease Obligations;
(iv) Debt with respect to the financing and
contemplated purchase of office equipment, vehicles and non-
essential telecommunications equipment, not to exceed an
aggregate amount for the Credit Parties of $1,000,000 at any
time ("PURCHASE DEBT");
-------------
(v) Qualified Inter company Loans;
(vi) Comdisco Debt and all other Debt outstanding on
the Closing Date set forth on Schedule 6.12 hereto;
SECOND PRIORITY LOAN AGREEMENT
------------------------------
(vii) other unsecured Debt not in excess of $5,000,000
at any time outstanding;
(viii) other Debt permitted pursuant to Section
6.12(viii) of the First Priority Loan Agreement;
(ix) Vendor Financing not to exceed at any time, an
aggregate principal amount, (y) prior to the consummation of
a Qualified Equity Offering, $10,000,000, and (z) after
consummation of a Qualified Equity Offering, $20,000,000;
(x) Permitted Holdings Debt; and
(xi) Interest Rate Agreements permitted pursuant to
Section 6.12(xi) of the First Priority Loan Agreement.
1.12 SECTION PREPAYMENT AND DEBT DOCUMENTS.
-----------------------------
(a) Until such time as a Qualified Equity Offering shall have been
consummated, such Credit Party shall not voluntarily prepay any Debt other than
the First Priority Loans except the Obligations in accordance with the terms
hereof or out of equity proceeds.
(b) Until such time as a Qualified Equity Offering shall have been
consummated, such Credit Party shall not amend any agreement relating to Debt
other than the First Priority Loans other than the Obligations in any manner
which would increase the amount of principal, interest or fees on such Debt, or
accelerate any payments of such Debt.
1.13 SECTION SALE AND LEASEBACK TRANSACTIONS. Such Credit Party shall not,
-------------------------------
directly or indirectly, enter into any arrangement with any Person providing for
such Credit Party to lease or rent property that any Credit Party has sold or
will sell or otherwise transfer to such Person.
1.14 SECTION MARGIN REGULATION. Such Credit Party shall not use or permit any
-----------------
other Person to use any portion of the proceeds of any credit extended under
this Agreement in any manner which might cause the extension of credit made by
any Lender or the application of such proceeds to violate the Securities Act of
1933 or Securities Exchange Act of 1934 (each as amended from time to time, and
any successor statute) or to violate Regulation G, Regulation U, or Regulation
X, or any other regulation of the Federal Reserve Board, in each case as in
effect on the date or dates of such extension of credit and such use of
proceeds.
SECOND PRIORITY LOAN AGREEMENT
------------------------------
1.15 SECTION RESTRICTIVE AGREEMENTS, ETC. Such Credit Party shall not enter
---------------------------
into any agreement (excluding this Agreement, the Loan Documents, the First
Priority Loan Documents, any Vendor Financing or any Purchase Debt with respect
to the assets financed thereby) prohibiting the creation or assumption of any
Lien upon its properties, revenues or assets, whether now owned or hereafter
acquired, or the ability of such Credit Party to amend or otherwise modify this
Agreement or any other Loan Document.
2 ARTICLE
FINANCIAL COVENANTS
-------------------
Each Credit Party covenants and agrees with the Agents and the Lenders
that as long as this Agreement shall remain in effect, any Commitment hereunder
shall be outstanding or the Obligations hereunder or under any of the Loan
Documents shall be unpaid, unless the Requisite Lenders shall have otherwise
given prior written consent:
1.1 SECTION FINANCIAL COVENANTS PRIOR TO ACHIEVING POSITIVE EBITDA. Until
------------------------------------------------------
the date on which Borrower and its Subsidiaries shall have achieved positive
EBITDA for Borrower and its Subsidiaries on a consolidated basis for two (2)
consecutive fiscal quarters as determined by reference to the financial
statements submitted pursuant to Section 5.06 (which in any event shall be
required to occur on or before June 30, 2001):
(a) Consolidated Debt to Capitalization. Holdings and its Subsidiaries
-----------------------------------
shall not at any time permit the ratio of Consolidated Debt to Capitalization to
exceed 0.60:1.00.
(b) EBITDA.
-------
(i) As of the last day of each fiscal quarter
occurring on or before December 31, 2000, Borrower and its
Subsidiaries shall not permit the EBITDA losses for Borrower
and its Subsidiaries on a consolidated basis for the fiscal
quarter then ending to exceed the correlative amount
indicated below:
-----------------------------------------------------
Fiscal Quarter Ending Maximum EBITDA
Losses
-----------------------------------------------------
June 30, 1999 $22,500,000
-----------------------------------------------------
September 30, 1999 $27,500,000
-----------------------------------------------------
December 31, 1999 $29,800,000
-----------------------------------------------------
March 31, 2000 $29,000,000
SECOND PRIORITY LOAN AGREEMENT
------------------------------
-----------------------------------------------------
June 30, 2000 $22,100,000
-----------------------------------------------------
September 30, 2000 $13,700,000
-----------------------------------------------------
December 31, 2000 $ 6,700,000
-----------------------------------------------------
(i) As of the last day of each fiscal quarter
thereafter, Borrower and its Subsidiaries shall not permit
EBITDA for Borrower and its Subsidiaries on a consolidated
basis for the fiscal quarter then ending to be less than the
correlative amount indicated below:
-----------------------------------------------------
Fiscal Quarter Ending Minimum EBITDA
-----------------------------------------------------
March 31, 2001 $ 500,000
-----------------------------------------------------
June 30, 2001 $7,500,000
-----------------------------------------------------
(a) Capital Expenditures. As of the last day of each fiscal quarter,
--------------------
Borrower and its Subsidiaries shall not permit Capital Expenditures on a
consolidated, cumulative basis from the Closing Date to exceed the
correlative amount set forth below:
Fiscal Quarter Ending Maximum Cumulative
Capital Expenditures
-----------------------------------------------------
June 30, 1999 $ 45,600,000
-----------------------------------------------------
September 30, 1999 $ 82,500,000
-----------------------------------------------------
December 31, 1999 $112,900,000
-----------------------------------------------------
March 31, 2000 $137,800,000
-----------------------------------------------------
June 30, 2000 $158,500,000
-----------------------------------------------------
September 30, 2000 $162,000,000
-----------------------------------------------------
December 31, 2000 $173,700,000
SECOND PRIORITY LOAN AGREEMENT
------------------------------
-----------------------------------------------------
March 31, 2001 $189,400,000
-----------------------------------------------------
June 30, 2001 $203,800,000
-----------------------------------------------------
1.1 SECTION FINANCIAL COVENANTS AFTER ACHIEVING POSITIVE EBITDA. On and
after the date on which Borrower and its Subsidiaries have achieved positive
EBITDA on a consolidated basis for two (2) consecutive fiscal quarters as
determined by reference to the financial statements submitted pursuant to
Section 5.06 (which in any event, shall occur on or before June 30, 2001):
(a) Minimum Fixed Charge Coverage Ratio. As of the last day of any fiscal
-----------------------------------
quarter, Borrower and its Subsidiaries shall not permit the ratio of (1) the
product of two (2) times the EBITDA for Borrower and its Subsidiaries on a
consolidated basis for the most recently ended six (6) month period to (2) Fixed
Charges for Borrower and its Subsidiaries (such ratio being referred to as the
"FIXED CHARGE COVERAGE RATIO") to be less than the following:
---------------------------
Fiscal Quarter Ending Minimum Fixed
Charge Coverage Ratio
On or prior to March 31, 2003 1.00 to 1.00
Last Day of each 1.10:1.00
Fiscal Quarter Thereafter
(a) Maximum Total Leverage Ratio. As of the last day of any fiscal
----------------------------
quarter, Borrower and its Subsidiaries shall not permit the ratio of (1) Total
Debt as of such date to (2) the product of two (2) times the EBITDA for Borrower
and its Subsidiaries for the most recently ended six (6) month period to exceed
the correlative ratio set forth below:
-----------------------------------------------------
Maximum Total
Fiscal Quarter Ending Leverage Ratio
-----------------------------------------------------
September 30, 2001 7.00:1.00
-----------------------------------------------------
December 31, 2001 5.00:1.00
-----------------------------------------------------
Last Day of each Fiscal
Quarter Thereafter 4.00:1.00
-----------------------------------------------------
SECOND PRIORITY LOAN AGREEMENT
------------------------------
(a) Maximum Consolidated Leverage Ratio. As of the last day of any fiscal
-----------------------------------
quarter, Holdings and its Subsidiaries shall not permit the ratio of (1)
Consolidated Debt as of such date to (2) the product of two (2) times the EBITDA
for Borrower and its Subsidiaries for the most recently ended six (6) month
period to exceed the correlative ratio set forth below:
(b)
-----------------------------------------------------
Fiscal Quarter Ending Maximum Consolidated
Leverage Ratio
-----------------------------------------------------
September 30, 2001 9.00:1.00
-----------------------------------------------------
December 31, 2001 7.00:1.00
-----------------------------------------------------
March 31, 2002 6.00:1.00
-----------------------------------------------------
June 30, 2002 and
each Fiscal Quarter 5.00:1.00
Thereafter
-----------------------------------------------------
(a) Capital Expenditures. Borrower and its Subsidiaries shall not permit
--------------------
Capital Expenditures on a consolidated cumulative basis for the period of April
5, 1999 to September 30, 2001 to exceed $243,800,000.
(b)
1.2 SECTION CERTAIN CALCULATIONS. With respect to any period ending on or
--------------------
after consummation of a Permitted Acquisition, for purposes of determining
compliance with the financial covenants set forth in this Article VII, or clause
(iv) of the definition of Permitted Acquisition, EBITDA shall be calculated with
respect to such period on a pro forma basis (without giving effect to
adjustments to increase EBITDA to account for expected improvements in the
operations of the Permitted Acquisition unless otherwise approved in writing by
the Requisite Lenders) using the historical financial statements of any business
or person acquired or to be acquired and the consolidated financial statements
of Borrower and its Subsidiaries, which shall be reformulated as if such
Permitted Acquisition, and any Debt incurred in connection therewith, had been
consummated or incurred at the beginning of such period (and assuming that such
Debt bears interest during any portion of the applicable measurement period
prior to the relevant acquisition at the weighted average of the interest rates
applicable to outstanding Loans incurred during such period).
SECOND PRIORITY LOAN AGREEMENT
------------------------------
1 ARTICLE
GUARANTY
--------
2.1 SECTION GUARANTY OF THE OBLIGATIONS. Subject to the provisions of
---------------------------
Section 8.02, Guarantors jointly and severally hereby irrevocably and
------------
unconditionally guaranty the due and punctual payment in full of all Obligations
when the same shall become due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including amounts
that would become due but for the operation of the United States Bankruptcy
Code.
2.2 SECTION CONTRIBUTION BY GUARANTORS. Each Guarantor desires to allocate
--------------------------
among themselves (collectively, the "CONTRIBUTING GUARANTORS"), in a fair and
-----------------------
equitable manner, their obligations arising under this Guaranty. Accordingly, in
the event any payment or distribution is made on any date by a Guarantor under
this Guaranty (a "FUNDING GUARANTOR") that exceeds its Fair Share as of such
-----------------
date, that Funding Guarantor shall be entitled to a contribution from each of
the other Contributing Guarantors in the amount of such other Contributing
Guarantor's Fair Share Shortfall as of such date, with the result that all such
contributions will cause each Contributing Guarantor's Aggregate Payments to
equal its Fair Share as of such date. "FAIR SHARE" means, with respect to a
----------
Contributing Guarantor as of any date of determination, an amount equal to the
ratio of the Fair Share Contribution Amount with respect to such Contributing
Guarantor to the aggregate of the Fair Share Contribution Amounts with respect
to all Contributing Guarantors multiplied by the aggregate amount paid or
distributed on or before such date by all Funding Guarantors under this Guaranty
in respect of the obligations guarantied. "FAIR SHARE SHORTFALL" means, with
--------------------
respect to a Contributing Guarantor as of any date of determination, the excess,
if any, of the Fair Share of such Contributing Guarantor over the Aggregate
Payments of such Contributing Guarantor. "FAIR SHARE CONTRIBUTION AMOUNT" means,
------------------------------
with respect to a Contributing Guarantor as of any date of determination, the
maximum aggregate amount of the obligations of such Contributing Guarantor under
this Guaranty that would not render its obligations hereunder or thereunder
subject to avoidance as a fraudulent transfer or conveyance under Section 548 of
Title 11 of the United States Code or any applicable provisions of comparable
state law; provided, solely for purposes of calculating the "FAIR SHARE
----------
CONTRIBUTION AMOUNT" with respect to any Contributing Guarantor for purposes of
-------------------
this Section 8.02, any assets or liabilities of such Contributing Guarantor
------------
arising by virtue of any rights to subrogation, reimbursement or indemnification
or any rights to or obligations of contribution hereunder shall not be
considered as assets or liabilities of such Contributing Guarantor. "AGGREGATE
---------
PAYMENTS" means, with respect to a Contributing Guarantor as of any date of
--------
determination, an amount equal to the aggregate amount of all payments and
distributions made on or before such date by such Contributing Guarantor in
respect of this Guaranty (including, without limitation, in respect of this
Section 8.02), minus the aggregate amount
------------
SECOND PRIORITY LOAN AGREEMENT
------------------------------
of all payments received on or before such date by such Contributing Guarantor
from the other Contributing Guarantors as contributions under this Section 8.02.
------------
The amounts payable as contributions hereunder shall be determined as of the
date on which the related payment or distribution is made by the applicable
Funding Guarantor. The allocation among Contributing Guarantors of their
obligations as set forth in this Section 8.02 shall not be construed in any way
------------
to limit the liability of any Contributing Guarantor for all of the Obligations
as set forth in Section 8.01 and otherwise hereunder. Each Subsidiary Guarantor
is a third party beneficiary to the contribution agreement set forth in this
Section 8.02.
------------
2.3 SECTION PAYMENT BY GUARANTORS. Guarantors hereby jointly and severally
---------------------
agree, in furtherance of the foregoing and not in limitation of any other right
which any Beneficiary may have at law or in equity against any Guarantor by
virtue hereof, that upon the failure of Borrower to pay any of the Obligations
when and as the same shall become due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including amounts
that would become due but for the operation of the United States Bankruptcy
Code), Guarantors will upon demand pay, or cause to be paid, in cash, to
Administrative Agent for the ratable benefit of Beneficiaries, an amount equal
to the sum of the unpaid principal amount of all Obligations then due as
aforesaid, accrued and unpaid interest on such Obligations (including interest
which, but for the filing of a petition in bankruptcy with respect to Borrower,
would have accrued on such Obligations, whether or not a claim is allowed
against Borrower for such interest in the related bankruptcy proceeding) and all
other Obligations then owed to Beneficiaries as aforesaid.
2.4 SECTION LIABILITY OF GUARANTORS ABSOLUTE. Each Guarantor agrees that its
--------------------------------
obligations hereunder are irrevocable, absolute, independent and unconditional
and shall not be affected by any circumstance which constitutes a legal or
equitable discharge of a guarantor or surety other than payment in full of the
Obligations. In furtherance of the foregoing and without limiting the generality
thereof, each Guarantor agrees as follows:
(a) this Guaranty is a guaranty of payment when due and not of
collectibility;
(b) Administrative Agent may enforce this Guaranty upon the occurrence of
an Event of Default notwithstanding the existence of any dispute between
Borrower and any Beneficiary with respect to the existence of such Event of
Default;
(c) the obligations of each Guarantor hereunder are independent of the
obligations of Borrower and the obligations of any other guarantor (including
any other Guarantor) of the obligations of Borrower, and a separate action or
actions may be brought and prosecuted against such Guarantor whether or not any
action is brought against Borrower or any of such other guarantors and whether
or not Borrower is joined in any such action or actions;
SECOND PRIORITY LOAN AGREEMENT
------------------------------
(d) payment by any Guarantor of a portion, but not all, of the Obligations
shall in no way limit, affect, modify or abridge any Guarantor's liability for
any portion of the Obligations which has not been paid. Without limiting the
generality of the foregoing, if Administrative Agent is awarded a judgment in
any suit brought to enforce any Guarantor's covenant to pay a portion of the
Obligations, such judgment shall not be deemed to release such Guarantor from
its covenant to pay the portion of the Obligations that is not the subject of
such suit, and such judgment shall not, except to the extent satisfied by such
Guarantor, limit, affect, modify or abridge any other Guarantor's liability
hereunder in respect of the Obligations;
(e) any Beneficiary, upon such terms as it deems appropriate, without
notice or demand and without affecting the validity or enforceability hereof or
giving rise to any reduction, limitation, impairment, discharge or termination
of any Guarantor's liability hereunder, from time to time may (i) renew, extend,
accelerate, increase the rate of interest on, or otherwise change the time,
place, manner or terms of payment of the Obligations; (ii) settle, compromise,
release or discharge, or accept or refuse any offer of performance with respect
to, or substitutions for, the Obligations or any agreement relating thereto
and/or subordinate the payment of the same to the payment of any other
obligations; (iii) request and accept other guaranties of the Obligations and
take and hold security for the payment hereof or the Obligations; (iv) release,
surrender, exchange, substitute, compromise, settle, rescind, waive, alter,
subordinate or modify, with or without consideration, any security for payment
of the Obligations, any other guaranties of the Obligations, or any other
obligation of any Person (including any other Guarantor) with respect to the
Obligations; (v) enforce and apply any security now or hereafter held by or for
the benefit of such Beneficiary in respect hereof or the Obligations and direct
the order or manner of sale thereof, or exercise any other right or remedy that
such Beneficiary may have against any such security, in each case as such
Beneficiary in its discretion may determine consistent herewith or the
applicable Lender Counterparty Interest Rate Agreement and any applicable
security agreement, including foreclosure on any such security pursuant to one
or more judicial or nonjudicial sales, whether or not every aspect of any such
sale is commercially reasonable, and even though such action operates to impair
or extinguish any right of reimbursement or subrogation or other right or remedy
of any Guarantor against Borrower or any security for the Obligations; and (vi)
exercise any other rights available to it under the Loan Documents or the Lender
Counterparty Interest Rate Agreements; and
(f) this Guaranty and the obligations of Guarantors hereunder shall be valid
and enforceable and shall not be subject to any reduction, limitation,
impairment, discharge or termination for any reason (other than payment in full
of the Obligations), including the occurrence of any of the following, whether
or not any Guarantor shall have had notice or knowledge of any of them: (i) any
failure or omission to assert or enforce or agreement or election not to assert
or enforce, or the stay or enjoining, by order of court, by operation of
SECOND PRIORITY LOAN AGREEMENT
------------------------------
law or otherwise, of the exercise or enforcement of, any claim or demand or any
right, power or remedy (whether arising under the Loan Documents or the Lender
Counterparty Interest Rate Agreements, at law, in equity or otherwise) with
respect to the Obligations or any agreement relating thereto, or with respect to
any other guaranty of or security for the payment of the Obligations; (ii) any
rescission, waiver, amendment or modification of, or any consent to departure
from, any of the terms or provisions (including provisions relating to events of
default) hereof, any of the other Loan Documents, any of the Lender Counterparty
Interest Rate Agreements or any agreement or instrument executed pursuant
thereto, or of any other guaranty or security for the Obligations, in each case
whether or not in accordance with the terms hereof or such Loan Document, such
Lender Counterparty Interest Rate Agreement or any agreement relating to such
other guaranty or security; (iii) the Obligations, or any agreement relating
thereto, at any time being found to be illegal, invalid or unenforceable in any
respect; (iv) the application of payments received from any source (other than
payments received pursuant to the other Loan Documents or Lender Counterparty
Interest Rate Agreements from the proceeds of any security for the Obligations,
except to the extent such security also serves as collateral for indebtedness
other than the Obligations) to the payment of indebtedness other than the
Obligations, even though any Beneficiary might have elected to apply such
payment to any part or all of the Obligations; (v) any Beneficiary's consent to
the change, reorganization or termination of the corporate or organizational
structure or existence of Borrower or any of its Subsidiaries and to any
corresponding restructuring of the Obligations; (vi) any failure to perfect or
continue perfection of a security interest in any collateral which secures any
of the Obligations; (vii) any defenses, set-offs or counterclaims which Borrower
may allege or assert against any Beneficiary in respect of the Obligations,
including, without limitation, failure of consideration, breach of warranty,
payment, statute of frauds, statute of limitations, accord and satisfaction and
usury; and (viii) any other act or thing or omission, or delay to do any other
act or thing, which may or might in any manner or to any extent vary the risk of
any Guarantor as an obligor in respect of the Obligations.
2.5 SECTION WAIVERS BY GUARANTORS. Each Guarantor hereby waives, for the
---------------------
benefit of Beneficiaries: (i) any right to require any Beneficiary, as a
condition of payment or performance by such Guarantor, to proceed against
Borrower, any other guarantor (including any other Guarantor) of the Obligations
or any other Person, proceed against or exhaust any security held from Borrower,
any such other guarantor or any other Person, proceed against or have resort to
any balance of any deposit account or credit on the books of any Beneficiary in
favor of Borrower, any such other guarantor (including any other Guarantor) or
any other Person, or pursue any other remedy in the power of any Beneficiary
whatsoever; (ii) any defense arising by reason of the incapacity, lack of
authority or any disability or other defense of Borrower including any defense
based on or arising out of the lack of validity or the unenforceability of the
Obligations or any agreement or instrument relating thereto or by reason of the
cessation of the liability of Borrower from any cause
SECOND PRIORITY LOAN AGREEMENT
------------------------------
other than payment in full of the Obligations; (iii) any defense based upon any
statute or rule of law which provides that the obligation of a surety must be
neither larger in amount nor in other respects more burdensome than that of the
principal; (iv) any defense based upon any Beneficiary's errors or omissions in
the administration of the Obligations, except behavior which amounts to bad
faith; (v) any principles or provisions of law, statutory or otherwise, which
are or might be in conflict with the terms hereof and any legal or equitable
discharge of such Guarantor's obligations hereunder, the benefit of any statute
of limitations affecting such Guarantor's liability hereunder or the enforcement
hereof, any rights to set-offs, recoupments and counterclaims, and promptness,
diligence and any requirement that any Beneficiary protect, secure, perfect or
insure any security interest or lien or any property subject thereto; (vi)
notices, demands, presentments, protests, notices of protest, notices of
dishonor and notices of any action or inaction, including acceptance hereof,
notices of default hereunder, or any agreement or instrument related thereto,
notices of any renewal, extension or modification of the Obligations or any
agreement related thereto, notices of any extension of credit to Borrower and
notices of any of the matters referred to in Section 8.04 and any right to
------------
consent to any thereof; and (vii) any defenses or benefits that may be derived
from or afforded by law which limit the liability of or exonerate guarantors or
sureties, or which may conflict with the terms hereof.
2.6 SECTION GUARANTORS' RIGHTS OF SUBROGATION, CONTRIBUTION, ETC. Each
----------------------------------------------------
Guarantor hereby waives, until the Obligations shall have been indefeasibly paid
in full and the Commitments shall have terminated, shall have expired or been
cancelled, any claim, right or remedy, direct or indirect, that such Guarantor
now has or may hereafter have against Borrower or any of its assets in
connection with this Guaranty or the performance by such Guarantor of its
obligations hereunder, in each case whether such claim, right or remedy arises
in equity, under contract, by statute, under common law or otherwise and
including without limitation any right of subrogation, reimbursement or
indemnification that such Guarantor now has or may hereafter have against
Borrower with respect to the Obligations, any right to enforce, or to
participate in, any claim, right or remedy that any Beneficiary now has or may
hereafter have against Borrower, and any benefit of, and any right to
participate in, any collateral or security now or hereafter held by any
Beneficiary. In addition, until the Obligations shall have been indefeasibly
paid in full and the Commitments shall have terminated shall have expired or
been cancelled, each Guarantor shall withhold exercise of any right of
contribution such Guarantor may have against any other guarantor (including any
other Guarantor) of the Obligations, including, without limitation, any such
right of contribution as contemplated by Section 8.02. Each Guarantor further
------------
agrees that, to the extent the waiver or agreement to withhold the exercise of
its rights of subrogation, reimbursement, indemnification and contribution as
set forth herein is found by a court of competent jurisdiction to be void or
voidable for any reason, any rights of subrogation, reimbursement or
indemnification such Guarantor may have against Borrower or against any
collateral or security, and any rights of contribution such Guarantor may have
against any such other guar-
SECOND PRIORITY LOAN AGREEMENT
------------------------------
antor, shall be junior and subordinate to any rights any Beneficiary may have
against Borrower, to all right, title and interest any Beneficiary may have in
any such collateral or security, and to any right any Beneficiary may have
against such other guarantor. If any amount shall be paid to any Guarantor on
account of any such subrogation, reimbursement, indemnification or contribution
rights at any time when all Obligations shall not have been paid in full, such
amount shall be held in trust for such Beneficiary and shall forthwith be paid
over to such Person to be credited and applied against the Obligations, whether
matured or unmatured, in accordance with the terms hereof.
2.7 SECTION SUBORDINATION OF OTHER OBLIGATIONS. Any Indebtedness of Borrower
----------------------------------
or any Guarantor now or hereafter held by any Guarantor (the "OBLIGEE
-------
GUARANTOR") is hereby subordinated in right of payment to the Obligations, and
---------
any such indebtedness collected or received by the Obligee Guarantor after an
Event of Default has occurred and is continuing shall be held in trust for
Administrative Agent on behalf of Beneficiaries and shall forthwith be paid over
to Administrative Agent for the benefit of Beneficiaries to be credited and
applied against the Obligations but without affecting, impairing or limiting in
any manner the liability of the Obligee Guarantor under any other provision
hereof.
2.8 SECTION CONTINUING GUARANTY. This Guaranty is a continuing guaranty and
-------------------
shall remain in effect until all of the Obligations shall have been paid in full
and the Commitments shall have terminated. Each Guarantor hereby irrevocably
waives any right to revoke this Guaranty as to future transactions giving rise
to any Obligations.
2.9 SECTION AUTHORITY OF GUARANTORS OR BORROWER. It is not necessary for any
-----------------------------------
Beneficiary to inquire into the capacity or powers of any Guarantor or Borrower
or the officers, directors or any agents acting or purporting to act on behalf
of any of them.
2.10 SECTION FINANCIAL CONDITION OF BORROWER. Any Loan may be granted to
-------------------------------
Borrower or continued from time to time, and any Lender Counterparty Interest
Rate Agreements may be entered into from time to time, in each case without
notice to or authorization from any Guarantor regardless of the financial or
other condition of Borrower at the time of any such grant or continuation or at
the time such Lender Counterparty Interest Rate Agreement is entered into, as
the case may be. No Beneficiary shall have any obligation to disclose or discuss
with any Guarantor its assessment, or any Guarantor's assessment, of the
financial condition of Borrower. Each Guarantor has adequate means to obtain
information from Borrower on a continuing basis concerning the financial
condition of Borrower and its ability to perform its obligations under the Loan
Documents and the Lender Counterparty Interest Rate Agreements, and each
Guarantor assumes the responsibility for being and keeping informed of the
financial condition of Borrower and of all circumstances bearing upon the risk
of nonpayment of the Obligations. Each Guarantor hereby waives and relinquishes
any duty on the part of any Beneficiary to disclose any matter, fact or thing
relating
SECOND PRIORITY LOAN AGREEMENT
------------------------------
to the business, operations or conditions of Borrower now known or hereafter
known by any Beneficiary.
2.11 SECTION BANKRUPTCY, ETC.
---------------
(a) The obligations of Guarantors hereunder shall not be reduced, limited,
impaired, discharged, deferred, suspended or terminated by any proceeding,
voluntary or involuntary, involving the bankruptcy, insolvency, receivership,
reorganization, liquidation or arrangement of Borrower or by any defense which
Borrower may have by reason of the order, decree or decision of any court or
administrative body resulting from any such proceeding.
(b) Each Guarantor acknowledges and agrees that any interest on any
portion of the Obligations which accrues after the commencement of any
proceeding referred to in clause (a) above (or, if interest on any portion of
the Obligations ceases to accrue by operation of law by reason of the
commencement of said proceeding, such interest as would have accrued on such
portion of the Obligations if said proceedings had not been commenced) shall be
included in the Obligations because it is the intention of Guarantors and
Beneficiaries that the Obligations which are guarantied by Guarantors pursuant
hereto should be determined without regard to any rule of law or order which may
relieve Borrower of any portion of such Obligations. Guarantors will permit any
trustee in bankruptcy, receiver, debtor in possession, assignee for the benefit
of creditors or similar person to pay Administrative Agent, or allow the claim
of Administrative Agent in respect of, any such interest accruing after the date
on which such proceeding is commenced.
(c) In the event that all or any portion of the Obligations are paid by
Borrower or any other Person (including any Guarantor), the obligations of
Guarantors hereunder shall continue and remain in full force and effect or be
reinstated, as the case may be, in the event that all or any part of such
payment(s) are rescinded or recovered directly or indirectly from any
Beneficiary as a preference, fraudulent transfer or otherwise (and whether by
action or proceeding, settlement or otherwise), and any such payments which are
so rescinded or recovered shall constitute Obligations for all purposes
hereunder.
2.12 SECTION NOTICE OF EVENTS. As soon as any Guarantor obtains knowledge
----------------
thereof, such Guarantor shall give Administrative Agent written notice of any
condition or event which has resulted in a material adverse change in the
financial condition of any Guarantor or Borrower or a breach of or noncompliance
with any term, condition or covenant contained herein, any other Loan Document
or any other document delivered pursuant hereto or thereto.
2.13 SECTION DISCHARGE OF GUARANTY UPON SALE OF GUARANTOR. If all of the
--------------------------------------------
equity Securities of any Guarantor or any of its successors in interest
hereunder shall be sold or
SECOND PRIORITY LOAN AGREEMENT
------------------------------
otherwise disposed of (including by merger or consolidation) in accordance with
the terms and conditions hereof, the Guaranty of such Guarantor hereunder or
such successor in interest hereunder, as the case may be, shall automatically be
discharged and released without any further action by any Beneficiary or any
other Person effective as of the time of such asset sale; provided, as a
condition precedent to such discharge and release, Collateral Agent shall have
received evidence satisfactory to it that arrangements satisfactory to it have
been made for delivery to Collateral Agent of the applicable proceeds of such
disposition pursuant to Section 2.09(c).
---------------
3 ARTICLE
EVENTS OF DEFAULT; REMEDIES
----------------------------
4.1 SECTION EVENTS OF DEFAULT. The following events shall each constitute
-----------------
an "EVENT OF DEFAULT":
----------------
(a) Borrower shall fail to pay the principal of, or, within 5 days of the
date that it is due, interest on its Notes, or any other amounts payable
hereunder or under any of the other Loan Documents when due, whether as
scheduled, at a date fixed for prepayment, by acceleration or otherwise; or
(b) any Credit Party shall fail to observe or perform any other covenant,
condition or agreement to be observed or performed by such Credit Party in any
of the Loan Documents, and such Credit Party fails to cure such breach within
ten (10) Days after written notice thereof unless the breach relates to a
covenant contained in Section 5.04, or Article VI (other than Section 6.05 or
Section 6.06) or VII, in which case no notice or grace period shall apply, or
unless the breach relates to Section 5.06, in which case an Event of Default
shall occur on the thirtieth day following the breach without any notice
requirement, unless the breach shall have been cured before such date; or
(c) any representation or warranty made by any Credit Party in connection
with this Agreement or any other Loan Document, or the Loans or any statement or
representation made in any report, certificate, financial statement or other
instrument furnished by or on behalf of such Credit Party pursuant to this
Agreement or any other Loan Document, shall prove to have been false or
misleading in any material respect when made or delivered or when deemed made in
accordance with the terms hereof or thereof; or
(d) any Credit Party shall fail to make any payment due (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise) on
any other obligation for borrowed money in excess of $250,000 with respect to
any Credit Party (other than Holdings) or in excess of $1,000,000 with respect
to Holdings, and such failure shall continue after the applicable grace period,
if any, specified in the agreement or instrument relating to such indebtedness;
or any other default or event under any agreement or instrument
SECOND PRIORITY LOAN AGREEMENT
------------------------------
(other than the First Priority Loan Agreement) relating to any indebtedness for
borrowed money in excess of $250,000 with respect to any Credit Party (other
than Holdings) or in excess of $1,000,000 with respect to Holdings, or any other
event, shall occur and shall continue after the applicable grace period, if any,
specified in such agreement or instrument if the effect of such default or event
is to accelerate, or to permit the acceleration of, the maturity of such
indebtedness in excess of $250,000 with respect to any Credit Party (other than
Holdings) or in excess of $1,000,000 with respect to Holdings; or any such
indebtedness in excess of $250,000 with respect to any Credit Party (other than
Holdings) or in excess of $1,000,000 with respect to Holdings shall be declared
to be due and payable or required to be prepaid (other than by a regularly
scheduled required prepayment) prior to the stated maturity thereof; or
(e) any Credit Party shall (i) apply for or consent to the appointment of
a receiver, trustee, custodian, sequestrator or similar official for such Credit
Party or for a substantial part of its property, (ii) make a general assignment
for the benefit of creditors, (iii) become unable, or admit in writing its
inability, to pay its debts as they become due, (iv) voluntarily or
involuntarily dissolve, liquidate or wind up its affairs, or (v) take action for
the purpose of effecting any of the foregoing; or
(f) a proceeding under any bankruptcy, reorganization, arrangement of
debts, insolvency or receivership law is filed by or against any Credit Party,
or any Credit Party takes any action to authorize any of the foregoing matters,
and in the case of any such proceeding instituted against any Credit Party (but
not instituted by any Credit Party), either such proceeding shall remain
undismissed or unstayed for a period of sixty (60) days or any of the actions
sought in such proceeding (including, without limitation, the entry of an order
for relief against, or the appointment of a receiver, trustee or other similar
official for any Credit Party or any substantial part of its property) shall be
granted or shall occur; or
(g) a Termination Event (other than a Reportable Event) occurs which the
Requisite Lenders in good faith believe would subject Borrower to a liability
which is reasonably likely to have a Material Adverse Effect; or
(h) the plan administrator of any Plan applies under Section 412(d) of the
IRC for a waiver of the minimum funding standards of Section 412(a) of the IRC
and the Requisite Lenders in good faith believe that the approval of such waiver
could subject Borrower or any ERISA Affiliate to liability which is reasonably
likely to have a Material Adverse Effect; or
(i) unless it is not reasonably likely to have a Material Adverse Effect,
any of the Governmental Approvals or any other license, Governmental Approval or
other governmental consent or approval necessary for the continuing operation of
any Credit Party or any
SECOND PRIORITY LOAN AGREEMENT
------------------------------
System or any other material Governmental Approval or approval of or material
filing with the FCC, any PUC or any other Governmental Authority with respect to
the conduct by any Credit Party of its business and operations, including its
Business, shall not be obtained or shall cease to be in full force and effect,
which in respect of any of the Governmental Approvals shall, in the case of an
order of the FCC, any PUC or other Governmental Authority having jurisdiction
with respect thereto, revoking, or deciding not to renew, any such Governmental
Approval, occur upon the issuance of such order, and, in the case of any other
order revoking or terminating any of the Governmental Approvals or deciding not
to renew such Governmental Approvals prior to the termination thereof, occur
when such order becomes final; or
(j) unless it is not reasonably likely to have a Material Adverse Effect,
the FCC, any PUC or any other Governmental Authority, by final order, determines
that the existence or performance of this Agreement or any other Loan Document
will result in a revocation, suspension or material adverse modification of any
of the Governmental Approvals for any System; or
(k) for any reason any Loan Document shall not be in full force and effect
or shall not be enforceable in accordance with its terms, or the Guaranty set
forth at Article VIII hereof for any reason, other than the satisfaction in full
------------
of all Obligations, shall cease to be in full force and effect (other than in
accordance with its terms) or shall be declared to be null and void or voidable
or any Guarantor shall repudiate its obligations thereunder with respect to such
Guaranty, or any security interest or lien granted pursuant thereto with respect
to Collateral having an aggregate value of $500,000 or greater shall fail to be
perfected or to have its intended priority, or any Credit Party or any Affiliate
thereof shall contest the validity of any Lien granted under, or shall disaffirm
its obligations under any Loan Document; or
(l) unless it is not reasonably likely to have a Material Adverse Effect,
for any reason, any Credit Party ceases to operate any System or ceases to own
any of its Governmental Approvals necessary for the continuing operation of any
System; or
(m) a judgment or judgments for the payment of money in excess of $500,000
individually or $1,000,000 in the aggregate at any one time shall have been
rendered against any Credit Party and the same shall have remained unsatisfied
and in effect for any period of ninety (90) days during which no stay of
execution shall have been obtained; or
(n) unless it is not reasonably likely to have a Material Adverse Effect,
any Credit Party is enjoined, restrained or in any way prevented by the order of
any court or administrative or regulatory agency from conducting its business in
any material respect with respect to any one or more of its Systems; or
SECOND PRIORITY LOAN AGREEMENT
------------------------------
(o) any Credit Party becomes subject to any liabilities, costs, expenses,
damages, fines or penalties which could reasonably be expected to have a
Material Adverse Effect arising out of or related to (i) any Remedial Action in
response to a Release or threatened Release at any location of any Contaminant
into the indoor or outdoor environment or (ii) any material violation of any
Environmental Law; or
(p) a Change of Control shall occur; or
(q) an Event of Default (as such term is defined in the First Priority
Loan Agreement) shall occur and be continuing for a period of 45 days.
4.2 SECTION TERMINATION OF COMMITMENT; ACCELERATION. Upon the
---------------------------------------
occurrence and at any time during the continuance of any Event of Default, the
Administrative Agent shall upon direction from the Requisite Lenders:
(a) by notice to Borrower, terminate Lenders' Commitment to make Loans
hereunder; or
(b) by notice to Borrower, declare the Obligations to be immediately due
and payable, whereupon all the Obligations shall be immediately due and payable
without further notice of any kind, provided, however, that if an Event of
-------- -------
Default described in Section 9.01(e) or 9.01(f) shall exist or occur, all of the
--------------------------
Obligations shall automatically, without declaration or notice of any kind, be
immediately due and payable and the Commitments shall be automatically
terminated.
(c) Any amounts described in clause (b) above, when received by Administrative
Agent, shall be held by Administrative Agent pursuant to the terms of the
Intercreditor Agreement and shall be applied as therein provided.
SECOND PRIORITY LOAN AGREEMENT
------------------------------
4.3 SECTION WAIVERS. Demand, presentment, protest and notices of nonpayment,
-------
protest, dishonor and acceptance are hereby waived by Borrower. Borrower also
waives the benefit of all valuation, appraisal and exemption laws and the
posting of any bond required of the Administrative Agent or any Lender in
connection with any judicial process to realize on the Collateral, to enforce
any judgment or other court order entered in favor of the Administrative Agent
or any Lender or to enforce by specific performance, temporary restraining
order, or preliminary or permanent injunction, this Agreement or any other Loan
Documents. Each Borrower waives the right, if any, to the benefit of, or to
direct the application of, any Collateral. Each Borrower hereby acknowledges
that none of the Administrative Agent or any Lender has any obligation to resort
to any Collateral or make claim against any other Person before seeking payment
or performance from Borrower.
5 ARTICLE
AGENTS
------
6.1 SECTION APPOINTMENT OF AGENTS. GSCP is hereby appointed Joint Lead
---------------------
Arranger and Syndication Agent hereunder, CSC is hereby appointed Joint Lead
Arranger, and each Lender hereby authorizes each Joint Lead Arranger and
Syndication Agent to act as its agent in accordance with the terms hereof and
the other Loan Documents. Newcourt is hereby appointed Administrative Agent
hereunder and under the other Loan Documents and each Lender hereby authorizes
Administrative Agent to act as its agent in accordance with the terms hereof and
the other Loan Documents. Newcourt is hereby appointed Collateral Agent
hereunder, under the Intercreditor Agreement and the other Loan Documents, and
each Lender hereby authorizes Collateral Agent to act as its agent in accordance
with the terms of the Intercreditor Agreement and the other Loan Documents.
Newcourt is hereby appointed Documentation Agent hereunder, and each Lender
hereby authorizes Documentation Agent to act as its agent in accordance with the
terms hereof and the other Loan Documents. Each Agent hereby agrees to act upon
the express conditions contained herein and the other Loan Documents, as
applicable. Without limitation of any right of the Borrower pursuant to Section
10.07, the provisions of this Article X are solely for the benefit of Agents and
---------
Lenders and no Person shall have any rights as a third party beneficiary of any
of the provisions thereof. In performing its functions and duties hereunder,
each Agent shall act solely as an agent of Lenders and does not assume and shall
not be deemed to have assumed any obligation towards or relationship of agency
or trust with or for any of Borrower, any of the other Credit Parties or any of
their respective Affiliates. As of the Closing Date, all the respective
obligations of CSC, in its capacity as Joint Lead Arranger, GSCP, in its
capacity as Joint Lead Arranger and Syndication Agent, and Newcourt, in its
capacity as Documentation Agent, shall terminate.
6.2 SECTION POWERS AND DUTIES. Each Lender irrevocably authorizes
-----------------
each Agent to take such action on such Lender's behalf and to exercise such
powers, rights and remedies
SECOND PRIORITY LOAN AGREEMENT
------------------------------
hereunder and under the other Loan Documents as are specifically delegated or
granted to such Agent by the terms hereof and thereof, together with such
powers, rights and remedies as are reasonably incidental thereto. Each Agent
shall have only those duties and responsibilities that are expressly specified
herein and the other Loan Documents. Each Agent may exercise such powers, rights
and remedies and perform such duties by or through its agents or employees and
such Agent shall have no liability with respect to the actions, omissions,
exercise or performance of any such Agent or employees selected by such Agent
with reasonable care. No Agent shall have, by reason hereof or any of the other
Loan Documents, a fiduciary relationship in respect of any Lender; and nothing
herein or any of the other Loan Documents, expressed or implied, is intended to
or shall be so construed as to impose upon any Agent any obligations in respect
hereof or any of the other Loan Documents except as expressly set forth herein
or therein.
(a) SECTION GENERAL IMMUNITY. No Agent shall be responsible to any Lender
----------------
for the execution, effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency hereof or of any other Loan Document or for any
representations, warranties, recitals or statements made herein or therein or
made in any written or oral statements or in any financial or other statements,
instruments, reports or certificates or any other documents furnished or made by
any of the Agents to Lenders or by or on behalf of any Credit Party to any of
the Agents or any Lender in connection with the Loan Documents and the
transactions contemplated thereby or for the financial condition or business
affairs of any Person liable for the payment of any Obligations, nor shall any
Agent be required to ascertain or inquire as to the performance or observance of
any of the terms, conditions, provisions, covenants or agreements contained in
any of the Loan Documents or as to the use of the proceeds of the Loans or as to
the existence or possible existence of any Event of Default or Default. Anything
contained herein to the contrary notwithstanding, Administrative Agent shall not
have any liability arising from confirmations of the amount of outstanding Loans
or the component amounts thereof, except as to any such liability arising from
gross negligence or willful misconduct.
(b) No Agent nor any of its officers, partners, directors, employees or
agents shall be liable to Lenders for any action taken or omitted by any Agent
under or in connection with any of the Loan Documents except to the extent
caused by such Agent's gross negligence or willful misconduct. Each Agent shall
be entitled to refrain from any act or the taking of any action (including the
failure to take an action) in connection herewith or any of the other Loan
Documents or from the exercise of any power, discretion or authority vested in
it hereunder or thereunder unless and until such Agent shall have received
instructions in respect thereof from Requisite Lenders (or such other Lenders as
may be required to give such instructions under Section 11.05) and, upon receipt
--------------
of such instructions from Requisite Lenders (or such other Lenders, as the case
may be), such Agent shall be entitled to act or (where so instructed) refrain
from acting, or to exercise such power, discretion or authority,
SECTION PRIORITY LOAN AGREEMENT
-------------------------------
in accordance with such instructions. Without prejudice to the generality of the
foregoing, (i) each Agent shall be entitled to rely, and shall be fully
protected in relying, upon any communication, instrument or document believed by
it to be genuine and correct and to have been signed or sent by the proper
person or persons, and shall be entitled to rely and shall be protected in
relying on opinions and judgments of attorneys (who may be attorneys for
Borrower and its Affiliates), accountants, experts and other professional
advisors selected by it; and (ii) no Lender shall have any right of action
whatsoever against any Agent as a result of such Agent acting or (where so
instructed) refraining from acting hereunder or any of the other Loan Documents
in accordance with the instructions of Requisite Lenders (or such other Lenders
as may be required to give such instructions under Section 11.05).
--------------
6.3 SECTION AGENTS ENTITLED TO ACT AS LENDER. The agency hereby created
--------------------------------
shall in no way impair or affect any of the rights and powers of, or impose any
duties or obligations upon, any Agent in its individual capacity as a Lender
hereunder. With respect to its participation in the Loans, each Agent shall have
the same rights and powers hereunder as any other Lender and may exercise the
same as though it were not performing the duties and functions delegated to it
hereunder, and the term "Lender" shall, unless the context clearly otherwise
indicates, include each Agent in its individual capacity. Any Agent and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of banking, trust, financial advisory or other business with any of
Borrower and its Affiliates as if it were not performing the duties specified
herein, and may accept fees and other consideration from any Credit Party for
services in connection herewith and otherwise without having to account for the
same to Lenders.
6.4 SECTION LENDERS' REPRESENTATIONS AND WARRANTIES. Each Lender represents
---------------------------------------
and warrants that it has made its own independent investigation of the financial
condition and affairs of the Credit Parties and their Affiliates in connection
with Loans made hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Credit Parties and their Affiliates. No
Agent shall have any duty or responsibility, either initially or on a continuing
basis, to make any such investigation or any such appraisal on behalf of Lenders
or to provide any Lender with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or at
any time or times thereafter, and no Agent shall have any responsibility with
respect to the accuracy of or the completeness of any information provided to
Lenders.
6.5 SECTION RIGHT TO INDEMNITY. Each Lender, in proportion to its Pro Rata
------------------
Share, severally agrees to indemnify each Agent, to the extent that such Agent
shall not have been reimbursed by Borrower, for and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including counsel fees and disbursements) or disbursements of
any kind or nature whatsoever which may be imposed on, incurred by or asserted
against such Agent in exercising its powers, rights and remedies
SECOND PRIORITY LOAN AGREEMENT
------------------------------
or performing its duties hereunder or under the other Loan Documents or
otherwise in its capacity as such Agent in any way relating to or arising out
hereof or the other Loan Documents; provided, no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from such Agent's
gross negligence or willful misconduct; provided further, however, that the
-------- ------- -------
gross negligence or willful misconduct of any Agent shall not affect any other
Agent's right to indemnification hereunder. If any indemnity furnished to any
Agent for any purpose shall, in the opinion of such Agent, be insufficient or
become impaired, such Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished; provided, in no event shall this sentence require any Lender to
indemnify any Agent against any liability, obligation, loss, damage, penalty,
action, judgment, suit, cost, expense or disbursement in excess of such Lender's
Pro Rata Share thereof; and provided further, this sentence shall not be deemed
to require any Lender, subject to the second provisio of the immediately
preceding sentence, to indemnify any Agent against any liability, obligation,
loss, damage, penalty, action, judgment, suit, cost, expense or disbursement
described in the initial proviso in the immediately preceding sentence.
6.6 SECTION SUCCESSOR ADMINISTRATIVE AGENT. Administrative Agent may resign
------------------------------
at any time by giving thirty (30) days' prior written notice thereof to Lenders
and Borrower, and Administrative Agent may be removed at any time with or
without cause by an instrument or concurrent instruments in writing delivered to
Borrower and Administrative Agent and signed by Requisite Lenders. Upon any such
notice of resignation or any such removal, Requisite Lenders shall have the
right, upon five Business Days' notice to Borrower, to appoint a successor
Administrative Agent which successor shall, unless a Default or Event of Default
shall have occurred and be continuing, be reasonably acceptable to the Borrower.
Upon the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, that successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring or removed Administrative Agent and the retiring or
removed Administrative Agent shall be discharged from its duties and obligations
hereunder. After any retiring or removed Administrative Agent's resignation or
removal hereunder as Administrative Agent, the provisions of this Article X
--------
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent hereunder.
6.7 SECTION OTHER LOAN DOCUMENTS. Each Lender hereby further authorizes
--------------------
Administrative Agent, on behalf of and for the benefit of Lenders, to enter into
the other Loan Documents , and each Lender agrees to be bound by the terms of
the other Loan Documents; provided that Administrative Agent shall not enter
--------
into or consent to any amendment, modification, supplementation, termination or
waiver of any other Loan Document without the prior consent of Requisite Lenders
(or such other Lenders as may be re-
SECOND PRIORITY LOAN AGREEMENT
------------------------------
quired to give such instructions under Section 11.05 hereof). Each Lender hereby
-------------
further authorizes Collateral Agent (and under the terms of the Intercreditor
Agreement Collateral Agent is authorized), on behalf of and for the benefit of
Lenders, to enter into each Collateral Document as secured party, and each
Lender agrees to be bound by the terms of each Collateral Document; provided
--------
that Collateral Agent shall not enter into or consent to any amendment,
modification, supplementation, termination or waiver of the Intercreditor
Agreement without the prior consent of Requisite Lenders (or such other Lenders
as may be required to give such instructions under Section 11.05 hereof);
-------------
provided further, however, that, without further written consent or
-------- ------- -------
authorization from Lenders, Collateral Agent may execute any documents or
instruments necessary to (a) release any Lien encumbering any item of Collateral
that is the subject of a sale or other disposition of assets permitted by this
Agreement or as permitted or required under the Intercreditor Agreement or the
Collateral Documents or to which Requisite Lenders (or such other Lenders as may
be required to give such consent under Section 11.05 hereof) have otherwise
-------------
consented or (b) release any Guarantor from its Guaranty hereunder if all of the
capital stock of such Guarantor is sold to any Person pursuant to a sale or
other disposition permitted hereunder or as permitted under the Intercreditor
Agreement or to which Requisite Lenders (or such other Lenders as may be
required to give such consent under Section 11.05 hereof) have otherwise
-------------
consented. Anything contained in any of the Collateral Documents to the contrary
notwithstanding, Borrower, Administrative Agent, Collateral Agent and each
Lender hereby agree that (X) no Lender shall have any right individually to
realize upon any of the Collateral under any Collateral Document or to a
Guarantor's Guaranty hereunder, it being understood and agreed that all powers,
rights and remedies under the Collateral Documents may be exercised solely by
Collateral Agent for the benefit of Secured Parties in accordance with the terms
hereof or thereof, and (Y) in the event of a foreclosure by Collateral Agent on
any of the Collateral pursuant to a public or private sale, Collateral Agent or
any Secured Party may be the purchaser of any or all of such Collateral at any
such sale and Collateral Agent, as agent for and representative of Secured
Parties (but not any Secured Party or Secured Parties in its or their respective
individual capacities unless Requisite Lenders shall otherwise agree in writing)
shall be entitled, for the purpose of bidding and making settlement or payment
of the purchase price for all or any portion of the Collateral sold at any such
public sale, to use and apply any of the Obligations as a credit on account of
the purchase price for any Collateral payable by Collateral Agent at such sale.
SECOND PRIORITY LOAN AGREEMENT
------------------------------
7 ARTICLE
MISCELLANEOUS
-------------
8.1 SECTION NOTICES. Unless otherwise specifically provided herein, any
-------
notice or other communication herein required or permitted to be given to a
Credit Party, an Agent or a Lender shall be sent to such Person's address as set
forth on the signature pages hereto or in the other relevant Loan Document, and
in the case of any Lender, the address as set forth on the signature pages
hereto or otherwise indicated to Administrative Agent in writing. Each notice
hereunder shall be in writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service and signed for
against receipt thereof, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with postage prepaid
and properly addressed; provided, no notice to any Agent shall be effective
until received by such Agent.
8.2 SECTION EXPENSES. Whether or not the transactions contemplated hereby
--------
shall be consummated, Borrower agrees to pay promptly (a) all the actual and
reasonable costs and expenses of the Documentation Agent, and the Syndication
Agent and each Joint Lead Arranger (without duplication with respect to each
such Person) of preparation of the Loan Documents and any consents, amendments,
waivers or other modifications thereto; (b) all the costs of furnishing all
opinions by counsel for Borrower (including any opinions requested by Lenders as
to any legal matters arising hereunder) and of each Credit Party's performance
of and compliance with all agreements and conditions on its part to be performed
or complied with hereunder and the other Loan Documents including with respect
to confirming compliance with environmental, insurance and solvency
requirements; (c) the reasonable fees, expenses and disbursements of counsel to
Agents (in each case including allocated costs of internal counsel) in
connection with the negotiation, preparation, execution and administration of
the Loan Documents and any consents, amendments, waivers or other modifications
thereto and any other Loan Documents or matters requested by a Credit Party; (d)
all the actual costs and reasonable expenses of creating and perfecting Liens in
favor of Collateral Agent on behalf of Lenders pursuant hereto, including filing
and recording fees, expenses and taxes, stamp or documentary taxes, search fees,
title insurance premiums and reasonable fees, expenses and disbursements of
counsel to each Agent and of counsel providing any opinions that any Agent or
Requisite Lenders may request in respect of the Collateral or the Liens created
pursuant the Loan Documents pertaining to the Collateral; (e) all the actual
costs and reasonable fees, expenses and disbursements of any auditors,
accountants, consultants or appraisers retained by the Administrative Agent; (f)
all the actual costs and reasonable expenses (including the reasonable fees,
expenses and disbursements of any appraisers, consultants, advisors and agents
employed or retained by any Agent and its counsel) in connection with the
custody or preservation of any of the Collateral; (g) all other actual and
reasonable costs and expenses incurred by each Agent in connection with the
▇▇▇▇▇-
SECOND PRIORITY LOAN AGREEMENT
------------------------------
cation of the Loans and the negotiation, preparation and execution of the Loan
Documents and any consents, amendments, waivers or other modifications thereto
and the transactions contemplated thereby; (h) and after the occurrence of an
Event of Default, all costs and expenses, including reasonable attorneys' fees
(including allocated costs of internal counsel) and costs of settlement,
incurred by any Agent and Lenders in enforcing any Obligations of or in
collecting any payments due from any Credit Party hereunder or under the other
Loan Documents by reason of such Event of Default (including in connection with
the sale of, collection from, or other realization upon any of the Collateral or
the enforcement of the Guaranty) or in connection with any refinancing or
restructuring of the credit arrangements provided hereunder in the nature of a
"work-out" or pursuant to any insolvency or bankruptcy proceedings.
8.3 SECTION INDEMNITY. In addition to the payment of expenses pursuant to
---------
Section 11.02, whether or not the transactions contemplated hereby shall be
consummated, Borrower agrees to defend (subject to Indemnitees' selection of
counsel), indemnify, pay and hold harmless, each Agent and Lender and the
officers, partners, directors, trustees, employees, agents and Affiliates of
each Agent and each Lender (each, an "INDEMNITEE"), from and against any and all
----------
Indemnified Liabilities; provided, no Credit Party shall have any obligation to
any Indemnitee hereunder with respect to any Indemnified Liabilities to the
extent such Indemnified Liabilities arise solely from the gross negligence or
willful misconduct of that Indemnitee as determined by a final, non-appealable
judgment of a court of competent jurisdiction; and provided, further, however,
-------- ------- -------
that the gross negligence or willful misconduct of any Indemnitee shall not
affect the right of indemnification of any other Indemnitee hereunder. To the
extent that the undertakings to defend, indemnify, pay and hold harmless set
forth in this Section 11.03 may be unenforceable in whole or in part because
they are violative of any law or public policy, the applicable Credit Party
shall contribute the maximum portion that it is permitted to pay and satisfy
under applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by Indemnitees or any of them.
8.4 SECTION 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 any Event of Default each Lender is hereby authorized by each
Credit Party at any time or from time to time subject to the consent of
Administrative Agent (such consent not to be unreasonably withheld, conditioned
or delayed), without notice to any Credit Party or any other Person (other than
Administrative Agent), any such notice being hereby expressly waived, to set off
and to appropriate and to apply any and all deposits (general or special,
including Indebtedness evidenced by certificates of deposit, whether matured or
unmatured, but not including trust accounts) and any other Indebtedness at any
time held or owing by such Lender to or for the credit or the account of such
Credit Party against and on account of the obligations and liabilities of such
Credit Party to such Lender hereunder and under the other Loan Documents,
including all claims of any nature or description arising out of or connected
with
SECOND PRIORITY LOAN AGREEMENT
------------------------------
this Agreement or any other Loan Document, irrespective of whether or not (a)
such Lender shall have made any demand hereunder or (b) the principal of or the
interest on the Loans or any other amounts due hereunder shall have become due
and payable pursuant to Article II and although said obligations and
----------
liabilities, or any of them, may be contingent or unmatured.
(a) SECTION AMENDMENTS AND WAIVERS. Subject to Section 11.05(b) and
---------------------- ----------------
11.05(c), no amendment, modification, termination or waiver of any provision of
--------
the Loan Documents, or consent to any departure by any Credit Party therefrom,
shall in any event be effective without the prior written concurrence of the
Requisite Lenders.
(b) Without the prior written consent of each Lender that would be
affected thereby, no amendment, modification, termination, or consent shall be
effective if the effect thereof would:
(i) extend the scheduled final maturity of any Loan or
Note;
(ii) waive, reduce or postpone any scheduled repayment
(but not prepayment);
(iii) reduce the rate of interest on any Loan (other
than any waiver of any increase in the interest rate
applicable to any Loan pursuant to Section 2.05(b)) or any
fee payable hereunder;
(iv) extend the time for payment of any such interest
or fees;
(v) reduce the principal amount of any Loan;
(vi) amend, modify, terminate or waive any provision of
this Section 11.05(b);
(vii) amend the definition of "Requisite Lenders" and
"Pro Rata Shares"; provided, with the consent of Requisite
Lenders, additional extensions of credit pursuant hereto may
be included in the determination of "Requisite Lenders" and
"Pro Rata Shares" on substantially the same basis as the
Commitment Amounts and the Loans are included on the Closing
Date;
SECOND PRIORITY LOAN AGREEMENT
------------------------------
(viii) release or otherwise subordinate all or
substantially all of the Collateral or any Guarantor from
its obligations hereunder except as expressly provided in
the Loan Documents; or
(ix) consent to the assignment or transfer by any
Credit Party of any of its rights and obligations under any
Loan Document.
(c) No amendment, modification, termination or waiver of any provision of
the Loan Documents, or consent to any departure by Borrower or Holdings
therefrom, shall:
(i) increase any Commitment Amount of any Lender over
the amount thereof then in effect without the consent of
such Lender; provided, no amendment, modification or waiver
of any condition precedent, covenant, Default or Event of
Default shall constitute an increase in any Commitment
Amount of any Lender; or
(ii) amend, modify, terminate or waive any provision of
Article X as the same applies to any Agent, or any other
---------
provision hereof as the same applies to the rights or
obligations of any Agent, in each case without the consent
of such Agent.
(d) Administrative Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of such Lender. Any waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it was given. No
notice to or demand on any Credit Party in any case shall entitle any Credit
Party to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this Section 11.05 shall be binding upon each Lender
-------------
at the time outstanding, each future Lender and, if signed by a Borrower or
Holdings, on Borrower or Holdings.
(e) SECTION SUCCESSORS AND ASSIGNS; PARTICIPATIONS. This Agreement shall be
binding upon the parties hereto and their respective successors and assigns and
shall inure to the benefit of the parties hereto and the successors and assigns
of Lenders. No rights or obligations of Borrower or Holdings hereunder nor any
interest therein may be assigned or delegated by Borrower or Holdings without
the prior written consent of all Lenders.
SECOND PRIORITY LOAN AGREEMENT
------------------------------
(f) Borrower, Administrative Agent and Lenders shall deem and treat the
Persons listed as Lenders in the Register as the holders and owners of the
corresponding Commitment Amounts and Loans listed therein for all purposes
hereof, and no assignment or transfer of any such Commitment Amount or Loan
shall be effective unless and until an Assignment Agreement effecting the
assignment or transfer thereof shall have been delivered to Administrative Agent
and recorded in the Register. Prior to such recordation, all amounts owed with
respect to the applicable Commitment Amount or Loan shall be owed to the Lender
listed in the Register as the owner thereof, and any request, authority or
consent of any Person who, at the time of making such request or giving such
authority or consent, is listed in the Register as a Lender shall be conclusive
and binding on any subsequent holder, assignee or transferee of the
corresponding Commitment Amounts or Loans.
(g) Each Lender shall have the right at any time to sell, assign or
transfer any Commitment Amount, any Loan or any other Obligation:
(i) to any Person meeting the criteria of clause (i)
of the definition of the term of "Eligible Assignee" upon
the giving of notice to Borrower and Administrative Agent;
and
(ii) to any Person meeting the criteria of clause (ii)
of the definition of the term of "Eligible Assignee";
provided, each such assignment pursuant to this Section
11.06(c)(ii) shall be in an aggregate amount of not less
than $2,000,000 (or such lesser amount as may be agreed to
by Borrower and Administrative Agent or as shall constitute
the aggregate amount of the Commitment Amount, Loans and
other Obligations of the assigning Lender).
(h) The assigning Lender and the assignee thereof shall execute and
deliver to Administrative Agent an Assignment Agreement, together with (i) a
processing and recordation fee of (y) $1,000 in the case of assignments by or to
GSCP, Newcourt or CIBC; provided that no such fee shall be payable until such
time as GSCP and Newcourt have notified Administrative Agent that the primary
syndication of the Loans has been completed, and (z) $3,500 in the case of other
assignments pursuant to Section 11.06(c)(ii); provided, no such processing and
--------------------
recordation fee shall be payable upon any assignment pursuant to Section
11.06(c)(i), and (ii) such forms, certificates or other evidence, if any, with
respect to United States federal income tax withholding matters as the assignee
under such Assignment Agreement may be required to deliver to Administrative
Agent pursuant to Section 2.12(b)(5).
------------------
SECOND PRIORITY LOAN AGREEMENT
------------------------------
(i) Upon its receipt of a duly executed and completed Assignment
Agreement, together with the processing and recordation fee referred to in
Section 11.06(d) (and any forms, certificates or other evidence required by this
----------------
Agreement in connection therewith), Administrative Agent shall record the
information contained in such Assignment Agreement in the Register, shall give
prompt notice thereof to Borrower and shall maintain a copy of such Assignment
Agreement.
(j) Each Lender, upon execution and delivery hereof or upon executing and
delivering an Assignment Agreement, as the case may be, represents and warrants
as of the Closing Date or as of the applicable Effective Date (as defined in the
applicable Assignment Agreement) that (i) it is an Eligible Assignee; (ii) it
has experience and expertise in the making of or investing in commitments or
loans such as the Commitment Amounts or Loans, as the case may be; and (iii) it
will make or invest in, as the case may be, its Commitment Amounts or Loans for
its own account in the ordinary course of its business and without a view to
distribution of such Commitment Amounts or Loans within the meaning of the
Securities Act or the Exchange Act or other federal securities laws (it being
understood that, subject to the provisions of this Section 11.06, the
-------------
disposition of such Commitment Amounts or Loans or any interests therein shall
at all times remain within its exclusive control).
(k) Subject to the terms and conditions of this Section 11.06, as of the
-------------
"Effective Date" specified in such Assignment Agreement: (i) the assignee
thereunder shall have the rights and obligations of a "Lender" hereunder to the
extent such rights and obligations hereunder have been assigned to it pursuant
to such Assignment Agreement and shall thereafter be a party hereto and a
"Lender" for all purposes hereof; (ii) the assigning Lender thereunder shall, to
the extent that rights and obligations hereunder have been assigned thereby
pursuant to such Assignment Agreement, relinquish its rights (other than any
rights which survive the termination hereof under Section 11.08) and be released
from its obligations hereunder (and, in the case of an Assignment Agreement
covering all or the remaining portion of an assigning Lender's rights and
obligations hereunder, such Lender shall cease to be a party hereto; (iii) the
Commitment Amounts shall be modified to reflect the Commitment Amount of such
assignee and any remaining Commitment Amount of such assigning Lender, if any;
and (iv) if any such assignment occurs after the issuance of any Note hereunder,
the assigning Lender shall, upon the effectiveness of such assignment or as
promptly thereafter as practicable, surrender its applicable Notes to
Administrative Agent for cancellation, and thereupon Borrower shall issue and
deliver new Notes, if so requested by the assignee and/or assigning Lender, to
such assignee and/or to such assigning Lender, with appropriate insertions, to
reflect the new Commitment Amounts and/or outstanding Loans of the assignee
and/or the assigning Lender.
SECOND PRIORITY LOAN AGREEMENT
------------------------------
(l) Each Lender shall have the right at any time to sell one or more
participations to any Person in all or any part of its Commitment Amounts, Loans
or in any other Obligation. The holder of any such participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except with
respect to any amendment, modification or waiver described in Section 11.05(b)
or 11.05(c) to the extent directly affecting the Loan or Commitment Amount
relating to the participation. All amounts payable by Borrower or Holdings
hereunder, including amounts payable to such Lender pursuant to Section 2.07(e),
2.12 or 2.14, shall be determined as if such Lender had not sold such
participation. Each Borrower and Holdings and each Lender hereby acknowledge and
agree that, solely for purposes of Sections 11.04 and 11.18, any participation
will give rise to a direct obligation of Borrower and Holdings to the
participant and the participant shall be considered to be a "Lender".
(m) In addition to any other assignment permitted pursuant to this
Section 11.06, (i) any Lender may assign and pledge all or any portion of its
Loans, the other Obligations owed to such Lender, and its Notes for or in
connection with any loan or financing, or as part of any securitization or other
similar transaction, and (ii) with the consent of Borrower and Administrative
Agent any Lender which is an investment fund may pledge all or any portion of
its Notes or Loans to its trustee in support of its obligations to such trustee;
provided, no Lender, as between Borrower and such Lender, shall be relieved of
any of its obligations hereunder as a result of any such assignment and pledge,
and provided further, in no event shall the applicable Federal Reserve Bank or
trustee be considered to be a "Lender" or be entitled to require the assigning
Lender to take or omit to take any action hereunder.
8.5 SECTION INDEPENDENCE OF COVENANTS. All covenants hereunder shall be given
-------------------------
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or would otherwise be within the limitations of, another covenant shall not
avoid the occurrence of a Default or an Event of Default if such action is taken
or condition exists.
8.6 SECTION SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
------------------------------------------------------
representations, warranties and agreements made herein shall survive the
execution and delivery hereof and the making of any Loan. Notwithstanding
anything herein or implied by law to the contrary, the agreements of any Credit
Party set forth in Sections 2.07(e), 2.12, 2.14, 11.02, 11.03, 11.04 and 11.17
and the agreements of Lenders set forth in Sections 10.06 and 11.18 shall
survive the payment of the Loans and the reimbursement of any amounts drawn
thereunder, and the termination hereof.
8.7 SECTION NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part of
------------------------------
any Agent or any Lender in the exercise of any power, right or privilege
hereunder or under any other Loan Document shall impair such power, right or
privilege or be construed to
SECOND PRIORITY LOAN AGREEMENT
------------------------------
be a waiver of any default or acquiescence therein, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. The rights, powers
and remedies given to each Agent and each Lender hereby are cumulative and shall
be in addition to and independent of all rights, powers and remedies existing by
virtue of any statute or rule of law or in any of the other Loan Documents. Any
forbearance or failure to exercise, and any delay in exercising, any right,
power or remedy hereunder shall not impair any such right, power or remedy or be
construed to be a waiver thereof, nor shall it preclude the further exercise of
any such right, power or remedy.
8.8 SECTION MARSHALLING; PAYMENTS SET AIDE. Neither Administrative Agent nor
------------------------------
any Lender shall be under any obligation to marshal any assets in favor of any
Credit Party or any other Person or against or in payment of any or all of the
Obligations. To the extent that any Credit Party makes a payment or payments to
Administrative Agent or Lenders (or to Administrative Agent for the benefit of
Lenders), or any Agent or Lenders enforce any security interests or exercise
their rights of setoff, and such payment or payments or the proceeds of such
enforcement or setoff or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, any other state
or federal law, common law or any equitable cause (whether as a result of any
action or proceeding settlement or otherwise), then, to the extent of such
recovery, the obligation or part thereof originally intended to be satisfied,
and all Liens, rights and remedies therefor or related thereto, shall be revived
and continued in full force and effect as if such payment or payments had not
been made or such enforcement or setoff had not occurred.
8.9 SECTION SEVERABILITY. In case any provision in or obligation hereunder or
------------
any Note shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
8.10 SECTION OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS. The
----------------------------------------------------------
obligations of Lenders hereunder are several and no Lender shall be responsible
for the obligations or Commitment Amounts of any other Lender hereunder. Nothing
contained herein or in any other Loan Document, and no action taken by Lenders
pursuant hereto or thereto, shall be deemed to constitute Lenders as a
partnership, an association, a joint venture or any other kind of entity. The
amounts payable at any time hereunder to each Lender shall be a separate and
independent debt, and each Lender shall be entitled to protect and enforce its
rights arising out hereof and it shall not be necessary for any other Lender to
be joined as an additional party in any proceeding for such purpose.
SECOND PRIORITY LOAN AGREEMENT
------------------------------
8.11 SECTION ENTIRE AGREEMENT; HEADINGS. This Agreement, together with the
--------------------------
other Loan Documents, constitutes and expresses the entire understanding between
the parties hereto with respect to the subject matter hereof, and supersedes all
prior agreements and understandings, inducements, commitments or conditions,
express or implied, oral or written, except as herein contained. Section
headings herein are included herein for convenience of reference only and shall
not constitute a part hereof for any other purpose or be given any substantive
effect.
8.12 SECTION APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401
OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES THEREOF.
8.13 SECTION CONSENT TO JURISDICTION. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST
ANY CREDIT PARTY ARISING OUT OF OR RELATING HERETO OR ANY OTHER LOAN DOCUMENT,
OR ANY OF THE OBLIGATIONS, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ AND ANY
APPELLATE COURT TO WHICH APPEALS WITH RESPECT TO JUDICIAL PROCEEDINGS IN SUCH
COURTS MAY BE TAKEN. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH CREDIT
PARTY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY ACCEPTS
GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH
COURTS; WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; AGREES THAT SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THE APPLICABLE CREDIT PARTY AT ITS
ADDRESS PROVIDED IN ACCORDANCE WITH SECTION 11.01; AGREES THAT SERVICE AS
PROVIDED HEREINABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE
APPLICABLE CREDIT PARTY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE
CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND AGREES SUCH
LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR TO BRING PROCEEDINGS AGAINST EACH CREDIT PARTY IN THE COURTS OF ANY OTHER
JURISDICTION.
8.14 SECTION WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES TO
WAIVE ITS RESPECTIVE RIGHTS TO A JURY
SECOND PRIORITY LOAN AGREEMENT
------------------------------
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT HEREOF OR ANY OF
THE OTHER LOAN DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT
MATTER OF THIS LOAN TRANSACTION OR THE LENDER/BORROWER RELATIONSHIP THAT IS
BEING ESTABLISHED. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING
OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE
SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS,
BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY
HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A
BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING
INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN THEIR
RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT
IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY
REFERRING TO THIS SECTION 11.16 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS HERETO OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY OTHER
DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. IN THE EVENT OF
LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE
COURT.
8.15 SECTION CONFIDENTIALITY. Each Lender shall hold all non-public information
---------------
obtained pursuant to the requirements hereof which is in written, printed or
other tangible form and consists of Projections or which has been marked or
labeled as confidential by Borrower in accordance with such Lender's customary
procedures for handling confidential information of this nature and in
accordance with prudent lending or investing practices, it being understood and
agreed by Borrower that in any event a Lender may make disclosures to Affiliates
of such Lender or disclosures reasonably required by any bona fide or potential
assignee, transferee or participant in connection with the contemplated
assignment, transfer or participation by such Lender of any Loans or any
participations therein or by any direct or indirect contractual counterparties
(or the professional advisors thereto) in swap agreements (provided, such swap
counterparties and advisors are advised of and agree to be bound by the
provisions of this Section 11.17) or in connection with the enforcement of any
rights or remedies hereunder or under any other Loan Document or disclosures
required or requested
SECOND PRIORITY LOAN AGREEMENT
------------------------------
by any governmental agency or representative thereof or by the National
Association of Insurance Commissioners or as request or required pursuant to any
law, rules or regulations or legal process; provided, unless specifically
prohibited by applicable law or court order, each Lender shall notify Borrower
of any request by any governmental agency or representative thereof (other than
any such request in connection with any examination of the financial condition
of such Lender by such governmental agency) for disclosure of any such non-
public information prior to disclosure of such information; and provided
further, in no event shall any Lender be obligated or required to return any
materials furnished by Borrower or any of its Affiliates. Notwithstanding
anything contained herein or otherwise to the contrary, none of the Lenders
shall in any event be required to hold as confidential any information (a) that
is or becomes published or otherwise generally available to the public other
than as a result of a disclosure in violation of this Section 11.17, (b) that
was available to any Lender on a non-confidential basis prior to its disclosure
to any Lender hereunder, or (c) that becomes available to any Lender on a non-
confidential basis from a source other than Borrower or any other Credit Party.
The obligations of the Lenders under this Section 11.17 shall continue with
respect to any item of non-public information for only so long as such item of
non-public information has or retains a confidential or proprietary nature, but
in no event beyond a period of two (2) years after the date on which such
information is provided to any Lender hereunder.
8.16 SECTION RATABLE SHARING. Lenders hereby agree among themselves that if any
---------------
of them shall, whether by voluntary payment (other than a voluntary prepayment
of Loans made and applied in accordance with the terms hereof), by realization
upon security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, fees and other
amounts then due and owing to such Lender hereunder or under the other Loan
Documents (collectively, the "AGGREGATE AMOUNTS DUE" to such Lender) which
---------------------
is greater than the proportion received by any other Lender in respect of the
Aggregate Amounts Due to such other Lender, then the Lender receiving such
proportionately greater payment shall (a) notify Administrative Agent and each
other Lender of the receipt of such payment and (b) apply a portion of such
payment to purchase participations (which it shall be deemed to have purchased
from each seller of a participation simultaneously upon the receipt by such
seller of its portion of such payment) in the Aggregate Amounts Due to the other
Lenders so that all such recoveries of Aggregate Amounts Due shall be shared by
all Lenders in proportion to the Aggregate Amounts Due to them; provided, if all
or part of such proportionately greater payment received by such purchasing
Lender is thereafter recovered from such Lender upon the bankruptcy or
reorganization of Borrower or otherwise, those purchases shall be rescinded and
the purchase prices paid for such participations shall be returned to such
purchasing Lender ratably to the extent of such recovery, but with any interest
on such purchase
SECOND PRIORITY LOAN AGREEMENT
------------------------------
prices as such purchasing Lender is required to pay in connection with such
recovery. Borrower expressly consents to the foregoing arrangement and agrees
that any holder of a participation so purchased may exercise any and all rights
of banker's lien, set-off or counterclaim with respect to any and all monies
owing by Borrower to that holder with respect thereto as fully as if that holder
were owed the amount of the participation held by that holder and that such
holder shall be treated as a Lender with respect to such participation for any
and all purposes.
8.17 SECTION COUNTERPARTS; EFFECTIVENESS. This Agreement may be executed in any
---------------------------
number of counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto and receipt by
Borrower and Administrative Agent of written or telephonic notification of such
execution and authorization of delivery thereof.
[The remainder of this page is intentionally left blank.]
SECOND PRIORITY LOAN AGREEMENT
------------------------------
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their duly authorized officers as of the day and year first
above written.
NORTHPOINT COMMUNICATIONS, INC.
By: _____________________________________
Name:
Title:
Notice Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
NORTHPOINT COMMUNICATIONS OF
VIRGINIA, INC.
By: _____________________________________
Name:
Title:
Notice Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
NORTHPOINT COMMUNICATIONS
HOLDINGS, INC.
By: _____________________________________
Name:
Title:
Notice Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
1
SECOND PRIORITY LOAN AGREEMENT
------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ CREDIT PARTNERS
L.P., as Syndication Agent, Joint Lead Arranger and as a Lender
By: ___________________________
Authorized Signatory
Notice Address:
2
SECOND PRIORITY LOAN AGREEMENT
------------------------------
NEWCOURT COMMERCIAL FINANCE
CORPORATION, as Administrative Agent,
Documentation Agent, Collateral Agent and a
Lender
By: ___________________________
Name:
Title:
Notice Address:
3
SECOND PRIORITY LOAN AGREEMENT
------------------------------
CAPITAL SYNDICATION CORPORATION,
as Joint Lead Arranger,
By: ___________________________
Name:
Title:
Notice Address:
4
SECOND PRIORITY LOAN AGREEMENT
------------------------------
[OTHER LENDERS]
5
SECOND PRIORITY LOAN AGREEMENT
------------------------------
ANNEX A
Commitment Amounts
------------------
LOANS
Lender Commitment Amount
--------------------------------------------------------------------------------------------------------------------------
--------------------
--------------------------------------------------------------------------------------------------------------------------
TOTAL $40,000,000
--------------------------------------------------------------------------------------------------------------------------
1
SECOND PRIORITY LOAN AGREEMENT
------------------------------
SCHEDULE 3.15
INSURANCE
The Borrower shall at its own expense, with insurers and with maximum
deductibles satisfactory to the Collateral Agent:
(a) keep its insurable properties, adequately insured on a all risk basis
for the full replacement value thereof at all times;
(b)
(c) maintain in full force and effect, pay all premiums when due in
respect of, and comply with all terms and conditions of the following insurance
coverages:
(d)
(i) All Risk Property Insurance. The Borrower shall
---------------------------
maintain all risk property insurance against physical loss
or damage, including but not limited to fire and extended
coverage, collapse, flood, earth movement and comprehensive
boiler and machinery coverage (including electrical and
mechanical breakdown). Such insurance shall cover the
Borrower's entire operation shall not contain any exclusion
for resultant damage caused by faulty workmanship, design or
materials. Coverage shall be written on a replacement cost
basis in an amount reasonably acceptable to the Collateral
Agent. Such insurance policy shall contain an agreed amount
endorsement waiving any coinsurance penalty;
(i) Business Interruption. As an extension of the
---------------------
coverage required under the preceding clause (b)(i), the
Borrower shall maintain business interruption insurance in
an agreed amount equal to twelve (12) months projected loss
of net profits, continuing expenses and debt service payment
and shall contain an agreed amount endorsement waiving any
coinsurance penalty;
(i) Comprehensive or Commercial General Liability
---------------------------------------------
Insurance. The Borrower shall maintain comprehensive general
---------
liability insurance written on an occurrence basis with a
limit of not less than $2,000,000. Such coverage shall
include, but not be limited to, premises/operations,
explosion, collapse, underground hazards, contractual
liability, independent contractors, products, com-
2
SECOND PRIORITY LOAN AGREEMENT
------------------------------
pleted operations, property damage and personal injury
liability. Such insurance shall not exclude coverage for
punitive or exemplary damages where insurable by law; and
(i) Workers' Compensation/Employer's Liability. The
------------------------------------------
Borrower shall maintain workers' compensation insurance in
accordance with statutory provisions covering accidental
injury, illness or death of an employee of the Borrower
while at work or in the scope of his or her employment with
the Borrower and employer's liability insurance in an amount
not less than $500,000. Such coverage shall not contain any
occupational disease exclusions; and
(i) Automobile Liability. The Borrower shall maintain
--------------------
automobile liability insurance covering owned, non-owned,
leased, hired or borrowed vehicles against bodily injury or
property damage. Such coverage shall have a limit of not
less than $1,000,000; and
(i) Excess/Umbrella Liability. The Borrower shall
-------------------------
maintain excess or umbrella liability insurance in an amount
not less than $10,000,000 written on an occurrence basis
providing coverage limits in excess of the insurance limits
required under clauses (b)(iii), (b)(iv) (employer's
liability only), and (b)(v). Such insurance shall follow
from the primary insurances and drop down in case of
exhaustion of underlying limits and/or aggregates. Such
insurance shall not exclude coverage for punitive or
exemplary damages where insurable by law; and
(i) Directors and Officer's Liability Insurance. On or
-------------------------------------------
after any initial public offering of Holdings Common Stock,
the Borrower shall maintain Directors and Officers Liability
Insurance in an amount not less than $2,000,000.
SECOND PRIORITY LOAN AGREEMENT
------------------------------
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS 1
SECTION 1.01 Definitions 1
SECTION 1.02 Accounting Terms. 24
SECTION 1.03 Other Terms Defined in New York Uniform Commercial Code 24
ARTICLE II
LOANS 24
SECTION 2.01 Agreement to Lend 24
SECTION 2.02 Loans 24
SECTION 2.03 Procedure for Loan Request. 25
SECTION 2.04 The Notes 26
SECTION 2.05 Interest on Loans 27
SECTION 2.06 Conversion or Continuation 27
SECTION 2.07 Special Provisions Governing LIBOR Loans 28
SECTION 2.08 Payments 31
SECTION 2.09 Voluntary and Mandatory Prepayment of Loans 33
SECTION 2.10 Certain Provisions Regarding Prepayments. 34
SECTION 2.11 Fees 35
SECTION 2.12 Manner of Payment; Special Tax Considerations 36
SECTION 2.13 Maximum Lawful Interest Rate 40
SECTION 2.14 Funding Issues 40
ARTICLE III
REPRESENTATIONS AND WARRANTIES 41
SECTION 3.01 Organization; Powers 42
SECTION 3.02 Corporate Authorization 42
SECTION 3.03 Financial Statements 43
SECTION 3.04 No Material Adverse Change 43
SECTION 3.05 Litigation 43
SECTION 3.06 Tax Returns 43
SECTION 3.07 No Defaults 43
SECTION 3.08 Properties 44
SECTION 3.09 Collateral 44
SECOND PRIORITY LOAN AGREEMENT
------------------------------
SECTION 3.10 Licenses, Material Agreements, Intellectual Property 45
SECTION 3.11 Compliance With Laws 45
SECTION 3.12 ERISA 46
SECTION 3.13 Investment Company Act; Public Utility Holding Company Act 46
SECTION 3.14 Federal Reserve Regulations 47
SECTION 3.15 Insurance 47
SECTION 3.16 Capitalization and Subsidiaries 47
SECTION 3.17 Real Estate Assets 47
SECTION 3.18 Solvency 47
SECTION 3.19 Brokers, etc. 48
SECTION 3.20 No Material Misstatements 48
SECTION 3.21 Year 2000 Matters 48
ARTICLE IV
CONDITIONS FOR LOANS 48
SECTION 4.01 Conditions Precedent 48
ARTICLE V
AFFIRMATIVE COVENANTS 52
SECTION 5.01 Corporate and Franchise Existence 52
SECTION 5.02 Compliance with Laws, Etc. 52
SECTION 5.03 Maintenance of Properties 53
SECTION 5.04 Insurance 53
SECTION 5.05 Obligations and Taxes 54
SECTION 5.06 Financial Statements, Reports, etc 54
SECTION 5.07 Litigation and Other Notices 56
SECTION 5.08 Future Properties 57
SECTION 5.09 ERISA 57
SECTION 5.10 Access to Premises and Records 57
SECTION 5.11 Design and Construction 57
SECTION 5.12 Environmental Notices 57
SECTION 5.13 Amendment of Organizational Documents 58
SECTION 5.14 Fiscal Year 58
SECTION 5.15 Year 2000 Problems 58
SECTION 5.16 Future Subsidiaries 58
SECTION 5.17 Accounting; Maintenance of Records 58
SECTION 5.18 Further Assurances 59
SECTION 5.19 Interest Rate Agreements 59
ii
SECOND PRIORITY LOAN AGREEMENT
------------------------------
ARTICLE VI
NEGATIVE COVENANTS 60
SECTION 6.01 Liens, etc 60
SECTION 6.02 Use of Proceeds 62
SECTION 6.03 Sale of Assets, Consolidation, Merger, Acquisitions etc 62
SECTION 6.04 Dividends and Distributions; Sale of Equity Interests 62
SECTION 6.05 Management Fees and Permitted Corporate Overhead 63
SECTION 6.06 Investments 63
SECTION 6.07 Subsidiaries 64
SECTION 6.08 Permitted Activities 64
SECTION 6.09 Disposition of Licenses, etc. 64
SECTION 6.10 Transactions with Affiliates 64
SECTION 6.11 ERISA 65
SECTION 6.12 Debt 65
SECTION 6.13 Prepayment and Debt Documents 66
SECTION 6.14 Sale and Leaseback Transactions 66
SECTION 6.15 Margin Regulation 67
SECTION 6.16 Restrictive Agreements, etc. 67
ARTICLE VII
FINANCIAL COVENANTS 67
SECTION 7.01 Financial Covenants Prior to Achieving Positive EBITDA 67
SECTION 7.02 Financial Covenants After Achieving Positive EBITDA 69
ARTICLE VIII
GUARANTY 71
SECTION 8.01 Guaranty of the Obligations 71
SECTION 8.02 Contribution by Guarantors 71
SECTION 8.03 Payment by Guarantors 72
SECTION 8.04 Liability of Guarantors Absolute 72
SECTION 8.05 Waivers by Guarantors 74
SECTION 8.06 Guarantors' Rights of Subrogation, Contribution, Etc. 75
SECTION 8.07 Subordination of Other Obligations 76
SECTION 8.08 Continuing Guaranty 76
SECTION 8.09 Authority of Guarantors or Borrower 76
iii
SECOND PRIORITY LOAN AGREEMENT
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SECTION 8.10 Financial Condition of Borrower 76
SECTION 8.11 Bankruptcy, Etc. 76
SECTION 8.12 Notice of Events 77
SECTION 8.13 Discharge of Guaranty Upon Sale of Guarantor 77
ARTICLE IX
EVENTS OF DEFAULT; REMEDIES 78
SECTION 9.01 Events of Default 78
SECTION 9.02 Termination of Commitment; Acceleration 81
SECTION 9.03 Waivers 81
ARTICLE X
AGENTS 81
SECTION 10.01 Appointment of Agents 81
SECTION 10.02 Powers and Duties 82
SECTION 10.03 General Immunity 82
SECTION 10.04 Agents Entitled to Act as Lender 83
SECTION 10.05 Lenders' Representations and Warranties 83
SECTION 10.06 Right to Indemnity 84
SECTION 10.07 Successor Administrative Agent 84
SECTION 10.08 Other Loan Documents 85
ARTICLE XI
MISCELLANEOUS 86
SECTION 11.01 Notices 86
SECTION 11.02 Expenses 86
SECTION 11.03 Indemnity 87
SECTION 11.04 Set-Off 87
SECTION 11.05 Amendments and Waivers 88
SECTION 11.06 Successors and Assigns; Participations 89
SECTION 11.07 Independence of Covenants 92
SECTION 11.08 Survival of Representations, Warranties and Agreements 92
SECTION 11.09 No Waiver; Remedies Cumulative 92
SECTION 11.10 Marshalling; Payments Set Aide 93
SECTION 11.11 Severability 93
SECTION 11.12 Obligations Several; Independent Nature of Lenders' Rights 93
SECTION 11.13 Entire Agreement; Headings 93
SECTION 11.14 APPLICABLE LAW 94
SECTION 11.15 CONSENT TO JURISDICTION 94
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SECOND LOAN AGREEMENT
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SECTION 11.16 WAIVER OF JURY TRIAL 94
SECTION 11.17 Confidentiality 95
SECTION 11.18 Ratable Sharing 96
SECTION 11.19 Counterparts; Effectiveness 96
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