EXHIBIT 10.39
EXECUTION COPY
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Published CUSIP Number: [__________________]
SECOND LIEN LOAN AGREEMENT
Dated as of November 10, 2004,
among
VALOR TELECOMMUNICATIONS ENTERPRISES, LLC,
VALOR TELECOMMUNICATIONS ENTERPRISES II, LLC
and
CERTAIN OF THEIR RESPECTIVE DOMESTIC SUBSIDIARIES,
as Borrowers,
VALOR TELECOMMUNICATIONS, LLC,
VALOR TELECOMMUNICATIONS SOUTHWEST, LLC,
VALOR TELECOMMUNICATIONS SOUTHWEST II, LLC
and
CERTAIN OF THEIR RESPECTIVE DOMESTIC SUBSIDIARIES, INCLUDING SUCH BORROWERS,
as Guarantors,
BANK OF AMERICA, N.A.,
as Second Lien Administrative Agent,
JPMORGAN CHASE BANK
and
WACHOVIA BANK, N.A.,
as Second Lien Syndication Agents,
CIBC WORLD MARKETS CORP.
and
MERRILL, LYNCH, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED,
as Second Lien Documentation Agents,
and
THE LENDERS PARTY HERETO
================================================
BANC OF AMERICA SECURITIES LLC
and
WACHOVIA CAPITAL MARKETS LLC
as
Sole and Exclusive Second Lien Lead Arrangers
and Sole Second Lien Book Managers
=================================================
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS............................................... 1
Section 1.01 Defined Terms........................................................... 1
Section 1.02 Other Interpretive Provisions........................................... 38
Section 1.03 Accounting Terms........................................................ 39
Section 1.04 Rounding................................................................ 40
Section 1.05 Times of Day............................................................ 40
ARTICLE II COMMITMENTS AND BORROWINGS..................................................... 40
Section 2.01 Second Lien Loans....................................................... 40
Section 2.02 Borrowings, Conversions and Continuations of Second Lien Loans.......... 40
Section 2.03 Prepayments............................................................. 42
Section 2.04 Termination or Reduction of Commitment.................................. 44
Section 2.05 Repayment of Second Lien Loans.......................................... 44
Section 2.06 Interest................................................................ 44
Section 2.07 Fees.................................................................... 45
Section 2.08 Computation of Interest and Fees........................................ 45
Section 2.09 Evidence of Debt........................................................ 45
Section 2.10 Payments Generally...................................................... 46
Section 2.11 Sharing of Payments by Second Lien Lenders.............................. 47
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY......................................... 48
Section 3.01 Taxes................................................................... 48
Section 3.02 Illegality.............................................................. 50
Section 3.03 Inability to Determine Rates............................................ 51
Section 3.04 Increased Costs......................................................... 51
Section 3.05 Funding Losses.......................................................... 53
Section 3.06 Mitigation Obligations; Replacement of Second Lien Lenders.............. 53
Section 3.07 Matters Applicable to all Requests for Compensation..................... 54
Section 3.08 Survival................................................................ 54
ARTICLE IV CONDITIONS PRECEDENT TO BORROWING.............................................. 54
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TABLE OF CONTENTS
(continued)
PAGE
Section 4.01 Conditions of Borrowing................................................. 54
ARTICLE V REPRESENTATIONS AND WARRANTIES................................................. 59
Section 5.01 Existence, Qualification and Power...................................... 59
Section 5.02 Authorization; No Contravention......................................... 60
Section 5.03 Governmental Authorization; Other Consents.............................. 60
Section 5.04 Binding Effect.......................................................... 60
Section 5.05 Financial Statements; No Material Adverse Effect........................ 61
Section 5.06 Litigation.............................................................. 62
Section 5.07 No Default.............................................................. 62
Section 5.08 Subsidiaries and Equity Investments..................................... 62
Section 5.09 Ownership............................................................... 63
Section 5.10 Ownership of Personal Property; Liens................................... 63
Section 5.11 Intellectual Property; Licenses, Etc.................................... 63
Section 5.12 Real Estate, Leases..................................................... 63
Section 5.13 Environmental Matters................................................... 64
Section 5.14 Security Documents...................................................... 65
Section 5.15 Insurance............................................................... 66
Section 5.16 Transactions with Affiliates............................................ 66
Section 5.17 Taxes................................................................... 66
Section 5.18 ERISA Compliance........................................................ 67
Section 5.19 Purpose of Second Lien Loans............................................ 67
Section 5.20 Margin Regulations; Investment Company Act; Public Utility Holding
Company Act............................................................. 67
Section 5.21 Disclosure.............................................................. 68
Section 5.22 Compliance with Laws.................................................... 68
Section 5.23 Labor Matters........................................................... 68
Section 5.24 Solvency................................................................ 69
Section 5.25 Nature of Business...................................................... 69
Section 5.26 Independent Credit Analysis............................................. 69
Section 5.27 Designation as Senior Debt.............................................. 70
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TABLE OF CONTENTS
(continued)
PAGE
ARTICLE VI AFFIRMATIVE COVENANTS.......................................................... 70
Section 6.01 Financial Statements.................................................... 70
Section 6.02 Certificates; Other Information......................................... 71
Section 6.03 Notices................................................................. 75
Section 6.04 Payment of Obligations.................................................. 76
Section 6.05 Preservation of Existence, Etc.......................................... 76
Section 6.06 Maintenance of Properties............................................... 76
Section 6.07 Maintenance of Insurance; Certain Proceeds.............................. 77
Section 6.08 Compliance with Laws, Contractual Obligations........................... 78
Section 6.09 Books and Records....................................................... 79
Section 6.10 Inspection Rights....................................................... 79
Section 6.11 Further Assurances with Respect to Additional Subsidiaries.............. 79
Section 6.12 Further Assurances with Respect to Additional Collateral................ 80
Section 6.13 Use of Proceeds......................................................... 81
Section 6.14 Environmental........................................................... 81
Section 6.15 Further Assurances with Respect to Post-Closing Date Deliveries......... 81
ARTICLE VII NEGATIVE COVENANTS............................................................. 82
Section 7.01 Liens................................................................... 82
Section 7.02 Investments............................................................. 83
Section 7.03 Indebtedness............................................................ 85
Section 7.04 Fundamental Changes and Acquisitions.................................... 86
Section 7.05 Dispositions............................................................ 87
Section 7.06 Restricted Payments..................................................... 88
Section 7.07 Amendment, Etc. of Material Documents and Payments in Respect of
Indebtedness............................................................ 90
Section 7.08 Change in Nature of Business............................................ 92
Section 7.09 Transactions with Affiliates............................................ 92
Section 7.10 Limitations on Restricted Actions....................................... 92
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TABLE OF CONTENTS
(continued)
PAGE
Section 7.11 Sale-Leasebacks; Off-Balance Sheet Obligation.......................... 93
Section 7.12 Use of Proceeds........................................................ 93
Section 7.13 Ownership of Subsidiaries and Other Restrictions....................... 93
Section 7.14 Unrestricted Subsidiaries.............................................. 94
Section 7.15 Fiscal Year............................................................ 95
Section 7.16 Partnerships, etc...................................................... 95
Section 7.17 Sales of Receivables................................................... 95
Section 7.18 Financial Covenants.................................................... 95
ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES................................................ 96
Section 8.01 Events of Default...................................................... 96
Section 8.02 Remedies Upon Event of Default......................................... 99
Section 8.03 Application of Funds................................................... 100
ARTICLE IX GUARANTY...................................................................... 101
Section 9.01 Guaranty; Limitation of Liability...................................... 101
Section 9.02 Guaranty Absolute...................................................... 102
Section 9.03 Waivers and Acknowledgments............................................ 103
Section 9.04 Subordination.......................................................... 104
Section 9.05 Continuing Guaranty.................................................... 106
ARTICLE X SECOND LIEN ADMINISTRATIVE AGENT.............................................. 106
Section 10.01 Appointment and Authorization of Second Lien Administrative Agent...... 106
Section 10.02 Rights as a Second Lien Lender......................................... 107
Section 10.03 Exculpatory Provisions................................................. 107
Section 10.04 Reliance by Second Lien Administrative Agent........................... 108
Section 10.05 Delegation of Duties................................................... 108
Section 10.06 Resignation of Second Lien Administrative Agent........................ 108
Section 10.07 Non-Reliance on Second Lien Administrative Agent and Other Second
Lien Lenders........................................................... 109
Section 10.08 No Other Duties, Etc................................................... 110
Section 10.09 Second Lien Administrative Agent May File Proofs of Claim.............. 110
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TABLE OF CONTENTS
(continued)
PAGE
Section 10.10 Collateral and Guaranty Matters........................................ 110
ARTICLE XI MISCELLANEOUS................................................................. 111
Section 11.01 Amendments, Etc........................................................ 111
Section 11.02 Notices; Effectiveness; Electronic Communication....................... 113
Section 11.03 No Waiver; Cumulative Remedies......................................... 115
Section 11.04 Expenses; Indemnity; Damage Waiver..................................... 115
Section 11.05 Payments Set Aside..................................................... 117
Section 11.06 Successors and Assigns................................................. 117
Section 11.07 Treatment of Certain Information; Confidentiality...................... 121
Section 11.08 Right of Setoff........................................................ 122
Section 11.09 Interest Rate Limitation............................................... 123
Section 11.10 Counterparts; Integration; Effectiveness............................... 123
Section 11.11 Survival of Representations and Warranties............................. 123
Section 11.12 Severability........................................................... 123
Section 11.13 Replacement of Second Lien Lenders..................................... 124
Section 11.14 Governing Law; Jurisdiction; Etc....................................... 124
Section 11.15 Waiver of Jury Trial................................................... 125
Section 11.16 Entire Agreement....................................................... 126
Section 11.17 USA Patriot Act Notice................................................. 126
Section 11.18 Borrowers' Representative.............................................. 126
Section 11.19 Conflicts with Second Lien Mortgages................................... 127
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SCHEDULES
1.01 Consolidated EBITDA; Consolidated Interest Charges
2.01 Commitments and Applicable Percentages
5.03 Approvals and Consents
5.06 Litigation
5.08 Subsidiaries and Other Equity Investments
5.09 Ownership of Holdings
5.12 Existing Mortgages; Real Property
5.13 Environmental Matters
5.15 Insurance
5.16 Transactions with Affiliates
5.23 Labor Matters
7.01 Existing Liens
11.02 Second Lien Administrative Agent's Office, Certain Addresses for Notices
EXHIBITS
FORM OF
A Second Lien Loan Notice
B Note
C Compliance Certificate
D Second Lien Assignment and Assumption
E Second Lien Joinder Agreement
F Second Lien Opinion Matters
G Second Lien Pledge and Security Agreement
H Second Lien Mortgage
I Intercreditor Agreement
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SECOND LIEN LOAN AGREEMENT
This SECOND LIEN LOAN AGREEMENT is entered into as of November 10, 2004
(this "Agreement"), among (a) VALOR TELECOMMUNICATIONS ENTERPRISES, LLC, a
Delaware limited liability company ("Enterprises"), VALOR TELECOMMUNICATIONS
ENTERPRISES II, LLC, a Delaware limited liability company ("Enterprises II"),
each Domestic Subsidiary (such term and the other capitalized terms used herein
shall have the meanings assigned thereto in Section 1.01 of this Agreement) of
Enterprises or Enterprises II identified on the signature pages of this
Agreement as a "Borrower" (all such Subsidiaries, together with Enterprises, and
Enterprises II, hereinafter collectively referred to as the "Borrowers", and
each individually as a "Borrower"), (b) VALOR TELECOMMUNICATIONS, LLC, a
Delaware limited liability company ("Holdings"), VALOR TELECOMMUNICATIONS
SOUTHWEST, LLC, a Delaware limited liability company ("Southwest"), VALOR
TELECOMMUNICATIONS SOUTHWEST II, LLC, a Delaware limited liability company
("Southwest II"), and each other Domestic Subsidiary of Holdings identified on
the signature pages of this Agreement as a "Guarantor", including each Borrower
(all such Subsidiaries including each Borrower, together with Holdings,
Southwest and Southwest II, hereinafter collectively referred to as the
"Guarantors", and each individually as a "Guarantor"), (c) each lender from time
to time party hereto (collectively, the " Second Lien Lenders" and individually,
a "Second Lien Lender"), (d) BANK OF AMERICA, N.A., as Second Lien
Administrative Agent, (e) JPMORGAN CHASE BANK and WACHOVIA BANK, N.A., as Second
Lien Syndication Agents, (f) CIBC WORLD MARKETS CORP. and MERRILL, LYNCH,
▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED, as Second Lien Documentation Agents, and
(g) BANC OF AMERICA SECURITIES LLC and WACHOVIA CAPITAL MARKETS LLC, as Sole and
Exclusive Second Lien Lead Arrangers and as Sole Second Lien Book Managers.
RECITALS
WHEREAS, each Borrower is engaged in a business which is related to
the business of each other Borrower; and each Guarantor will derive substantial
direct and indirect benefit from the making of the Second Lien Loans by the
Second Lien Lenders to the Borrowers hereunder, and each Guarantor is willing to
guaranty the Second Lien Obligations of each Borrower under this Agreement as
hereinafter provided in order to obtain such benefits;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto covenant and agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01 DEFINED TERMS. As used in this Agreement, the following terms
shall have the meanings set forth below:
"Account Control Agreements" means, collectively, (a) at any time prior to
the Final Senior Termination Date, the Account Control Agreements each
substantially in the form of Exhibits C-1 and C-2, as applicable, to the Senior
Pledge and Security Agreement or (b) thereafter, otherwise in a form reasonably
acceptable to the Second Lien Administrative Agent.
"Acquisition" by any Person, means the purchase or acquisition in a single
transaction or a series of transactions by such Person individually or, together
with its Affiliates, of (a) any Equity Interests of another Person which are
sufficient to permit such Person and its Affiliates to Control such other Person
or (b) all or any substantial portion of the Property (including, without
limitation, all or a substantial portion of the Property comprising a division,
unit or line of business) of another Person, whether or not involving a merger
or consolidation with such other Person. "Acquire" has a meaning correlative
thereto.
"Acquisition Agreement" means for any Acquisition the stock purchase
agreement, asset purchase agreement, merger agreement or other definitive
agreement for such Acquisition.
"Acquisition Documents" means, for any Acquisition, the Acquisition
Agreement, including all exhibits and schedules thereto, and all other
agreements, documents and instruments relating to such Acquisition.
"Additional Intermediate Holding Company" has the meaning provided in the
definition of the term "Permitted Restructuring Transaction".
"Administrative Questionnaire" means an Administrative Questionnaire in a
form supplied by the Second Lien Administrative Agent.
"Affiliate" means, with respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified. "Control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise.
"Agreement" means this Second Lien Loan Agreement.
"Applicable Borrower" means, with respect to any Borrowing, each Borrower
that borrowed or was deemed to have borrowed a portion of the Second Lien Loans,
as designated by the Loan Party Representative in the Second Lien Loan Notice.
"Applicable Percentage" means, with respect to any Second Lien Lender at
any time, the percentage (carried out to the ninth decimal place) of the
Outstanding Amount represented by such Second Lien Lender's Second Lien Loans at
such time. The initial Applicable Percentage of each Second Lien Lender is set
forth opposite the name of such Second Lien Lender on Schedule 2.01 or in the
Second Lien Assignment and Assumption pursuant to which such Second Lien Lender
becomes a party hereto, as applicable.
"Applicable Prepayment Premium" means, in connection with any prepayment
of the Second Lien Loans made pursuant to Section 2.03(a) or (b), the percentage
set forth below of the aggregate principal amount of the Second Lien Loans to be
prepaid during each period set forth below:
2
PERIOD PERCENTAGE
------------------------------------------------------------- ----------
On and following the Closing Date through the first 3.0%
anniversary thereof
------------------------------------------------------------- ---
Following the first anniversary of the Closing Date 2.0%
through the second anniversary thereof
------------------------------------------------------------- ---
Following the second anniversary of the Closing Date 1.0%
through the third anniversary thereof
------------------------------------------------------------- ---
Thereafter 0.0%
------------------------------------------------------------- ---
"Applicable Rate" means: (a) in the case of Eurodollar Rate Loans, 7.75%;
and (b) in the case of Base Rate Loans, 6.75%. The Applicable Rate for
Eurodollar Rate Loans and Base Rate Loans shall be increased by 2.0% during the
periods and as provided in Section 2.06(b).
"Approved Fund" means any Fund that is administered or managed by (a) a
Second Lien Lender, (b) an Affiliate of a Second Lien Lender or (c) an entity or
an Affiliate of an entity that administers or manages a Second Lien Lender.
"Assignee Group" means two or more Eligible Assignees that are Affiliates
of one another or two or more Approved Funds managed by the same investment
advisor.
"Assignment Fee" means a processing and recordation fee charged by the
Second Lien Administrative Agent in the amount of $2,500 for each assignment to
an Eligible Assignee pursuant to Section 11.06(b); provided, however, that in
the event of two or more concurrent assignments to members of the same Assignee
Group (which may be effected by a suballocation of an assigned amount among
members of such Assignee Group) or two or more concurrent assignments by members
of the same Assignee Group to a single Eligible Assignee (or to an Eligible
Assignee and members of its Assignee Group), the Assignment Fee will be the sum
of (a) $2,500 plus (b) the following amount: (i) -0-, for the first four
assignments or suballocations to members of an Assignee Group (or from members
of an Assignee Group, as applicable), and (ii) $500, for each additional
assignment or suballocation to a member of such Assignee Group (or from a member
of such Assignee Group, as applicable).
"Attributable Indebtedness" means, on any date, (a) in respect of any
Capitalized Lease of any Person, the capitalized amount thereof that would
appear on a balance sheet of such Person prepared as of such date in accordance
with GAAP, and (b) in respect of any Off-Balance Sheet Obligation of any Person,
(i) in the case of an Off-Balance Sheet Obligation in an asset securitization
transaction of the type described under clause (a) of the definition thereof,
the unrecovered investment of such Person in transferred assets as to which such
Person has or may have recourse obligations or (ii) in the case of an
Off-Balance Sheet Obligation in an off-balance sheet lease or similar type
transaction described under clauses (b) or (c) of the definition thereof, the
capitalized amount of the remaining lease or similar type payments under the
relevant lease or similar agreement that would appear on a balance sheet of such
Person prepared as of such
3
date in accordance with GAAP if such lease or similar agreement were accounted
for as a Capitalized Lease.
"Audited Financial Statements" means (a) the audited consolidated balance
sheets of Holdings and its Subsidiaries for the fiscal years ended 2002 and
2003, and the related consolidated statements of income or operations,
shareholders' equity and cash flows for each such fiscal year of Holdings and
its Subsidiaries, including the notes thereto, (b) the audited consolidated
balance sheets of Southwest and its Subsidiaries for the fiscal years ended
2001, 2002 and 2003, and the related consolidated statements of income or
operations, shareholders' equity and cash flows for each such fiscal year of
Southwest and its Subsidiaries, including the notes thereto, and (c) the audited
consolidated balance sheets of Southwest II and its Subsidiaries for the fiscal
years ended 2002 and 2003, and the related consolidated statements of income or
operations, shareholders' equity and cash flows for each fiscal year of
Southwest II and its Subsidiaries, including the notes thereto.
"Available Equity Proceeds" means on any date of determination an amount
equal to the sum of the following cumulative amounts for the period commencing
on the Closing Date and ending on such date of determination:
(a) the aggregate amount of all Net Cash Proceeds received by
Holdings (or, in connection with or following a Permitted Restructuring
Transaction, the Surviving Parent) from Equity Issuances after the Closing Date
and as to which the Second Lien Administrative Agent has received a Compliance
Certificate pursuant to Section 6.02(b) confirming the date of each such Equity
Issuance and the amount of such Net Cash Proceeds, in each case net of the
amount of such Net Cash Proceeds required to be applied to a mandatory
prepayment of the Senior Loans or, after the Final Senior Termination Date, the
Second Lien Loans pursuant to Section 2.03(b)(iii), which have been contributed
by Holdings (or the Surviving Parent) to the Consolidated Borrower Parties;
minus
(b) the aggregate amount of such cumulative Net Cash Proceeds
which have been applied on any date prior to such date of determination to fund
any of the following payments by the Consolidated Borrower Parties, without
duplication:
(i) payment of all or a portion of the aggregate
consideration payable by the Consolidated Borrower Parties in connection
with a Permitted Acquisition;
(ii) payments to fund permitted Consolidated Capital
Expenditures by the Consolidated Parties;
(iii) any other Investments made by the Consolidated Parties
(other than Investments in any Consolidated Borrower Party (or Investments
in any other Consolidated Party to the extent made to fund directly or
indirectly through another Consolidated Party such an Investment in a
Consolidated Borrower Party), including, without limitation, in any
Consolidated Borrower Party organized to make, or acquired in, a Permitted
Acquisition); and
4
(iv) other Restricted Payments made by the Consolidated
Borrower Parties (other than Restricted Payments to any Consolidated
Borrower Party); provided, however, that any such Restricted Payment by a
Consolidated Borrower Party to any other person (other than another
Consolidated Party) which is made with the proceeds of a substantially
contemporaneous Restricted Payment from another Consolidated Party shall
be deemed to be a single Restricted Payment for these purposes.
"Bank of America" means Bank of America, N.A. and its successors.
"Banc of America Securities" means Banc of America Securities LLC and its
successors.
"Base Rate" means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest
in effect for such day as publicly announced from time to time by Bank of
America as its "prime rate." The "prime rate" is a rate set by Bank of America
based upon various factors including Bank of America's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement of such
change.
"Base Rate Loan" means a Second Lien Loan that bears interest based on the
Base Rate.
"Borrower" and "Borrowers" have the meanings specified in the introductory
paragraph hereto.
"Borrowers' Account" means the account of the Loan Party Representative on
behalf of the Borrowers with Bank of America at its office at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ABA No. ▇▇▇▇▇▇▇▇▇, or such other joint account of
the Borrowers as is agreed from time to time in writing between the Loan Party
Representative and the Second Lien Administrative Agent.
"Borrowing" means a borrowing consisting of simultaneous Second Lien Loans
of the same Type and, in the case of Eurodollar Rate Loans, having the same
Interest Period, made by the Borrowers on the Closing Date.
"Business Day" means any day other than a Saturday, Sunday or other day on
which commercial banks are authorized to close under the Laws of, or are in fact
closed in, the state where the Second Lien Administrative Agent's Office is
located and, if such day relates to any Eurodollar Rate Loan, means any such day
on which dealings in Dollar deposits are conducted by and between banks in the
London interbank eurodollar market.
"Businesses" has the meaning specified in Section 5.13(a).
"Capital Assets" means, with respect to any Person, all equipment, fixed
assets and real property or improvements of such Person, or replacements or
substitutions therefor or additions thereto, that, in accordance with GAAP, have
been or should be reflected as additions to property, plant or equipment on the
balance sheet of such Person or that have a useful life of more than one year.
5
"Capitalized Lease" means, as applied to any Person, any lease of any
Property (whether real, personal or mixed) by that Person as lessee which in
accordance with GAAP, is or should be accounted for, as a capital lease on the
balance sheet of such Person.
"Cash Equivalents" means:
(a) securities issued or directly and fully guaranteed or insured
by the United States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States of America is
pledged in support thereof) having maturities of not more than twelve (12)
months from the date of acquisition;
(b) marketable obligations issued by any State of the United
States of America or any local government or other political subdivision thereof
rated (at the time of acquisition of such security) at least "AA" by S&P, or the
equivalent thereof by ▇▇▇▇▇'▇ having maturities of not more than one year from
the date of acquisition;
(c) time deposits (including eurodollar time deposits),
certificates of deposit (including eurodollar certificates of deposit) and
bankers' acceptances of (i) any Senior Lender or any Affiliate of any Senior
Lender, (ii) any commercial bank of recognized standing either organized under
the laws of the United States (or any State or territory thereof) having capital
and surplus in excess of $500,000,000 or (iii) any bank whose short-term
commercial paper rating (at the time of acquisition of such security) by S&P is
at least "A-1" or the equivalent thereof (any such bank, an "Approved Bank"), in
each case with maturities of not more than one year from the date of
acquisition;
(d) commercial paper and variable or fixed rate notes issued by
any Senior Lender or Approved Bank or by the parent company of any Senior Lender
or Approved Bank and commercial paper and variable rate notes issued by, or
guaranteed by, any industrial or financial company with a short-term commercial
paper rating (at the time of acquisition of such security) of at least "A-2" or
the equivalent thereof by S&P or at least "P-2" or the equivalent thereof by
▇▇▇▇▇'▇, or guaranteed by any industrial company with a long-term unsecured debt
rating (at the time of at least "Aa" or the equivalent thereof by ▇▇▇▇▇'▇) and
in each case maturing within one year after the date of acquisition;
(e) repurchase agreements with any Senior Lender or any primary
dealer maturing within one year from the date of acquisition that are fully
collateralized by investment instruments that would otherwise be Cash
Equivalents; provided that the terms of such repurchase agreements comply with
the guidelines set forth in the "Federal Financial Institutions Examinations
Council Supervisory Policy - Repurchase Agreements of Depository Institutions
With Securities Dealers and Others, as adopted by the Comptroller of the
Currency in October 31, 1985"; and
(f) Investments classified in accordance with GAAP as current
assets of a Consolidated Party in money market investment programs registered
under the Investment Company Act of 1940, as amended, which are administered by
financial institutions that have the highest rating obtainable from either
▇▇▇▇▇'▇ or S&P, and not less than 95% of the portfolios of
6
which are limited solely to Investments of the character, quality and maturity
described in clauses (a), (b), (c), (d) and (e) of this definition.
"Casualty" means any casualty or other loss, damage or destruction to any
Property having a fair market value in excess of $100,000 per occurrence.
"Change in Law" means the occurrence, after the date of this Agreement, of
any of the following: (a) the adoption or taking effect of any law, rule,
regulation or treaty; (b) any change in any law, rule, regulation or treaty or
in the administration, interpretation or application thereof by any Governmental
Authority; or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority.
"Change of Control" means, at any time:
(a) (i) except following a Permitted Restructuring Transaction,
the Sponsors shall cease to directly or indirectly own and control legally and
beneficially (on a fully diluted basis), 50.1% or more of each class of Voting
Interests of Holdings or 50.1% or more of the outstanding Class A Preferred
Interests of Holdings, or (ii) after a Permitted Restructuring Transaction,
except following an IPO Transaction, the Sponsors shall cease to directly or
indirectly own and control legally and beneficially (on a fully diluted basis)
50.1% or more of each class of Voting Interests of the Surviving Parent or 50.1%
or more of each other class of Equity Interests of the Surviving Parent;
(b) except following a Permitted Restructuring Transaction,
Holdings shall cease to directly, or indirectly through Southwest II (or, after
a Permitted Restructuring Transaction, the Surviving Parent shall cease to
directly, or indirectly through other wholly-owned Loan Parties), own and
control legally and beneficially (on a fully diluted basis) (i) 90% or more of
the outstanding Class B Common Interests of Southwest (or any other Voting
Interests of Southwest with rights to designate or nominate any Independent
Manager of Southwest), or (ii) 90% or more of the outstanding Equity Interests
of any other class of Southwest; or the Southwest Operating Agreement shall be
amended or otherwise modified in any manner which reduces the voting power of
the holders of Class B Common Interests of Southwest, whether in absolute terms,
or relative to the holders of any other class of membership interests in
Southwest as a result of an increase in the voting power of such other holders;
(c) except following a Permitted Restructuring Transaction,
Holdings shall cease to directly or indirectly through other Loan Parties (or
after a Permitted Restructuring Transaction, the Surviving Parent shall cease to
directly, or indirectly through other Loan Parties) own and control legally and
beneficially, 100% of the outstanding Equity Interests of Southwest II;
(d) except following a Permitted Restructuring Transaction, any
Person other than Southwest shall become a member or a manager of Enterprises or
any Person other than Southwest II shall become a member of Enterprises II (or
after a Permitted Restructuring Transaction, any Person other than the Surviving
Parent or any of its wholly-owned Restricted Subsidiaries which are a Loan Party
shall become a member or a manager of Enterprises or Enterprises II);
7
(e) any Person other than Enterprises, Enterprises II or a wholly
owned Domestic Restricted Subsidiary of Enterprises or Enterprises II shall own
any Equity Interests in, or become the manager or general partner of, any
Borrower (other than Enterprises or Enterprises II), except pursuant to a
Disposition permitted pursuant to this Agreement;
(f) any Person or two or more Persons acting in concert (other
than the Sponsors or any Loan Party) shall have acquired by contract or
otherwise the power to exercise, directly or indirectly, a controlling influence
over the management or policies of any of the Loan Parties, except pursuant to a
Disposition permitted pursuant to this Agreement; or
(g) at any time after the consummation of an IPO Transaction:
(i) the Sponsors shall cease to directly own and control
legally and beneficially (A) 35% (on a fully diluted basis) or more of
each class of outstanding Voting Interests of the Surviving Parent or (B)
if the Surviving Parent has any class of outstanding Equity Interests
which are not Voting Interests, 50.1% (on a fully diluted basis) or more
of the outstanding Equity Interests of such class;
(ii) the Surviving Parent shall cease to own and control
legally and beneficially, either directly, or indirectly through
wholly-owned Domestic Restricted Subsidiaries which have become Guarantors
hereunder (including any of Holdings, Southwest and Southwest II which
survive the Restructuring Transaction), 100% of the outstanding Equity
Interests in Enterprises and Enterprises II;
(iii) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but
excluding any employee benefit plan of such person or its subsidiaries,
and any person or entity acting in its capacity as trustee, agent or other
fiduciary or administrator of any such plan) becomes the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange
Act of 1934, except that a person or group shall be deemed to have
"beneficial ownership" of all securities that such person or group has the
right to acquire (such right, an "option right"), whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly (other than any of the Sponsors, either individually or in any
combination), of 35% or more of Voting Interests of the Surviving Parent
entitled to vote for members of the board of directors or equivalent
governing body of the Surviving Parent on a fully-diluted basis (and
taking into account all such securities that such person or group has the
right to acquire pursuant to any option right); or
(iv) during any period of 12 consecutive months, a majority
of the members of the board of directors or other equivalent governing
body of the Surviving Parent cease to be composed of individuals (A) who
were members of that board or equivalent governing body on the first day
of such period, (B) whose election or nomination to that board or
equivalent governing body was approved by (1) the Sponsors or (2)
individuals referred to in clause (A) above constituting at the time of
such election or nomination at least a majority of that board or
equivalent governing body or (C) whose election or nomination to that
board or other equivalent governing body was approved by individuals
referred to in clauses (A) and (B) above constituting at the time of such
8
election or nomination at least a majority of that board or equivalent
governing body (excluding, in the case of both clause (B) and clause (C),
any individual whose assumption of office as a member of that board or
equivalent governing body occurs as a result of an actual or threatened
solicitation of proxies or consents for the election or removal of one or
more directors by any Person or group other than a solicitation for the
election of one or more directors by or on behalf of the board of
directors).
"Closing Date" means the first date all the conditions precedent in
Section 4.01 are satisfied or waived in accordance with Section 4.01 (or, in the
case of Section 4.01(m), waived by the Person entitled to receive the applicable
payment).
"Code" means the Internal Revenue Code of 1986.
"Collateral" means all the "Collateral" referred to in the Second Lien
Collateral Documents and any other assets and property that are or are intended
under the terms of the Second Lien Collateral Documents to be subject to Liens
in favor of the Second Lien Administrative Agent for the benefit of the Second
Lien Secured Parties.
"Commitment" means, as to each Second Lien Lender, its obligation to make
a Second Lien Loan to the Borrowers on the Closing Date pursuant to Section 2.01
in an aggregate principal amount not to exceed the amount set forth opposite
such Second Lien Lender's name on Schedule 2.01 or in the Second Lien Assignment
and Assumption pursuant to which such Second Lien Lender becomes a party hereto,
as applicable, as such amount may be adjusted from time to time in accordance
with this Agreement.
"Commitment Letter" means the commitment letter agreement dated October 7,
2004, among Holdings and the Second Lien Agents.
"Comparable Second Lien Collateral Document" has the meaning provided in
the Intercreditor Agreement.
"Compliance Certificate" means a certificate substantially in the form of
Exhibit C hereto.
"Condemnation" means any taking of Property having a fair market value in
excess of $100,000, or any part thereof or interest therein, for public or
quasi-public use under the power of eminent domain, by reason of any public
improvement or condemnation proceeding, or in any other manner.
"Condemnation Award" means all proceeds of any Condemnation or transfer in
lieu thereof.
"Consolidated Adjusted Net Income" means, for any period, net income (or
loss) for the Consolidated Parties determined on a consolidated basis for such
period in accordance with GAAP, but excluding (without duplication), to the
extent included therein, the following:
(a) the income (or loss) of any Person (other than a Consolidated
Party) in which a Consolidated Party owns or otherwise holds an Equity Interest,
except to the extent of
9
the amount of dividends and other distributions actually paid to such
Consolidated Party in cash during such period (including, without limitation,
any dividends or other distributions received in cash from any Wireless
Partnerships);
(b) solely for purposes of calculating Excess Cash Flow, the
income (or loss) of any Restricted Subsidiary accrued during such period but
prior to the date such Person is Acquired by a Consolidated Party or the income
(or loss) attributable to Property comprising a line of business accrued during
such period but prior to the date such Property is Acquired by a Restricted
Subsidiary; and
(c) the income (or loss) of any Restricted Subsidiary, or the
income (or loss) attributable to Property comprising a line of business of any
Restricted Subsidiary, in each case, which is Disposed of during such period;
provided, however, that solely for purposes of calculating Excess Cash Flow, the
income (or loss) of any such Person or Property shall not be excluded.
"Consolidated Borrower Parties" means Enterprises, Enterprises II and each
of their respective Domestic Restricted Subsidiaries, collectively, and
"Consolidated Borrower Party" means any one of them.
"Consolidated Capital Expenditures" means, for any period for the
Consolidated Parties determined on a consolidated basis, without duplication (a)
all expenditures made by the Consolidated Parties directly or indirectly during
such period for Capital Assets (whether paid in cash or other consideration or
accrued as a liability and including, without limitation, all expenditures for
maintenance and repairs which are required, in accordance with GAAP, to be
capitalized on the books of such Person) and (b) solely to the extent not
otherwise included in clause (a) of this definition, the aggregate principal
amount of all Indebtedness (including, without limitation, obligations in
respect of Capitalized Leases) assumed or incurred by the Consolidated Parties
during such period in connection with any such expenditures for Capital Assets.
For purposes of this definition, (i) Permitted Acquisitions shall not be
included in Capital Expenditures, and (ii) the purchase price of equipment that
is purchased substantially contemporaneously with the trade-in of existing
equipment or with insurance proceeds shall be included in Capital Expenditures
only to the extent of the gross amount by which such purchase price exceeds the
credit granted by the seller of such equipment for the equipment being traded in
at such time or the amount of such insurance proceeds, as the case may be.
"Consolidated EBITDA" means, for any period for the Consolidated Parties
determined on a consolidated basis, an amount equal to the sum of:
(a) Consolidated Adjusted Net Income for such period, plus
(b) the following with respect to the Consolidated Parties to the
extent deducted in calculating such Consolidated Adjusted Net Income (without
duplication):
(i) Consolidated Interest Charges for such period;
(ii) the provision for Federal, state, local and foreign
income taxes for such period;
10
(iii) depreciation and amortization expense;
(iv) nonrecurring costs incurred during the period commencing
September 30, 2004, and ending on and including the Closing Date not to
exceed $5,000,000, and the costs related to the Transaction and the
previously proposed income deposit securities offering and related
refinancing transactions;
(v) transaction costs related to Permitted Acquisitions, and
other nonrecurring costs incurred following the Closing Date; provided,
however, that all such costs and expenses under this clause (v) shall not
exceed $10,000,000 in any four consecutive fiscal quarter period;
(vi) losses attributable to the Disposition of Property of a
Consolidated Party (other than inventory Disposed of in the ordinary
course of business); and
(vii) other losses and expenses reducing Consolidated Adjusted
Net Income which do not represent a cash item in such period or any future
period; minus
(c) the following with respect to the Consolidated Parties to the
extent included in calculating such Consolidated Adjusted Net Income:
(i) Federal, state, local and foreign income tax credits of
the Consolidated Parties for such period;
(ii) gains attributable to the Disposition of any Property of
a Consolidated Party (other than Inventory Disposed of in the ordinary
course of business);
(iii) all other items increasing Consolidated Adjusted Net
Income for such period which do not represent a cash item in such period
or any future period;
(iv) any interest income of the Consolidated Parties for such
period; and
(v) any dividend income of the Consolidated Parties for such
period, including dividends or other distributions from the Wireless
Partnerships, but in any case, excluding any RTFC Patronage Distributions,
for such period.
Notwithstanding the foregoing, until the end of the third full fiscal quarter of
Holdings ended after the Closing Date the Consolidated EBITDA for the
Consolidated Parties for each four fiscal quarter period ending prior to such
date shall be calculated as set forth on Schedule 1.01.
"Consolidated First Lien Leverage Ratio" means, as of any date of
determination, the ratio of (a) the difference between (i) the outstanding
amount of Consolidated Funded Indebtedness as of such date and (ii) the sum of
(A) the outstanding principal amount of Second Lien Loans, Senior Subordinated
Loans and Permitted Additional Subordinated Debt as of such date, and (B) if no
revolving loans are outstanding under the Senior Credit Agreement on such date,
the aggregate amount of cash and Cash Equivalents of the Consolidated Borrower
Parties
11
as of such date, to (b) Consolidated EBITDA for the period of the four
consecutive fiscal quarters most recently ended on or prior to such date.
"Consolidated Funded Indebtedness" means, for the Consolidated Parties
determined on a consolidated basis, as of any date of determination, without
duplication, the sum of (a) the outstanding principal amount of all obligations,
whether current or long-term, for borrowed money (including the outstanding
principal amount of Senior Loans (other than any Tranche D Term Loans under and
as such term is defined in the Senior Credit Agreement), Senior Subordinated
Loans and any Permitted Additional Subordinated Debt and the outstanding
principal amount of Second Lien Loans hereunder) and the outstanding principal
amount of all obligations evidenced by bonds, debentures, notes, loan agreements
or other similar instruments, (b) the outstanding principal amount of all
purchase money Indebtedness, (c) the stated amount of all direct obligations
arising under letters of credit (including standby and commercial), bankers'
acceptances, bank guaranties, surety bonds and similar instruments, (d) the
outstanding principal amount of all obligations in respect of the deferred
purchase price of property or services (other than trade accounts payable in the
ordinary course of business), (e) Attributable Indebtedness in respect of
Capitalized Leases and Off-Balance Sheet Obligations, (f) in respect of all
Guarantees with respect to outstanding Indebtedness of the types specified in
clauses (a) through (e) above, the principal amount, stated amount and
Attributable Indebtedness of all such Indebtedness, and (g) the amount of all
Indebtedness of the types referred to in clauses (a) through (f) above of any
partnership or joint venture (other than a joint venture that is itself a
corporation or limited liability company) in which any Consolidated Party is a
general partner or joint venturer, unless such Indebtedness is expressly made
non-recourse to such Consolidated Party.
"Consolidated Interest Charges" means, for any period for the Consolidated
Parties determined on a consolidated basis, the difference between (a) the sum
of all interest, premium payments, fees, charges and related expenses of the
Consolidated Parties in connection with Indebtedness (including capitalized
interest) whether paid or accrued, in each case to the extent treated as
interest in accordance with GAAP, including the portion of rent expense of the
Consolidated Parties with respect to such period under Capitalized Leases that
is treated as interest in accordance with GAAP, minus (b) the sum of all
interest income received in such period; provided, however, that Consolidated
Interest Charges under clause (a) above shall not include any amortization of
deferred transaction costs, debt issuance expenses or original issue discount;
and provided further, that until the end of the fourth full fiscal quarter of
Holdings which commences on or after the Closing Date, Consolidated Interest
Charges for any four fiscal quarter period shall instead be calculated as
provided in Schedule 1.01.
"Consolidated Parties" means Holdings and each of its Restricted
Subsidiaries (regardless of whether or not consolidated with Holdings for
purposes of GAAP), collectively, and "Consolidated Party" means any one of them.
"Consolidated Total Leverage Ratio" means, as of any date of
determination, the ratio of (a) the difference between (i) the outstanding
amount of Consolidated Funded Indebtedness as of such date and (ii) if no
revolving loans under the Senior Credit Facility are outstanding on such date,
the aggregate amount of the cash and Cash Equivalents of the Consolidated
Borrower
12
Parties as of such date, to (b) Consolidated EBITDA for the period of the four
consecutive fiscal quarters most recently ended on or prior to such date.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person, or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control" has the meaning provided in the definition of the term
"Affiliate".
"Debt Issuance" means the issuance by any Consolidated Party of any
Indebtedness for borrowed money.
"Debtor Relief Laws" means the Bankruptcy Code of the United States, and
all other liquidation, conservatorship, bankruptcy, assignment for the benefit
of creditors, moratorium, rearrangement, receivership, insolvency, fraudulent
conveyance or transfer, reorganization, or similar debtor relief Laws of the
United States or other applicable jurisdictions from time to time in effect and
affecting the rights of creditors generally.
"Default" means any event or condition that constitutes an Event of
Default or that, with the giving of any notice, the passage of time, or both,
would be an Event of Default.
"Default Rate" means an interest rate equal to (a) in the case of
Eurodollar Rate Loans, the sum of (i) the Eurodollar Rate for Eurodollar Rate
Loans, plus (ii) the Applicable Rate applicable to Eurodollar Rate Loans, plus
(iii) 2% per annum, (b) in the case of Base Rate Loans, the sum of (i) the Base
Rate for Base Rate Loans plus (ii) the Applicable Rate applicable to Base Rate
Loans, plus (iii) 2% per annum and (c) for all other purposes, the sum of (i)
the Base Rate plus (ii) the Applicable Rate applicable to Base Rate Loans plus
(iii) 2% per annum.
"Defaulting Second Lien Lender" means any Second Lien Lender (a) that has
failed to fund any portion of a Borrowing hereunder, (b) that has otherwise
failed to pay over to the Second Lien Administrative Agent or any other Second
Lien Lender any other amount required to be paid by it hereunder within one
Business Day of the date when due, unless the subject of a good faith dispute,
or (c) that has been deemed insolvent or become the subject of a bankruptcy or
insolvency proceeding.
"Designation" means a Designation by Holdings of a newly organized or
newly Acquired Subsidiary as an Unrestricted Subsidiary pursuant to Section 6.11
and in accordance with Section 7.14. "Designate" has the meaning correlative
thereto.
"Disposition" or "Dispose" means the sale, transfer, license, lease,
Casualty or Condemnation or other disposition (including any Sale and Leaseback
Transaction or any sale of any Equity Interest of any Restricted Subsidiary or
of any Unrestricted Subsidiary that is a First-Tier Subsidiary) of any property
having a fair market value in excess of $100,000 sold, transferred, licensed,
leased or otherwise disposed of in a single transaction or a series of related
transactions by any Person, including any sale, assignment, transfer or other
disposal, with or without recourse, of any notes issued by any other Person or
accounts receivable or any rights and claims associated therewith or any capital
stock of, or other Equity Interests in, any other
13
Person; provided that the foregoing shall not be deemed to imply that any such
disposition is permitted under this Agreement. The term "Disposition" shall not
include any Equity Issuance.
"Dollar" and "$" mean lawful money of the United States.
"Domestic Subsidiary" means a Subsidiary that is organized under the Laws
of a political subdivision of the United States. A "Domestic Restricted
Subsidiary" is a Restricted Subsidiary which is a Domestic Subsidiary.
"Eligible Assignee" means: (a) a Second Lien Lender; (b) an Affiliate of a
Second Lien Lender; (c) an Approved Fund; and (d) any other Person (other than a
natural person) approved by the Second Lien Administrative Agent (each such
approval not to be unreasonably withheld or delayed); provided that
notwithstanding the foregoing, "Eligible Assignee" shall not include any Loan
Party or any Affiliate or Subsidiary of a Loan Party.
"Enforcement Expenses" has the meaning specified in Section 11.04(a)(iii).
"Enterprises" has the meaning specified in the first paragraph of this
Agreement.
"Enterprises II" has the meaning specified in the first paragraph of this
Agreement.
"Environmental Laws" means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including those related to
Hazardous Materials, air emissions and discharges to waste or public systems.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of any Consolidated Party directly or indirectly
resulting from or based upon (a) violation of any Environmental Law, (b) the
generation, use, handling, transportation, storage, treatment or disposal of any
Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.
"Equity Interests" means, with respect to any Person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of
the warrants, options or other rights for the purchase or acquisition from such
Person of shares of capital stock of (or other ownership or profit interests in)
such Person, all of the securities convertible into or exchangeable for shares
of capital stock of (or other ownership or profit interests in) such Person or
warrants, rights or options for the purchase or acquisition from such Person of
such shares (or such other interests), and all of the other ownership or profit
interests in such Person (including partnership, member or trust interests
therein), whether voting or nonvoting.
"Equity Issuance" means any issuance by Holdings (or in connection with or
following a Permitted Restructuring Transaction, the Surviving Parent) of any of
its Equity Interests to any Person or receipt by Holdings of a capital
contribution from any Person, including the issuance
14
of Equity Interests pursuant to the exercise of options or warrants and the
conversion of any Indebtedness to equity; provided that the foregoing shall not
be deemed to imply that any such issuance is permitted under this Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with Holdings within the meaning of Section
414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes
of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension Plan;
(b) a withdrawal by Holdings or any ERISA Affiliate from a Pension Plan subject
to Section 4063 of ERISA during a plan year in which it was a substantial
employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of
operations that is treated as such a withdrawal under Section 4062(e) of ERISA;
(c) a complete or partial withdrawal by Holdings or any ERISA Affiliate from a
Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the treatment
of a Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or
the commencement of proceedings by the PBGC to terminate a Pension Plan or
Multiemployer Plan; (e) an event or condition which constitutes grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any
liability under Title IV of ERISA, other than for PBGC premiums due but not
delinquent under Section 4007 of ERISA, upon Holdings or any ERISA Affiliate.
"Eurodollar Base Rate" means, for such Interest Period, the rate per annum
equal to the British Bankers Association LIBOR Rate ("BBA LIBOR") as published
by Reuters (or other commercially available source providing quotations of BBA
LIBOR designated by the Second Lien Administrative Agent from time to time) at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period for deposits in Dollars (for delivery on the first day
of such Interest Period) with a term equivalent to such Interest Period. If such
rate is not available at any time for any reason, then the "Eurodollar Base
Rate" for such Interest Period shall be the rate per annum determined by the
Second Lien Administrative Agent as the rate of interest at which deposits in
Dollars for delivery on the first day of such Interest Period in same day funds
in the approximate amount of the Eurodollar Rate Loan being made, continued or
converted by Bank of America and with a term equivalent to such Interest Period
would be offered by Bank of America's London Branch to major banks in the London
interbank eurodollar market at their request at approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest Period.
"Eurodollar Rate" means for any Interest Period with respect to any
Eurodollar Rate Loan, a rate per annum determined by the Second Lien
Administrative Agent pursuant to the following formula:
Eurodollar Base Rate
Eurodollar Rate = ------------------------------------
1.00 - Eurodollar Reserve Percentage
15
"Eurodollar Rate Loan" means a Second Lien Loan that bears interest based
on the Eurodollar Rate.
"Eurodollar Reserve Percentage" means, for any day during any Interest
Period, the reserve percentage (expressed as a decimal, carried out to five
decimal places) in effect on such day, whether or not applicable to any Second
Lien Lender, under regulations issued from time to time by the FRB for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to Eurocurrency
funding (currently referred to as "Eurocurrency liabilities"). The Eurodollar
Rate for each outstanding Eurodollar Rate Loan shall be adjusted automatically
as of the effective date of any change in the Eurodollar Reserve Percentage.
"Event of Default" has the meaning specified in Section 8.01.
"Excess Cash Flow" means, for any fiscal year of Holdings, an amount equal
to the sum, without duplication, of:
(a) Consolidated Adjusted Net Income for such fiscal year; plus
(b) the following amounts with respect to the Consolidated Parties
to the extent deducted in calculating such Consolidated Adjusted Net Income:
(i) depreciation and amortization expense;
(ii) losses attributable to the Disposition of Property of a
Consolidated Party (other than inventory Disposed of in the ordinary
course of business); and
(iii) other losses and expenses reducing such Consolidated
Adjusted Net Income which do not represent a cash item in such period or
any future period; minus
(c) the following amounts with respect to the Consolidated Parties
to the extent included in calculating such Consolidated Adjusted Net Income:
(i) gains attributable to the Disposition of any Property of
a Consolidated Party (other than Inventory Disposed of in the ordinary
course of business); and
(ii) all other items increasing such Consolidated Adjusted
Net Income which do not represent a cash item in such period or any future
period; minus
(d) the following amounts paid by the Consolidated Parties during
such fiscal year (to the extent such payments were permitted to be paid by this
Agreement):
(i) Consolidated Capital Expenditures for such fiscal year
(except to the extent financed by the incurrence of any Consolidated
Funded Indebtedness or with Available Equity Proceeds);
16
(ii) mandatory payments and prepayments of Consolidated
Funded Indebtedness (other than (A) payments and prepayments under the
Revolving Facility under the Senior Credit Agreement prior to the Final
Senior Termination Date which are not accompanied by a concurrent
reduction of commitments thereunder, (B) mandatory prepayments of the
Tranche D Loans under the Senior Credit Agreement with the proceeds of any
amortization payments on the SCCs and (C) any Consolidated Funded
Indebtedness refinanced by the incurrence of any other Consolidated Funded
Indebtedness); and
(iii) any Permitted Tax Dividend paid to members of Holdings
and Southwest during such fiscal year pursuant to Section 7.06(d)(iv);
plus
(e) the amount, if any, by which Net Working Capital decreased
during such fiscal year; minus
(f) the amount, if any, by which Net Working Capital increased
during such fiscal year.
"Excluded Debt Issuance Proceeds" means the Net Cash Proceeds from any
Debt Issuance by any Consolidated Party which is (a) permitted pursuant to
Section 7.03(a), (b), (c), (d), (e), (f), (g) or (h); or (b) Permitted
Additional Subordinated Debt permitted pursuant to Section 7.03(i), but only to
the extent that not later than 90 days after any such Debt Issuance, such Net
Cash Proceeds are applied as provided in clauses (i), (ii) or (iv) of Section
7.03(i).
"Excluded Equity Issuance Proceeds" means the Net Cash Proceeds from any
of the following Equity Issuances: (a) any Equity Issuance by a Loan Party to
another Loan Party; (b) any receipt by a Loan Party of a capital contribution
from any other Loan Party; (c) any receipt by Holdings of a capital contribution
from any Sponsor or any Equity Issuance by Holdings to any Sponsor; and (d) the
Net Cash Proceeds from any other Equity Issuance, but only to the extent that
not later than 90 days after any such Equity Issuance, such Net Cash Proceeds
are applied (i) to finance a Permitted Acquisition, (ii) to finance Consolidated
Capital Expenditures or (iii) to finance an Investment pursuant to Section
7.02(i).
"Excluded Taxes" means, with respect to the Second Lien Administrative
Agent, any Second Lien Lender or any other recipient of any payment to be made
by or on account of any obligation of the Borrowers hereunder or under any other
Second Lien Loan Document, (a) taxes imposed on or measured by its overall net
income by the United States, and taxes imposed on or measured by its overall net
income (however denominated), and franchise taxes imposed on it (in lieu of net
income taxes), by the jurisdiction (or any political subdivision thereof) under
the laws of which such recipient is organized or in which its principal office
is located or, in the case of any Second Lien Lender, in which its applicable
Lending Office is located, or in which it is or was "doing business" or is or
was otherwise connected (other than any jurisdiction to the extent that it is
deemed to be doing business or is deemed to be otherwise connected by reason of
having executed and delivered this Agreement and performed its obligations
hereunder or enforced its rights hereunder or under any other Second Lien Loan
Document), (b) any branch profits taxes imposed by the United States or any
similar tax imposed by any other jurisdiction in which it is located and (c) in
the case of a Foreign Lender, any withholding tax that is imposed
17
on amounts payable to such Foreign Lender at the time such Foreign Lender
becomes a party hereto (or designates a new Lending Office) or is attributable
to such Foreign Lender's failure or inability (other than as a result of a
Change in Law) to comply with Section 3.01(e), except to the extent that such
Foreign Lender (or its assignor, if any) was entitled, at the time of
designation of a new Lending Office (or assignment), to receive additional
amounts from the Borrowers with respect to such withholding tax pursuant to
Section 3.01(a).
"Existing Credit Agreements" means, collectively, the Existing Valor
Credit Agreement and the Existing Kerrville Credit Agreement.
"Existing Kerrville Credit Agreement" means that certain Amended and
Restated Credit Agreement dated as of January 31, 2002, as supplemented by a
Credit Agreement Supplement dated as of January 1, 2003, and as amended by
Consent and Amendment No. 1 dated as of April 12, 2004, each among Enterprises
II and its Subsidiaries, Southwest II, the lenders party thereto and CoBank,
ACB, as administrative agent.
"Existing Mortgage" means each Mortgage or Deed of Trust under the
Existing Credit Agreements as more particularly described on Schedule 5.12.
"Existing Subordinated Notes" means those certain Senior Subordinated
Notes issued by Southwest to the Sponsors and/or their Affiliates, including
those issued on June 30, 2000, and August 31, 2000 and the deferred interest
notes issued by Southwest pursuant thereto.
"Existing Valor Credit Agreement" means that certain Amended and Restated
Credit Agreement dated as of August 31, 2000, as supplemented by Credit
Agreement Supplements dated as of January 1, 2003, and a Loan Document
Supplement dated as of July 1, 2003, and as amended by Amendment No. 1 dated as
of October 3, 2003, each among Enterprises and its Subsidiaries, Southwest, the
lenders party thereto from time to time and Bank of America, N.A. and JPMorgan
Chase Bank (formerly The Chase Manhattan Bank), as the administrative agents.
"FCC" means the Federal Communications Commission or any successor
Governmental Authority.
"FCC License" means any Governmental Authorization granted or issued by
the FCC.
"Federal Funds Rate" means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate (rounded upward,
if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on
such day on such transactions as determined by the Second Lien Administrative
Agent.
"Fee Letter" means the fee letter agreement dated October 7, 2004, among
Holdings and the Second Lien Agents.
18
"Final Second Lien Termination Date" means the date on which the Second
Lien Termination Date has occurred for all Loan Parties under this Agreement, as
amended, restated, supplemented or otherwise modified from time to time,
together with any Refinancing Agreement pursuant to which any of the Second Lien
Obligations are refinanced, restructured, renewed, extended, refunded or
replaced.
"Final Senior Termination Date" has the meaning provided in the Senior
Credit Agreement.
"First-Tier Subsidiary" means for any Person each Subsidiary of such
Person in which such Person directly owns any Equity Interests.
"Fixtures" has the meaning specified in the Second Lien Pledge and
Security Agreement.
"Foreign Lender" means any Second Lien Lender that is organized under the
laws of a jurisdiction other than that in which the Borrowers are residents for
tax purposes. For purposes of this definition, the United States, each State
thereof and the District of Columbia shall be deemed to constitute a single
jurisdiction.
"Foreign Subsidiary" means a Subsidiary that is not a Domestic Subsidiary.
"FRB" means the Board of Governors of the Federal Reserve System of the
United States.
"Fund" means any Person (other than a natural person) that is (or will be)
engaged as one of its material activities in making, purchasing, holding or
otherwise investing in commercial loans and similar extensions of credit in the
ordinary course.
"GAAP" means generally accepted accounting principles in the United States
set forth in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or such other
principles as may be approved by a significant segment of the accounting
profession in the United States, that are applicable to the circumstances as of
the date of determination, consistently applied.
"Governmental Authority" means the government of the United States or any
other nation, or of any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government (including
the FCC, any PUC and any supra-national bodies such as the European Union or the
European Central Bank).
"Governmental Authorization" means any material authorization, approval,
consent, franchise, license, covenant, order, ruling, permit, certification,
exemption, notice, declaration or similar right, undertaking or other action of,
to or by, or any material filing, qualification or registration with, any
Governmental Authority, including, without limitation, any FCC License and any
PUC Authorization.
19
"Granting Lender" has the meaning specified in Section 11.06(h).
"Guarantee" means, as to any Person, (a) any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person (or any right, contingent or otherwise, of
any holder of such Indebtedness to obtain any such Lien). The amount of any
Guarantee shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guarantee is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith. The term "Guarantee" as a verb has a
corresponding meaning.
"Guaranteed Obligations" has the meaning specified in Section 9.01(a).
"Guarantor" means Holdings, Southwest, Southwest II, each Borrower, and
each other Restricted Subsidiary of Holdings identified as a "Guarantor" in a
Second Lien Joinder Agreement delivered after the date hereof pursuant to
Sections 6.11 or 7.04(a)(ii) or (iii), together with their successors and
assigns.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Holdings" has the meaning specified in the introductory paragraph hereto.
"Indebtedness" means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;
(b) all direct or contingent obligations of such Person arising
under letters of credit, bankers' acceptances, bank guaranties, surety bonds and
similar instruments;
20
(c) net obligations of such Person under any Swap Contract;
(d) all obligations of such Person to pay the deferred purchase
price of property or services (other than trade accounts payable in the ordinary
course of business);
(e) indebtedness (excluding prepaid interest thereon) secured by a
Lien on property owned or being purchased by such Person (including indebtedness
arising under conditional sales or other title retention agreements), whether or
not such indebtedness shall have been assumed by such Person or is limited in
recourse;
(f) Capitalized Leases and Off-Balance Sheet Obligations;
(g) all obligations of such Person to purchase, redeem, retire,
defease or otherwise make any payment in respect of any Equity Interest in such
Person or any other Person, valued, in the case of a redeemable preferred
interest, at the greater of its voluntary or involuntary liquidation preference
plus accrued and unpaid dividends;
(h) all Indebtedness in respect of any of the foregoing of another
Person secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on the property,
including, without limitation, accounts and contract rights owned by such
Person, even though such Person has not assumed or become liable for such
Indebtedness; and
(i) all Guarantees of such Person in respect of any of the
foregoing.
For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer in an amount proportionate to such
Person's interest therein, unless such Indebtedness is non-recourse to such
Person or except to the extent such Indebtedness is owed by such partnership or
joint venture to such Person. The amount of any net obligation under any Swap
Contract on any date shall be deemed to be the Swap Termination Value thereof as
of such date. The amount of any Capitalized Lease or Off-Balance Sheet
Obligation as of any date shall be deemed to be the amount of Attributable
Indebtedness in respect thereof as of such date.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Indemnitee" has the meaning specified in Section 11.04(b).
"Information" has the meaning specified in Section 11.07.
"Insurance Proceeds" means all insurance proceeds (other than business
interruption insurance proceeds), damages, awards, claims and rights of action
with respect to any Casualty.
"Intellectual Property Collateral" has the meaning specified in the Second
Lien Pledge and Security Agreement.
21
"Intercompany Note" means the promissory notes issued as contemplated by
Section 7.02(d), substantially in the form of Exhibit D to the Second Lien
Pledge and Security Agreement.
"Intercreditor Agreement" means an Intercreditor Agreement dated as of the
date hereof among the Loan Party Representative, the Senior Administrative Agent
and the Second Lien Administrative Agent, substantially in the form of Exhibit
I.
"Interest Payment Date" means (a) as to any Eurodollar Rate Loan, the last
day of each Interest Period applicable to such Second Lien Loan and the Maturity
Date; provided, however, that if any Interest Period for a Eurodollar Rate Loan
exceeds three months, the respective dates that fall every three months after
the beginning of such Interest Period shall also be Interest Payment Dates, and
(b) as to any Base Rate Loan, the last Business Day of each March, June,
September and December and the Maturity Date for such Second Lien Loan.
"Interest Period" means, as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or converted to or
continued as a Eurodollar Rate Loan and ending on the date one, two, three or
six months thereafter, as selected by the Loan Party Representative in the
applicable Second Lien Loan Notice; provided that:
(a) any Interest Period that would otherwise end on a day that is
not a Business Day shall be extended to the next succeeding Business Day unless,
in the case of a Eurodollar Rate Loan, such Business Day falls in another
calendar month, in which case such Interest Period shall end on the immediately
preceding Business Day;
(b) any Interest Period pertaining to a Eurodollar Rate Loan that
begins on the last Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the calendar month at the
end of such Interest Period; and
(c) no Interest Period shall extend beyond the Maturity Date for
the applicable Second Lien Loan.
"Investment" means, as to any Person, any direct or indirect acquisition
or investment by such Person, whether by means of (a) the purchase or other
acquisition of capital stock or other securities of another Person, (b) a loan,
advance or capital contribution to, Guarantee or assumption of debt of, or
purchase or other acquisition of, any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person and any arrangement pursuant to which the investor
Guarantees Indebtedness of such other Person, or (c) the purchase or other
acquisition (in one transaction or a series of transactions) of Property of
another Person that constitute a division, business unit or line of business.
For purposes of covenant compliance, the amount of any Investment shall be the
amount (or the fair market value of property) actually invested, without
adjustment for subsequent increases or decreases in the value of such
Investment. A Permitted Acquisition or Permitted Asset Exchange by a Loan Party
shall be deemed to be an Investment by such Loan Party in the Person acquired by
such Loan Party, the Property acquired by such Loan Party or the
22
Person organized by such Loan Party to acquire Property the subject of such
transaction, as the case may be.
"IP Rights" has the meaning specified in Section 5.11.
"IPO Transaction" means an initial public offering under the Securities
Act of 1933, as amended, of Equity Interests of the Surviving Parent.
"IRS" means the United States Internal Revenue Service.
"Laws" means, collectively, all international, foreign, Federal, state and
local statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
"Lending Office" means, as to any Second Lien Lender, the office or
offices of such Second Lien Lender described as such in such Second Lien
Lender's Administrative Questionnaire, or such other office or offices as to
which a Second Lien Lender may from time to time notify the Loan Party
Representative and the Second Lien Administrative Agent.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory, judgment or other), charge, or
preference, priority or other security interest or preferential arrangement of
any kind or nature whatsoever (including any conditional sale or other title
retention agreement, any easement, right of way or other encumbrance on title to
real property and any financing lease having substantially the same economic
effect as any of the foregoing).
"Loan Party" means, each Borrower, Holdings and each other Guarantor, and
"Loan Parties" means any combination of the foregoing.
"Loan Party Representative" has the meaning specified in Section 11.18.
"Master Agreement" has the meaning specified in the definition of "Swap
Contract".
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, liabilities
(actual or contingent) or condition (financial or otherwise) of the Consolidated
Parties taken as a whole, (b) a material impairment of the ability of any Loan
Party to perform its obligations under the Second Lien Loan Documents to which
it is a party (other than pursuant to the Intercreditor Agreement), or (c) a
material impairment of the rights, powers, or remedies of the Second Lien
Administrative Agent, the Second Lien Lenders under the Second Lien Loan
Documents (other than pursuant to the Intercreditor Agreement).
"Material Documents" means (a) the Organization Documents of each Loan
Party, (b) the Senior Loan Documents, (c) the Senior Subordinated Loan
Documents, (d) any Permitted
23
Additional Subordinated Debt Documents (in respect of Indebtedness in a
principal amount in excess of $15,000,000), and (e) the Acquisition Documents
for any Permitted Acquisition with a purchase price in excess of $15,000,000.
"Maturity Date" means the seventh anniversary of the Closing Date.
"Maximum Rate" has the meaning specified in Section 11.09.
"Maximum Senior Debt Amount" has the meaning provided in Section 7.03(a).
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc. and any successor in
interest.
"Mortgaged Property" means on any date all Real Property Assets subject to
a Second Lien Mortgage on such date.
"Multiemployer Plan" means any employee benefit plan of the type described
in Section 4001(a)(3) of ERISA, to which Holdings or any ERISA Affiliate makes
or is obligated to make contributions, or during the preceding five plan years,
has made or has been obligated to make contributions.
"NAIC" means the National Association of Insurance Commissioners, a
national organization of insurance regulators.
"Net Cash Proceeds" means:
(a) with respect to any Disposition by a Consolidated Party, (x)
the gross amount of cash proceeds (including Insurance Proceeds and Condemnation
Awards in the case of any Casualty or Condemnation) actually paid to or actually
received by any Consolidated Party in respect of such Disposition (including any
cash proceeds received as income or other proceeds of any noncash proceeds of
any Disposition as and when received), less (y) the sum without duplication of
the following amounts, but only to the extent not already deducted in arriving
at the amount referred to in clause (a) (x) above:
(i) the amount, if any, of all legal fees, brokerage fees,
finders fees, consulting fees, accounting fees, commissions, costs and
other expenses (other than those payable to any Consolidated Party or any
Affiliate of any such Person) that are incurred by a Consolidated Party in
connection with such Disposition and are payable by such seller of the
assets or property to which such Disposition relates;
(ii) the amount of all taxes payable or reasonably
anticipated to be payable by the Consolidated Parties in connection with
such Disposition;
(iii) the outstanding principal amount of, the premium or
penalty, if any, on, and any accrued and unpaid interest on, any
Indebtedness (other than the Indebtedness outstanding under the Senior
Loan Documents and the Second Lien Loan Documents) that is secured by a
Lien on the property and assets subject to such Disposition and is
required to be repaid by any Consolidated Party under the terms thereof as
a result of such Disposition and the amount of any consent payment
required to
24
be paid by any Consolidated Party to the holder of any Indebtedness whose
consent to such Disposition is required;
(iv) in the case of any Disposition of any interest in any
Wireless Partnership by any Loan Party, any amount of the gross proceeds
from such disposition that is due to be paid by any Loan Party (other than
to a Loan Party) pursuant to Contractual Obligations relating to such
Wireless Partnership as a result of such Disposition; and
(v) any other appropriate amounts that must be set aside as
a reserve in accordance with GAAP against any liabilities of the
Consolidated Party associated with such Disposition;
(b) with respect to any Equity Issuance or Debt Issuance, the
gross amount of cash proceeds paid to or received by any Consolidated Party in
respect of such Equity Issuance or Debt Issuance as the case may be (including
cash proceeds subsequently received at any time in respect of such Equity
Issuance or Debt Issuance from non-cash consideration initially received or
otherwise), net of underwriting discounts and commissions or placement fees,
investment banking fees, legal fees, consulting fees, accounting fees and other
customary fees and expenses directly incurred by any Consolidated Party in
connection therewith (other than those payable to any Consolidated Party or any
Affiliate of any such Person); and
(c) with respect to any SCC, any cash distribution of any
amortization payment in respect of such SCC actually received by any
Consolidated Party.
"Net Working Capital" means at any date, without duplication, (a) all
assets of the Consolidated Parties as of such date which would be included on a
consolidated balance sheet as current assets in accordance with GAAP (excluding
cash and Cash Equivalents) minus (b) all liabilities of the Consolidated Parties
as of such date which would be included on a consolidated balance sheet as
current liabilities in accordance with GAAP (excluding the current portion of
Consolidated Funded Indebtedness). Net Working Capital at any date may be a
positive or negative number. Net Working Capital increases when it becomes more
positive or less negative and decreases when it becomes less positive or more
negative.
"Non-Corporate Domestic Lender" means any Second Lien Lender that is a
"United States person" but is not a "domestic" corporation (as such terms are
defined in Section 7701(a) of the Code).
"Note" means a promissory note made by the Borrowers in favor of a Second
Lien Lender evidencing Second Lien Loans made by such Second Lien Lender,
substantially in the form of Exhibit B.
"Off-Balance Sheet Obligations" means, with respect to any Person as of
any date of determination thereof, without duplication and to the extent not
included as a liability on the consolidated balance sheet of such Person and its
Subsidiaries in accordance with GAAP: (a) with respect to any asset
securitization transaction (including any accounts receivable purchase facility)
(i) the unrecovered investment of purchasers or transferees of assets so
transferred, and (ii) any other payment, recourse, repurchase, hold harmless,
indemnity or similar obligation of
25
such Person or any of its Subsidiaries in respect of assets transferred or
payments made in respect thereof, other than limited recourse provisions that
are customary for transactions of such type and that neither (x) have the effect
of limiting the loss or credit risk of such purchasers or transferees with
respect to payment or performance by the obligors of the assets so transferred
nor (y) impair the characterization of the transaction as a true sale under
applicable Laws (including Debtor Relief Laws); (b) the monetary obligations
under any financing lease or so-called "synthetic," tax retention or off-balance
sheet lease transaction which, upon the application of any Debtor Relief Law to
such Person or any of its Subsidiaries, would be characterized as indebtedness;
or (c) any other monetary obligation arising with respect to any other
transaction which (i) is characterized as indebtedness for tax purposes but not
for accounting purposes in accordance with GAAP or (ii) is the functional
equivalent of or takes the place of borrowing but which does not constitute a
liability on the consolidated balance sheet of such Person and its Subsidiaries
(for purposes of this clause (c), any transaction structured to provide tax
deductibility as interest expense of any dividend, coupon or other periodic
payment will be deemed to be the functional equivalent of a borrowing).
"Operating Lease" means, as applied to any Person, any lease (including,
without limitation, leases that may be terminated by the lessee at any time) of
any Property that is not a Capitalized Lease other than any such lease in which
that Person is the lessor.
"Organization Documents" means (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws, (b) with respect to any
limited liability company, the certificate or articles of formation or
organization and operating agreement, and (c) with respect to any partnership,
joint venture, trust or other form of business entity, the partnership, joint
venture or other applicable agreement of formation or organization and any
agreement, instrument, filing or notice with respect thereto filed in connection
with its formation or organization with the applicable Governmental Authority in
the jurisdiction of its formation or organization and, if applicable, any
certificate or articles of formation or organization of such entity.
"Other Taxes" means all present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies arising from any
payment made hereunder or under any other Second Lien Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, this
Agreement or any other Second Lien Loan Document.
"Outstanding Amount" means on any date, the aggregate principal amount of
Second Lien Loans outstanding on such date after giving effect to any borrowings
and prepayments or repayments of Second Lien Loans occurring on the same date.
"Participant" has the meaning specified in Section 11.06(d).
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means any "employee pension benefit plan" (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by Holdings or any
ERISA Affiliate or to which Holdings or any ERISA Affiliate contributes or has
an obligation to contribute, or in the case of a multiple
26
employer or other plan described in Section 4064(a) of ERISA, has made
contributions at any time during the immediately preceding five plan years.
"Perfection Certificate" has the meaning specified in the Second Lien
Pledge and Security Agreement.
"Permitted Acquisitions" means any Acquisition by Enterprises, Enterprises
II or any other Consolidated Borrower Party; provided that (a) the Property
acquired (or the Property of the Person acquired) in such Acquisition shall be
used or useful in a telecommunications business, (b) in the case of an
Acquisition of the Equity Interests of another Person, the board of directors
(or other comparable governing body) of such other Person shall have duly
approved such Acquisition, (c) giving effect to such Acquisition on a Pro Forma
Basis determined on the date the applicable Loan Party enters into the
Acquisition Agreement for such Permitted Acquisition, no Default shall have
occurred and be continuing or would result, (d) immediately after giving effect
to such Acquisition on a Pro Forma Basis, the Borrowers shall have not less than
$25,000,000 of availability under the revolving credit facility under the Senior
Credit Agreement (including, without limitation, any permitted Refinancing
Agreement with respect to such Indebtedness), (e) the aggregate consideration
(including the amount of Indebtedness assumed) paid by the Consolidated Parties
for such Acquisition and all prior Acquisitions since the Closing Date shall not
exceed an amount equal to the sum of (i) $150,000,000; provided, however, that
such aggregate limit for all Acquisitions since the Closing Date may be
increased to $300,000,000 in the case of any Acquisition, if immediately after
giving effect to such Acquisition on a Pro Forma Basis the Consolidated Total
Leverage Ratio is less than 4.75:1, plus (ii) an amount equal to such aggregate
consideration funded with Available Equity Proceeds, and (f) the Second Lien
Administrative Agent shall have received a certificate from a Responsible
Officer of the Loan Party Representative on or prior to the date of the
consummation of such Acquisition describing such Acquisition and certifying as
to the foregoing matters, and demonstrating such compliance in reasonable
detail.
"Permitted Additional Subordinated Debt" means any Indebtedness of any
Consolidated Party in respect of any unsecured, subordinated debt securities or
debt obligations of Holdings or any Borrower permitted pursuant to Section
7.03(i), which securities or obligations may be guaranteed on an unsecured,
subordinated basis by each other Loan Party, provided, however, that (a) the
maturity of any principal amount thereof shall not mature earlier than the final
maturity of the Senior Subordinated Loans; (b) the interest rate thereon shall
be a market rate of interest as of the date such Indebtedness is incurred; (c)
the other terms thereof, including, without limitation, in respect of mandatory
prepayments, prepayment premium, fees, covenants, events of default, remedies
and the subordination provisions thereof, taken as a whole, are as or more
favorable to the Loan Parties and the Second Lenders hereunder than the
comparable terms of the Senior Subordinated Loan Documents as of the date such
debt securities are issued or such debt obligations are incurred; (d) no Default
shall have occurred and be continuing or would result; (e) the proceeds thereof
shall be applied as permitted pursuant to Section 7.03(i) hereunder; and (f) the
Loan Party Representative shall have delivered copies of the Permitted
Additional Subordinated Debt Documents in respect of such Indebtedness to the
Second Lien Administrative Agent, together with a certificate of a Responsible
Officer of the Loan Party Representative comparing the material terms and
conditions of such Permitted Additional Subordinated Debt Documents to the
comparable terms and conditions of the Senior
27
Subordinated Loan Documents (based on the review of all such documents by the
Loan Party Representative without the necessity of obtaining any third-party
review of any such documents) and certifying that all such conditions have been
satisfied.
"Permitted Additional Subordinated Debt Documents" means, for any
Permitted Additional Subordinated Debt, the loan agreement, credit agreement,
note purchase agreement, indenture or other definitive agreement for such
Indebtedness to which any applicable Loan Party is a party, and any related
notes, guarantees and other documents contemplated to be delivered by any Loan
Party thereunder, as such agreement, instruments and other documents may be
amended, restated, supplemented or otherwise modified from time to time in
accordance with the terms of this Agreement and the terms thereof, together with
any other agreement or agreements pursuant to which any such Permitted
Additional Subordinated Debt may be refinanced, restructured, renewed, extended,
refunded or replaced, in each case, in whole or in part, as such other agreement
or agreements may be amended, restated, supplemented or otherwise modified from
time to time, in each case, in accordance with the terms of this Agreement and
the terms thereof.
"Permitted Asset Exchange" means a Disposition of assets and property of
any of the Consolidated Borrower Parties in consideration for the Acquisition of
assets and property of a Person in the telecommunications business not an
Affiliate of any Loan Party; provided that (a) the aggregate assets and
properties of the Consolidated Borrower Parties which may be subject to such
Dispositions shall not exceed, in aggregate, assets and property related to more
than 35% of the access lines of the Loan Parties as of the Closing Date; (b) the
assets and properties so Disposed of, together with any cash consideration paid
by the Consolidated Borrower Parties shall have a fair market value
substantially equivalent to the fair market value of the assets and properties
so Acquired, together with any cash consideration received by the Consolidated
Borrower Parties; (c) any such cash consideration received by the Consolidated
Borrower Parties (net of the deductions set forth in the definition of "Net Cash
Proceeds") shall be treated hereunder as Net Cash Proceeds of a Disposition; (d)
any such cash consideration paid by the Consolidated Borrower Parties (but not
any other Property disposed of in such Disposition) shall be treated hereunder
as consideration paid by the Consolidated Borrower Parties in a Permitted
Acquisition for purposes of clause (e) of the definition of such term; and (e)
at the time of the execution and delivery of the Acquisition Agreement in
respect of such transaction, no Default shall have occurred and be continuing or
would result.
"Permitted Liens" has the meaning specified in Section 7.01.
"Permitted Restructuring Transaction" means a transaction or series of
related transactions in which, any Person (the "Surviving Parent") newly
organized by the Sponsors or one more of the Loan Parties Acquires directly, or
indirectly through wholly-owned Domestic Subsidiaries (each an "Additional
Intermediate Holding Company"), all the outstanding Equity Interests of
Holdings, provided, however, that in connection with any such transactions (a)
each member of Holdings or Southwest on the date hereof identified on Schedule
5.09 which is a corporation shall have become a Restricted Subsidiary of the
Surviving Parent; (b) the Surviving Parent and any such Additional Intermediate
Holding Company shall have entered into a Second Lien Joinder Agreement and
agreed to the terms of this Agreement (including, without limitation, Section
7.13(b)) as a Guarantor hereunder; (b) no Change of Control shall have
28
occurred and be continuing or would result; and (c) no other Event of Default
shall have occurred and be continuing or would result.
"Permitted Tax Distributions" has the meaning specified in Section
7.06(d).
"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"Plan" means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established or sponsored by Holdings or, with respect to
any such plan that is subject to Section 412 of the Code or Title IV of ERISA,
any ERISA Affiliate.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Pro Forma Basis" means, for any transaction, including for purposes of
determining compliance with any financial covenant or test hereunder,
determining whether the conditions precedent to a Debt Issuance of Permitted
Additional Subordinated Debt pursuant to Section 7.03(i) have been met, and
determining whether the conditions precedent to a Permitted Acquisition have
been met, that the subject transaction shall be deemed to have occurred as of
the first day of the four consecutive fiscal quarters most recently ended for
which annual or quarterly financial statements shall have been delivered in
accordance with the provisions hereof (the "Reference Period"). For purposes of
making calculations on a "Pro Forma Basis" hereunder, (a) any funds to be used
by any Person in consummating a Permitted Acquisition will be assumed to have
been used for that purpose as of the first day of the Reference Period, (b) any
Indebtedness to be incurred by any Person in connection with the consummation of
any Permitted Acquisition and/or a Debt Issuance will be assumed to have been
incurred on the first day of the Reference Period, (c) the gross interest
expenses, determined in accordance with GAAP, with respect to such Indebtedness
assumed to have been incurred on the first day of the Reference Period that
bears interest at a floating rate shall be calculated at the current rate under
the agreement governing such Indebtedness (including this Agreement if the
Indebtedness is incurred hereunder), and (d) any gross interest expense,
determined in accordance with GAAP, incurred during the Reference Period that
was or is to be refinanced with proceeds of Indebtedness assumed to have been
incurred as of the first day of the Reference Period will be excluded from the
calculation for which a Pro Forma Basis is being given.
"PUC" means any state Governmental Authority that exercises jurisdiction
over the rates or services or the acquisition, construction or operation of any
telecommunications system of any Person who owns, constructs or operates any
telecommunications system, in each case by reason of the nature or type of the
business subject to regulation and not pursuant to laws and regulations of
general applicability to Persons conducting business in said state including,
without limitation, the PUC of Texas.
"PUC Authorization" means any Governmental Authorization granted or issued
by a PUC.
"Real Property Assets" means all interest (excluding leasehold interests)
of any Consolidated Party in any real property.
29
"Refinancing Agreement" has the meaning specified in Section 7.07(a).
"Register" has the meaning specified in Section 11.06(c).
"Reinvestment Funds" means with respect to any Insurance Proceeds from a
Casualty, any Condemnation Award from a Condemnation, or any Net Cash Proceeds
from any other Disposition, that portion of such funds as shall, according to
the Compliance Certificate delivered pursuant to Section 6.02(b) for the fiscal
quarter in which the Disposition occurs, be reinvested in the repair,
restoration or replacement of the Properties that were the subject of such
Casualty, Condemnation or Disposition or in the purchase of other Capital Assets
useful in the business of the Consolidated Parties; provided that (a) pending
such reinvestment, the entire amount of such proceeds may either (i) be
deposited in a deposit account subject to an Account Control Agreement or (ii)
at any time prior to the Final Senior Termination Date, applied to prepay any
Revolving Loans under the Senior Credit Agreement (without any reduction of
commitment thereunder), (b) within 365 days from the Casualty, Condemnation or
Disposition giving rise to such Reinvestment Funds, the Borrowers shall complete
the repair, restoration or replacement of the Properties that were the subject
of such Casualty, Condemnation or Disposition or shall purchase other Capital
Assets useful in the business of the Consolidated Parties and (c) no Default
shall have occurred and be continuing; and provided further that, if any of the
foregoing conditions shall cease to be satisfied at any time, such funds shall
no longer be deemed Reinvestment Funds and such funds shall immediately be
applied to prepayment of the Senior Loans or, following the Final Senior
Termination Date, the Second Lien Obligations in accordance with Section
2.03(b)(i).
"Related Parties" means, with respect to any Person, such Person's
Affiliates and the partners, directors, officers, employees, agents, trustees
and advisors of such Person and of such Person's Affiliates.
"Reportable Event" means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.
"Required Lenders" means, as of any date of determination, Second Lien
Lenders having more than 50% of the Outstanding Amount of Second Lien Loans;
provided, however, that if any Second Lien Lender shall be a Defaulting Second
Lien Lender at such time, there shall be excluded for purposes of making a
determination of Required Lenders at such time the aggregate principal amount of
Second Lien Loans held or deemed held by any Defaulting Second Lien Lender.
"Responsible Officer" means the chief executive officer, president, chief
financial officer, principal accounting officer or treasurer of any Loan Party
or any other officer of a Loan Party or of the Loan Party which is the general
partner or manager of a Loan Party which has been identified in writing to the
Second Lien Administrative Agent by any such officer of the Loan Party
Representative as being the officer of such Loan Party or such Loan Party which
is the partner or manager of such Loan Party responsible for overseeing the
administration of, or reviewing compliance with, all or any portion of this
Agreement or any of the other Second Lien Loan Documents on behalf of such Loan
Party. Any document delivered hereunder that is signed by a Responsible Officer
of a Loan Party shall be conclusively presumed to have been
30
authorized by all necessary corporate, limited liability company, partnership
and/or other action on the part of such Loan Party and such Responsible Officer
shall be conclusively presumed to have acted on behalf of such Loan Party in
such capacity (and not in his or her individual capacity).
"Restricted Payment" means (a) any dividend or other distribution (whether
in cash, securities or other property) with respect to any Equity Interest of
any Consolidated Party (including, without limitation, any payment in connection
with any dissolution, merger, consolidation or disposition involving Restricted
Subsidiaries), (b) any payment of principal, interest or other amount in respect
of any Indebtedness of any Consolidated Party payable to any Affiliate of such
Consolidated Party or (c) any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any such Equity Interest or on account of any return of capital to any
Consolidated Party's stockholders, partners or members (or the equivalent
Persons thereof) or any such Indebtedness of a Consolidated Party which is due
to any Affiliate of such Consolidated Party.
"Restricted Subsidiary" means each direct or indirect Subsidiary of
Holdings that is not an Unrestricted Subsidiary.
"RTFC" means Rural Telephone Finance Cooperative.
"Sale and Leaseback Transaction" means any arrangement pursuant to which
any Consolidated Party, directly or indirectly, becomes liable as lessee,
guarantor or other surety with respect to any lease, whether an Operating Lease
or a Capitalized Lease, of any Property that such Consolidated Party (a) has
sold or transferred (or is to sell or transfer) to, or arranged the purchase by,
a Person other than a Consolidated Party or (b) intends to use for substantially
the same purpose as any other Property that has been sold or is transferred (or
is to be sold or transferred) by such Consolidated Party to a Person other than
a Consolidated Party in connection with such lease.
"S&P" means Standard & Poor's Ratings Services, a division of The McGraw
Hill Companies, Inc., and any successor in interest.
"▇▇▇▇▇▇▇▇-▇▇▇▇▇" means the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002.
"SCC" means a non-interest bearing, amortizing subordinated capital
certificate of RTFC.
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
"Second Lien Administrative Agent" means Bank of America, in its capacity
as administrative agent and collateral agent, as applicable, under any of the
Second Lien Loan Documents, or any successor administrative agent and collateral
agent, as provided in Section 10.06.
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"Second Lien Administrative Agent's Office" means the Second Lien
Administrative Agent's address and, as appropriate, account as set forth on
Schedule 11.02, or such other address or account as to which the Second Lien
Administrative Agent may from time to time notify the Loan Party Representative
and the Second Lien Lenders.
"Second Lien Agents" means, collectively, the Second Lien Administrative
Agent, the Second Lien Syndication Agents, the Second Lien Documentation Agents
and the Second Lien Arrangers.
"Second Lien Arrangers" means Banc of America Securities and Wachovia
Capital Markets LLC, in their capacities as joint lead arrangers and joint book
managers.
"Second Lien Assignment and Assumption" means an assignment and assumption
entered into by a Second Lien Lender and an Eligible Assignee (with the consent
of any party whose consent is required by Section 11.06(b)), and accepted by the
Second Lien Administrative Agent, in substantially the form of Exhibit D, or any
other form approved by the Second Lien Administrative Agent.
"Second Lien Collateral Agent" means the Second Lien Administrative Agent
in its capacity as collateral agent under the Second Lien Collateral Documents.
"Second Lien Collateral Documents" means, collectively, the Second Lien
Pledge and Security Agreement, each Account Control Agreement, each Waiver
Agreement, each Second Lien Mortgage, the Perfection Certificate, the
Intercreditor Agreement and any other security agreements, pledge agreements or
similar instruments delivered to the Second Lien Administrative Agent as
collateral agent for itself in such capacity and the Second Lien Lenders from
time to time pursuant to Sections 6.11 and 6.12, and each other agreement,
instrument or document that creates or purports to create a Lien in favor of the
Second Lien Administrative Agent for the benefit of the Second Lien Secured
Parties.
"Second Lien Documentation Agents" means CIBC World Markets Corp. and
Merrill, Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, in their capacity as
documentation agents.
"Second Lien Guaranty" means the guaranty of each Guarantor set forth in
Article IX.
"Second Lien Intellectual Property Security Agreement" has the meaning
specified in the Second Lien Pledge and Security Agreement.
"Second Lien Joinder Agreement" means a joinder agreement executed and
delivered in accordance with the provisions of Sections 6.11 or 7.04(a)(ii) or
(iii) substantially in the form of Exhibit E hereto. Upon the execution and
delivery by any Person of a Second Lien Joinder Agreement, (a) such Person shall
become and be a Guarantor hereunder, and each reference in this Agreement or any
other Second Lien Loan Document to a "Guarantor" shall also mean and be a
reference to such Person, (b) such Person shall become and be a Grantor under
the Second Lien Pledge and Security Agreement, (c) such Person shall become a
Loan Party for purposes of the Intercreditor Agreement, and (d) each reference
herein to "this Agreement", "hereunder", "hereof" or words of like import
referring to this Agreement or the Second Lien Joinder Agreement, and each
reference in any other Second Lien Loan Document to the "Senior Credit
32
Agreement", "Senior Joinder Agreement", "thereunder", "thereof" or words of like
import referring to this Agreement, shall mean and be a reference to this
Agreement or, as applicable, the Second Lien Pledge and Security Agreement, the
Intercreditor Agreement or other Second Lien Loan Document, as supplemented by
such Second Lien Joinder Agreement.
"Second Lien Lender" and "Second Lien Lenders" have the meanings specified
in the introductory paragraph hereto and, as the context requires, includes each
Second Lien Lender with a commitment to make Second Lien Loans as designated in
Schedule 2.01 or a Second Lien Assignment and Assumption pursuant to which such
Second Lien Lender becomes a party hereto.
"Second Lien Loan" has the meaning specified in Section 2.01. Each Second
Lien Loan may be divided into tranches which are Base Rate Loans or Eurodollar
Rate Loans (each a "Type" of Second Lien Loan).
"Second Lien Loan Documents" means this Agreement, the Notes, the Fee
Letter, each Second Lien Collateral Document and each other document delivered
to the Second Lien Administrative Agent or any Second Lien Lender in connection
herewith or therewith relating specifically to the Second Lien Obligations.
"Second Lien Loan Notice" means a notice by the Loan Party Representative
of (a) the Borrowing, (b) a conversion of Second Lien Loans from one Type to the
other, or (c) a continuation of Eurodollar Rate Loans pursuant to Section 2.02,
which, in each case, if in writing, shall be substantially in the form of
Exhibit A hereto.
"Second Lien Mortgages" means, collectively, (a) each mortgage or deed of
trust, assignment of leases and rents in substantially the form of Exhibit H
hereto (with appropriate modifications to such form to take into account
variances in the requirements of applicable state laws or as the Second Lien
Administrative Agent may reasonably request) delivered pursuant to Section 6.15
on the Real Property Assets subject to a Senior Mortgage, and (b) any mortgage
or deed of trust, assignment of leases and rents, in similar form granting a
security interest to the Second Lien Administrative Agent on any additional
Mortgaged Property, as contemplated by Section 6.12.
"Second Lien Obligations" means for any Loan Party: (a) in its capacity as
a Borrower, all advances to, and debts, liabilities, obligations, covenants and
duties of, such Borrower arising under any Second Lien Loan Document or
otherwise with respect to any Second Lien Loan for which such Borrower is the
Applicable Borrower, whether direct or indirect (including those acquired by
assumption), absolute or contingent, due or to become due, now existing or
hereafter arising and including interest and fees that accrue after the
commencement by or against such Borrower or any Affiliate thereof of any
proceeding under any Debtor Relief Laws naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in
such proceeding; and (b) in its capacity as a Guarantor, all Guaranteed
Obligations of such Guarantor and all other liabilities, obligations, covenants
and duties of such Guarantor arising under any Second Lien Loan Document,
whether direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising, including
any such Guaranteed Obligations in respect of interest and fees that accrue
33
after the commencement by or against such Guarantor or any Affiliate thereof of
any proceeding under any Debtor Relief Laws naming such Person as the debtor in
such proceeding, regardless of whether such interest and fees are allowed claims
in such proceeding. Without limiting the generality of the foregoing, (i) the
Second Lien Obligations of any Borrower include (A) the obligation to pay
principal and interest in respect of any Second Lien Loan for which such
Borrower is the Applicable Borrower, (B) the obligation to pay all other
charges, expenses, fees, attorney fees and disbursements, indemnities and other
amounts payable by the Borrowers under any Second Lien Loan Document and (C) the
obligation to reimburse any amount in respect of any of the foregoing that any
Second Lien Lender, in its sole discretion, may elect to pay or advance on
behalf of the Borrowers, and (ii) the Second Lien Obligations of each Loan Party
shall include any of the foregoing obligations of such Loan Party which are
reinstated pursuant to Section 11.05.
"Second Lien Pledge and Security Agreement" means the Second Lien Pledge
and Security Agreement executed by the Borrowers, the Guarantors and the Second
Lien Administrative Agent substantially in the form of Exhibit G hereto.
"Second Lien Secured Party" means the Second Lien Administrative Agent and
each Second Lien Lender.
"Second Lien Syndication Agents" means JPMorgan Chase Bank and Wachovia
Bank, N.A., in its their capacity as syndication agents.
"Second Lien Termination Date" means for any Loan Party, the payment in
full in cash of the Second Lien Obligations of such Loan Party, including any
Enforcement Expenses and all other amounts payable by such Loan Party under this
Agreement and the other Second Lien Loan Documents; provided, however, that if
any Loan Party shall cease to be a Subsidiary of Holdings in connection with any
transaction permitted under Article VII, the Second Lien Termination Date for
such Loan Party shall instead be the date on which such transaction is
consummated.
"Senior Administrative Agent" has the meaning provided in the Senior
Credit Agreement.
"Senior Lenders" has the meaning provided in the Senior Credit Agreement.
"Senior Loan" has the meaning provided in the Senior Credit Agreement.
"Senior Credit Agreement" means the Senior Credit Agreement dated as of
the date hereof among the Loan Parties, the Senior Lenders party thereto, Bank
of America, N.A., as Senior Administrative Agent, Wachovia Bank, N.A. and
JPMorgan Chase Bank, as Senior Syndication Agents, CIBC World Markets Corp. and
Merrill, Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, as Senior Syndication
Agents, and Banc of America Securities LLC and ▇.▇. ▇▇▇▇▇▇ Securities Inc., as
Senior Joint Lead Arrangers and Joint Book Managers, as such agreement may be
amended, restated, supplemented or otherwise modified from time to time in
accordance with the terms of this Agreement and the terms thereof, together with
any Refinancing Agreements pursuant to which any of the Senior Obligations may
be refinanced, restructured, renewed, extended, refunded or replaced, in each
case, in whole or in part, as such
34
Refinancing Agreements may be amended, restated, supplemented or otherwise
modified from time to time, in each case, in accordance with the terms of this
Agreement and the terms thereof.
"Senior Loan Documents" has the meaning provided in the Senior Credit
Agreement.
"Senior Obligations" has the meaning provided in the Senior Credit
Agreement.
"Senior Subordinated Loan Agreement" means the Senior Subordinated Loan
Agreement dated as of the date hereof among the Loan Parties, the Senior
Subordinated Lenders party thereto, Bank of America, N.A., as Senior
Subordinated Administrative Agent, Wachovia Bank, N.A. and JPMorgan Chase Bank,
as Senior Subordinated Syndication Agents, CIBC World Markets Corp. and Merrill,
Lynch, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, as Senior Subordinated Syndication
Agents, and Banc of America Securities LLC and Wachovia Capital Markets LLC, as
Senior Subordinated Joint Lead Arrangers and Joint Book Managers, as such
agreement may be amended, restated, supplemented or otherwise modified from time
to time in accordance with the terms of this Agreement and the terms thereof,
together with any Refinancing Agreements pursuant to which any of the Senior
Subordinated Obligations may be refinanced, restructured, renewed, extended,
refunded or replaced, in each case, in whole or in part, as such Refinancing
Agreements may be amended, restated, supplemented or otherwise modified from
time to time, in each case, in accordance with the terms of this Agreement and
the terms thereof.
"Senior Subordinated Loan Documents" has the meaning provided in the
Senior Subordinated Loan Agreement.
"Senior Subordinated Loans" has the meaning provided in the Senior
Subordinated Loan Agreement.
"Senior Subordinated Obligations" has the meaning provided in the Senior
Subordinated Loan Agreement.
"Southwest" has the meaning specified in the introductory paragraph
hereto.
"Southwest II" has the meaning specified in the introductory paragraph
hereto.
"Sponsors" means each of (a) Welsh, Carson, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ VIII, L.P., a
Delaware limited partnership, Welsh, Carson, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇ IX, L.P., a
Delaware limited partnership, and their Affiliates, (b) Vestar Capital Partners
III, L.P., a Delaware limited partnership, Vestar Capital Partners IV, L.P., a
Delaware limited partnership, and their Affiliates, and (c) Citicorp Venture
Capital Ltd., a New York corporation, and its Affiliates.
"Subject Properties" has the meaning specified in Section 5.13(a).
"Subordinated Debt" means the Senior Subordinated Loans and Permitted
Additional Subordinated Debt.
"Subsidiary" of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than
35
securities or interests having such power only by reason of the happening of a
contingency) are at the time beneficially owned, or the management of which is
otherwise controlled, directly, or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise specified, all
references herein to a "Subsidiary" or to "Subsidiaries" shall refer to a
Subsidiary or Subsidiaries of Holdings.
"Surviving Parent" has the meaning specified in the definition of the term
"Permitted Restructuring Transaction". Following the consummation of a Permitted
Restructuring Transaction, except as the context otherwise requires, each
reference in this Agreement and in each other Second Lien Loan Document to
"Holdings" shall mean and be a reference to the Surviving Parent.
"Swap Contract" means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a "Master Agreement"), including
any such obligations or liabilities under any Master Agreement.
"Swap Termination Value" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
▇▇▇▇-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Second Lien Lender or any
Affiliate of a Second Lien Lender).
"Taxes" means all present or future taxes, levies, imposts, duties,
deductions, withholdings, assessments, fees or other charges imposed by any
Governmental Authority, including any interest, additions to tax or penalties
applicable thereto.
"Threshold Amount" means $15,000,000.
"Transaction" means, collectively, the consummation of the following
transactions on the Closing Date:
36
(a) the funding of the Senior Subordinated Loans under the Senior
Subordinated Loan Documents;
(b) the funding of the Second Lien Loans hereunder;
(c) the funding of the initial Senior Loans under the Senior Loan
Documents;
(d) the application of the proceeds of such loans as follows:
(i) the prepayment in full of the obligations under the
Existing Subordinated Notes;
(ii) the prepayment of obligations under the Existing Credit
Agreements and the amendment, restatement and refinancing of all remaining
obligations outstanding thereunder on the Closing Date after giving effect
to such prepayment as provided in the Senior Loan Documents;
(iii) the payment of certain bonuses to current and former
management of the Consolidated Parties and to pay fees and expenses in
connection with such transactions and the previously proposed income
deposit securities offering and related refinancing transactions; and
(iv) the payment of Restricted Payments by the Borrowers
through Southwest to holders of equity interests in Southwest and through
Holdings to holders of equity interests in Holdings in an aggregate amount
not to exceed $160,000,000.
"Transaction Documents" means the Senior Loan Documents, the Second Lien
Loan Documents and Senior Subordinated Loan Documents collectively, and
"Transaction Document" means any one of them.
"Type" has the meaning specified in the definition of "Second Lien Loan".
"UCC" means the Uniform Commercial Code as from time to time in effect in
the State of New York or, with respect to any Collateral located in any state or
jurisdiction other than the State of New York, the Uniform Commercial Code as
from to time in effect in such state or jurisdiction.
"Unaudited Financial Statements" means the unaudited consolidated
financial statements of Holdings and its Subsidiaries dated September 30, 2004,
and the related consolidated statements of income or operations, shareholders'
equity and cash flows for the fiscal quarter ended on that date, subject to
year-end adjustments.
"Unfunded Pension Liability" means the excess of a Pension Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.
"United States" and "U.S." mean the United States of America.
37
"Unrestricted Subsidiary" means each direct or indirect Subsidiary of
Holdings organized or Acquired after the Closing Date and Designated as an
Unrestricted Subsidiary by Holdings pursuant to Section 6.11. Each Subsidiary of
an Unrestricted Subsidiary shall be deemed to be an Unrestricted Subsidiary.
"Voting Interests" means shares of capital stock issued by a corporation,
partnership interests issued by a limited partnership, membership interests
issued by a limited liability company or equivalent Equity Interests in any
other Person, the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors, general partners
or managers (or Persons performing similar functions), as the case may be, of
such Person, even if the right so to vote has been suspended by the happening of
such a contingency.
"Waiver Agreement" means, collectively, (a) at any time prior to the Final
Senior Termination Date, the Waiver Agreements and such other subordinations of
landlord statutory and contractual lien rights agreements executed by the
parties thereto, each substantially in the form of Exhibit E to the Senior
Pledge and Security Agreement or otherwise in a form reasonably satisfactory to
the Second Lien Administrative Agent.
"Wireless Partnership" means each of (a) CGKC&H Rural Cellular Limited
Partnership, a Texas limited partnership, (b) Texas RSA 15B2 Limited
Partnership, a Texas limited partnership, (c) CGKC&H No. 2 Rural Cellular
Limited Partnership, a Texas limited partnership, and (d) any other successor
Person with which any of them are consolidated or into which any of them are
merged or to which any of their material assets are sold, transferred, assigned
or otherwise conveyed.
SECTION 1.02 OTHER INTERPRETIVE PROVISIONS. With reference to this
Agreement and each other Second Lien Loan Document, unless otherwise specified
herein or in such other Second Lien Loan Document:
(a) The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include," "includes" and "including" shall be deemed to
be followed by the phrase "without limitation." The word "will" shall be
construed to have the same meaning and effect as the word "shall." Unless the
context requires otherwise, (i) any definition of or reference to any agreement,
instrument or other document (including this Agreement, any Organization
Document and any definition incorporated by reference in another document) shall
be construed as referring to such agreement, instrument or other document as
from time to time amended, supplemented or otherwise modified and, in the case
of any such agreement, instrument or document relating to any Indebtedness,
together with any other agreement or agreements pursuant to which such
Indebtedness may be refinanced, restructured, renewed, extended, refunded or
replaced, in each case, in whole or in part (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Second
Lien Loan Document), (ii) any reference herein to any Person shall be construed
to include such Person's successors and assigns permitted under this Agreement,
(iii) the words "herein," "hereof" and "hereunder," and words of similar import
when used in any Second Lien Loan Document, shall be construed to refer to such
Second Lien Loan Document in its entirety and not to any particular provision
thereof, (iv)
38
all references in a Second Lien Loan Document to Articles, Sections, Exhibits
and Schedules shall be construed to refer to Articles and Sections of, and
Exhibits and Schedules to, such Second Lien Loan Document, (v) any reference to
any Law shall include all statutory and regulatory provisions consolidating,
amending, replacing or interpreting such Law and any reference to any Law or
regulation shall, unless otherwise specified, refer to such Law or regulation as
amended, modified or supplemented from time to time, and (vi) the words "asset"
and "property" shall be construed to have the same meaning and effect and to
refer to any and all tangible and intangible assets and properties, including
cash, securities, accounts and contract rights.
(b) In the computation of periods of time from a specified date to
a later specified date, the word "from" means "from and including;" the words
"to" and "until" each mean "to but excluding;" and the word "through" means "to
and including."
(c) Each reference to "basis points" or "bps" shall be interpreted
in accordance with the convention that 100 bps = 1.0% .
(d) Section headings herein and in the other Second Lien Loan
Documents are included for convenience of reference only and shall not affect
the interpretation of this Agreement or any other Second Lien Loan Document.
SECTION 1.03 ACCOUNTING TERMS.
(a) Generally. All accounting terms not specifically or completely
defined herein shall be construed in conformity with, and all financial data
(including financial ratios and other financial calculations) required to be
submitted pursuant to this Agreement shall be prepared in conformity with, GAAP
applied on a consistent basis, as in effect from time to time, applied in a
manner consistent with that used in preparing the Audited Financial Statements,
except as otherwise specifically prescribed herein.
(b) Changes in GAAP. If at any time any change in GAAP would
affect the computation of any financial ratio or requirement set forth in any
Second Lien Loan Document, and the Loan Party Representative or the Required
Lenders shall so request, the Second Lien Administrative Agent, the Second Lien
Lenders and Holdings shall negotiate in good faith to amend such ratio or
requirement to preserve the original intent thereof in light of such change in
GAAP (subject to the approval of the Required Lenders); provided, however, that
if any change in GAAP would affect any comparable computation of any financial
ratio or requirement set forth in any Senior Loan Document and the Loan Parties
and the Senior Lenders have entered into an amendment, modification, waiver or
consent under the Senior Loan Documents in respect of such change, then such
amendment, modification, waiver or consent shall also apply automatically to any
comparable provision of this Agreement, in each case, without the Consent of any
Second Lien Lender and without any action by the Second Lien Administrative
Agent, the Loan Party Representative or any Loan Party (and in the case of any
such change in GAAP occurring prior to the Final Senior Termination Date, this
Agreement shall not be otherwise amended in respect of such change, except as
permitted under the Senior Credit Agreement); and provided further that, until
so amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Loan Parties
shall
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provide to the Second Lien Administrative Agent and the Second Lien Lenders
financial statements and other documents required under this Agreement or as
reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect to
such change in GAAP.
(c) Consolidated Parties. Any reference made in this Agreement or
any other Second Lien Loan Document to any consolidated financial statement or
statements of the Consolidated Parties means such financial statement or
statements prepared on a combined basis for the Consolidated Parties pursuant to
GAAP and accounting for any Unrestricted Subsidiary on an unconsolidated basis
as investments, not utilizing the equity method.
SECTION 1.04 ROUNDING. Any financial ratios required to be maintained by
the Consolidated Parties pursuant to this Agreement shall be calculated by
dividing the appropriate component by the other component, carrying the result
to one place more than the number of places by which such ratio is expressed
herein and rounding the result up or down to the nearest number (with a
rounding-up if there is no nearest number).
SECTION 1.05 TIMES OF DAY. Unless otherwise specified, all references
herein to times of day shall be references to Eastern time (daylight or
standard, as applicable).
ARTICLE II
COMMITMENTS AND BORROWINGS
SECTION 2.01 SECOND LIEN LOANS. Subject to the terms and conditions set
forth herein, each Second Lien Lender severally agrees to make a single loan
(each such loan, a "Second Lien Loan") to each Applicable Borrower on the
Closing Date and in an aggregate amount, together with the aggregate amount of
all Second Lien Loans made by such Second Lien Lender to the other Applicable
Borrowers on the Closing Date, not to exceed such Second Lien Lender's
Commitment on the Closing Date. Each Borrowing by any Borrower made on the
Closing Date shall consist of Second Lien Loans made to such Borrower
simultaneously by the Second Lien Lenders ratably according to their
Commitments. Amounts borrowed under this Section 2.01 and repaid or prepaid may
not be reborrowed.
SECTION 2.02 BORROWINGS, CONVERSIONS AND CONTINUATIONS OF SECOND LIEN
LOANS.
(a) Each Borrowing, each conversion of Second Lien Loans from one
Type to the other, and each continuation of Eurodollar Rate Loans shall be made
upon the Loan Party Representative's irrevocable notice to the Second Lien
Administrative Agent. Each such notice must be received by the Second Lien
Administrative Agent, not later than 11:00 a.m. (i) three Business Days prior to
the requested date of any Borrowing of, conversion to, or continuation of,
Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate
Loans and, (ii) on the requested date of any Borrowing of Base Rate Loans. Each
telephonic notice by the Loan Party Representative pursuant to this Section
2.02(a) must be confirmed promptly by delivery to the Second Lien Administrative
Agent of a written Second Lien Loan Notice, appropriately completed and signed
by a Responsible Officer of the Loan Party Representative. Each Borrowing of,
conversion to, or continuation of, Eurodollar Rate Loans shall be in a principal
amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof. Each
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Borrowing of or conversion to Base Rate Loans shall be in a principal amount of
$1,000,000 or a whole multiple of $100,000 in excess thereof. Each Second Lien
Loan Notice (whether telephonic or written) shall specify (A) whether the Loan
Party Representative is requesting a Borrowing, a conversion of Second Lien
Loans from one Type to the other, or a continuation of Eurodollar Rate Loans,
(B) the requested date of the Borrowing, conversion or continuation, as the case
may be (which shall be a Business Day), (C) the principal amount of Second Lien
Loans to be borrowed, converted or continued, (D) the Type of Second Lien Loans
to be borrowed or to which existing Second Lien Loans are to be converted or
continued, (E) if applicable, the duration of the Interest Period with respect
thereto and (F) in the case of any Borrowing, the Applicable Borrower for which
such Borrowing is requested. If the Loan Party Representative fails to specify
the Applicable Borrower for which any Borrowing is requested, such Borrowing
shall be deemed to be requested for the accounts of Enterprises. If the Loan
Party Representative fails to specify a Type of Second Lien Loan in a Second
Lien Loan Notice, or if the Loan Party Representative fails to give a timely
notice requesting a conversion or continuation of Second Lien Loans or if a
Default has occurred and is continuing, then the Second Lien Loans shall be made
as, or converted to, Base Rate Loans. If the Loan Party Representative requests
a Borrowing of, conversion to, or continuation of, Eurodollar Rate Loans in any
such Second Lien Loan Notice, but fails to specify an Interest Period, the Loan
Party Representative will be deemed to have specified an Interest Period of one
month.
(b) Following receipt of a Second Lien Loan Notice, the Second
Lien Administrative Agent shall promptly notify each Second Lien Lender of the
amount of its Applicable Percentage of the applicable Second Lien Loans, and if
no timely notice of a conversion or continuation is provided by the Loan Party
Representative, the Second Lien Administrative Agent shall notify each
applicable Second Lien Lender of the details of any automatic conversion to Base
Rate Loans described in the preceding subsection (a). In the case of a
Borrowing, each applicable Second Lien Lender shall make the amount of its
Second Lien Loan available to the Second Lien Administrative Agent in
immediately available funds at the Second Lien Administrative Agent's Office not
later than 1:00 p.m. on the Business Day specified in the applicable Second Lien
Loan Notice. Upon satisfaction of the applicable conditions set forth in Article
IV, the Second Lien Administrative Agent shall make all funds so received
available to the Applicable Borrower in like funds as received by the Second
Lien Administrative Agent either by (i) crediting an account of the Applicable
Borrower on the books of Bank of America with the amount of such funds or (ii)
wire transfer of such funds, in each case in accordance with instructions
provided to (and reasonably acceptable to) the Second Lien Administrative Agent
by the Loan Party Representative.
(c) Except as otherwise provided herein, a Eurodollar Rate Loan
may be continued or converted only on the last day of an Interest Period for
such Eurodollar Rate Loan. During the existence of a Default, no Second Lien
Loans may be requested as, converted to, or continued as, Eurodollar Rate Loans
without the consent of the Required Lenders.
(d) The Second Lien Administrative Agent shall promptly notify the
Loan Party Representative and the applicable Second Lien Lenders of the interest
rate applicable to any Interest Period for Eurodollar Rate Loans upon
determination of such interest rate. At any time that Base Rate Loans are
outstanding, the Second Lien Administrative Agent shall notify the Loan Party
Representative and the applicable Second Lien Lenders of any change in Bank of
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America's prime rate used in determining the Base Rate promptly following the
public announcement of such change.
(e) After giving effect to all Borrowings, all conversions of
Second Lien Loans from one Type to the other, and all continuations of Second
Lien Loans as the same Type, there shall not be more than three Interest Periods
in effect with respect to Second Lien Loans.
(f) The failure of any Second Lien Lender to make any Second Lien
Loan to be made by it as part of any Borrowing shall not relieve any other
Second Lien Lender of its obligation, if any, hereunder to make its Second Lien
Loan on the date of such Borrowing, but no Second Lien Lender shall be
responsible for the failure of any other Second Lien Lender to make any Second
Lien Loan to be made by such other Second Lien Lender on the date of any
Borrowing.
SECTION 2.03 PREPAYMENTS.
(a) Voluntary Prepayments.
(i) The Borrowers may upon notice by the Loan Party
Representative to the Second Lien Administrative Agent, at any time or
from time to time, voluntarily prepay the Second Lien Loans in whole or in
part at any time that such prepayment is permitted under the Senior Credit
Agreement; provided that (A) such notice must be received by the Second
Lien Administrative Agent not later than 11:00 a.m. (1) three Business
Days prior to any date of prepayment of Eurodollar Rate Loans and (2) on
the date of prepayment of Base Rate Loans, (B) any prepayment of
Eurodollar Rate Loans shall be in a principal amount of $5,000,000 or a
whole multiple of $1,000,000 in excess thereof, and (C) any prepayment of
Base Rate Loans shall be in a principal amount of $1,000,000 or a whole
multiple of $100,000 in excess thereof or, in each case, if less, the
entire principal amount thereof then outstanding. Each such notice shall
specify the date and amount of such prepayment, the Type(s) of Second Lien
Loans to be prepaid and each such notice shall be consistent with the
other requirements of this Section 2.03(a)(i).
(ii) The Second Lien Administrative Agent will promptly
notify each applicable Second Lien Lender of its receipt of each such
notice, and of the amount of such Second Lien Lender's Applicable
Percentage of such prepayment. If such notice is given by the Loan Party
Representative, the Borrowers shall irrevocably make such prepayment and
the payment amount specified in such notice shall be due and payable on
the date specified therein.
(iii) Unless the Loan Party Representative specifies
otherwise, repayments will be applied first to Base Rate Loans and then to
Eurodollar Rate Loans.
(b) Mandatory Prepayments. Following the Final Senior Termination
Date the Borrowers shall prepay the Second Lien Loans in the following amounts:
(i) Dispositions. Immediately upon receipt by any
Consolidated Party of aggregate proceeds from Dispositions (other than
proceeds of any Disposition permitted in Sections 7.05 (b), (c) and (d) or
the proceeds of any other Dispositions to the
42
extent they constitute Reinvestment Funds) in any fiscal year of Holdings
(commencing with the fiscal year of Holdings immediately preceding the
fiscal year in which the Final Senior Termination Date occurs) in excess
of $10,000,000, the Borrowers shall prepay the Second Lien Loans in an
aggregate amount equal to 100% of the Net Cash Proceeds of all such
Dispositions (including the initial $10,000,000 of such proceeds) (less
the amount of any such Net Cash Proceeds which have been applied to prepay
Senior Loans on or prior to the Final Senior Termination Date).
(ii) Debt Issuances. Immediately upon receipt by any
Consolidated Party of proceeds from any Debt Issuance (other than any
Excluded Debt Issuance Proceeds) occurring on the Final Senior Termination
Date or at any time thereafter, the Borrowers shall prepay the Second Lien
Loans in an aggregate amount equal to 100% of the Net Cash Proceeds of
such Debt Issuance (less the amount of any such Net Cash Proceeds which
have been applied to prepay Senior Loans on or prior to the Final Senior
Termination Date).
(iii) Equity Issuances. Immediately upon receipt by any
Consolidated Party of proceeds from any Equity Issuance (other than any
Excluded Equity Issuance Proceeds) occurring on the Final Senior
Termination Date or at any time thereafter, the Borrowers shall prepay the
Second Lien Loans in an aggregate amount equal to 50% of the Net Cash
Proceeds of such Equity Issuance (less the amount of any such Net Cash
Proceeds which have been applied to prepay Senior Loans on or prior to the
Final Senior Termination Date).
(iv) Excess Cash Flow. Not later than 100 days after the last
day of each fiscal year of Holdings (commencing with the fiscal year in
which the Final Senior Termination Date occurs), the Borrowers shall
prepay the Second Lien Loans in an aggregate amount equal to (A) 75% of
Excess Cash Flow for the prior fiscal year of Holdings if the Consolidated
Total Leverage Ratio as of the end of such prior fiscal year is equal to
or greater than 4.0:1.0, or (B) 50% of Excess Cash Flow for the prior
fiscal year of Holdings if the Consolidated Total Leverage Ratio as of the
end of such prior fiscal year is less than 4.0:1.0, less the amount of any
voluntary prepayments of the Second Lien Loans and Senior Loans during
such prior fiscal year (and the amount of Senior Loans repaid or prepaid
during the period from the end of such prior fiscal year through the Final
Senior Termination Date).
(c) Accrued Interest; Funding Losses. Each prepayment of the
Second Lien Loans made pursuant to this Section 2.03, shall be accompanied by
all accrued interest on the amount prepaid, together with any additional amounts
required pursuant to Section 3.05.
(d) Prepayment Premium. Each prepayment of any Second Lien Loans
made pursuant to this Section 2.03 shall be made with the Applicable Prepayment
Premium.
(e) Notice. The Loan Party Representative shall give to the Second
Lien Administrative Agent and the Second Lien Lenders at least three Business
Days' prior notice of each and every event or occurrence requiring a prepayment
under Section 2.03(b)(i), (ii) and
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(iii), including the amount of Net Cash Proceeds expected to be received
therefrom and the expected schedule for receiving such proceeds.
(f) Applicable Borrowers. Except as may be otherwise agreed in
writing by the Loan Party Representative and the Second Lien Administrative
Agent, each prepayment of Second Lien Loans pursuant to this Section 2.03 shall
be deemed to reduce on a pro rata basis the outstanding amount of Second Lien
Loans made to each Applicable Borrower.
SECTION 2.04 TERMINATION OR REDUCTION OF COMMITMENT. The Commitment of
each Second Lien Lender to make Second Lien Loans shall be automatically and
permanently reduced to $0 on the Closing Date after giving effect to the
Borrowings on the Closing Date.
SECTION 2.05 REPAYMENT OF SECOND LIEN LOANS. The Borrowers shall repay to
the Second Lien Lenders on the Maturity Date the Outstanding Amount of Second
Lien Loans on such date.
SECTION 2.06 INTEREST.
(a) Second Lien Loans may be outstanding as Base Rate Loans or
Eurodollar Rate Loans. Subject to the provisions of subsection (b) below, (i)
each Eurodollar Rate Loan shall bear interest on the outstanding principal
amount thereof for each Interest Period at a rate per annum equal to the
Eurodollar Rate for such Interest Period plus the Applicable Rate; and (ii) each
Base Rate Loan shall bear interest on the outstanding principal amount thereof
from the applicable borrowing date at a rate per annum equal to the Base Rate
plus the Applicable Rate.
(b) (i) If any amount of principal of any Second Lien Loan is not
paid when due (after giving effect to any applicable grace periods), whether at
stated maturity, by acceleration or otherwise, such amount thereafter shall bear
interest at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws.
(i) If any amount (other than principal of any Second Lien
Loan) payable by any Loan Party under any Second Lien Loan Document is not
paid when due (after giving effect to any applicable grace periods),
whether at stated maturity, by acceleration or otherwise, then upon the
request of the Required Lenders, such amount shall thereafter bear
interest at the Default Rate to the fullest extent permitted by applicable
Law.
(ii) Upon the request of the Required Lenders, while any
Event of Default exists, the Borrowers shall pay interest on the principal
amount of all outstanding Second Lien Obligations hereunder at a
fluctuating interest rate per annum at all times equal to the Default Rate
to the fullest extent permitted by applicable Laws.
(iii) Accrued and unpaid interest on past due amounts
(including interest on past due interest) shall be due and payable upon
demand.
(c) Interest on each Second Lien Loan shall be due and payable in
arrears on each Interest Payment Date applicable thereto and at such other times
as may be specified herein.
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Interest hereunder shall be due and payable in accordance with the terms hereof
before and after judgment and before and after the commencement of any
proceeding under any Debtor Relief Law.
SECTION 2.07 FEES. The Borrowers shall pay to the Second Lien Agents and
the Second Lien Administrative Agent for their own respective accounts fees in
the amounts and at the times specified in the Fee Letter. The Borrowers shall
pay to the Second Lien Lenders such fees as shall have been separately agreed
upon in writing in the amounts and at the times so specified.
SECTION 2.08 COMPUTATION OF INTEREST AND FEES. All computations of
interest for Base Rate Loans when the Base Rate is determined by Bank of
America's "prime rate" shall be made on the basis of a year of 365 or 366 days,
as the case may be, and actual days elapsed. All other computations of fees and
interest shall be made on the basis of a 360-day year and actual days elapsed
(which results in more fees or interest, as applicable, being paid than if
computed on the basis of a 365-day year). Interest shall accrue on each Second
Lien Loan for the day on which the Second Lien Loan is made, and shall not
accrue on a Second Lien Loan, or any portion thereof, for the day on which the
Second Lien Loan or such portion is paid; provided that any Second Lien Loan
that is repaid on the same day on which it is made shall, subject to Section
2.10(a), bear interest for one day. Each determination by the Second Lien
Administrative Agent of an interest rate or fee hereunder shall be conclusive
and binding for all purposes, absent manifest error.
SECTION 2.09 EVIDENCE OF DEBT.
(a) The Second Lien Loans made by each Second Lien Lender shall be
evidenced by one or more accounts or records maintained by such Second Lien
Lender and by the Second Lien Administrative Agent in the ordinary course of
business. The accounts or records maintained by the Second Lien Administrative
Agent and each Second Lien Lender shall be conclusive absent manifest error of
the amount of the Second Lien Loans made by the Second Lien Lenders to the
Borrowers and the interest and payments thereon. Any failure to so record or any
error in doing so shall not, however, limit or otherwise affect the obligations
of the Borrowers hereunder to pay any amount owing with respect to the Second
Lien Obligations. In the event of any conflict between the accounts and records
maintained by any Second Lien Lender and the accounts and records of the Second
Lien Administrative Agent in respect of such matters, the accounts and records
of the Second Lien Administrative Agent shall control in the absence of manifest
error. Upon the request of any Second Lien Lender made through the Second Lien
Administrative Agent, the Borrowers shall execute and deliver to such Second
Lien Lender (through the Second Lien Administrative Agent) a Note, which shall
evidence such Second Lien Lender's Second Lien Loans in addition to such
accounts or records. Each Second Lien Lender may attach schedules to its Note
and endorse thereon the date, Type, amount and maturity of its Second Lien Loans
and payments with respect thereto.
(b) Entries made in good faith by the Second Lien Administrative
Agent in the Register pursuant to subsection (a) above, and by each Second Lien
Lender in its accounts pursuant to subsection (a) above, shall be prima facie
evidence of the amount of principal and interest due and payable or to become
due and payable from the Borrowers to, in the case of the Register each Second
Lien Lender and, in the case of such account or accounts, such Second
45
Lien Lender, under this Agreement and the other Second Lien Loan Documents,
absent manifest error; provided that the failure of the Second Lien
Administrative Agent or such Second Lien Lender to make any entry, or any
finding that an entry is incorrect, in the Register or such account or accounts
shall not limit or otherwise affect the obligations of the Borrowers under this
Agreement and the other Second Lien Loan Documents.
SECTION 2.10 PAYMENTS GENERALLY.
(a) General. All payments to be made by the Borrowers shall be
made without condition or deduction for any counterclaim, defense, recoupment or
setoff. Except as otherwise expressly provided herein, all payments by the
Borrowers hereunder shall be made to the Second Lien Administrative Agent, for
the account of the respective Second Lien Lenders to which such payment is owed,
at the Second Lien Administrative Agent's Office in Dollars and in immediately
available funds not later than 2:00 p.m. on the date specified herein. The
Second Lien Administrative Agent will promptly distribute to each Second Lien
Lender its Applicable Percentage (or other applicable share as provided herein)
of such payment in like funds as received by wire transfer to such Second Lien
Lender's Lending Office. All payments received by the Second Lien Administrative
Agent after 2:00 p.m. shall, solely for the purpose of the calculation of
interest and fees, be deemed received on the next succeeding Business Day and
any applicable interest or fee shall continue to accrue.
(b) Funding Source. Nothing herein shall be deemed to obligate any
Second Lien Lender to obtain the funds for any Second Lien Loan in any
particular place or manner or to constitute a representation by any Second Lien
Lender that it has obtained or will obtain the funds for any Second Lien Loan in
any particular place or manner.
(c) Payments by Borrowers; Presumptions by Second Lien
Administrative Agent. Unless the Second Lien Administrative Agent shall have
received notice from the Loan Party Representative prior to the date on which
any payment is due to the Second Lien Administrative Agent for the account of
the Second Lien Lenders hereunder that the Borrowers will not make such payment,
the Second Lien Administrative Agent may assume that the Borrowers have made
such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Second Lien Lenders the amount due. In such event,
if the Borrowers have not in fact made such payment, then each of the Second
Lien Lenders severally agrees to repay to the Second Lien Administrative Agent
forthwith on demand the amount so distributed to such Second Lien Lender in
immediately available funds with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Second Lien Administrative Agent, at the greater of the Federal
Funds Rate and a rate determined by the Second Lien Administrative Agent in
accordance with banking industry rules on interbank compensation.
A notice of the Second Lien Administrative Agent to any Second Lien
Lender or the Loan Party Representative with respect to any amount owing under
this subsection (c) shall be conclusive, absent manifest error.
(d) Failure to Satisfy Conditions Precedent. If any Second Lien
Lender makes available to the Second Lien Administrative Agent funds for any
Second Lien Loan to be made
46
by such Second Lien Lender as provided in the foregoing provisions of this
Article II, and such funds are not made available to the Borrowers or the Loan
Party Representative by the Second Lien Administrative Agent because the
conditions to borrowing set forth in Article IV are not satisfied or waived in
accordance with the terms hereof, the Second Lien Administrative Agent shall
promptly return such funds (in like funds as received from such Second Lien
Lender) to such Second Lien Lender, without interest.
(e) Obligations of Second Lien Lenders Several. The obligations of
the Second Lien Lenders hereunder to make Second Lien Loans and the obligations
of the Second Lien Lenders to make payments pursuant to Section 11.04(c) are
several and not joint. The failure of any Second Lien Lender to make any Second
Lien Loan, to fund any such participation or to make any payment under Section
11.04(c) on any date required hereunder shall not relieve any other Second Lien
Lender of its corresponding obligation to do so on such date, and no Second Lien
Lender shall be responsible for the failure of any other Second Lien Lender to
so make its Second Lien Loan, to purchase its participation or to make its
payment under Section 11.04(c).
SECTION 2.11 SHARING OF PAYMENTS BY SECOND LIEN LENDERS. If any Second
Lien Lender shall, by exercising any right of setoff or counterclaim or
otherwise (except as specifically provided in the last paragraph of Section
8.03), obtain payment in respect of any principal of or interest on any of the
Second Lien Loans made by it resulting in such Second Lien Lender's receiving
payment of a proportion of the aggregate amount of such Second Lien Loans or
participations and accrued interest thereon greater than its Applicable
Percentage thereof as provided herein, then the Second Lien Lender receiving
such greater proportion shall (a) notify the Second Lien Administrative Agent of
such fact, and (b) purchase (for cash at face value) participations in the
Second Lien Loans or make such other adjustments as shall be equitable, so that
the benefit of all such payments shall be shared by the Second Lien Lenders
ratably in accordance with the aggregate amount of principal of and accrued
interest on their respective Second Lien Loans and other amounts owing them;
provided that:
(i) if any such participations or subparticipations are
purchased and all or any portion of the payment giving rise thereto is
recovered, such participations or subparticipations shall be rescinded and
the purchase price restored to the extent of such recovery, without
interest; and
(ii) the provisions of this Section shall not be construed to
apply to (x) any payment made by any Borrower pursuant to and in
accordance with the express terms of this Agreement or (y) any payment
obtained by a Second Lien Lender as consideration for the assignment of or
sale of a participation in any of its Second Lien Loans, other than to a
Borrower or any Subsidiary thereof (as to which the provisions of this
Section shall apply).
Each Loan Party consents to the foregoing and agrees, to the extent it may
effectively do so under applicable Law, that any Second Lien Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against such
Loan Party rights of setoff and counterclaim with respect to such participation
as fully as if such Second Lien Lender were a direct creditor of such Loan Party
in the amount of such participation.
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ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
SECTION 3.01 TAXES.
(a) Payments Free of Taxes. Any and all payments by or on account
of any obligation of the Borrowers hereunder or under any other Second Lien Loan
Document shall be made free and clear of and without reduction or withholding
for any Indemnified Taxes or Other Taxes, provided that if any Borrower shall be
required by any Laws to deduct any Indemnified Taxes (including any Other Taxes)
from such payments, then (i) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Second Lien Administrative
Agent, or Second Lien Lender, as the case may be, receives an amount equal to
the sum it would have received had no such deductions been made, (ii) such Loan
Party shall make such deductions and (iii) such Loan Party shall timely pay the
full amount deducted to the relevant Governmental Authority in accordance with
applicable Law; provided, further that in respect of any such deduction from a
payment in respect of an Second Lien Obligation by any Borrower to any Second
Lien Lender, with the prior written consent of such Second Lien Lender (in the
sole discretion of such Second Lien Lender), such Loan Party may pay the full
amount so deducted as specifically agreed with such Second Lien Lender (in lieu
of paying the relevant Governmental Authority as provided in clause (iii) above)
pending the resolution of any contest of any Indemnified Taxes or Other Taxes in
respect of such payment as provided in any such written agreement between such
Loan Party and such Second Lien Lender; and provided, further, that no such
agreement with any Second Lien Lender shall release or otherwise modify the
obligations of the Loan Parties hereunder to any other Second Lien Lender or the
Second Lien Administrative Agent.
(b) Payment of Other Taxes by the Loan Parties. Without limiting
the provisions of subsection (a) above, the Loan Parties shall timely pay any
Other Taxes to the relevant Governmental Authority in accordance with applicable
Law.
(c) Indemnification by the Borrowers. The Borrowers shall
indemnify the Second Lien Administrative Agent and each Second Lien Lender,
within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
paid by the Second Lien Administrative Agent or such Second Lien Lender, as the
case may be, and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability (which shall include a statement setting forth in reasonable detail
the basis and calculation of any such payment or liability) delivered to the
Loan Party Representative by a Second Lien Lender (with a copy to the Second
Lien Administrative Agent), or by the Second Lien Administrative Agent on its
own behalf or on behalf of a Second Lien Lender, shall be conclusive absent
manifest error.
(d) Evidence of Payments. As soon as practicable after any payment
of Indemnified Taxes or Other Taxes by any Borrower to a Governmental Authority,
such
48
Borrower shall deliver to the Second Lien Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment (to the extent such a receipt is issued therefor), a copy of the
return reporting such payment or other evidence of such payment reasonably
satisfactory to the Second Lien Administrative Agent.
(e) Status of Second Lien Lenders. Any Foreign Lender that is
entitled to an exemption from withholding tax under the Law of the jurisdiction
in which the Borrowers are residents for tax purposes, or any treaty to which
such jurisdiction is a party, with respect to payments hereunder or under any
other Second Lien Loan Document shall deliver to the Loan Party Representative
(with a copy to the Second Lien Administrative Agent), at the time or times
prescribed by applicable Law or reasonably requested by the Loan Party
Representative or the Second Lien Administrative Agent, such properly completed
and executed documentation prescribed by applicable Law as will permit such
payments to be made without withholding. In addition, any Second Lien Lender, if
requested by the Loan Party Representative or the Second Lien Administrative
Agent, shall deliver such other documentation prescribed by applicable Law or
reasonably requested by the Loan Party Representative or the Second Lien
Administrative Agent as will enable the Loan Party Representative or the Second
Lien Administrative Agent to determine whether or not such Second Lien Lender is
subject to backup withholding or information reporting requirements.
Without limiting the generality of the foregoing, any Foreign Lender and
any Second Lien Lender which is a Non-Corporate Domestic Lender shall deliver to
the Loan Party Representative and the Second Lien Administrative Agent (in such
number of copies as shall be requested by the recipient) on or prior to the date
on which such Second Lien Lender becomes a Second Lien Lender under this
Agreement (and from time to time thereafter upon the request of the Loan Party
Representative or the Second Lien Administrative Agent, but only if such Foreign
Lender is legally entitled to do so), whichever of the following is applicable:
(i) in the case of a Foreign Lender,
(A) duly completed copies of Internal Revenue Service
Form W-8BEN or W-8IMY, as appropriate (or any successor form),
claiming eligibility for benefits of an income tax treaty to which
the United States is a party and certifying that such Second Lien
Lender is entitled thereunder to a zero (0) rate of United States
withholding tax in payments made pursuant to the Second Lien Loan
Documents,
(B) duly completed copies of Internal Revenue Service
Form W-8ECI (or any successor form),
(C) in the case of a Foreign Lender claiming the
benefits of the exemption for portfolio interest under Section
881(c) of the Code, (x) a certificate to the effect that such
Foreign Lender is not (I) a "bank" within the meaning of Section
881(c)(3)(A) of the Code, (II) a "ten percent shareholder" within
the meaning of Section 881(c)(3)(B) of the Code of any Borrower, or
(III) a "controlled foreign corporation" described in Section
881(c)(3)(C) of the Code and (y) duly completed copies of Internal
Revenue Service Form W-8BEN, or
49
Form W-81MY, as applicable (or any successor form), certifying that
such Second Lien Lender is exempt from United States withholding tax
on payments made pursuant to the Second Lien Loan Documents, or
(D) any other form prescribed by applicable Law as a
basis for claiming exemption from United States Federal withholding
tax duly completed together with such supplementary documentation as
may be prescribed by applicable Law to permit the Borrowers to
determine the withholding or deduction required to be made; and
(ii) in the case of a Non-Corporate Domestic Lender, a duly
completed Internal Revenue Service Form W-9 (or any successor form).
Each Second Lien Lender which has delivered any of the forms described
above as provided in this Section 3.01(e) shall deliver to the Loan Party
Representative (with a copy to the Second Lien Administrative Agent) such new
forms prescribed by the IRS upon expiration or obsolescence of any such
previously delivered forms or after the occurrence of an event requiring a
change in the most recent such forms delivered by such Second Lien Lender
hereunder, in each case, not later than 30 days following the earlier of the
date such Second Lien Lender first becomes aware of the need to deliver such new
form and the date of any request for such new form from the Loan Party
Representative. Each such Second Lien Lender shall also provide written notice
to the Loan Party Representative (with a copy to the Second Lien Administrative
Agent) not later than 30 days after the date on which it determines that it is
no longer in a position to deliver any such previously delivered form.
(f) Treatment of Certain Refunds. If the Second Lien
Administrative Agent or any Second Lien Lender determines, in its sole
reasonable discretion, that it has received a refund of any Taxes or Other Taxes
as to which it has been indemnified by the Borrowers or with respect to which
the Borrowers have paid additional amounts pursuant to this Section (whether by
way of direct payment or by offset), within 45 days of such determination it
shall pay to the Loan Party Representative an amount equal to such refund (but
only to the extent of indemnity payments made, or additional amounts paid, by
the Borrowers under this Section with respect to the Taxes or Other Taxes giving
rise to such refund), net of all reasonable out-of-pocket expenses of the Second
Lien Administrative Agent or such Second Lien Lender, as the case may be, and
without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund); provided that the Borrowers, upon the
request of the Second Lien Administrative Agent or such Second Lien Lender to
the Loan Party Representative, agrees to repay the amount paid over to the Loan
Party Representative (plus any penalties, interest or other charges imposed by
the relevant Governmental Authority) to the Second Lien Administrative Agent or
such Second Lien Lender in the event the Second Lien Administrative Agent or
such Second Lien Lender is required to repay such refund to such Governmental
Authority. This subsection shall not be construed to require the Second Lien
Administrative Agent or any Second Lien Lender to make available its tax returns
(or any other information relating to its taxes that it deems confidential) to
the Loan Party Representative, any Loan Party or any other Person.
SECTION 3.02 ILLEGALITY. If any Second Lien Lender determines that any
Change in Law has made it unlawful, or that any Governmental Authority has
asserted that it is unlawful, for any
50
Second Lien Lender or its applicable Lending Office to make, maintain or fund
Eurodollar Rate Loans, or any Governmental Authority has imposed material
restrictions on the authority of such Second Lien Lender to purchase or sell, or
to take deposits of Dollars in the London interbank market, or to determine or
charge interest rates based upon the Eurodollar Rate, then, on notice thereof by
such Second Lien Lender to the Loan Party Representative through the Second Lien
Administrative Agent, any obligation of such Second Lien Lender to make or
continue Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate
Loans shall be suspended until such Second Lien Lender notifies the Second Lien
Administrative Agent and the Loan Party Representative that the circumstances
giving rise to such determination no longer exist. Upon receipt of such notice,
the Borrowers shall, upon demand from such Second Lien Lender (with a copy to
the Second Lien Administrative Agent), prepay or, if applicable, convert all
Eurodollar Rate Loans of such Second Lien Lender to Base Rate Loans, either on
the last day of the Interest Period therefor, if such Second Lien Lender may
lawfully continue to maintain such Eurodollar Rate Loans to such day, or
immediately, if such Second Lien Lender may not lawfully continue to maintain
such Eurodollar Rate Loans. Upon any such prepayment or conversion, the
Borrowers shall also pay accrued interest on the amount so prepaid or converted.
At such time as any such Second Lien Lender determines that the circumstances
giving rise to such determination no longer exist, it shall so notify the Second
Lien Administrative Agent and the Loan Party Representative.
SECTION 3.03 INABILITY TO DETERMINE RATES. If the Required Lenders
determine that for any reason in connection with any request for a Eurodollar
Rate Loan or a conversion to or continuation thereof that (a) Dollar deposits
are not being offered to banks in the London interbank eurodollar market for the
applicable amount and Interest Period of such Eurodollar Rate Loan, (b) adequate
and reasonable means do not exist for determining the Eurodollar Rate for any
requested Interest Period with respect to a proposed Eurodollar Rate Loan or (c)
that the Eurodollar Rate for any requested Interest Period with respect to a
proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to
such Second Lien Lenders of funding such Second Lien Loan, the Second Lien
Administrative Agent will promptly so notify the Loan Party Representative and
each Second Lien Lender. Thereafter, the obligation of the Second Lien Lenders
to make or maintain Eurodollar Rate Loans shall be suspended until the Second
Lien Administrative Agent (upon the instruction of the Required Lenders) revokes
such notice. Upon receipt of such notice, the Loan Party Representative may
revoke any pending request for a Borrowing of, conversion to or continuation of
Eurodollar Rate Loans, and if it does not revoke such request, it will be deemed
to have converted such request into a request for a Borrowing of Base Rate Loans
in the amount specified therein. At the request of the Loan Party
Representative, the Second Lien Administrative Agent shall ask the Required
Lenders whether the circumstances giving rise to such determination no longer
exist and they are able to give any such revocation instruction.
SECTION 3.04 INCREASED COSTS.
(a) Increased Costs Generally. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit, compulsory loan, insurance charge or similar requirement against
assets of, deposits with
51
or for the account of, or credit extended or participated in by, any
Second Lien Lender (except any reserve requirement reflected in the
Eurodollar Rate);
(ii) subject any Second Lien Lender to any Tax with respect
to this Agreement or any Eurodollar Loan made by it, or change the basis
of taxation of payments to such Second Lien Lender in respect thereof
(except for Indemnified Taxes or Other Taxes covered by Section 3.01 and
the imposition of, or any change in the rate of, any Excluded Tax payable
by such Second Lien Lender); or
(iii) impose on any Second Lien Lender or the London interbank
market any other condition, cost or expense affecting this Agreement or
Eurodollar Loans made by such Second Lien Lender;
and the result of any of the foregoing shall be to increase the cost to such
Second Lien Lender of making or maintaining any Eurodollar Loan (or of
maintaining its obligation to make any such Second Lien Loan), or to reduce the
amount of any sum received or receivable by such Second Lien Lender hereunder
(whether of principal, interest or any other amount), then, upon request of such
Second Lien Lender, the Borrowers will pay to such Second Lien Lender such
additional amount or amounts as will compensate such Second Lien Lender for such
additional costs incurred or reduction suffered.
(b) Capital Requirements. If any Second Lien Lender determines
that any Change in Law affecting such Second Lien Lender or any Lending Office
of such Second Lien Lender or such Second Lien Lender's holding company, if any,
regarding capital requirements has or would have the effect of reducing the rate
of return on such Second Lien Lender's capital or on the capital of such Second
Lien Lender's holding company, if any, as a consequence of this Agreement, the
Commitment of such Second Lien Lender or the Second Lien Loans made by such
Second Lien Lender, to a level below that which such Second Lien Lender or such
Second Lien Lender's holding company could have achieved but for such Change in
Law (taking into consideration such Second Lien Lender's policies and the
policies of such Second Lien Lender's holding company with respect to capital
adequacy), then from time to time the Borrowers will pay to such Second Lien
Lender such additional amount or amounts as will compensate such Second Lien
Lender or such Second Lien Lender's holding company for any such reduction
suffered.
(c) Certificates for Reimbursement. A certificate of a Second Lien
Lender setting forth in reasonable detail the calculation of the amount or
amounts necessary to compensate such Second Lien Lender or its holding company,
as the case may be, as specified in subsection (a) or (b) of this Section and
delivered to the Loan Party Representative shall be conclusive absent manifest
error. The Borrowers shall pay such Second Lien Lender the amount shown as due
on any such certificate within 10 days after receipt thereof.
(d) Delay in Requests. Failure or delay on the part of any Second
Lien Lender to demand compensation pursuant to the foregoing provisions of this
Section shall not constitute a waiver of such Second Lien Lender's right to
demand such compensation; provided that the Borrowers shall not be required to
compensate a Second Lien Lender pursuant to the foregoing provisions of this
Section for any increased costs incurred or reductions suffered more
52
than six months prior to the date that such Second Lien Lender notifies the Loan
Party Representative of the Change in Law giving rise to such increased costs or
reductions and of such Second Lien Lender's intention to claim compensation
therefor (except that, if the Change in Law giving rise to such increased costs
or reductions is retroactive, then the six-month period referred to above shall
be extended to include the period of retroactive effect thereof).
SECTION 3.05 FUNDING LOSSES. (a) Upon demand of any Second Lien Lender
(with a copy to the Second Lien Administrative Agent) from time to time, the
Borrowers shall promptly compensate such Second Lien Lender for and hold such
Second Lien Lender harmless from any loss, cost or expense incurred by it as a
result of:
(i) any continuation, conversion, payment or prepayment of
any Second Lien Loan (other than a Base Rate Loan) on a day other than the
last day of the Interest Period for such Second Lien Loan (whether
voluntary, mandatory, automatic, by reason of acceleration, or otherwise);
(ii) any failure by the Borrowers (for a reason other than
the failure of such Second Lien Lender to make a Second Lien Loan) to
prepay, borrow, continue or convert any Second Lien Loan (other than a
Base Rate Loan) on the date or in the amount notified by the Loan Party
Representative; or
(iii) any assignment of a Eurodollar Rate Loan on a day other
than the last day of the Interest Period therefore as a result of a
request by Holdings pursuant to Section 11.13.
(b) In the case of any such Eurodollar Rate Loan, any such loss,
cost or expense will include any loss of anticipated profits and any loss or
expense arising from the liquidation or reemployment of funds obtained by it to
maintain such Second Lien Loan or from fees payable to terminate the deposits
from which such funds were obtained. The Borrowers shall also pay any customary
administrative fees charged by such Second Lien Lender in connection with the
foregoing. For purposes of calculating amounts payable by the Borrowers to the
Second Lien Lenders under this Section 3.05 in respect of Eurodollar Rate Loans,
each Second Lien Lender shall be deemed to have funded each Eurodollar Rate Loan
made by it at the Eurodollar Rate for such Second Lien Loan by a matching
deposit or other borrowing in the London interbank eurodollar market for a
comparable amount and for a comparable period, whether or not such Eurodollar
Rate Loan was in fact so funded.
SECTION 3.06 MITIGATION OBLIGATIONS; REPLACEMENT OF SECOND LIEN LENDERS.
(a) Designation of a Different Lending Office. If any Second Lien
Lender requests compensation under Section 3.04, or a Borrower is required to
pay any additional amount or indemnification to any Second Lien Lender or any
Governmental Authority for the account of any Second Lien Lender pursuant to
Section 3.01, or if any Second Lien Lender gives a notice pursuant to Section
3.02, then such Second Lien Lender shall use reasonable efforts to designate a
different Lending Office for funding or booking its Second Lien Loans hereunder
or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Second Lien Lender, such
designation or assignment (i) would eliminate or
53
reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in
the future, or eliminate the need for the notice pursuant to Section 3.02, as
applicable, and (ii) in each case, would not subject such Second Lien Lender to
any unreimbursed cost or expense and would not otherwise be disadvantageous to
such Second Lien Lender. The Borrowers hereby agree to pay all reasonable costs
and expenses incurred by any Second Lien Lender in connection with any such
designation or assignment.
(b) Replacement of Second Lien Lenders. If any Second Lien Lender
requests compensation under Section 3.04, or submits a notice pursuant to
Section 3.02 with respect to circumstances that do not affect the other Second
Lien Lenders hereunder, or if a Borrower is required to pay any additional
amount or indemnification to any Second Lien Lender or any Governmental
Authority for the account of any Second Lien Lender pursuant to Section 3.01,
the Borrowers may replace such Second Lien Lender in accordance with Section
11.13.
SECTION 3.07 MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION. A
certificate of the Second Lien Administrative Agent or any Second Lien Lender
claiming compensation under this Article III and setting forth in reasonable
detail the calculation of the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of manifest error. In determining
such amount, the Second Lien Administrative Agent or such Second Lien Lender may
use any reasonable averaging and attribution methods.
SECTION 3.08 SURVIVAL. All of the Borrowers' obligations under this
Article III shall survive termination of the Commitment and repayment of all
other Second Lien Obligations hereunder.
ARTICLE IV
CONDITIONS PRECEDENT TO BORROWING
SECTION 4.01 CONDITIONS OF BORROWING. The obligation of each Second Lien
Lender to make its Second Lien Loans hereunder is subject to satisfaction of the
following conditions precedent:
(a) The Second Lien Administrative Agent's receipt of the
following, each of which shall be originals or telecopies (followed promptly by
originals) unless otherwise specified, each dated the Closing Date (or, in the
case of certificates of governmental officials, a recent date before the Closing
Date) and each in form and substance reasonably satisfactory to the Second Lien
Administrative Agent and each of the Second Lien Lenders:
(i) counterparts of this Agreement and the Second Lien
Pledge and Security Agreement, each executed by each Loan Party,
sufficient in number for distribution to the Second Lien Administrative
Agent, each Second Lien Lender and the Loan Party Representative;
(ii) original Notes executed by the Borrowers in favor of
each Second Lien Lender requesting a Note;
(iii) such certificates of resolutions or other action,
incumbency certificates and/or other certificates of a Responsible Officer
or the Secretary of each
54
Loan Party as the Second Lien Administrative Agent may require evidencing
the identity, authority and capacity of each Responsible Officer
authorized to act on behalf of such Loan Party in connection with this
Agreement and the other Second Lien Loan Documents to which such Loan
Party is a party;
(iv) such documents and certifications as the Second Lien
Administrative Agent may reasonably require to evidence that each of the
Consolidated Parties is duly organized or formed, validly existing, in
good standing and qualified to engage in business in each jurisdiction
where its ownership, lease or operation of properties or the conduct of
its business requires such qualification and where the failure to be so
qualified could reasonably be expected to have a Material Adverse Effect,
including, certified copies of the Organization Documents of the Loan
Parties, certificates of good standing and/or qualification to engage in
business of the Loan Parties;
(v) favorable opinions of special counsel and local counsel
for the Loan Parties, addressed to the Second Lien Administrative Agent
and each Second Lien Lender, as to the matters set forth in Exhibit F
hereto and such other matters concerning the Loan Parties, the Second Lien
Loan Documents, the Collateral and the consents and approvals from
Governmental Authorities referred to in clause (vi) below as the Second
Lien Administrative Agent and the Syndication Agent may reasonably
request;
(vi) a certificate of a Responsible Officer or the Secretary
of the Loan Party Representative either attaching copies of, or
describing, all Governmental Authorizations (including FCC Licenses and
PUC Authorizations), and all material consents and approvals of
shareholders and other Persons, required in connection with the execution,
delivery and performance by each Loan Party, and the validity against such
Loan Party of the Second Lien Loan Documents and the other Transaction
Documents to which it is a party (including, without limitation, the
expiration, without imposition of material conditions, of all applicable
waiting periods in connection with the transactions contemplated by the
Second Lien Loan Documents and the other Transaction Documents), and such
consents, licenses and approvals shall be in full force and effect;
(vii) copies of the financial statements referred to in
Sections 5.05(a) through (c);
(viii) a certificate signed by a Responsible Officer or the
Secretary of Holdings certifying (A) that the conditions specified in
Sections 4.01(n) and (o) have been satisfied, and (B) that there has been
no event or circumstance since the date of the most recent Audited
Financial Statements that has had or could be reasonably expected to have,
either individually or in the aggregate, a Material Adverse Effect;
(ix) evidence that all insurance required to be maintained
pursuant to the Second Lien Loan Documents has been obtained and is in
full force;
(x) a Perfection Certificate duly completed by the Loan
Party Representative for the Loan Parties;
55
(xi) satisfactory evidence that the Senior Administrative
Agent has received original certificates evidencing all of the issued and
outstanding shares of capital stock or other certificated Equity Interests
(including, if available on the Closing Date, the SCCs) required to be
pledged pursuant to the terms of the Second Lien Pledge and Security
Agreement, which certificates shall be accompanied by undated stock powers
duly executed in blank by each relevant pledgor;
(xii) satisfactory evidence that the Senior Administrative
Agent has received the original Intercompany Notes required to be pledged
pursuant to the terms of the Second Lien Pledge and Security Agreement,
duly endorsed in blank by each relevant pledgor;
(xiii) search reports by a party acceptable to the Second Lien
Administrative Agent, dated a date reasonably near (but prior to) the
Closing Date, listing all effective UCC financing statements, tax liens
and judgment liens which name any Loan Party, as the debtor, and which are
filed in the jurisdictions in which the Loan Parties are organized, and in
such other jurisdictions as the Second Lien Administrative Agent may
reasonably request, together with copies of such financing statements
(none of which (other than financing statements filed pursuant to the
terms hereof in favor of the Second Lien Administrative Agent and
financing statements in favor of the Senior Administrative Agent pursuant
to the terms of the Senior Credit Agreement, if such search report is
current enough to list such financing statements) shall cover any of the
Collateral, other than Liens existing on the date hereof and listed on
Schedule 7.01 and other Permitted Liens);
(xiv) with respect to the Intellectual Property Collateral,
search results from the United States Patent and Trademark Office and
United States Copyright Office to the extent any patents, trademarks or
copyrights form a part of the Collateral;
(xv) (A) acknowledgment copies of UCC financing statements
(or delivery in proper form for filing) naming each Loan Party as the
debtor and the Second Lien Administrative Agent as the secured party,
which such UCC financing statements have been filed, or have been
delivered to the Second Lien Administrative Agent for filing, under the
UCC of all jurisdictions as may be necessary or, in the opinion of the
Second Lien Administrative Agent, desirable to perfect the first priority
security interest of the Second Lien Administrative Agent pursuant to the
Second Lien Pledge and Security Agreement; (B) evidence satisfactory to
the Second Lien Administrative Agent of the filing (or delivery to the
Second Lien Administrative Agent for filing) of the Second Lien
Intellectual Property Security Agreements with the United States Patent
and Trademark Office and United States Copyright Office; and (C) such
control agreements and deposit agreements as reasonably requested by the
Second Lien Administrative Agent with respect to the Collateral under the
Second Lien Pledge and Security Agreement in which a security interest may
be perfected by "control" (as defined in the relevant UCC), in each case,
duly executed and delivered or authenticated by the parties thereto;
56
(xvi) evidence that all other action that the Second Lien
Administrative Agent may reasonably deem necessary or desirable in order
to perfect and protect the first priority liens and security interests
created under the Second Lien Collateral Documents has been taken;
(xvii) the Intercreditor Agreement duly executed by the Loan
Party Representative, the Senior Administrative Agent and the Second Lien
Administrative Agent;
(xviii) certified copies of all Transaction Documents (other
than the Second Lien Loan Documents), which shall be in form and substance
reasonably satisfactory to the Second Lien Arrangers and the Second Lien
Administrative Agent;
(xix) a duly completed Compliance Certificate giving effect to
the Transaction on a Pro Forma Basis as of the last day of the fiscal
quarter of Holdings most recently ended prior to the Closing Date, signed
by a Responsible Officer of Holdings, which shall reflect that (A) the
ratio of (1) the outstanding amount of Consolidated Funded Indebtedness as
of such date (other than any outstanding Senior Subordinated Loans) to (2)
Consolidated EBITDA for the period of the four consecutive fiscal quarters
ended as of such date is not greater than 5.3:1.0 and (B) the Consolidated
Total Leverage Ratio as of such date is not greater than 5.8:1.0;
(xx) a duly completed Second Lien Loan Notice executed by a
Responsible Officer of the Loan Party Representative which shall specify,
among other things, each Applicable Borrower making a Borrowing on the
Closing Date; and
(xxi) such other assurances, certificates, documents, consents
and waivers, estoppel certificates, or opinions as the Second Lien
Administrative Agent or the Required Lenders reasonably may require.
(b) The Second Lien Arrangers and the Second Lien Administrative
Agent shall be satisfied that the Transaction has been consummated in accordance
with the Transaction Documents or that satisfactory arrangements for such
transactions, and for the application of the proceeds thereof, have been made.
(c) The Second Lien Arrangers and the Second Lien Administrative
Agent shall be satisfied that, concurrently with the Closing Date, all existing
Indebtedness of the Consolidated Parties (including the Existing Subordinated
Notes) has been repaid, redeemed or defeased in full or otherwise satisfied and
extinguished, except the Indebtedness permitted pursuant to Section 7.03, and
all Liens securing such obligations have been or concurrently with the Closing
Date are being released, other than the Liens being amended and restated
pursuant to the Senior Loan Documents, the Liens listed on Schedule 7.01 and
other Permitted Liens.
(d) After giving effect to the transactions contemplated by the
Transaction Documents, the Second Lien Arrangers and the Second Lien
Administrative Agent shall be reasonably satisfied with, the corporate, capital
and ownership structure (including, without limitation, the organizational
documents and each agreement and instrument relating thereto, and the amount,
terms and holders of intercompany Indebtedness) of the Consolidated Parties.
57
(e) The Second Lien Arrangers and the Second Lien Administrative
Agent shall be satisfied that (A) the Consolidated Parties will be able to meet
their obligations under all employee and retiree welfare plans, (B) the employee
benefit plans of Holdings and its ERISA Affiliates are, in all material
respects, funded in accordance with minimum statutory requirements, (C) no
Reportable Event, but excluding events for which reporting has been waived, has
occurred as to any such employee benefit plan and (D) no termination of, or
withdrawal from, any such employee benefit plan has occurred or is contemplated
that could reasonably be expected to result in any material liability.
(f) There shall exist (i) no order, decree, judgment, ruling,
injunction, writ, temporary restraining order or other order of any nature
issued by any court or Governmental Authority or (ii) no action, suit,
investigation, litigation, claim, dispute or proceeding, pending, or to the
knowledge of the Loan Party Representative, threatened or contemplated, at law
or in equity, in arbitration or before any Governmental Authority by or against
any Consolidated Party or against any of their respective properties or
revenues, in each case, that (A) purports to affect, pertain to or enjoin or
restrain the execution, delivery and performance of the Second Lien Loan
Documents and any other Transaction Document or any transactions contemplated
hereby or thereby, (B) either individually or in the aggregate could reasonably
be expected to have a Material Adverse Effect or (C) purports to affect the
legality, validity or enforceability of any Second Lien Loan Document or any
other Transaction Document or the consummation of the transactions contemplated
hereby or thereby.
(g) No Law shall be applicable, in the judgment of the Second Lien
Arrangers and the Second Lien Administrative Agent, in each case that restrains,
prevents or imposes materially adverse conditions upon the transactions
contemplated by the Second Lien Loan Documents and the other Transaction
Documents or the rights of the Loan Parties thereunder, to freely transfer or
otherwise dispose of, or to create any Lien on, any properties now owned or
hereafter acquired by any of them, except for the consents and approvals of the
FCC and any applicable PUC that would be necessary in connection with a change
of control of certain Loan Parties or the transfer or assignment of certain
Governmental Authorizations.
(h) On the Closing Date after giving effect to the transactions
contemplated by the Transaction Documents, the Borrowers shall have received
gross proceeds from the Senior Loans and the Senior Subordinated Loans, which
when aggregated with the proceeds of the Second Lien Loans, shall be sufficient
to, and shall be used to, consummate the transactions contemplated in the
Transaction Documents to be consummated on the Closing Date, including the
payment of bonuses to management of the Consolidated Parties and to pay fees and
expenses in connection with the Transaction in amounts approved by the Second
Lien Arrangers.
(i) The Second Lien Administrative Agent shall have received
certification as to the financial condition and solvency of each Loan Party
after giving effect to the transactions contemplated by the Transaction
Documents by the chief financial officer of Holdings.
(j) The Second Lien Loans shall have received a debt rating from
▇▇▇▇▇'▇ and S&P.
58
(k) The Commitment Letter and Fee Letter shall be in full force
and effect and Holdings shall have complied with all of its obligations
thereunder.
(l) Any fees and expenses required to be paid on or before the
Closing Date shall have been paid, including those fees and expenses set forth
in the Commitment Letter and Fee Letter, or shall be paid from the proceeds of
the initial Second Lien Loans on the Closing Date.
(m) The Borrowers shall have paid all reasonable fees, charges and
disbursements of counsel to the Second Lien Administrative Agent to the extent
invoiced prior to or on the Closing Date, plus such additional reasonable
amounts of fees, charges and disbursements of counsel to the Second Lien
Administrative Agent as shall constitute its reasonable estimate of fees,
charges and disbursements of counsel to the Second Lien Administrative Agent
incurred or to be incurred by it through the closing proceedings (provided, that
such estimate shall not thereafter preclude a final settling of accounts among
the Borrowers and the Second Lien Administrative Agent) or such amounts shall be
paid from the proceeds of the initial Second Lien Loans on the Closing Date.
(n) The representations and warranties of the Loan Parties
contained in Article V or any other Second Lien Loan Document, or which are
contained in any document furnished at any time under or in connection herewith
or therewith, shall be true and correct in all material respects on and as of
the date of such Borrowing, except to the extent that such representations and
warranties specifically refer to an earlier date, in which case they shall be
true and correct in all material respects as of such earlier date.
(o) No Default shall exist, or would result from such proposed
Borrowing or from the application of the proceeds thereof.
Without limiting the generality of the provisions of Section 10.04, for
purposes of determining compliance with the conditions specified in this Section
4.01, each Second Lien Lender that has signed this Agreement shall be deemed to
have consented to, approved or accepted or to be satisfied with, each document
or other matter required thereunder to be consented to or approved by or
acceptable or satisfactory to a Second Lien Lender unless the Second Lien
Administrative Agent shall have received notice from such Second Lien Lender
prior to the proposed Closing Date specifying its objection thereto.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Each Loan Party represents and warrants to the Second Lien Administrative
Agent and the Second Lien Lenders that:
SECTION 5.01 EXISTENCE, QUALIFICATION AND POWER. Each of the Consolidated
Parties (a) is duly organized or formed, validly existing and in good standing
under the Laws of the jurisdiction of its incorporation or organization, (b) has
all requisite corporate or other organizational power and authority and all
requisite Governmental Authorizations to (i) own its assets and carry on its
business as presently conducted and (ii) execute, deliver and perform its
obligations under the Second Lien Loan Documents to which it is a party, and (c)
is duly
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qualified and in good standing under the Laws of each jurisdiction where its
ownership, lease or operation of properties or the conduct of its business
requires such qualification and where the failure to be so qualified could
reasonably be expected to have a Material Adverse Effect.
SECTION 5.02 AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and
performance by each Loan Party of each Second Lien Loan Document to which such
Person is party have been duly authorized by all necessary corporate or other
organizational action. The execution, delivery and performance by each Loan
Party of each Second Lien Loan Document to which it is a party, and the
consummation of the transactions contemplated hereby with respect to each Loan
Party, do not and will not: (a) contravene the terms of any of such Person's
Organization Documents; (b) in any material respect conflict with or result in
any breach or contravention of, or (except for the Liens created under the
Second Lien Loan Documents) the creation of any Lien under, or require any
payment to be made under (i) any Contractual Obligation to which such Person is
a party or affecting such Person or properties of such Person or any of its
Restricted Subsidiaries or (ii) any order, injunction, writ or decree of any
Governmental Authority or any arbitral award to which such Person or its
property is subject; or (c) violate any Law.
SECTION 5.03 GOVERNMENTAL AUTHORIZATION; OTHER CONSENTS. No Governmental
Authorization (including, without limitation, any FCC License or PUC
Authorization) and no material approval, consent, authorization, or other
action, or notice to any other Person (including any party to any contract or
agreement to which any of Holdings or its Restricted Subsidiaries is a party) is
necessary or required in connection with (a) the execution, delivery or
performance by, or enforcement against, any Loan Party of this Agreement or any
other Second Lien Loan Document (other than those that have been obtained, the
PUC Authorization from the PUC in Arkansas to be delivered pursuant to Section
6.17(b), or that may be required in respect of any Governmental Authorization or
Contractual Obligation upon the exercise of remedies under the Second Lien Loan
Documents), (b) the validity or enforceability of any Second Lien Loan Documents
against the Loan Parties (except such filings as are necessary in connection
with the perfection of the Liens created by such Second Lien Loan Documents), or
(c) the consummation of the transactions contemplated hereby, including the
consummation of all the transactions contemplated in the Transaction Documents,
other than (i) the filing of financing statements in the UCC filing offices of
each jurisdiction referred to in Schedule 5 to the Perfection Certificate and
any local or other UCC filing relating to Fixtures, (ii) the filing of the
Second Lien Pledge and Security Agreement or Second Lien Intellectual Property
Security Agreements with the United States Patent and Trademark Office, or the
United States Copyright Office, as applicable, (iii) the execution of the
Account Control Agreements identified on Schedule 8 to the Perfection
Certificate, (iv) the filing of the Second Lien Mortgages as contemplated by
Section 6.15(a), and (v) those listed on Schedule 5.03 hereto, all of which have
been obtained.
SECTION 5.04 BINDING EFFECT. This Agreement has been, and each other
Second Lien Loan Document to which any Loan Party is a party, when delivered
hereunder, will have been, duly executed and delivered by each Loan Party that
is party thereto. This Agreement constitutes, and each other Second Lien Loan
Document to which any Loan Party is a party when so delivered will constitute, a
legal, valid and binding obligation of such Loan Party, enforceable against each
such Person in accordance with its terms, except as enforceability may
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be limited by applicable Debtor Relief Laws and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
SECTION 5.05 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT.
(a) The Audited Financial Statements furnished to each of the
Second Lien Administrative Agent and each Second Lien Lender (i) were prepared
in accordance with GAAP consistently applied throughout the period covered
thereby, except as otherwise expressly noted therein, (ii) fairly present in all
material respects the financial condition of Holdings and its Subsidiaries,
Southwest and its Subsidiaries and Southwest II and its Subsidiaries, as
applicable, as of the date thereof, and their results of operations for the
period covered thereby in accordance with GAAP consistently applied throughout
the period covered thereby, except as otherwise expressly noted therein, and
(iii) show all material indebtedness and other material liabilities, direct or
contingent, of Holdings and its Subsidiaries, Southwest and its Subsidiaries and
Southwest II and its Subsidiaries, as applicable, as of the date thereof,
including liabilities for taxes, material commitments and Indebtedness to the
extent required in accordance with GAAP.
(b) The Unaudited Financial Statements furnished to the Second
Lien Administrative Agent and each Second Lien Lender (i) were prepared in
accordance with GAAP consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein, and (ii) fairly present in all
material respects the financial condition, when read together with the notes
therein, of Holdings and its Subsidiaries as of the date thereof, and their
results of operations for the period covered thereby, subject, in the case of
clauses (i) and (ii) above, to the absence of footnotes and to year-end audit
adjustments and (iii) show all material indebtedness and other material
liabilities, direct or contingent, of Holdings and its Subsidiaries as of the
date of such financial statements, including liabilities for taxes, material
commitments and Indebtedness to the extent required in accordance with GAAP.
(c) The unaudited consolidated balance sheets and income
statements (including a calculation of Consolidated EBITDA) of Holdings and its
Subsidiaries, as at the end of the most recent fiscal quarter prior to the
Closing Date for which financial information is available, were prepared on a
Pro-Forma Basis giving effect to the consummation of the Transaction, for the
trailing four quarters of operations ending on such most recently ended fiscal
quarter of Holdings and its Subsidiaries, and have been furnished to each Second
Lien Lender. Such pro-forma balance sheets and income statements have been
prepared in good faith by Holdings based on the assumptions believed by Holdings
on the date hereof and on the Closing Date to be reasonably based on the best
information available to Holdings as of the date of delivery thereof, accurately
reflect all material adjustments required to be made to give effect to the
transactions contemplated by the Transaction Documents, and present fairly in
all material respects on a Pro-Forma Basis the estimated consolidated financial
position of Holdings and its Subsidiaries as of the most recent fiscal quarter
prior to the Closing Date. None of Holdings or any of its Subsidiaries has any
reason to believe that such pro-forma balance sheets or income statements are
misleading in any material respect in light of the circumstances existing at the
time of the preparation thereof.
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(d) As of the Closing Date, since the date of the Audited
Financial Statements, there has been no event or circumstance, either
individually or in the aggregate, that has had or could reasonably be expected
to have a Material Adverse Effect.
SECTION 5.06 LITIGATION. There are no actions, suits, investigations (to
the knowledge of the Consolidated Parties), litigations, claims, disputes or
proceedings, pending or, to the knowledge of the Loan Parties, threatened, at
law, in equity, in arbitration or before any Governmental Authority, by or
against any of Holdings or any of its Restricted Subsidiaries or against any of
their respective properties or revenues or orders, decrees, judgments, rulings,
injunctions, writs, temporary restraining orders or other orders of any nature
issued by any court or Governmental Authority that (a) purport to affect,
pertain to or enjoin or restrain the execution, delivery or performance of the
Second Lien Loan Documents or any other Transaction Documents, or any of the
transactions contemplated hereby or thereby, (b) (i) as of the Closing Date,
except as specifically disclosed in Schedule 5.06, either individually or in the
aggregate, could reasonably be expected to result in (A) a judgment or order for
the payment of money exceeding the Threshold Amount and not covered by insurance
or (B) a non-monetary judgment that could reasonably be expected to have a
Material Adverse Effect, and (ii) at any time after the Closing Date, (A) there
has been no material adverse change in the status, or financial effect on any
Loan Party or any Restricted Subsidiary thereof, of the matters described on
Schedule 5.06, or (B) either individually or in the aggregate, could reasonably
be expected to result in a judgment that could reasonably be expected to have a
Material Adverse Effect, or (c) purport to affect the legality, validity or
enforceability of the Second Lien Loan Documents and any other Transaction
Document or the consummation of the transactions contemplated hereby and
thereby.
SECTION 5.07 NO DEFAULT. None of Holdings nor any of its Restricted
Subsidiaries is in default under or with respect to any Contractual Obligation
that could, either individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. No Default has occurred and is continuing or
would result from the consummation of the transactions contemplated by this
Agreement or any other Second Lien Loan Document or any other Transaction
Document.
SECTION 5.08 SUBSIDIARIES AND EQUITY INVESTMENTS. On and as of the Closing
Date and on and as of each date thereafter the Loan Party Representative
delivers a Compliance Certificate pursuant to Section 6.02(b) or a certificate
of a Responsible Officer pursuant to Section 6.11, Holdings and each Restricted
Subsidiary has no First-Tier Subsidiaries other than those specifically
disclosed in Part (a) of Schedule 5.08 as supplemented from time to time by the
Borrowers (including the jurisdiction of organization, classes of Equity
Interests, options, warrants, rights of subscription, conversion and
exchangeability and other similar rights, ownership and ownership percentages
thereof), and neither Holdings nor any of its Restricted Subsidiaries has equity
investments in any other corporation or entity with an aggregate original cost
for any such Investment in any such corporation or entity in excess of $250,000
other than those specifically disclosed in Part (b) of Schedule 5.08 as so
supplemented (other than any such equity investments constituting Securities or
Security Entitlements maintained in a Securities Account (as such terms are
defined in the Second Lien Pledge and Security Agreement) subject to an Account
Control Agreement). The outstanding shares of Equity Interests shown have been
validly issued, fully-paid and are non-assessable (other than with respect to
any partnership or
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limited liability company) and owned free and clear of Liens other than the Lien
of the Second Lien Pledge and Security Agreement, subject to the Intercreditor
Agreement, the Senior Pledge and Security Agreement and other Permitted Liens.
The outstanding shares of Equity Interests shown are not subject to buy-sell,
voting trust or other shareholder agreement, except as specifically disclosed in
Part (c) of Schedule 5.08 as so supplemented.
SECTION 5.09 OWNERSHIP. Schedule 5.09 sets forth a true and accurate list
as of the Closing Date of each holder of Equity Interests of Holdings and
Southwest, indicating the name of each such holder and the Equity Interests held
by each such Person. All of such outstanding shares of Equity Interests of
Holdings and Southwest have been duly and validly issued, are fully paid and
nonassessable and were not issued in violation of any preemptive rights of any
stockholder. Except as set forth on Schedule 5.09 or as set forth in their
Organization Documents, as of the Closing Date there are no shareholders
agreements or other agreements pertaining to the ownership of the Equity
Interests of Holdings and Southwest.
SECTION 5.10 OWNERSHIP OF PERSONAL PROPERTY; LIENS. Each Consolidated
Party has good title to all of its respective personal properties and assets
that is material to its business, free and clear of any Liens, except for
Permitted Liens. Each Consolidated Party has obtained all Governmental
Authorizations and all private permits, licenses, franchises or other
certifications, consents, approvals and authorizations, governmental or private,
necessary to the ownership of such properties and assets and the conduct of its
business, except where any failure to do so could not reasonably be expected to
have a Material Adverse Effect.
SECTION 5.11 INTELLECTUAL PROPERTY; LICENSES, ETC. Each Consolidated Party
owns, or possesses the right to use, all of the material trademarks, service
marks, trade names, copyrights, patents, patent rights, franchises, licenses and
other intellectual property rights (collectively, "IP Rights") that are
reasonably necessary for the operation of its businesses as presently conducted,
without known conflict with the rights of any other Person. To the best
knowledge of the Loan Parties, no slogan or other advertising device, product,
process, method, substance, part or other material now employed, or now
contemplated to be employed, by any Consolidated Party infringes in any material
respect upon any rights held by any other Person. No claim or litigation
regarding any of the foregoing is pending or, to the best knowledge of the Loan
Parties, threatened, which, either individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
SECTION 5.12 REAL ESTATE, LEASES. (a) On and as of the Closing Date and
each date on which a Compliance Certificate is delivered by the Loan Party
Representative pursuant to Section 6.02(b), except as set forth on Schedule 5.12
as supplemented from time to time by the Borrowers (or on their behalf by the
Loan Party Representative), (i) no Loan Party owns any Real Property Asset with
a fair market value in excess of $1,000,000 which, as of such date, is not
subject to a Senior Mortgage or a Second Lien Mortgage, and Schedule 5.12 as so
supplemented accurately describes the location, by state and street address of
each such Real Property Asset and (ii) no Loan Party leases any Real Property
Asset at which personal property (including fixtures) of the Loan Parties with
an aggregate fair market value in excess of $1,000,000 is located, and Schedule
5.12 as so supplemented accurately describes the location, by state and street
address of each such Real Property Asset, together with the identity of the
lessor and lessee, the term of the lease and the annual rental payments.
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(b) Each Consolidated Party has (i) good and marketable fee title
to all of its owned Real Property Assets and (ii) good and valid title to the
leasehold estates in all of the leased Real Property Assets, in each case free
and clear of all Liens, easements, covenants, rights-of-way and other similar
restrictions of any nature whatsoever, except Permitted Liens.
(c) All Governmental Authorizations and all private consents,
approvals and authorizations with respect to the Real Property Assets, necessary
to enable the Consolidated Parties to lawfully occupy and use such property for
all of the purposes for which it is currently occupied and used have been
lawfully issued and are in full force and effect except as could not reasonably
be expected to have a Material Adverse Effect. All the Real Property Assets are
in compliance in all material respects with all applicable legal requirements,
including the Americans with Disabilities Act of 1990.
(d) Except as set forth on Schedule 5.12 as supplemented, no
consent or approval of any landlord or other third party in connection with any
material leased Real Property Assets is necessary for any Loan Party to enter
into and execute the Second Lien Loan Documents.
SECTION 5.13 ENVIRONMENTAL MATTERS. Except as disclosed on Schedule 5.13
or as would not reasonably be expected to have a Material Adverse Effect:
(a) Each of the facilities and properties owned, leased or
operated by any Consolidated Party (the "Subject Properties") and all operations
at the Subject Properties are in compliance with all applicable Environmental
Laws, and there is no violation of any Environmental Law by any Consolidated
Party with respect to the Subject Properties or the businesses operated by the
Consolidated Parties (the "Businesses"), and there are no conditions relating to
the Businesses or Subject Properties that could give rise to liability under any
applicable Environmental Laws.
(b) None of the Subject Properties contains, or has previously
contained, any Hazardous Materials at, on or under the Subject Properties in
amounts or concentrations that constitute or constituted a violation of, or
could give rise to liability under, Environmental Laws.
(c) None of the Consolidated Parties has received any written or
verbal notice of, or inquiry from any Governmental Authority regarding, any
violation, alleged violation, non-compliance, liability or potential liability
regarding environmental matters or compliance with Environmental Laws with
regard to any of the Subject Properties or the Businesses, nor does any
Consolidated Party have knowledge or reason to believe that any such notice will
be received or is being threatened.
(d) Hazardous Materials have not been transported or disposed of
from the Subject Properties, or generated, treated, stored or disposed of at, on
or under any of the Subject Properties or any other location, in each case by or
on behalf of any of the Consolidated Parties in violation of, or in a manner
that would be reasonably likely to give rise to liability under, any applicable
Environmental Law.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the best knowledge of the Loan Parties, threatened,
under any Environmental Law
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to which any Consolidated Party is or will be named as a party, nor are there
any consent decrees or other decrees, consent orders, administrative orders or
other orders, or other administrative or judicial requirements outstanding under
any Environmental Law with respect to any Consolidated Party, the Subject
Properties or the Businesses.
(f) There has been no release or threat of release of Hazardous
Materials at or from the Subject Properties, or arising from or related to the
operations (including, without limitation, disposal) of the Consolidated Parties
in connection with the Subject Properties or otherwise in connection with the
Businesses, in violation of, or in amounts or in a manner that could give rise
to liability under, Environmental Laws.
SECTION 5.14 SECURITY DOCUMENTS.
(a) The Second Lien Pledge and Security Agreement is effective to
create in favor of the Second Lien Administrative Agent, for the ratable benefit
of the Second Lien Secured Parties, a legal, valid and enforceable first
priority security interest (subject to Permitted Liens) in the Collateral
identified therein owned by each Loan Party who is a party thereto, and, when
financing statements in appropriate form are filed as provided in Section 5.03,
the Second Lien Pledge and Security Agreement shall constitute a fully perfected
Lien on, and security interest in, all right, title and interest of the grantors
thereunder in such Collateral that may be perfected by filing, recording or
registering a financing statement under the UCC, in each case prior and superior
in right to any other Lien on any Collateral other than Permitted Liens.
(b) The Second Lien Pledge and Security Agreement is effective to
create in favor of the Second Lien Administrative Agent, for the ratable benefit
of the Second Lien Secured Parties, a legal, valid and enforceable security
interest in the Pledged Equity and Pledged Debt (each as defined in the Second
Lien Pledge and Security Agreement) identified therein, and, when the Senior
Administrative Agent has entered into the Intercreditor Agreement and such
Pledged Equity which are certificated securities and such Pledged Debt are
delivered to the Senior Administrative Agent (and so long as they continue to be
properly held by the Senior Administrative Agent pursuant to the Intercreditor
Agreement), the Second Lien Pledge and Security Agreement shall constitute a
fully perfected first priority Lien on, and security interest in, all right,
title and interest of the pledgors thereunder in such Pledged Equity and Pledged
Debt, in each case subject to no other prior Lien except for the Lien of the
Senior Pledge and Security Agreement.
(c) The Second Lien Pledge and Security Agreement, together with
the Intellectual Property Security Agreements referred to therein, when duly
recorded in the United States Patent and Trademark Office, or the United States
Copyright Office, as applicable, will constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the grantors thereunder
in all Patents and Patent Licenses, Trademarks and Trademark Licenses and
Copyrights and Copyright Licenses (each as defined in the Second Lien Pledge and
Security Agreement) owned by such grantors and in which a security interest may
be perfected by filing, recording or registration of an Intellectual Property
Security Agreement in the United States Patent and Trademark Office and the
United States Copyright Office, in each case prior and superior in right to any
other Lien other than Permitted Liens.
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(d) Each Account Control Agreement when duly executed and
delivered by the banks and security intermediaries parties thereto will
constitute a fully perfected Lien on, and security interest in, all right, title
and interest of the Loan Parties in such Deposit Accounts and Securities
Accounts (described in such Account Control Agreement) prior and superior in
right to any other Person, subject only to other Liens permitted therein, the
Lien of Senior Administrative Agent and other Permitted Liens.
(e) Each Second Lien Mortgage, when executed and delivered,
pursuant to Sections 6.12(d) and 6.15, will be effective to create in favor of
the Second Lien Administrative Agent for the ratable benefit of the Second Lien
Secured Parties, a legal, valid and enforceable Lien on all of the right, title
and interest of the Loan Parties in and to the Mortgaged Properties thereunder
and the proceeds thereof. When any Second Lien Mortgage is filed in the real
estate recording offices specified in such Second Lien Mortgage, such Second
Lien Mortgage shall constitute, a fully perfected Lien on, and security interest
in, all right, title and interest of the Loan Parties in and to the Mortgaged
Properties thereto and proceeds thereof, in each case prior and superior in
right to any Lien, other than the applicable Senior Mortgage and other Permitted
Liens.
SECTION 5.15 INSURANCE. Each of the Consolidated Parties maintains, with
financially sound and reputable insurance companies not Affiliates of any
Consolidated Party, insurance (including liability insurance and casualty
insurance), with respect to its properties and business against loss or damage
of the kinds customarily insured against by Persons engaged in the same or
similar businesses and owning similar properties in localities where any of the
Consolidated Parties operates, of such types and in such amounts, with such
deductibles and covering such risks, as are customarily carried under similar
circumstances by such other Persons (or otherwise required in the Second Lien
Collateral Documents). All such policies are in full force and effect, all
premiums due and payable thereon have been paid, and no notice of cancellation
or termination has been received with respect to any such policy which has not
been replaced on substantially similar terms prior to the date of such
cancellation. The activities and operations of the Consolidated Parties have
been conducted in a manner so as to conform in all material respects to all
applicable provisions of such insurance policies. Schedule 5.15 sets forth the
insurance coverage of each of the Consolidated Parties as of the Closing Date by
carrier, policy number, expiration date, type and amount.
SECTION 5.16 TRANSACTIONS WITH AFFILIATES. Except as set forth in Schedule
5.16, none of Holdings or any of its Restricted Subsidiaries will be,
immediately after giving effect to the transactions contemplated by the
Transaction Documents on the Closing Date, a party to or engaged in any
transaction with, and none of the properties and assets of any of Holdings or
any of its Restricted Subsidiaries will be, immediately after giving effect to
the transactions contemplated by the Transaction Documents on the Closing Date,
subject to or bound by any agreement or arrangement with any Affiliate of
Holdings (other than transactions, agreements and arrangements with another
Restricted Subsidiary).
SECTION 5.17 TAXES. Each Consolidated Party has filed, has caused to be
filed or has been included in all Federal and all material state, local and
other tax returns and reports required to be filed, and has paid all Taxes shown
thereon to be due and all Federal and all material state, local and other tax
assessment fees and other governmental charges levied or imposed upon them
66
or their properties, income or assets, together with applicable interest and
penalties, except those which are being contested in good faith by appropriate
proceedings and for which adequate reserves have been provided in accordance
with GAAP. No Loan Party knows of any claims by any Governmental Authority for
any unpaid Taxes against any of Holdings or any of its Restricted Subsidiaries
that would, if made, have a Material Adverse Effect. No Loan Party is a party to
any tax sharing agreement other than as may be permitted pursuant to Section
7.09.
SECTION 5.18 ERISA COMPLIANCE.
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other Federal or state Laws. Each
Plan that is intended to qualify under Section 401(a) of the Code has received a
favorable determination letter from the IRS or an application for such a letter
is currently being processed by the IRS with respect thereto, and, to the best
knowledge of the Loan Parties, nothing has occurred which would prevent, or
cause the loss of, such qualification. Holdings and each of its ERISA Affiliates
have made all required material contributions to each Plan subject to Section
412 of the Code, and no application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code has been made with
respect to any Plan in respect of any amount in excess of the Threshold Amount.
(b) There are no pending or, to the best knowledge of the Loan
Parties, threatened claims, actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan that could be reasonably expected to have a
Material Adverse Effect. There has been no prohibited transaction or violation
of the fiduciary responsibility rules with respect to any Plan that has resulted
or could reasonably be expected to result in a Material Adverse Effect.
(c) Except for any thereof that do not give rise to any liability
on the part of the Consolidated Parties which individually or in the aggregate
is reasonably expected to exceed the Threshold Amount: (i) no ERISA Event has
occurred or is reasonably expected to occur; (ii) no Pension Plan has any
Unfunded Pension Liability; (iii) neither Holdings nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability under Title IV of ERISA
with respect to any Pension Plan (other than premiums due and not delinquent
under Section 4007 of ERISA); (iv) neither Holdings nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA, would
result in such liability) under Sections 4201 or 4243 of ERISA with respect to a
Multiemployer Plan; and (v) neither Holdings nor any ERISA Affiliate has engaged
in a transaction that could be subject to Sections 4069 or 4212(c) of ERISA.
SECTION 5.19 PURPOSE OF SECOND LIEN LOANS. The proceeds of the Second Lien
Loans made on the Closing Date are to be used solely to refinance the
outstanding obligations under the Existing Credit Agreements and under the
Existing Subordinated Notes, to pay fees and expenses incurred in connection
with the Transaction, including those as contemplated by Section 4.01(m) and to
fund the Restricted Payments which are part of the Transaction.
SECTION 5.20 Margin Regulations; Investment Company Act; Public Utility
Holding Company Act.
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(a) None of the Consolidated Parties is engaged and will engage,
principally or as one of its important activities, in the business of purchasing
or carrying margin stock (within the meaning of Regulation U issued by the FRB),
or extending credit for the purpose of purchasing or carrying margin stock, and
no proceeds of any Second Lien Loans will be used to purchase or carry any
margin stock or to extend credit to others for the purpose of purchasing or
carrying margin stock.
(b) None of the Consolidated Parties (i) is a "holding company,"
or a "subsidiary company" of a "holding company," or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding company," within
the meaning of the Public Utility Holding Company Act of 1935, or (ii) is or is
required to be registered as an "investment company" under the Investment
Company Act of 1940. Neither the making of the Second Lien Loans, nor the
application of the proceeds or repayment thereof by the Borrowers, nor the
consummation of other transactions contemplated hereunder, will violate any
provision of any such Act or any rule, regulation or order of the SEC.
SECTION 5.21 DISCLOSURE. Each of the Consolidated Parties has disclosed to
the Second Lien Administrative Agent and the Second Lien Lenders all agreements,
instruments and corporate or other restrictions to which it or any of its
Restricted Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. No report, financial statement, certificate or other
information furnished (whether in writing or orally) by or on behalf of any
Consolidated Party to the Second Lien Administrative Agent or any Second Lien
Lender in connection with the transactions contemplated hereby and the
negotiation of this Agreement and the other Second Lien Loan Documents or
delivered hereunder or thereunder or under any other Second Lien Loan Document
(in each case, as modified or supplemented by other information so furnished)
taken as a whole contains any material misstatement of fact or omits to state
any material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that with
respect to projected financial information, each Consolidated Party represents
only that such information was prepared in good faith based upon assumptions
believed to be reasonable at the time such projections were prepared.
SECTION 5.22 COMPLIANCE WITH LAWS. Each Consolidated Party is in
compliance in all material respects with the requirements of all Laws and all
orders, writs, injunctions and decrees applicable to it or to its properties,
except in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith, either individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
SECTION 5.23 LABOR MATTERS. Except as would not reasonably be expected to
have a Material Adverse Effect:
(a) There are no strikes or lockouts against any Consolidated
Party pending or, to the best knowledge of the Loan Parties, threatened.
(b) The hours worked by and payments made to employees of the
Consolidated Parties have not been in violation of the Fair Labor Standards Act
or any other
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applicable federal, state, local or foreign Law dealing with such matters in any
case where a Material Adverse Effect would reasonably be expected to occur as a
result of the violation thereof.
(c) All payments due from any Consolidated Party, or for which any
claim may be made against any Consolidated Party, on account of wages and
employee health and welfare insurance and other benefits, have been paid or
accrued as a liability on the books of such Consolidated Party.
(d) Except as set forth in Schedule 5.23, none of the Consolidated
Parties is a party to a collective bargaining agreement.
Set forth on Schedule 5.23 is a summary as of the Closing Date of all labor
matters pending or, to the best knowledge of the Loan Parties, threatened by or
against any Consolidated Party that could reasonably be expected to result in a
material liability, and none of such labor matters, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.
SECTION 5.24 SOLVENCY. Immediately after giving effect to the Borrowings
made on the Closing Date, (a) the fair value of the assets of each of the Loan
Parties will exceed its debts and liabilities, subordinated, contingent or
otherwise, (b) the present fair saleable value of the property of each of the
Loan Parties will be greater than the amount that will be required to pay the
probable liability of its debts and other liabilities, subordinated, contingent
or otherwise, as such debts and other liabilities become absolute and mature,
and (c) each of the Loan Parties will not have unreasonably small capital with
which to conduct the business in which it is engaged as such business is now
conducted and is proposed to be conducted following the Closing Date.
SECTION 5.25 NATURE OF BUSINESS. Each of Holdings, Southwest and Southwest
II (a) is engaged solely in the business of (i) being a holding company for its
Restricted Subsidiaries and any Unrestricted Subsidiaries and (ii) entering into
and performing its obligations under the Senior Loan Documents, the Second Lien
Loan Documents, the Senior Subordinated Loan Documents and any Permitted
Additional Subordinated Debt Documents to which it is a party, (b) holds no
Equity Interests other than those of its Restricted Subsidiaries and any
Unrestricted Subsidiaries and, in the case of Southwest II, equity interests in
Southwest, and (c) has no Indebtedness except as permitted pursuant to Section
7.03(a), (b), (c), (d), (h) and (i). As of the Closing Date, Holdings and its
Subsidiaries are not engaged in any business other than the telecommunications
business.
SECTION 5.26 INDEPENDENT CREDIT ANALYSIS. Each Guarantor has,
independently and without reliance upon the Second Lien Administrative Agent or
any Second Lien Secured Party and based on such documents and information as it
has deemed appropriate, made its own credit analysis and decision to enter into
this Agreement, the Second Lien Guaranty herein and each other Second Lien Loan
Document to which it is or is to be a party, and such Guarantor has established
adequate means of obtaining from each other Loan Party on a continuing basis
information pertaining to, and is now and on a continuing basis will be
completely familiar with, the business, condition (financial or otherwise),
operations, performance, properties and prospects of such other Loan Party.
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SECTION 5.27 DESIGNATION AS SENIOR DEBT. All Second Lien Obligations of
each Loan Party shall be "Senior Indebtedness" and "Designated Senior
Indebtedness" for purposes of and as defined in the Senior Subordinated Loan
Agreement.
ARTICLE VI
AFFIRMATIVE COVENANTS
So long as any Second Lien Lender shall have any Commitment hereunder, any
Second Lien Loan or other non-contingent Second Lien Obligation hereunder shall
remain unpaid or unsatisfied, each Loan Party shall, and shall cause each
Consolidated Party to:
SECTION 6.01 FINANCIAL STATEMENTS. Deliver to the Second Lien
Administrative Agent (for further distribution to each Second Lien Lender), in
form and detail reasonably satisfactory to the Second Lien Administrative Agent
and the Required Lenders:
(a) as soon as available, but in any event within 90 days after
the end of each fiscal year thereafter of Holdings (commencing with the fiscal
year ended December 31, 2004), (i) a consolidated balance sheet of Holdings and
its Subsidiaries, as at the end of such fiscal year, and the respective related
consolidated statements of income or operations, shareholders' equity and cash
flows for such fiscal year, setting forth in comparative form the figures for
the previous fiscal year, and (ii) a consolidating balance sheet (A) of each
Unrestricted Subsidiary which is either a First-Tier Subsidiary of Holdings or a
First-Tier Subsidiary of any of its Restricted Subsidiaries and (B) of each
material Restricted Subsidiary of Holdings, as at the end of such fiscal year,
and the respective related consolidating statements of income or operations, for
such fiscal year, setting forth in comparative form the figures for the previous
fiscal year, all in reasonable detail and prepared in accordance with GAAP, such
consolidated balance sheet and statements to be audited and accompanied by
reports and opinions of an independent certified public accountant of nationally
recognized standing, which reports and opinions shall be prepared in accordance
with generally accepted auditing standards and shall not be subject to any
"going concern" or like qualification or exception or any qualification or
exception as to the scope of such audit; and each such consolidating balance
sheet and statements to be certified by a Responsible Officer of Holdings to the
effect that such statements are fairly stated in all material respects when
considered in relation to the consolidated financial statements of Holdings and
its Subsidiaries, as applicable;
(b) as soon as available, but in any event within 45 days after
the end of each of the first three fiscal quarters of each fiscal year of
Holdings (commencing with the fiscal quarter ended March 31, 2005), (i) a
consolidated balance sheet of Holdings and its Subsidiaries, as at the end of
such fiscal quarter, and the related consolidated statements of income or
operations, shareholders' equity and cash flows for such fiscal quarter and for
the portion of such fiscal year then ended, setting forth in comparative form
the figures for the corresponding fiscal quarter of the previous fiscal year and
the corresponding portion of the previous fiscal year, (ii) a consolidating
balance sheet (A) of each Unrestricted Subsidiary which is either a First-Tier
Subsidiary of Holdings or a First-Tier Subsidiary of any of its Restricted
Subsidiaries and (B) of each material Restricted Subsidiary of Holdings, as at
the end of such fiscal quarter, and the related consolidating statements of
income or operations, for such fiscal quarter and for the portion of such fiscal
year then ended, setting forth in comparative form the figures for the
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corresponding fiscal quarter of the previous fiscal year and the corresponding
portion of the previous fiscal year, all in reasonable detail, and (iii) a
schedule describing in reasonable detail each transaction during such fiscal
quarter between a Consolidated Party and an Unrestricted Subsidiary or other
Affiliate of Holdings (other than any of its Restricted Subsidiaries), other
than any transaction described in the Compliance Certificate for such quarter
delivered pursuant to Section 6.02(b), such consolidated balance sheet and
statements to be certified by a Responsible Officer of Holdings as fairly
presenting in all material respects the financial condition, results of
operations, shareholders' equity and cash flows of Holdings and its
Subsidiaries, on a consolidated basis in accordance with GAAP, subject only to
year-end audit adjustments and the absence of footnotes and such consolidating
balance sheet and statements and such affiliate transaction schedule to be
certified by a Responsible Officer of Holdings to the effect that such
statements are fairly stated in all material respects when considered in
relation to the consolidated financial statements of Holdings and its
Subsidiaries and that such schedule is true, accurate and complete in all
material respects; and
(c) as soon as available, but in any event no later than 45 days
after the beginning of each fiscal year of Holdings, a detailed forecast
prepared by management of Holdings in form reasonably satisfactory to the Second
Lien Administrative Agent, of consolidated balance sheets and statements of
income or operations and cash flows of Holdings and its Subsidiaries on a
monthly basis for such fiscal year (including the fiscal year in which the
Maturity Date occurs).
As to any information contained in materials furnished pursuant to Section
6.02(d), the Loan Parties shall not be separately required to furnish such
information under clause (a) or (b) above, but the foregoing shall not be in
derogation or the obligation of the Loan Parties to furnish the information and
materials described in clauses (a) and (b) above at the times specified therein.
SECTION 6.02 CERTIFICATES; OTHER INFORMATION. Deliver to the Second Lien
Administrative Agent (for further distribution to each Second Lien Lender), in
form and detail reasonably satisfactory to the Second Lien Administrative Agent:
(a) concurrently with the delivery of the financial statements
referred to in Section 6.01(a), a report of the independent certified public
accountants certifying such financial statements and stating that in making the
examination necessary therefor no knowledge was obtained of any Default under
the financial covenants set forth herein or, if such knowledge was obtained,
stating the nature and status of such Default and setting forth the details of
such Default (including, to the extent of its knowledge, the action Holdings or
any Restricted Subsidiary has taken with respect thereto, if any);
(b) concurrently with the delivery of the financial statements
referred to in Sections 6.01(a) and (b) (commencing with the delivery of the
financial statements for the fiscal year ended December 31, 2004), a duly
completed Compliance Certificate signed by a Responsible Officer of Holdings (i)
calculating the Consolidated First Lien Leverage Ratio and the Consolidated
Total Leverage Ratio for the four-fiscal quarter period ending on the last day
of the period covered by such financial statements, (ii) certifying whether the
Loan Parties are in compliance with the financial covenants in Section 7.18, and
(iii) certifying as to any of the following transactions which have been
consummated, payments or expenditures which have
71
been made, payments which have been received, or other actions taken by the
Consolidated Parties since the date of the then most recent such certificate,
calculating the following amounts for the period covered by such financial
statements and certifying as to the following other matters:
(A) any Equity Issuance, including (1) the Equity
Interests issued and sold, (2) the date thereof, (3) the Net Cash
Proceeds thereof and (4) the use of such proceeds;
(B) any Debt Issuance by any Consolidated Party
including (1) a description of the Indebtedness issued, including
whether such Indebtedness constitutes Permitted Additional
Subordinated Debt, (2) the date thereof, (3) the Net Cash Proceeds
thereof (unless such proceeds are Excluded Debt Issuance Proceeds),
and (4) the use of such proceeds (and unless previously certified to
the Second Lien Administrative Agent, such certificate shall attach
true and correct copies of any Permitted Additional Subordinated
Debt Documents in respect of such Indebtedness, together with the
Certificate from the Loan Party Representative contemplated by the
definition of Permitted Additional Subordinated Debt);
(C) all Restricted Payments made by any Consolidated
Party (other than a Restricted Payment made to a Consolidated
Borrower Party), including a description of each Restricted Payment,
including the date and amount thereof;
(D) all Investments made by any Consolidated Party
(other than any Investment made in a Consolidated Borrower Party or
Investments made in any other Consolidated Party for the purposes of
funding, directly or indirectly, any such Investment in a
Consolidated Borrower Party), including (1) a description of each
Investment, including the date and amount thereof and (2) whether
all or any portion of such Investment was funded with Available
Equity Proceeds;
(E) any Permitted Acquisition made by any Consolidated
Borrower Party, including (1) a description of such Permitted
Acquisition, including the date of the consummation thereof, (2) the
aggregate consideration paid by the Consolidated Borrower Parties in
connection with such Acquisition, including the amount of
Indebtedness assumed, (3) the portion of such consideration paid
with Available Equity Proceeds, if any, and (4) the portion of such
consideration paid with the Net Cash Proceeds of any Debt Issuance,
if any (and unless previously certified to the Second Lien
Administrative Agent, such certificate shall attach true and correct
copies of any Acquisition Documents in respect of such Permitted
Acquisition);
(F) any Consolidated Capital Expenditures, including
(1) the aggregate amount thereof, and (2) the amount of any thereof
financed with Available Equity Proceeds;
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(G) any Permitted Asset Exchange, including (1) any
cash consideration paid by the Loan Parties and (2) any Net Cash
Proceeds received by the Loan Parties in such transaction;
(H) calculating Available Equity Proceeds as of the
date of such certificate, giving effect to the transactions reported
in such certificate and showing such calculations in reasonable
detail;
(I) with respect to Dispositions (other than
Dispositions permitted by Sections 7.05(b), (c), and (d)) occurring
during the fiscal quarter of Holdings then most recently ended, (1)
the aggregate Net Cash Proceeds thereof and the aggregate amount of
such Net Cash Proceeds proposed to be reinvested in Capital Assets,
and (2) in the case of any such Disposition the Net Cash Proceeds of
which exceeds $1,000,000, the date of such Disposition, the Net Cash
Proceeds thereof and whether the Consolidated Parties propose to
reinvest such proceeds in Capital Assets; and any Net Cash Proceeds
from Dispositions in a prior period which have not been so
reinvested in the period of 365 days following such Disposition; and
(J) certifying and attaching supplements to Schedules
5.08 and 5.12, supplements to Schedule I to the Second Lien Pledge
and Security Agreement, and supplements to the schedules to the
Perfection Certificate for any Loan Party, in each case, as required
by Sections 6.11 and 6.12 and Section 3.03(c) of the Second Lien
Pledge and Security Agreement, and certifying that the Loan Parties
are in compliance with the other requirements of this Agreement and
the other Second Lien Loan Documents, including Section 6.03(a).
(c) promptly after receipt thereof, copies of any detailed audit
reports, management letters or recommendations submitted to the board of
directors (or the audit committee of the board of directors) of any Consolidated
Party by independent accountants in connection with the accounts or books of any
Consolidated Party, or any audit of any of them;
(d) promptly after the same are available, (i) copies of
management discussion and analysis in relationship to the financial statements
delivered pursuant to Sections 6.01(a) and 6.01(b), (ii) copies of each annual
report, proxy or financial statement or other report or communication sent to
the stockholders of Holdings or the Surviving Parent, and copies of all annual,
regular, periodic and special reports and registration statements which Holdings
or the Surviving Parent may file or be required to file with the SEC under
Section 13 or 15(d) of the Securities Exchange Act of 1934, and not otherwise
required to be delivered to the Second Lien Administrative Agent pursuant hereto
(other than any Form S-8 registration statements and other reports relating to
employee benefit plans, supplements to registration statements relating solely
to pricing of securities offerings for which registration statements were
previously filed and Forms D with respect to transactions otherwise described on
a Form 8-K), and (iii) upon the reasonable request of the Second Lien
Administrative Agent, copies of all reports and written information to and from
(A) the FCC or any PUC of any State with jurisdiction over the property or
business of any Consolidated Party or (B) the United States Environmental
Protection Agency, or any state or local agency responsible for environmental
matters, the United States
73
Occupational Health and Safety Administration, or any state or local agency
responsible for health and safety matters, or any successor or other agencies or
authorities concerning environmental, health or safety matters;
(e) promptly, and in any event within two Business Days after
receipt thereof or any Responsible Officer of any Loan Party first becomes aware
thereof, (i) notice of any breach or non-performance by any Loan Party of, or
any default under, any Material Document, (ii) copies of all notices, requests
and other documents received by any Loan Party or any of its Restricted
Subsidiaries under or pursuant to any Material Document regarding or related to
any breach or default by any party thereto that has not been cured or is not
expected to be cured within any time period for cure provided in such Material
Document or any other event relating thereto that could be reasonably expected
to have a Material Adverse Effect and (iii) copies of any amendment,
modification or waiver of any provision of any Material Document;
(f) promptly, and in any event within five Business Days after
receipt thereof by any Loan Party or any Restricted Subsidiary thereof, copies
of each notice or other correspondence received from the SEC (or comparable
agency in any applicable non-U.S. jurisdiction) concerning any investigation or
possible investigation or other inquiry by such agency regarding financial or
other operational results of any Loan Party or any Restricted Subsidiary
thereof; and
(g) promptly, such additional information regarding the business,
financial or corporate affairs of any Consolidated Party, or compliance with the
terms of the Second Lien Loan Documents, as the Second Lien Administrative Agent
may from time to time reasonably request.
Documents required to be delivered pursuant to Sections 6.01(a) or (b) or
Section 6.02(d) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which
Holdings posts such documents, or provides a link thereto on Holdings' website
on the Internet at the website address listed on Schedule 11.02, or (ii) on
which such documents are posted on Holdings' behalf on an Internet or another
intranet website, if any, to which each Second Lien Lender and the Second Lien
Administrative Agent have access (whether a commercial, third-party website or
whether sponsored by the Second Lien Administrative Agent); provided that, the
Loan Party Representative shall notify the Second Lien Administrative Agent (by
telecopier or electronic mail) of the posting of any such documents and provide
to the Second Lien Administrative Agent by electronic mail electronic versions
(i.e., soft copies) of such documents. Notwithstanding anything contained
herein, in every instance Holdings shall be required to provide paper copies of
the Compliance Certificates required by Section 6.02(b) to the Second Lien
Administrative Agent. The Second Lien Administrative Agent shall have no
obligation to request the delivery or to maintain copies (except for such
Compliance Certificates) of the documents referred to above, and in any event
shall have no responsibility to monitor compliance by the Loan Parties or the
Loan Party Representative with any such request for delivery, and each Second
Lien Lender shall be solely responsible for requesting delivery to it or
maintaining its copies of such documents.
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Each Loan Party hereby acknowledges that (a) the Second Lien
Administrative Agent and/or the Second Lien Arrangers will make available to the
Second Lien Lenders materials and/or information provided by or on behalf of the
Loan Parties hereunder (collectively, "Loan Party Materials") by posting the
Loan Party Materials on IntraLinks or another similar electronic system (the
"Platform") and (b) certain of the Second Lien Lenders may be "public-side"
Second Lien Lenders (i.e., Second Lien Lenders that do not wish to receive
material non-public information with respect to any Loan Party or its
securities) (each, a "Public Lender"). Each Loan Party hereby agrees that (w)
each Loan Party will use commercially reasonable efforts to identify that
portion of the Loan Party Materials that may be made available to Public Lenders
and that all such Loan Party Materials shall be clearly and conspicuously marked
"PUBLIC" by the Loan Parties which, at a minimum, shall mean that the word
"PUBLIC" shall appear prominently on the first page thereof; (x) by marking Loan
Party Materials "PUBLIC," the Loan Parties shall be deemed to have authorized
the Second Lien Administrative Agent, the Second Lien Arrangers and the Second
Lien Lenders to treat such Loan Party Materials as either publicly available
information or not material information (although it may be sensitive and
proprietary) with respect to the Loan Parties or its securities for purposes of
United States Federal and state securities laws; (y) all Loan Party Materials
marked "PUBLIC" are permitted to be made available through a portion of the
Platform designated "Public Investor;" and (z) the Second Lien Administrative
Agent and the Second Lien Arrangers shall be entitled to treat any Loan Party
Materials that are not marked "PUBLIC" as being suitable only for posting on a
portion of the Platform not designated "Public Investor." The Loan Parties shall
be under no obligation to designate any Loan Party Materials as "PUBLIC."
SECTION 6.03 NOTICES. Promptly and, in any event, within two days after
any Responsible Officer of any Loan Party first becomes aware of any of the
following occurrences, notify the Second Lien Administrative Agent and each
Second Lien Lender:
(a) of the occurrence of any Default;
(b) of any dispute, action, litigation, investigation or
proceeding between any Consolidated Party and any Governmental Authority, or the
commencement of, or any material development in, any action, litigation,
investigation or proceeding against any Consolidated Party, including pursuant
to any applicable Environmental Laws, in any such case, which could reasonably
be expected to have a Material Adverse Effect;
(c) the receipt of any tax assessment against any of Holdings or
its Restricted Subsidiaries for unpaid Taxes in excess of the Threshold Amount;
(d) of the occurrence of any ERISA Event which could reasonably be
expected to result in liability in excess of the Threshold Amount;
(e) of any material change in accounting policies or financial
reporting practices by any Consolidated Party; and
(f) of any announcement by ▇▇▇▇▇'▇ or S&P of any change or
possible change in a debt rating.
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Each notice pursuant to this Section 6.03 shall be accompanied by a
statement of a Responsible Officer of Holdings setting forth details of the
occurrence referred to therein and stating what action Holdings or any
Restricted Subsidiary has taken and proposes to take with respect thereto. Each
notice pursuant to Section 6.03(a) shall describe with particularity any and all
provisions of this Agreement and any other Second Lien Loan Document that have
been breached.
SECTION 6.04 PAYMENT OF OBLIGATIONS. Pay and discharge, as the same shall
become due and payable, all its material obligations and liabilities, including
(a) all Federal Taxes and all other material tax liabilities, fees, assessments
and governmental charges or levies upon it or its properties or assets, unless
the same are being contested in good faith by appropriate proceedings diligently
conducted and adequate reserves in accordance with GAAP are being maintained,
(b) all lawful claims which, if unpaid, would by Law become a Lien (other than a
Permitted Lien) upon its property, and (c) all Indebtedness, as and when due and
payable, but subject to any subordination provisions contained in any instrument
or agreement evidencing such Indebtedness, unless such Indebtedness is being
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP are being maintained.
SECTION 6.05 PRESERVATION OF EXISTENCE, ETC. (a) Preserve, renew and
maintain, in full force and effect its (i) legal existence and (ii) good
standing under the Laws of the jurisdiction of its incorporation or
organization, except in a transaction permitted by Sections 7.04 or 7.05; (b)
take all reasonable action to maintain all Governmental Authorizations and all
material rights, privileges, permits, licenses, approvals and franchises in each
case which are necessary or desirable in the normal conduct of its business,
except in a transaction permitted by Sections 7.04 and 7.05; and (c) preserve or
renew all of its registered patents, trademarks, trade names and service marks,
the non-preservation or non-renewal of which could reasonably be expected to
have a Material Adverse Effect; provided, however, that no Loan Party shall be
required to preserve any Governmental Authorization or any material right,
privilege, permit, license, approval or franchise if the general partner, board
of managers, board of directors (or group performing a similar function) of such
Loan Party shall determine that the preservation thereof is no longer desirable
in the conduct of the business of such Loan Party and that the loss thereof is
not disadvantageous in any material respect to such Loan Party or the Second
Lien Lenders; provided, further, that no such determination shall excuse any
breach of the Loan Parties' obligations under any other provision of this
Agreement or any other Second Lien Loan Document if preservation of any such
Governmental Authorization, right, privilege, permit, license approval or
franchise is necessary to the compliance by the Loan Parties with the
requirements thereof; and provided further that any Loan Party shall be
permitted to change its name on not less than 30 days prior written notice to
the Second Lien Administrative Agent.
SECTION 6.06 MAINTENANCE OF PROPERTIES. (a) Maintain, preserve and protect
all of its material properties and equipment necessary in the operation of its
business in good working order and condition, ordinary wear and tear and
Casualty and Condemnation excepted; (b) make all necessary repairs thereto and
renewals and replacements thereof except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect; and (c) use the
standard of care typical in the industry in the operation and maintenance of its
facilities.
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SECTION 6.07 MAINTENANCE OF INSURANCE; CERTAIN PROCEEDS. (a) Maintain with
financially sound and reputable insurance companies not Affiliates of any
Consolidated Party, insurance (including liability insurance and casualty
insurance), with respect to its properties and business against loss or damage
of the kinds customarily insured against by Persons engaged in the same or
similar businesses and owning similar properties in localities where such
Consolidated Party operates, of such types and in such amounts, with such
deductibles and covering such risks, as are customarily carried under similar
circumstances by such other Persons (or otherwise required in the Second Lien
Collateral Documents). At all times after the Final Senior Termination Date, the
Second Lien Administrative Agent shall be named as loss payee and/or additional
insured with respect to any such insurance providing coverage in respect of any
Collateral, and each provider of any such insurance shall agree, by endorsement
upon the policy or policies issued by it or by independent instruments furnished
to the Second Lien Administrative Agent, that at all times after the Final
Senior Termination Date, it will give the Second Lien Administrative Agent 30
days prior written notice before any such policy or policies shall be altered or
canceled, and that no act or default of any Consolidated Party or any other
Person shall affect the rights of the Second Lien Administrative Agent or the
Second Lien Lenders under such policy or policies.
(b) In case of any Casualty or Condemnation with respect to any
Property of any Consolidated Party or any part thereof with a book value in
excess of the Threshold Amount, promptly give written notice thereof to the
Second Lien Administrative Agent generally describing the nature and extent of
such damage, destruction or taking. In such event, the Borrowers shall, or shall
cause such Consolidated Party to, promptly repair, restore or replace the
Property of such Consolidated Party (or such part thereof), which was subject to
such Casualty or Condemnation, at such Consolidated Party's cost and expense,
whether or not the Insurance Proceeds or Condemnation Award, if any, received on
account of such event shall be sufficient for that purpose; provided, however,
that such Property need not be repaired, restored or replaced to the extent the
failure to make such repair, restoration or replacement (i)(A) is desirable to
the proper conduct of the business of such Consolidated Party in the ordinary
course and otherwise in the best interest of such Consolidated Party and (B)
would not materially impair the rights and benefits of the Second Lien
Administrative Agent or the Second Lien Secured Parties under the Second Lien
Collateral Documents or any other Second Lien Loan Document or (ii) is
attributable to the application of the Insurance Proceeds from such Casualty or
the Condemnation Award from such Condemnation to payment of the Senior
Obligations or, after the Final Senior Termination Date, the payment of the
Second Lien Obligations in accordance with the provisions of Section 2.03.
(c) In the event any Consolidated Party receives any Insurance
Proceeds, Condemnation Award or Net Cash Proceeds from any Disposition after the
Final Senior Termination Date (other than any Disposition permitted pursuant to
Sections 7.05(b), (c) or (d)), the Borrowers will promptly (1) pay over, or
cause such funds to be paid over, such proceeds to the Second Lien
Administrative Agent, for prepayment of the Second Lien Obligations in
accordance with Section 2.03(b) or, (2) if such funds constitute Reinvestment
Funds, pending such reinvestment deposit or cause such funds to be deposited in
an account subject to an Account Control Agreement. The Second Lien
Administrative Agent agrees to release such Insurance Proceeds, Condemnation
Awards or other Net Cash Proceeds held by the Second Lien Administrative Agent
to the Borrowers upon request by the Loan Party Representative as needed
77
from time to time to pay for the repair, restoration or replacement of the
Property subject to such Casualty or Condemnation or other Disposition or to
purchase such other Capital Assets if, but only if, the conditions set forth in
the definition of "Reinvestment Funds" are satisfied at the time of such
request.
(c) In connection with the covenants set forth in this Section
6.07, it is understood and agreed that:
(i) none of the Second Lien Administrative Agent, the Second
Lien Lenders or their respective agents or employees shall be liable for
any loss or damage insured by the insurance policies required to be
maintained under this Section 6.07, it being understood that (A) the
Consolidated Parties shall look solely to their insurance companies or any
other parties other than the aforesaid parties for the recovery of such
loss or damage and (B) such insurance companies shall have no rights of
subrogation against the Second Lien Administrative Agent, the Second Lien
Lenders or their agents or employees. If, however, the insurance policies
do not provide waiver of subrogation rights against such parties, as
required above, then each of the Loan Parties shall, and shall cause each
Consolidated Party to, waive its right of recovery, if any, against the
Second Lien Administrative Agent, the Second Lien Lenders and their agents
and employees, to the extent permitted by Law;
(ii) the Consolidated Parties will permit a third party
insurance consultant retained by the Second Lien Administrative Agent, at
the expense of the Borrowers, to review the insurance policies maintained
by the Consolidated Parties upon the occurrence of an Event of Default;
and
(iii) after the occurrence and during the continuance of an
Event of Default, if the Final Senior Termination Date has occurred, the
Required Lenders shall have the right from time to time to require the
Consolidated Parties to keep other insurance in such form and amount as
the Second Lien Administrative Agent or the Required Lenders may
reasonably request; provided that such insurance shall be obtainable on
commercially reasonable terms; and provided further that the designation
of any form, type or amount of insurance coverage by the Second Lien
Administrative Agent or the Required Lenders under this Section 6.07 shall
in no event be deemed a representation, warranty or advice by the Second
Lien Administrative Agent or the Second Lien Lenders that such insurance
is adequate for the purposes of the business of the Consolidated Parties
or the protection of their properties.
SECTION 6.08 COMPLIANCE WITH LAWS, CONTRACTUAL OBLIGATIONS. Comply in all
material respects with the requirements of all Laws and all orders, writs,
injunctions and decrees applicable to it or to its business or property and all
Contractual Obligations to which it is a party, except in such instances in
which (a) such requirement of Law or order, writ, injunction or decree or
Contractual Obligation is being contested in good faith by appropriate
proceedings diligently conducted or (b) the failure to comply therewith could
not be reasonably expected to have a Material Adverse Effect.
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SECTION 6.09 BOOKS AND RECORDS. (a) Maintain proper books of record and
account, in which full, true and correct entries in conformity with GAAP
consistently applied shall be made of all financial transactions and matters
involving the assets and business of the Consolidated Parties, as the case may
be; and (b) maintain such books of record and account in material conformity
with all applicable requirements of any Governmental Authority having regulatory
jurisdiction over the Consolidated Parties.
SECTION 6.10 INSPECTION RIGHTS. Permit representatives and independent
contractors of the Second Lien Administrative Agent and the Second Lien Lenders
to visit and inspect any of its properties, to examine its corporate, financial
and operating records, and make copies thereof or abstracts therefrom, and to
discuss its affairs, finances and accounts with its directors, officers, and
independent public accountants, at such reasonable times during normal business
hours and as often as may be reasonably desired, upon reasonable advance notice
to the Loan Party Representative; provided, however, that when an Event of
Default exists the Second Lien Administrative Agent or any Second Lien Lender
(or any of their respective representatives or independent contractors) may do
any of the foregoing at the expense of the Borrowers at any time during normal
business hours and without advance notice.
SECTION 6.11 FURTHER ASSURANCES WITH RESPECT TO ADDITIONAL SUBSIDIARIES.
(a) Cause the Loan Party Representative to notify the Second Lien Administrative
Agent at the time that any Consolidated Party shall organize or Acquire a new
Subsidiary not later than 10 Business Days following the date of such
organization and not later than the date of such Acquisition. Such notice shall
specify its name, type of organization and jurisdiction of organization, a brief
description of the location and type of operations of such Person and either
that such Subsidiary is a Restricted Subsidiary or has been Designated an
Unrestricted Subsidiary hereunder as provided in Section 6.11(b);
(b) In the case of any such newly organized or Acquired Subsidiary
which has been Designated as an Unrestricted Subsidiary, Holdings shall deliver
to the Second Lien Administrative Agent a certificate of a Responsible Officer
of Holdings, (i) Designating such Person as an Unrestricted Subsidiary, (ii)
certifying that the organization or Acquisition of such Person was in compliance
with the provisions of Sections 7.13 and 7.14, and (iii) certifying a supplement
to Schedule 5.08 and a supplement to Schedule I to the Second Lien Pledge and
Security Agreement on behalf of the Loan Parties which directly own the Equity
Interests in such Subsidiary pledging such Equity Interests as required under
the Second Lien Pledge and Security Agreement;
(c) In the case of any newly organized or Acquired Restricted
Subsidiary which is a Domestic Subsidiary, (i) cause such Person to execute and
deliver a Second Lien Joinder Agreement, (ii) deliver, and cause such Person to
deliver, to the Second Lien Administrative Agent documents of the types referred
to in clauses (iii), (iv), (v) (to the extent reasonably requested by the Second
Lien Administrative Agent), (x), (xi), (xii), (xiii), (xiv), (xv) and (xvii) of
Section 4.01(a), to the extent required by the Second Lien Administrative Agent,
and (iii) deliver a certificate of a Responsible Officer of the Loan Party
Representative certifying supplements to Schedules 5.08 and 5.12 and Schedule I
to the Second Lien Pledge and Security Agreement, setting forth the information
contemplated by Sections 5.08 and 5.12 and Section
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2.03(a) of the Second Lien Pledge and Security Agreement, all in form, content
and scope reasonably satisfactory to the Second Lien Administrative Agent; and
(d) In the case of any newly organized or Acquired Restricted
Subsidiary which is a Foreign Subsidiary, the Loan Party Representative shall
deliver to the Second Lien Administrative Agent a certificate of a Responsible
Officer certifying a supplement to Schedule 5.08 and a supplement to Schedule I
to the Second Lien Pledge and Security Agreement on behalf of the Loan Parties
which directly own the Equity Interests in such Subsidiary describing all such
Equity Interests and pledging 65% of such Equity Interests as required under the
Second Lien Pledge and Security Agreement.
SECTION 6.12 FURTHER ASSURANCES WITH RESPECT TO ADDITIONAL COLLATERAL.
(a) Execute any and all further documents, financing statements,
agreements and instruments, and take all such further actions (including the
filing and recording of financing statements, fixture filings, mortgages, deeds
of trust and other documents), which may be required under any applicable Law,
or which the Second Lien Administrative Agent may reasonably request, to comply
with the terms of this Agreement and the other Second Lien Loan Documents,
including causing, to the fullest extent permitted by Law, (i) the Collateral to
be subject to a first priority security interest in favor of the Second Lien
Administrative Agent (subject to Permitted Liens) and (ii) the pledge of the
Equity Interests of its respective First-Tier Subsidiaries pursuant to the
Second Lien Pledge and Security Agreement, in each case to secure all the Second
Lien Obligations, all at the expense of the Borrowers. The Loan Parties also
agree to provide to the Second Lien Administrative Agent, from time to time upon
request (but not more frequently than once in any twelve month period), evidence
reasonably satisfactory to the Second Lien Administrative Agent as to the
validity, perfection and priority of the Liens created or intended to be created
by the Second Lien Loan Documents.
(b) If any Loan Party, after the Closing Date, (i) acquires any
Real Property Asset with a fair market value in excess of $1,000,000 or (ii)
leases any Real Property Asset at which personal property (including fixtures)
of the Loan Parties with an aggregate fair market value in excess of $1,000,000
is or may be located, the Loan Party Representative shall notify the Second Lien
Administrative Agent thereof.
(c) In the case of any such leased Real Property Asset, use
commercially reasonable efforts (i) to cause, to the fullest extent permitted by
Law, the fixtures and other personal property and assets of the Loan Parties at
such location to be subjected to a first priority security interest in favor of
the Second Lien Administrative Agent (subject to Permitted Liens) and (ii) to
take such actions as shall be necessary or reasonably requested by the Second
Lien Administrative Agent to grant and perfect such Liens, including to obtain a
Waiver Agreement from the applicable landlord.
(d) In the case of any owned Real Property Asset with a fair
market value in excess of $1,000,000 acquired by a Loan Party after the Closing
Date (and at any time after an Event of Default has occurred and is continuing,
any other Real Property Asset not then subject to a Second Lien Mortgage), if
the Senior Administrative Agent shall have received a Senior Mortgage with
respect to any such Real Property Asset, then the Loan Parties shall also
deliver
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to the Second Lien Administrative Agent with respect to each such Real Property
Asset substantially concurrently with the delivery of such Senior Mortgage to
the Senior Administrative Agent: (i) a duly executed Second Lien Mortgage in
respect of each such owned Real Property Asset; (ii) evidence satisfactory to
the Second Lien Administrative Agent that all actions as shall be necessary or
reasonably requested by the Second Lien Administrative Agent to record such
Second Lien Mortgage in the applicable real property records have been taken;
and (iii) evidence satisfactory to the Second Lien Administrative Agent that all
charges for mortgage recording tax, and all related expenses, if any, have been
paid.
SECTION 6.13 USE OF PROCEEDS. Use the proceeds of the Second Lien Loans on
the Closing Date solely for the purposes set forth in Section 5.19.
SECTION 6.14 ENVIRONMENTAL. (a) Provide the Second Lien Administrative
Agent with a copy of any report furnished to the Senior Administrative Agent of
an environmental assessment as to the nature and extent of the presence of
Hazardous Materials on any Subject Properties and as to the compliance by the
Consolidated Parties with Environmental Laws at such Subject Properties.
(b) Conduct and complete all investigations, studies, sampling,
and testing and all remedial, removal, and other actions necessary to address
all Hazardous Materials on, from or affecting any of the Subject Properties to
the extent necessary to be in compliance with all Environmental Laws and with
the validly issued orders and directives of all Governmental Authorities with
jurisdiction over such Subject Properties to the extent any failure could
reasonably be expected to have a Material Adverse Effect.
SECTION 6.15 FURTHER ASSURANCES WITH RESPECT TO POST-CLOSING DATE
DELIVERIES. The Loan Party Representative shall cause each of the following
documents to be delivered to the Second Lien Administrative Agent on or prior to
the date which is ninety (90) days following the Closing Date:
(a) With respect to each Real Property Asset subject to an
Existing Mortgage, (i) a Second Lien Mortgage in substantially the form of
Exhibit H (with appropriate modification made to such form to take into account
variances in the requirements of applicable state law or as the Second Lien
Administrative Agent may reasonably request), duly executed by the Loan Party a
party to such Existing Mortgage, (ii) evidence satisfactory to the Second Lien
Administrative Agent that arrangements have been made for the filing and
recording of such Second Lien Mortgage in the applicable real property records
and (iii) evidence satisfactory to the Second Lien Administrative Agent that all
related charges for mortgage recording tax and all related expenses have been
paid or provided for;
(b) a certificate of a Responsible Officer of the Loan Party
Representative attaching a copy of any Arkansas PUC Authorizations necessary to
permit the Lien of the Second Lien Collateral Documents to attach to any
Collateral located in Arkansas which is subject to the jurisdiction of the
Arkansas PUC, and certifying that such PUC Authorization is in full force and
effect; and
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(c) favorable opinions of local counsel for the Loan Parties,
addressed to the Second Lien Administrative Agent and each Second Lien Lender,
as the Second Lien Administrative Agent may reasonably request, with respect to
the Second Lien Mortgages and any such PUC Authorization.
ARTICLE VII
NEGATIVE COVENANTS
So long as any Second Lien Lender shall have any Commitment hereunder, any
Second Lien Loan or other non-contingent Second Lien Obligation hereunder shall
remain unpaid or unsatisfied, the Loan Parties shall not, directly or
indirectly, nor shall they permit any other Consolidated Party to, directly or
indirectly:
SECTION 7.01 LIENS. Create, incur, assume or suffer to exist any Lien upon
any of its property, assets or revenues, whether now owned or hereafter
acquired, other than the following (with such Liens described below being
referred to herein as "Permitted Liens"):
(a) Liens pursuant to any Second Lien Loan Document and Liens
pursuant to any Senior Loan Document;
(b) Liens existing on the date hereof and listed on Schedule 7.01
and any renewals or extensions thereof; provided that (i) the property covered
thereby is not changed, (ii) the amount secured or benefited thereby is not
increased, (iii) the direct or any contingent obligor with respect thereto is
not changed, and (iv) any renewal or extension of the obligations secured or
benefited thereby is permitted by Section 7.03(b);
(c) Liens for taxes, fees, assessments or other governmental
charges, not yet due or which are not delinquent or remain payable without
penalty, or to the extent non-payment thereof is permitted by Section 6.04;
provided that no notice of lien has been filed or recorded under the Code;
(d) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business which
are not delinquent or which are being contested in good faith and by appropriate
proceedings which proceedings have the effect of preventing the forfeiture or
sale of the property subject thereto and for which adequate reserves with
respect thereto are maintained on the books of the applicable person in
accordance with GAAP;
(e) Liens, including pledges or deposits made by any Consolidated
Party, in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other social security legislation;
(f) easements, rights-of-way, restrictions, survey exceptions,
reservations, licenses and other similar encumbrances affecting real property of
any Loan Party or any of their Restricted Subsidiaries incurred in the ordinary
course of business which, in the aggregate, are not substantial in amount, and
which do not in any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the
business of the applicable Person;
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(g) Permitted Encumbrances (as defined in any Second Lien
Mortgage);
(h) Liens securing judgments for the payment of money not
constituting an Event of Default under Section 8.01(h) or securing appeal or
other surety bonds related to such judgments;
(i) Liens securing Indebtedness permitted under Section 7.03(f);
(j) Liens on property of a Restricted Subsidiary Acquired by a
Consolidated Borrower Party after the Closing Date in a Permitted Acquisition or
Permitted Asset Exchange; provided, however, that (i) such Liens were not
created in contemplation of such Acquisition, (ii) if such Acquisition is
effected by a merger or consolidation with an existing Consolidated Borrower
Party, such Liens do not encumber any assets or property previously owned by
such Consolidated Borrower Party and (iii) if such Liens secure any
Indebtedness, such Indebtedness is otherwise permitted under Section 7.03(g);
(k) leases and subleases of Real Property Assets of a Consolidated
Party which do not materially interfere with the ordinary conduct of the
business of such Consolidated Party;
(l) Liens arising solely by virtue of any statutory or common law
provisions relating to banker's Liens, rights of setoff or similar rights and
remedies as to deposit accounts or other funds maintained with a depositary
institution;
(m) Liens arising from Uniform Commercial Code financing statement
filings regarding operating leases entered into by any Consolidated Borrower
Party in the ordinary course of business;
(n) Liens securing the performance of, or payment in respect of,
leases, bids, tenders, government contracts (other than for the repayment of
borrowed money), surety, performance and other obligations of a similar nature
incurred in the ordinary course of business;
(o) Liens in favor of customs and revenue authorities arising as a
matter of law or pursuant to a bond to secure payment of customs duties in
connection with the importation of goods; and
(p) Liens arising by virtue of statute in favor of any Senior
Lender in respect of the Investment of the Loan Parties in non-voting
participation certificates of such Senior Lender permitted pursuant to Section
7.02(b).
SECTION 7.02 INVESTMENTS. Make or hold any Investments in any Person,
except:
(a) Investments held in the form of Cash Equivalents;
(b) Investments made on or prior to the Closing Date, including
Investments in the Wireless Partnerships, Investments in the SCCs and other
Investments in non-voting participation certificates of any Senior Lender, in
each case, as set forth in Schedule 5.08 as of the Closing Date (and in respect
of any such scheduled non-voting participation certificates of a
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Senior Lender, additional Investments made after the Closing Date in such
non-voting certificates including accruals on such certificates made by such
Senior Lender in accordance with its bylaws and capital plan);
(c) Advances or loans to directors, officers and employees of any
Loan Party or in the ordinary course of business as presently conducted in a
principal amount not to exceed $2,500,000 in the aggregate at any one time
outstanding; provided, however that any such advances or loans to directors or
executive officers shall only be permitted to the extent allowable under
▇▇▇▇▇▇▇▇-▇▇▇▇▇;
(d) Investments by any Loan Party in the form of contributions to
capital or loans or advances (i) outstanding or made on the Closing Date in any
other Consolidated Party and (ii) made in any Consolidated Borrower Party at any
time after the Closing Date (or made in any other Consolidated Party for the
sole purpose of funding a substantially contemporaneous Investment in a
Consolidated Borrower Party by such other Consolidated Party); provided that (A)
immediately before and after giving effect thereto, no Default exists or would
result therefrom, (B) each item of intercompany Indebtedness shall be unsecured
and (C) each item of intercompany Indebtedness shall be evidenced by an
Intercompany Note which shall be pledged as security for the Second Lien
Obligations of the holder thereof under the Second Lien Loan Documents and, if
prior to the Final Senior Termination Date, delivered to the Senior
Administrative Agent pursuant to the Senior Pledge and Security Agreement and
the Intercreditor Agreement, and thereafter, delivered to the Second Lien
Administrative Agent pursuant to the terms of the Second Lien Collateral
Documents;
(e) Investments constituting (i) accounts receivable received and
other trade credit granted in the ordinary course of business; (ii) stock,
obligations or securities received in settlement of debts created in the
ordinary course of business or in satisfaction of judgments; (iii) prepaid
expenses, negotiable instruments held for collection and lease, and utility and
workers' compensation, performance and other similar deposits; (iv) deposits of
proceeds from sales and other dispositions permitted pursuant hereto with a
"qualified intermediary," "qualified trustee" or similar Person for purposes of
facilitating a "like-kind" exchange made in accordance with the applicable
provisions of the Code; and (v) Investments in connection with the bankruptcy or
reorganization of suppliers or customers and in settlement of delinquent
obligations of, and other disputes with, customers arising in the ordinary
course of business;
(f) Investments by any Consolidated Borrower Party that constitute
Permitted Acquisitions or Permitted Asset Exchanges;
(g) Investments by any Borrower in Swap Contracts permitted under
Section 7.03(e);
(h) Guarantees permitted by Section 7.03; and
(i) at any time that no Event of Default has occurred and is
continuing or would result, Holdings and its Restricted Subsidiaries may make
Investments in Foreign Restricted Subsidiaries, Unrestricted Subsidiaries and
other Persons primarily engaged in a telecommunications business during the term
of this Agreement which do not exceed in the
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aggregate the sum of (A) $20,000,000; provided, however, that such aggregate
amount shall increase to not more than $50,000,000 in respect of any Investment
if immediately after giving effect to such Investment the Consolidated Total
Leverage Ratio is less than 4.75:1, plus (B) Available Equity Proceeds (giving
effect to any other application of Available Equity Proceeds on the date of any
such Investment).
SECTION 7.03 INDEBTEDNESS. Create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness under the Senior Loan Documents in an aggregate
principal amount not to exceed the sum of (i) the difference between (A)
$1,300,000,000 minus (B) the sum of (1) the aggregate principal amount of any
term loans under the Senior Credit Agreement as may be prepaid from time to
time, plus (2) the aggregate amount by which the aggregate revolving loan
commitments under the Senior Credit Agreement are permanently reduced from time
to time, plus (ii) the amount on any date of determination of any accrued
interest and fees and premium, if any, thereon (such amount, the "Maximum Senior
Debt Amount") at any time outstanding;
(b) Indebtedness under the Second Lien Loan Documents;
(c) Indebtedness under the Senior Subordinated Loan Documents in an
aggregate principal amount not to exceed $135,000,000 (minus the amount of any
Senior Subordinated Loans as may be prepaid from time to time in compliance with
this Agreement, if any) at any time outstanding;
(d) Guarantees of any Loan Party in respect of Indebtedness otherwise
permitted hereunder of any other Loan Party;
(e) obligations (contingent or otherwise) of any Borrower existing or
arising under any Swap Contract; provided that (i) such obligations are (or
were) entered into by such Person in the ordinary course of business for the
purpose of directly mitigating risks associated with liabilities, commitments,
investments, assets, or property held or reasonably anticipated by such Person,
or changes in the value of securities issued by such Person, and not for
purposes of speculation or taking a "market view"; provided, that the Loan
Parties may enter into fixed-to-floating Swap Contracts as a part of a program
to reduce aggregate Consolidated Interest Charges, and (ii) such Swap Contract
does not contain any provision exonerating the non-defaulting party from its
obligation to make payments on outstanding transactions to the defaulting party;
(f) purchase money Indebtedness of the Loan Parties including
Capitalized Leases or Off-Balance Sheet Obligations; provided, however, that (i)
the total aggregate amount of all such Indebtedness at any one time outstanding
for the Loan Parties taken together, together with the aggregate amount of
Indebtedness under Section 7.03(g) shall not exceed $25,000,000, (ii) such
Indebtedness, when incurred, shall not exceed 100% of the cost or fair market
value, whichever is lower, of the Property being acquired on the date of
acquisition, (iii) such Indebtedness is created and any Lien attaches to such
Property concurrently with or within 90
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days of the acquisition thereof, and (iv) such Lien does not at any time
encumber any Property other than the Property financed by such Indebtedness;
(g) Indebtedness secured by Liens permitted pursuant to Section
7.01(j) and other unsecured Indebtedness in an aggregate amount at any one time
outstanding for the Loan Parties taken together, together with the aggregate
amount of Indebtedness under Section 7.03(f) shall not exceed $25,000,000;
(h) intercompany Indebtedness permitted under Section 7.02(d);
(i) Permitted Additional Subordinated Debt in the following aggregate
principal amounts:
(i) up to $50,000,000 principal amount of Permitted Additional
Subordinated Debt may be incurred by the Loan Parties if the Net Cash
Proceeds thereof are used to finance a Permitted Acquisition within 90 days
of such Debt Issuance;
(ii) up to $50,000,000 principal amount of Permitted Additional
Subordinated Debt may be incurred by the Loan Parties if the Net Cash
Proceeds thereof are used to finance Capital Expenditures, working capital
uses or any other uses (including to finance Permitted Acquisitions)
permitted under this Agreement;
(iii) Permitted Additional Subordinated Debt may be incurred by
the Loan Parties if the Net Cash Proceeds thereof are used to prepay Senior
Loans until the Final Senior Termination Date, and thereafter, if the
proceeds are used pursuant to Section 2.03(b)(iii); and
(iv) Permitted Additional Subordinated Debt may be incurred by
the Loan Parties to refinance any Permitted Additional Subordinated Debt
previously incurred under this Section 7.03(i);
(j) Indebtedness under cash management arrangements in the ordinary
course of business; and
(k) unsecured Indebtedness to finance insurance premiums in an
aggregate principal amount not to exceed $5,000,000 at any time outstanding.
SECTION 7.04 FUNDAMENTAL CHANGES AND ACQUISITIONS.
(a) Merge, dissolve, liquidate, consolidate with or into another
Person, or Dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person, except that, so long as no
Default exists or would result therefrom:
(i) each Consolidated Borrower Party may merge with or
consolidate with any other Consolidated Borrower Party;
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(ii) any Consolidated Borrower Party may be party to a
transaction of merger or consolidation with any other Person in connection
with a Permitted Acquisition of such Person; provided that (A) the
continuing or Surviving Person shall be a Consolidated Borrower Party and
(B) if such Consolidated Borrower Party is not the continuing or surviving
Person, such continuing or surviving Person shall be a Consolidated
Borrower Party and shall have complied with the terms of Sections 6.11 and
6.12;
(iii) in connection with a Permitted Restructuring Transaction,
Holdings, Southwest and/or Southwest II may merge or consolidate with the
Surviving Parent, any Additional Intermediate Holding Company a party to
such Permitted Restructuring Transaction, or any of Holdings, Southwest or
Southwest II; provided that (A) in connection with any such Restructuring
Transaction the Surviving Parent and any such Intermediate Holding Company
enter into a Second Lien Joinder Agreement and agree to the terms of this
Agreement as a Guarantor hereunder; (B) no Change of Control shall have
occurred and be continuing or would result; and (C) no other Event of
Default shall have occurred and be continuing or would result; and
(iv) a Restricted Subsidiary of Holdings may enter into a
transaction of merger or consolidation in connection with a Disposition
permitted under Section 7.05(d), (e) or (f).
(b) Permit any Loan Party to make any Acquisition, unless:
(i) in the case of an acquisition of Equity Interests of
another Person, after giving effect to such acquisition,
(A) if the Acquisition is not of a controlling interest
in the subject Person such that after giving effect thereto the
subject Person will not be a Subsidiary, then only if such
Acquisition would be permitted as an Investment under Section 7.02;
and
(B) if the Acquisition is of a controlling interest in
the subject Person such that after giving effect thereto the subject
Person will be a Subsidiary, then only if such Acquisition
constitutes a Permitted Acquisition or a Permitted Asset Exchange;
and
(ii) in the case of an Acquisition of all or any substantial
portion of the Property (other than Equity Interests) of another Person,
then only if such Acquisition will constitute a Permitted Acquisition or
Permitted Asset Exchanges.
SECTION 7.05 DISPOSITIONS. Make any Disposition (other than any Casualty
or Condemnation) or enter into any agreement to make any Disposition, except:
(a) Dispositions of obsolete or worn out property, whether now owned
or hereafter acquired for cash or for credit against the purchase price of
similar or replacement property, in an aggregate amount not to exceed
$10,000,000 in any fiscal year of Holdings;
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(b) Dispositions of inventory in the ordinary course of business;
(c) Dispositions of property by a Borrower or a Subsidiary of a
Borrower (i) to any Borrower or any Restricted Subsidiary of a Borrower, and
(ii) as an Investment in any other Person to the extent permitted pursuant to
Section 7.02(i); and Dispositions permitted by Section 7.04(a)(i), (ii) or
(iii);
(d) Permitted Asset Exchanges;
(e) Dispositions by any Loan Party of all its Equity Interests in a
Wireless Partnership; and
(f) other Dispositions for cash not to exceed $45,000,000 in any
calendar year or $130,000,000 in the aggregate;
provided, however, that any Disposition pursuant to subsections (a), (b), (d),
(e) and (f) shall be for fair market value.
SECTION 7.06 RESTRICTED PAYMENTS. Declare or make any Restricted Payment,
or incur any obligation contingent or otherwise to do so except that:
(a) any Consolidated Party may declare and pay dividends and
distributions payable solely in common stock or other common Equity Interests of
such Consolidated Party;
(b) any Consolidated Party may make Restricted Payments to any other
Consolidated Borrower Party;
(c) at any time that no Event of Default has occurred and is
continuing or would result, any Consolidated Party may make Restricted Payments
directly or indirectly (through another Consolidated Party) to Holdings in the
aggregate amount of, and Holdings shall use the proceeds of such Restricted
Payments to pay, actual advisory, monitoring and management fees pursuant to
Holdings' Organization Documents, and administrative and other miscellaneous
expenses incurred by Holdings in the ordinary course in accordance with Section
7.13(b) in an aggregate amount not to exceed $2,000,000 during any fiscal year
of Holdings (in the case of the fiscal year of Holdings ending December 31,
2004, such annual amount permitted hereunder shall be reduced by the amount of
any such payments made during such fiscal year but prior to the Closing Date);
(d) (i) the Consolidated Borrower Parties may make Restricted
Payments, directly or indirectly through other Consolidated Parties, to any
other Consolidated Borrower Party for the purpose of paying Taxes owed by such
Consolidated Borrower Party, excluding for this purpose any Taxes attributable
to the income of Unrestricted Subsidiaries;
(ii) the Restricted Subsidiaries of Southwest II may make
Restricted Payments, directly or indirectly through other Consolidated
Parties, to Southwest II in an amount not to exceed, and to be used solely
for the immediate payment of, any actual Taxes (including estimated Taxes
but not any other anticipated Taxes) of Southwest II and all members of the
consolidated group including Southwest II for such period that are
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due and payable to any taxing authority, excluding for this purpose any
Taxes attributable to the income of Unrestricted Subsidiaries;
(iii) Southwest II and its Restricted Subsidiaries may make
Restricted Payments, directly or indirectly through other Consolidated
Parties, to the Surviving Parent (on or after any date on which it becomes
a Loan Party) in an amount not to exceed, and to be used solely for the
immediate payment of, any actual Taxes (including estimated Taxes but not
any other anticipated Taxes) of Surviving Parent and all members of the
consolidated group including the Surviving Parent for such period that are
due and payable to any taxing authority, excluding for this purpose any
Taxes attributable to the income of (A) any Restricted Subsidiary of the
Surviving Parent other than Southwest II and its Restricted Subsidiaries
and (B) Unrestricted Subsidiaries;
(iv) during any tax period prior to, or in which occurs, a
Permitted Restructuring Transaction, Holdings, Southwest and its Restricted
Subsidiaries may make Restricted Payments, directly or indirectly through
other Consolidated Parties, to Holdings or Southwest's or Holdings' members
for the purposes of paying Taxes in an amount not to exceed a notional
amount for such period equal to the product of (A) the net taxable income
of Southwest and its Restricted Subsidiaries for such period, reduced by
net operating losses of Southwest and its Restricted Subsidiaries in excess
of taxable income for all prior periods, assuming that since its inception
Southwest's sole assets were and are the Equity Interests in Enterprises
and its Restricted Subsidiaries and Southwest had realized no tax items
other than through Enterprises and its Restricted Subsidiaries, multiplied
by (B) an assumed tax rate for such purposes equal to the highest combined
federal, state and local income tax rate applicable to a resident of New
York City at the time of the applicable tax period (assuming the full
deductibility for U.S. federal income tax purposes of any state and local
income taxes), excluding for this purpose any Taxes on income that is
attributable to Unrestricted Subsidiaries;
(v) during any tax period after a Permitted Restructuring
Transaction, Southwest and its Restricted Subsidiaries may make Restricted
Payments, directly or indirectly through other Consolidated Parties, to the
Surviving Parent (on or after any date on which it becomes a Loan Party) in
an amount not to exceed, and to be used solely for the immediate payment
of, any actual Taxes (including estimated Taxes but not any other
anticipated Taxes) of Surviving Parent and all members of the consolidated
group including the Surviving Parent for such period that are due and
payable to any taxing authority, excluding for this purpose any Taxes on
income that is attributable to or allocable from (A) any Restricted
Subsidiary of the Surviving Parent other than Southwest and its Restricted
Subsidiaries and (B) Unrestricted Subsidiaries; and
(vi) during any tax year, the Consolidated Borrower Parties may
make Restricted Payments, directly or indirectly through other Consolidated
Parties, to each Restricted Subsidiary of the Surviving Parent, in an
amount not to exceed, and to be used solely for the immediate payment of,
any actual state and local Taxes of such Restricted Subsidiary, excluding
for this purpose any Taxes attributable to any Unrestricted Subsidiary,
only if the Loan Parties would not be permitted to make such a Restricted
Payment to fund the payment of such Taxes pursuant to clause (ii), (iii),
(iv) or (v) above;
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provided, however, that no Restricted Payment pursuant to this Section
7.06(d)(ii), (iii), (iv) or (v) may be paid by any Consolidated Borrower Party
until 5 days after receipt by the Second Lien Administrative Agent of a
certificate of a Responsible Officer of the Loan Party Representative in form
and substance reasonably acceptable to the Second Lien Administrative Agent
demonstrating compliance with the foregoing provisions (such payments,
"Permitted Tax Distributions");
(e) the Consolidated Parties may make the Restricted Payments on the
Closing Date as a part of the Transaction in an amount not to exceed the amount
specified in the definition thereof; and
(f) at any time that no Event of Default has occurred and is
continuing or would result, Holdings and its Restricted Subsidiaries may
purchase, redeem or otherwise acquire or retire Equity Interests held by current
or former employees in an aggregate amount not to exceed $15,000,000 during the
term of this Agreement.
SECTION 7.07 AMENDMENT, ETC. OF MATERIAL DOCUMENTS AND PAYMENTS IN RESPECT
OF INDEBTEDNESS.
(a) After the issuance or incurrence thereof, amend, restate,
supplement or otherwise modify (or permit the amendment, restatement, supplement
or modification of (including any waivers of or any agreement to forebear from
exercising any rights under)) the terms of any Indebtedness in a principal
amount (individually or, with respect to Indebtedness due to the same Lender or
group of Lenders in a series of related transactions, in the aggregate) in
excess of the Threshold Amount (including, without limitation, pursuant to any
agreement or agreements pursuant to which such Indebtedness may be refinanced,
restructured, renewed, extended, refunded or replaced (such agreement or
agreements being "Refinancing Agreements") but, in any case, excluding
Indebtedness under this Agreement and the other Second Lien Loan Documents)
unless:
(i) such documents, as so amended, restated, supplemented or
otherwise modified (including, in connection with any such waiver or
forbearance) or such Refinancing Agreements:
(A) in the case of the Senior Obligations, contain terms
which (1) do not increase the principal amount of the Senior
Obligations in excess of the Maximum Senior Debt Amount, (2) are
subject to, and in compliance with, the requirements of the
Intercreditor Agreement, and (3) do not materially impair the ability
of the Loan Parties to perform their obligation under this Agreement;
and
(B) in the case of any other Indebtedness (including the
Senior Subordinated Obligations, but excluding the Senior
Obligations), contain only terms which (1) extend the date or reduce
the amount of any required repayment, prepayment or redemption of the
principal of such Indebtedness, (2) reduce the rate or extend the
date for payment of the interest, premium (if any) or fees payable on
such Indebtedness, (3) make the covenants, events of default or
remedies relating to such Indebtedness, taken as a whole, less
restrictive on the
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Loan Parties or (4) otherwise contain terms (including, in the case
of the Senior Subordinated Loan Documents and any Permitted
Additional Subordinated Debt Documents, the subordination provisions
thereof) which, taken as a whole, are as or more favorable to the
interests of the Loan Parties and the Second Lien Lenders than those
in effect before giving effect to such amendment, restatement,
supplement, modification or waiver or such Refinancing Agreements;
(ii) no Default shall have occurred and be continuing or would
result; and
(iii) the Loan Party Representative shall have delivered copies
of any such amendment, restatement, supplement or other modification or
such Refinancing Agreements, together with a certificate of a Responsible
Officer of the Loan Party Representative comparing the material terms and
conditions of such documents, as so amended, supplemented or otherwise
modified, or such Refinancing Agreement to the comparable terms thereof
immediately before giving effect to such amendment, restatement, supplement
or other modification or such Refinancing Agreements (based on the review
of all such documents by the Loan Party Representative without the
necessity of obtaining any third-party review of such documents) and
certifying that the foregoing conditions are satisfied.
(b) Cancel or terminate any Material Document or consent to or accept
any cancellation or termination thereof by any Consolidated Party, amend or
modify (or permit the amendment or modification of (including any waivers of)),
any Material Document (other than amendments or modifications of the terms of
Indebtedness permitted under Section 7.07(a) or Organization Documents permitted
under Section 7.07(c)), waive any default under or breach any Material Document,
or take any other action in connection with any Material Document, unless, in
each case, any such cancellation, termination, amendment or modification, or
consent, waiver or approval thereunder, is not adverse in any material respect
to the Consolidated Parties or the Second Lien Lenders.
(c) Amend their Organization Documents, unless, in each case, any
such amendment is not adverse in any material respect to the Second Lien
Lenders. Notwithstanding the foregoing, any Consolidated Party may amend or
modify its Organization Documents to change its name or form of legal
organization so long as it shall have given the Second Lien Administrative Agent
thirty days prior written notice of such change.
(d) Make any payment in contravention of the terms of any
subordination with respect to any Indebtedness; or permit any Indebtedness
(other than the Senior Obligations and the Second Lien Obligations) to
constitute "Designated Senior Indebtedness" (or any similar term) under the
subordination provisions of the Senior Subordinated Loan Documents or any
Permitted Additional Subordinated Debt Documents.
(e) Make any prepayment, redemption, defeasance or acquisition for
value prior to stated maturity (including, without limitation, by way of
depositing money or securities with the trustee with respect thereto before due
for the purpose of paying when due), refund,
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refinance or exchange any Indebtedness or make any other voluntary or optional
payment of Indebtedness (other than the refinancing of Indebtedness as a part of
the Transaction), other than:
(i) the Indebtedness under the Senior Loan Documents and the
Second Lien Loan Documents;
(ii) intercompany Indebtedness permitted hereunder;
(iii) the Loan Parties may refund, refinance or exchange:
(A) any Senior Obligations pursuant to applicable
Refinancing Agreements which comply with the requirements of clause
(a) of this Section 7.07;
(B) any Senior Subordinated Obligations pursuant to
applicable Refinancing Agreements which comply with the requirements
of clause (a) of this Section 7.07;
(C) any of the Indebtedness permitted pursuant to Section
7.03(f) and (g) with other Indebtedness permitted thereunder; and
(D) any Permitted Additional Subordinated Debt with the
proceeds of other Permitted Additional Subordinated Debt.
SECTION 7.08 CHANGE IN NATURE OF BUSINESS. Conduct any business other than
a telecommunications business.
SECTION 7.09 TRANSACTIONS WITH AFFILIATES. Engage in any transaction or
series of transactions with (a) any Subsidiary or Affiliate of any Consolidated
Party, (b) any Affiliate of any such Subsidiary or Affiliate or (c) the Sponsors
or any of their respective officers, directors, holders of Equity Interests,
Subsidiaries or Affiliates, other than (i) transactions with Holdings or any of
its Restricted Subsidiaries, (ii) transactions listed on Schedule 5.16 or
expressly permitted by Sections 7.02, 7.03, 7.04, 7.05 and 7.06; and (iii) so
long as no Default has occurred and is continuing, other transactions which are
engaged in by any Consolidated Party (other than Holdings) on terms and
conditions as favorable to such Person as would be obtainable by it in a
comparable arms-length transaction with an independent, unrelated third party.
SECTION 7.10 LIMITATIONS ON RESTRICTED ACTIONS. Enter into or create or
otherwise cause to exist or become effective any agreement or arrangement that:
(a) limits the ability of any Consolidated Party (i) to make Restricted Payments
to any Loan Party, (ii) to act as a guarantor pursuant to the Second Lien Loan
Documents or (iii) to create, incur, assume or suffer to exist Liens on its
property to secure the Second Lien Obligations; provided, however, that this
clause (iii) shall not prohibit any negative pledge incurred or provided in
favor of (A) any holder of Indebtedness permitted under Section 7.03(f) (solely
to the extent any such negative pledge relates to the property financed by such
Indebtedness) or Section 7.03(g) (solely to the extent such negative pledge
relates to property subject to a Lien permitted pursuant to Section 7.01(j)),
(B) any encumbrance or restriction that restricts in a customary manner the
subletting, assignment or transfer of any property or asset that is subject to a
lease, license or other contract
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or the assignment, encumbrance or hypothecation of such lease, license or other
contract, (C) any limitation or restriction contained in any Permitted Lien to
the extent such limitation or restriction restricts the transfer of the property
subject to such Permitted Lien, (D) any restriction imposed pursuant to an
agreement entered into in connection with a sale or other disposition permitted
pursuant hereto pending the closing of such sale or other disposition, (E) any
restriction imposed in any Contractual Obligation in effect on the Closing Date
relating to the Wireless Partnerships, (F) any restriction in the Intercreditor
Agreement or any other Transaction Document, (G) any provision of the SCC's or
any non-voting participation certificate of a Senior Lender identified on
Schedule 5.08 or (H) any restrictions imposed in any Governmental Authorization;
or (b) requires the grant of a Lien to secure an obligation of such Person if a
Lien is granted to secure another obligation of such Person (except as provided
in the Intercreditor Agreement).
SECTION 7.11 SALE-LEASEBACKS; OFF-BALANCE SHEET OBLIGATION. Enter into any
Sale and Leaseback Transaction or Off-Balance Sheet Obligation, unless such Sale
and Leaseback Transaction or Off-Balance Sheet Obligation constitutes
Indebtedness permitted by Section 7.03(f).
SECTION 7.12 USE OF PROCEEDS. Use the proceeds of any Borrowing, whether
directly or indirectly, and whether immediately, incidentally or ultimately, to
purchase or carry margin stock (within the meaning of Regulation U of the FRB)
in violation of Regulation U or to extend credit to others for the purpose of
purchasing or carrying margin stock or to refund indebtedness originally
incurred for such purpose.
SECTION 7.13 OWNERSHIP OF SUBSIDIARIES AND OTHER RESTRICTIONS.
(a) Notwithstanding any other provision of this Agreement, (i) permit
any Person (other than a Borrower or any wholly-owned Restricted Subsidiary of a
Borrower) to own any Equity Interests of any Restricted Subsidiary of a
Borrower, (ii) permit any Restricted Subsidiary of a Borrower to issue Equity
Interests to any Person, except a Borrower or any wholly-owned Restricted
Subsidiary of a Borrower, (iii) permit a Borrower or any Restricted Subsidiary
of a Borrower to issue any shares of preferred Equity Interests or (iv) permit,
create, incur, assume or suffer to exist any first priority Lien on any Equity
Interests of any Consolidated Party (other than the Equity Interests of
Holdings) (other than the Lien of the Second Lien Collateral Documents and,
subject to the Intercreditor Agreement, the Lien of the Senior Collateral
Documents) or any other Lien on any Equity Interests of a Consolidated Party
(other than the Equity Interests of Holdings) (other than Permitted Liens).
(b) In the case of Holdings and each of its Restricted Subsidiaries
(other than any Consolidated Borrower Party or any Restricted Subsidiary of a
Consolidated Borrower Party), including, without limitation, Southwest,
Southwest II and, after any permitted Restructuring Transaction, the Surviving
Parent and any Additional Intermediate Holding Company (i) hold any assets other
than the Equity Interests of its Restricted Subsidiaries on the Closing Date (or
another Restricted Subsidiary in existence on the Closing Date or, in the case
of Southwest II, Equity Interests in Southwest) and Unrestricted Subsidiaries,
(ii) have any material liabilities other than (A) liabilities under the Second
Lien Loan Documents, the Senior Loan Documents, the Senior Subordinated Loan
Documents and any Permitted Additional
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Subordinated Debt Documents, (B) tax liabilities, and (C) liabilities for
advisory, monitoring and management fees pursuant to Holdings' Organization
Documents, or (iii) engage in any business or activity other than (A)
consummation of the Transactions by Holdings or by such Restricted Subsidiary
contemplated in the Transaction Documents, (B) owning all the Equity Interests
of its Restricted Subsidiaries which it owned on the Closing Date (or another
Restricted Subsidiary in existence on the Closing Date) and any Unrestricted
Subsidiaries which Holdings or such Restricted Subsidiary may organize or
Acquire after the Closing Date and activities incidental or related thereto or
activities related to the maintenance of the corporate existence of Holdings or
such Restricted Subsidiary, or compliance with applicable Law, and (C)
performing its obligations under the Second Lien Loan Documents, the Senior Loan
Documents, the Subordinated Loan Documents and any Permitted Additional
Subordinated Debt Documents and consummating a Permitted Restructuring
Transaction pursuant to the Second Lien Collateral Documents to which it is a
party.
SECTION 7.14 UNRESTRICTED SUBSIDIARIES.
(a) Designate a newly organized or Acquired Subsidiary as an
Unrestricted Subsidiary unless:
(i) all Indebtedness of, or Equity Interests in, any
Consolidated Party which are owned by such Subsidiary (or any of its
Subsidiaries) have been assigned to a Consolidated Party;
(ii) the requirements of Sections 6.11 have been met; and
(iii) no Default shall have occurred and be continuing at the
time of or after giving effect to such Designation.
(b) Do any of the following:
(i) Provide a Guarantee of any Indebtedness of any Unrestricted
Subsidiary;
(ii) be otherwise directly or indirectly liable for any
Indebtedness of any Unrestricted Subsidiary;
(iii) be directly or indirectly liable for any other
Indebtedness which provides that the holder thereof may (upon notice, lapse
of time or both) declare a default thereon (or cause such Indebtedness or
the payment thereof to be accelerated, payable or subject to repurchase
prior to its final scheduled maturity) upon the occurrence of a default
with respect to any Indebtedness of an Unrestricted Subsidiary;
(iv) become a general partner of any Unrestricted Subsidiary or
otherwise become personally liable for the obligations of an Unrestricted
Subsidiary;
(v) permit any material portion of any business conducted by
any Unrestricted Subsidiary to be a business which is not directly or
indirectly related to a telecommunications business;
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(vi) permit any of its Unrestricted Subsidiaries to Guarantee
any Indebtedness of a Loan Party (other than any Indebtedness under this
Agreement and the other Second Lien Loan Documents), unless such
Unrestricted Subsidiary shall have also executed and delivered to the
Second Lien Administrative Agent an unsubordinated Guarantee of the Second
Lien Obligations of the Loan Parties under the Second Lien Loan Documents
which Guarantee shall be secured by a security interest on substantially
all of the material assets of such Unrestricted Subsidiary which is subject
only to the security interest or in favor of the Senior Administrative
Agent granted pursuant to Section 7.14(b)(vi) of the Senior Credit
Agreement and Permitted Liens;
(vii) permit any of its Unrestricted Subsidiaries to acquire
any Indebtedness of any Consolidated Party (including, without limitation,
by way of depositing money or securities with the agent or trustee thereto
before due for the purpose of paying when due); or
(viii) permit any of its Unrestricted Subsidiaries to enter
into a transaction or a series of related transactions with a Restricted
Subsidiary that would be prohibited hereunder if entered into directly by a
Restricted Subsidiary.
SECTION 7.15 FISCAL YEAR. Change their fiscal years.
SECTION 7.16 PARTNERSHIPS, ETC. Become general partners or limited partners
or joint venturers with any Person other than a wholly-owned domestic Restricted
Subsidiary, except pursuant to an Investment permitted pursuant to Sections
7.02(b) and 7.02(i).
SECTION 7.17 SALES OF RECEIVABLES. Dispose of any of their notes or
accounts receivable, except for Dispositions of defaulted accounts.
SECTION 7.18 FINANCIAL COVENANTS.
(a) Maximum Consolidated First Lien Leverage Ratio. Permit the
Consolidated First Lien Leverage Ratio on any date during any period set forth
below to exceed the ratio set forth for such period:
Period Ratio
------ -----
Closing Date to end of fiscal quarter ending 5.00:1
March 31, 2006;
April 1, 2006, to end of fiscal quarter ending 4.75:1
December 31, 2006;
January 1, 2007, to end of fiscal quarter 4.50:1
ending September 30, 2007;
October 1, 2007, to end of fiscal quarter 4.25:1
ending December 31, 2007;
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January 1, 2008, to end of fiscal quarter 4.00:1
ending December 31, 2008;
January 1, 2009, to end of fiscal quarter 3.75:1
ending December 31, 2009; and
Thereafter 3.25:1
(b) Maximum Consolidated Total Leverage Ratio. Permit the
Consolidated Total Leverage Ratio on any date during any period set forth below
to exceed the ratio set forth for such period:
Period Ratio
------ -----
Closing Date to end of fiscal quarter ending 6.50:1
March 31, 2006;
April 1, 2007, to end of fiscal quarter ending 6.25:1
December 31, 2006;
January 1, 2007, to end of fiscal quarter 6.00:1
ending September 30, 2007;
October 1, 2007, to end of fiscal quarter 5.75:1
ending December 31, 2007;
January 1, 2008, to end of fiscal quarter 5.50:1
ending December 31, 2008;
January 1, 2009, to end of fiscal quarter 5.25:1
ending December 31, 2009; and
Thereafter 4.75:1
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
SECTION 8.01 EVENTS OF DEFAULT. Any of the following shall constitute an
Event of Default:
(a) Non-Payment. The Borrowers or any other Loan Party shall fail to
pay (i) when and as required to be paid herein, any amount of principal of any
Second Lien Loan, or (ii) within three Business Days after the same becomes due,
any interest on any Second Lien Loan,
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or any fee due hereunder, or (iii) within five Business Days after the same
becomes due, any other amount payable hereunder or under any other Second Lien
Loan Document; or
(b) Specific Covenants. Any Loan Party fails to perform or observe
any term, covenant or agreement contained in (i) any of Section 6.03(a),
6.05(a)(i), 6.07(a), 6.10, 6.13, or Article VII or (ii) any of Section 6.01,
6.02(a)-(f), 6.03(b)-(e), 6.11 or 6.12 and any such failure in this clause (ii)
continues for five Business Days; or
(c) Other Defaults. Any Loan Party fails to perform or observe any
other covenant or agreement (not specified in subsection (a) or (b) above)
contained in any Second Lien Loan Document on its part to be performed or
observed and such failure continues for 30 days after the earlier of the date on
which (i) a Responsible Officer of any of the Loan Parties first becomes aware
of such failure and (ii) written notice thereof shall have been given to such
Loan Party or the Loan Party Representative by the Second Lien Administrative
Agent or any Second Lien Lender; provided, however, that if any such failure to
perform or observe any covenant in any Second Lien Mortgage (and any comparable
covenant under the corresponding Senior Mortgage) is capable of being cured and
on or prior to such 30 day period after so obtaining knowledge or notice thereof
the Loan Parties have commenced commercially reasonable activities to effect
such cure and have delivered to the Second Lien Administrative Agent a
certificate of a Responsible Officer of the Loan Party Representative describing
such activities, then such 30 day period shall automatically be extended for a
single additional 30 day period; or
(d) Representations and Warranties. Any representation, warranty,
certification or statement of fact made by or on behalf of any Loan Party
herein, in any other Second Lien Loan Document, or in any Compliance
Certificate, Certificate of a Responsible Officer, Second Lien Loan Notice or
similar certificate delivered by a Responsible Officer pursuant to the terms
hereof or thereof shall be incorrect or misleading in any material respect when
made; or
(e) Cross-Default. (i) Any Consolidated Party (A) fails to make any
payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Guarantee
(other than Indebtedness hereunder and Indebtedness under Swap Contracts) having
an aggregate principal amount (including undrawn committed or available amounts
and including amounts owing to all creditors under any combined or syndicated
credit arrangement) of more than the Threshold Amount and such failure shall
continue after the expiration of any applicable grace period specified in the
agreements or instruments relating to such Indebtedness, (B) fails to observe or
perform any other agreement or condition relating to any such Indebtedness or
Guarantee or contained in any instrument or agreement evidencing, securing or
relating thereto (other than any such other agreement or condition in the Senior
Loan Documents), or any other event occurs, the effect of which default or other
event is to cause, or to permit the holder or holders of such Indebtedness or
the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries), to cause,
with the giving of notice if required, such Indebtedness to be demanded or to
become due or to be repurchased, prepaid, defeased or redeemed (automatically or
otherwise), or an offer to repurchase, prepay, defease or redeem such
Indebtedness to be made, prior to its stated maturity, or such Guarantee to
become payable, or
97
(C) fails to observe or perform any other agreement or condition under the
Senior Loan Documents giving rise to an Event of Default thereunder and the
Senior Administrative Agent or any of the Senior Lenders exercise any of the
remedies pursuant to Section 8.02 of the Senior Credit Agreement with respect to
such Event of Default; or (ii) there occurs under any Swap Contract an Early
Termination Date (as defined in such Swap Contract) resulting from (A) any event
of default under such Swap Contract as to which any Consolidated Party is the
Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event
(as defined in such Swap Contract) under such Swap Contract as to which any
Consolidated Party is an Affected Party (as defined in such Swap Contract) and,
in either event, the Swap Termination Value owed by such Consolidated Party as a
result thereof is greater than the Threshold Amount; or
(f) Insolvency Proceedings, Etc. Any Consolidated Party (i)
institutes or consents to the institution of any proceeding under any Debtor
Relief Law, or makes an assignment for the benefit of creditors or (ii) applies
for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or
any material part of its property; or any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer is appointed without
the application or consent of such Person and the appointment continues
undischarged or unstayed for 60 calendar days; or any proceeding under any
Debtor Relief Law relating to any such Person or to all or any material part of
its property is instituted without the consent of such Person and continues
undismissed or unstayed for 60 calendar days, or an order for relief is entered
in any such proceeding; or
(g) Inability to Pay Debts; Attachment. (i) Any Consolidated Party
becomes unable or admits in writing its inability or fails generally to pay its
debts as they become due, or (ii) any writ or warrant of attachment or execution
or similar process is issued or levied against all or any material part of the
property of any such Person and is not released, vacated or fully bonded within
30 days after its issue or levy; or
(h) Judgments. There is entered against any Consolidated Party (i) a
final judgment or order for the payment of money in an aggregate amount
exceeding the Threshold Amount (to the extent not covered by independent
third-party insurance as to which the insurer does not dispute coverage), or
(ii) any one or more non-monetary final judgments that have, or could reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect
and, in either case, (A) enforcement proceedings are commenced by any creditor
upon such judgment or order, or (B) there is a period of thirty consecutive days
during which a stay of enforcement of such judgment, by reason of a pending
appeal or otherwise, is not in effect; or
(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan
or Multiemployer Plan which has resulted or could reasonably be expected to
result in liability of Holdings under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold
Amount, or (ii) Holdings or any ERISA Affiliate fails to pay when due, after the
expiration of any applicable grace period, any installment payment with respect
to its withdrawal liability under Section 4201 of ERISA under a Multiemployer
Plan in an aggregate amount in excess of the Threshold Amount; or
(j) Invalidity of Second Lien Loan Documents. Any Second Lien Loan
Document (other than a Second Lien Mortgage) or any Second Lien Mortgage or
Second Lien
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Mortgages with respect to Mortgaged Property with a fair market value in excess
of $1,000,000, at any time after its execution and delivery and for any reason
other than as expressly permitted hereunder or thereunder or satisfaction in
full of all the Second Lien Obligations, ceases to be in full force and effect
and, in the case of any such deficiency in any such Second Lien Mortgage which
is capable of being cured within 30 days, such deficiency shall continue for 30
days after the earlier of the date on which (i) a Responsible Officer of any of
the Loan Parties first becomes aware of such deficiency and (ii) written notice
thereof shall have been given to the Loan Party Representative by the Second
Lien Administrative Agent or any Second Lien Lender; or any Loan Party contests
in writing in any manner the validity or enforceability of any provision of any
Second Lien Loan Document; or any Loan Party contests in writing in any manner
the validity, perfection or priority of any Lien on or security interest in the
Collateral purported to be covered by any Second Lien Collateral Document; or
any Loan Party denies in writing that it has any or further liability or
obligation under any provision of any Second Lien Loan Document, or purports to
revoke, terminate or rescind any provision of any Second Lien Loan Document, or
in the case of any Lien granted pursuant to any Collateral Document (including
any Lien granted after the Closing Date in accordance with Sections 6.11, 6.12
and 6.15) in favor of the Second Lien Administrative Agent in any material item,
items or portion of the Collateral, such Lien is declared by a court of
competent jurisdiction to be null and void, invalid or unenforceable in any
respect or ceases to have the priority purported to be granted under such
Collateral Document (except pursuant to a transaction expressly permitted under
this Agreement) and, solely in the case of such a defect in priority, if such
priority defect is capable of being cured, such defect remains uncured for ten
days after a Responsible Officer of a Loan Party shall have been notified or
otherwise obtained knowledge of such defect; or
(k) Second Lien Guaranty. The Second Lien Guaranty given by any
Guarantor hereunder (including any Person that becomes a Guarantor after the
Closing Date in accordance with Section 6.11) shall cease to be in full force
and effect (except pursuant to a transaction expressly permitted under this
Agreement), or any Guarantor (including any Person that becomes a Guarantor
after the Closing Date in accordance with Section 6.11) or any Person acting by
or on behalf of such Guarantor shall deny or disaffirm in writing such
Guarantor's obligations under the Second Lien Guaranty; or
(l) Change of Control. There occurs any Change of Control; or
(m) Material Adverse Effect. Any FCC License or PUC Authorization of
any Loan Party shall expire or terminate or be revoked or otherwise lost which
in any case could reasonably be expected to have a Material Adverse Effect; or
(n) Invalidity of Subordination. The subordination provisions of any
Senior Subordinated Loan Document or any Permitted Additional Subordinated Debt
Document, at any time after the execution and delivery thereof, for any reason
other than satisfaction in full in cash of the Second Lien Obligations, cease to
be in full force and effect; or any Loan Party contests in writing in any manner
the validity or enforceability of any such provision.
SECTION 8.02 REMEDIES UPON EVENT OF DEFAULT. If any Event of Default occurs
and is continuing, the Second Lien Administrative Agent shall, at the request
of, or may, with the consent of, the Required Lenders, take any or all of the
following actions:
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(a) declare the Commitment of each Second Lien Lender to make Second
Lien Loans to be terminated, whereupon such Commitment and obligation shall be
terminated;
(b) declare the unpaid principal amount of all outstanding Second
Lien Loans, all interest accrued and unpaid thereon, and all other amounts owing
or payable hereunder or under any other Second Lien Loan Document to be
immediately due and payable, without presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived by the Loan
Parties; and
(c) exercise on behalf of itself and the Second Lien Lenders all
rights and remedies available to it and the Second Lien Lenders under the Second
Lien Loan Documents, including, without limitation, subject to the Intercreditor
Agreement, all rights and remedies existing under the Second Lien Collateral
Documents and all rights and remedies against any Guarantor;
provided, however, that upon the occurrence of an actual or deemed entry of an
order for relief with respect to any Consolidated Party under the Bankruptcy
Code of the United States, the obligation of each Second Lien Lender to make
Second Lien Loans shall automatically terminate, the unpaid principal amount of
all outstanding Second Lien Loans and all interest and other amounts as
aforesaid shall automatically become due and payable without further act of the
Second Lien Administrative Agent or any Second Lien Lender.
SECTION 8.03 APPLICATION OF FUNDS. After the exercise of remedies provided
for in Section 8.02 (or after the Second Lien Loans have automatically become
immediately due and payable), any amounts received by the Second Lien
Administrative Agent on account of the Second Lien Obligations shall be applied
by the Second Lien Administrative Agent in the following order (any amounts
received by the Second Lien Administrative Agent in respect of the Collateral
shall be applied as provided in the Intercreditor Agreement):
First, to payment of that portion of the Second Lien Obligations
constituting fees, indemnities, expenses and other amounts (including fees,
charges and disbursements of counsel to the Second Lien Administrative Agent,
but excluding principal and interest of any Second Lien Loan) and amounts
payable under Article III hereof and Article XI hereof payable to the Second
Lien Administrative Agent in its capacity as such (including, without limitation
in its capacity as Second Lien Collateral Agent);
Second, to payment of that portion of the Second Lien Obligations
constituting fees, indemnities and other amounts (other than principal and
interest) payable to the Second Lien Lenders (including fees, charges and
disbursements of counsel to the respective Second Lien Lenders (including fees
and time charges for attorneys who may be employees of any Second Lien Lender))
and amounts payable under Article III hereof and Article XI hereof, ratably
among them in proportion to the amounts described in this clause Second payable
to them;
Third, to payment of that portion of the Second Lien Obligations
constituting accrued and unpaid interest on the Second Lien Loans, ratably among
the Second Lien Lenders in proportion to the respective amounts described in
this clause Third payable to them;
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Fourth, to the payment of that portion of the Second Lien Obligations
constituting unpaid principal of the Second Lien Loans ratably among the Second
Lien Lenders in proportion to the respective amounts described in this clause
Fourth held by them; and
Last, the balance, if any, after all of the Second Lien Obligations have
been paid in full in cash, to the Borrowers or as otherwise required by Law.
ARTICLE IX
GUARANTY
SECTION 9.01 GUARANTY; LIMITATION OF LIABILITY.
(a) Each Guarantor hereby absolutely, unconditionally and irrevocably
guarantees the punctual payment when due, whether at scheduled maturity or on
any date of a required prepayment or by acceleration, demand or otherwise, of
all Second Lien Obligations of each other Loan Party now or hereafter existing
under or in respect of this Agreement or any of the other Second Lien Loan
Documents (including, without limitation, any extensions, modifications,
substitutions, amendments or renewals of any or all of the foregoing Second Lien
Obligations), whether direct or indirect, absolute or contingent, and whether
for principal, interest, premiums, fees, indemnities, contract causes of action,
costs, expenses or otherwise (such Second Lien Obligations being the "Guaranteed
Obligations"), and agrees to pay any and all reasonable expenses (including,
without limitation, Enforcement Expenses) incurred by the Second Lien
Administrative Agent or any other Second Lien Secured Party in enforcing any
rights under this Agreement or any other Second Lien Loan Document. Without
limiting the generality of the foregoing, each Guarantor's liability shall
extend to all amounts that constitute part of the Guaranteed Obligations and
would be owed by any other Loan Party to any Second Lien Secured Party under or
in respect of the Second Lien Loan Documents but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such other Loan Party.
(b) Each Guarantor and the Second Lien Administrative Agent and each
other Second Lien Secured Party hereby confirms that it is the intention of all
such Persons that this Second Lien Guaranty and the Second Lien Obligations of
each Guarantor hereunder not constitute a fraudulent transfer or conveyance for
purposes of Debtor Relief Laws, the Uniform Fraudulent Conveyance Act, the
Uniform Fraudulent Transfer Act or any similar Law to the extent applicable to
this Second Lien Guaranty and the Second Lien Obligations of each Guarantor
hereunder. To effectuate the foregoing intention, the Second Lien Administrative
Agent, the other Second Lien Secured Parties and the Guarantors hereby
irrevocably agree that the Second Lien Obligations of each Guarantor (other than
Holdings) under this Second Lien Guaranty at any time shall be limited to the
maximum amount as will result in the Second Lien Obligations of such Guarantor
under this Second Lien Guaranty not constituting a fraudulent transfer or
conveyance.
(c) Each Guarantor hereby unconditionally and irrevocably agrees that
in the event any payment shall be required to be made to any Second Lien Secured
Party under this Second Lien Guaranty, such Guarantor will contribute, to the
maximum extent permitted by
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Law, such amounts to each other Guarantor so as to maximize the aggregate amount
paid to the Second Lien Secured Parties under or in respect of the Second Lien
Loan Documents.
SECTION 9.02 GUARANTY ABSOLUTE. Each Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of
this Agreement and the other Second Lien Loan Documents, regardless of any Law
now or hereafter in effect in any jurisdiction affecting any of such terms or
the rights of any Second Lien Secured Party with respect thereto. The Second
Lien Obligations of each Guarantor under or in respect of this Second Lien
Guaranty are independent of the Guaranteed Obligations or any other Second Lien
Obligations of any other Loan Party under or in respect of the Second Lien Loan
Documents, and a separate action or actions may be brought and prosecuted
against each Guarantor to enforce this Agreement, irrespective of whether any
action is brought against any of the Borrowers or any other Loan Party or
whether any Borrower or any other Loan Party is joined in any such action or
actions. This Second Lien Guaranty is a present and continuing, absolute and
unconditional guaranty of payment when due, and not of collection, by each
Guarantor jointly and severally with any other Guarantor of the Guaranteed
Obligations. The liability of each Guarantor under this Second Lien Guaranty
shall be irrevocable, absolute and unconditional irrespective of, and each
Guarantor hereby irrevocably waives, to the extent permitted by applicable Law,
any defenses it may now have or hereafter acquire in any way relating to, any or
all of the following:
(a) any lack of validity or enforceability of any Second Lien Loan
Document or any agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations or any other Second Lien
Obligations of any other Loan Party under or in respect of the Second Lien Loan
Documents, or any other amendment or waiver of or any consent to departure from
any Second Lien Loan Document, including, without limitation, any increase in
the Guaranteed Obligations resulting from the extension of additional credit to
any Loan Party or any of its Subsidiaries or otherwise;
(c) any taking, exchange, release, subordination or non-perfection of
any Collateral or any other collateral, or any taking, release, subordination or
amendment or waiver of, or consent to departure from, any other guaranty, for
all or any of the Guaranteed Obligations;
(d) any manner of application of Collateral or any other collateral,
or proceeds thereof, to all or any of the Guaranteed Obligations, or any manner
of sale or other disposition of any Collateral or any other collateral for all
or any of the Guaranteed Obligations or any other Second Lien Obligations of any
Loan Party under the Second Lien Loan Documents or any other assets of any Loan
Party or any of its Subsidiaries;
(e) any change, restructuring or termination of the corporate
structure or existence of any Loan Party or any of its Subsidiaries or any
insolvency, bankruptcy, reorganization or other similar proceeding affecting any
Borrower or any other Loan Party or its assets or any resulting release or
discharge of any Guaranteed Obligation;
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(f) the existence of any claim, setoff or other right which any
Guarantor may have at any time against any Loan Party, the Second Lien
Administrative Agent, any Second Lien Lender or any other Person, whether in
connection herewith or with any unrelated transaction;
(g) any provision of applicable Law purporting to prohibit the
payment or performance by any Borrower of the Guaranteed Obligations;
(h) any failure of any Second Lien Secured Party to disclose to any
Loan Party any information relating to the business, condition (financial or
otherwise), operations, performance, properties or prospects of any other Loan
Party now or hereafter known to such Second Lien Secured Party (each Guarantor
waiving any duty on the part of the Second Lien Secured Parties to disclose such
information);
(i) the failure of any other Person to execute or deliver this
Agreement or any other guaranty or agreement or the release, subordination or
reduction of liability of any Guarantor or other guarantor or surety with
respect to the Guaranteed Obligations; or
(j) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any representation by
any Second Lien Secured Party that might otherwise constitute a defense
available to, or a discharge of, any Loan Party or any other guarantor or
surety.
This Second Lien Guaranty shall continue to be effective or be reinstated,
as the case may be, if at any time any payment of any of the Guaranteed
Obligations is rescinded or must otherwise be returned by any Second Lien
Secured Party or any other Person upon the insolvency, bankruptcy or
reorganization of any Borrower or any other Loan Party or otherwise, all as
though such payment had not been made.
SECTION 9.03 WAIVERS AND ACKNOWLEDGMENTS.
(a) Each Guarantor hereby unconditionally and irrevocably waives, to
the extent permitted by applicable Law, promptness, diligence, notice of
acceptance, presentment, demand for performance, notice of nonperformance,
default, acceleration, protest or dishonor and any other notice with respect to
any of the Guaranteed Obligations and this Second Lien Guaranty and any
requirement that any Second Lien Secured Party protect, secure, perfect or
insure any Lien or any property subject thereto or exhaust any right or take any
action against any Loan Party or any other Person or any Collateral.
(b) Each Guarantor hereby unconditionally and irrevocably waives, to
the extent permitted by applicable Law, any right to revoke this Second Lien
Guaranty and acknowledges that this Second Lien Guaranty is continuing in nature
and applies to all Guaranteed Obligations, whether existing now or in the
future.
(c) Each Guarantor hereby unconditionally and irrevocably waives, to
the extent permitted by applicable Law, (i) any defense arising by reason of any
claim or defense based upon an election of remedies by any Second Lien Secured
Party that in any manner impairs, reduces, releases or otherwise adversely
affects the subrogation, reimbursement,
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exoneration, contribution or indemnification rights of such Guarantor or other
rights of such Guarantor to proceed against any of the other Loan Parties, any
other guarantor or any other Person or any Collateral and (ii) any defense based
on any right of setoff or counterclaim against or in respect of the Second Lien
Obligations of such Guarantor hereunder.
(d) Each Guarantor acknowledges that the Second Lien Administrative
Agent may, without notice to or demand upon such Guarantor and without affecting
the liability of such Guarantor under this Second Lien Guaranty, foreclose under
any mortgage by nonjudicial sale to the extent permitted by applicable Law, and
each Guarantor hereby waives, to the extent permitted by applicable Law, any
defense to the recovery by the Second Lien Administrative Agent and the other
Second Lien Secured Parties against such Guarantor of any deficiency after such
nonjudicial sale and any defense or benefits that may be afforded by applicable
Law.
(e) Each Guarantor hereby unconditionally and irrevocably waives any
duty on the part of any Second Lien Secured Party to disclose to such Guarantor
any matter, fact or thing relating to the business, condition (financial or
otherwise), operations, performance, properties or prospects of any other Loan
Party or any Subsidiaries now or hereafter known by such Second Lien Secured
Party.
(f) Each Guarantor acknowledges that it will receive substantial
direct and indirect benefits from the financing arrangements contemplated by
this Agreement and the other Second Lien Loan Documents and that the waivers set
forth in Section 9.02 and this Section 9.03 are knowingly made in contemplation
of such benefits.
SECTION 9.04 SUBORDINATION. (a) Each Guarantor hereby unconditionally and
irrevocably agrees not to exercise any rights that it may now have or hereafter
acquire against any Borrower, any other Loan Party or any other insider
guarantor that arise from the existence, payment, performance or enforcement of
such Guarantor's Obligations under or in respect of this Agreement or any other
Second Lien Loan Document, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution (pursuant to Section
9.01(c) or otherwise) or indemnification and any right to participate in any
claim or remedy of any Second Lien Secured Party against any Borrower, any other
Loan Party or any other insider guarantor or any Collateral, whether or not such
claim, remedy or right arises in equity or under contract, statute or common
law, including, without limitation, the right to take or receive from any
Borrower, any other Loan Party or any other insider guarantor, directly or
indirectly, in cash or other property or by setoff or in any other manner,
payment or security on account of such claim, remedy or right, unless and until
the Second Lien Termination Date for such Guarantor has occurred.
(b) Each Guarantor hereby agrees that any and all debts, liabilities
and other obligations owed to such Guarantor by each other Loan Party, including
pursuant to Section 9.01(c) (collectively, the "Subordinated Obligations"), are
hereby subordinated to the prior payment in full in cash of the Second Lien
Obligations of such other Loan Party under the Second Lien Loan Documents to the
extent and in the manner hereinafter set forth in this Section 9.04(b):
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(i) Except during the continuance of a Default under Section
8.01(a) or (f) (including the commencement and continuation of any
proceeding under any Debtor Relief Law relating to any other Loan Party) or
an Event of Default, each Guarantor may receive regularly scheduled
payments from any other Loan Party on account of the Subordinated
Obligations. After the occurrence and during the continuance of any Default
under Section 8.01(a) or (f) (including the commencement and continuation
of any proceeding under any Debtor Relief Law relating to any other Loan
Party) or an Event of Default, however, unless the Second Lien
Administrative Agent otherwise agrees in writing, no Guarantor shall
demand, accept or take any action to collect any payment on account of the
Subordinated Obligations.
(ii) In any proceeding under any Debtor Relief Law relating to
any other Loan Party, each Guarantor agrees that the Second Lien Secured
Parties shall be entitled to receive payment in full in cash of all Second
Lien Obligations (including all interest and expenses accruing after the
commencement of a proceeding under any Debtor Relief Law, whether or not
constituting an allowed claim in such proceeding ("Post Petition
Interest")) before such Guarantor receives payment of any Subordinated
Obligations.
(iii) After the occurrence and during the continuance of any
Default under Section 8.01(a) or (f) (including the commencement and
continuation of any proceeding under any Debtor Relief Law relating to any
other Loan Party) or an Event of Default, each Guarantor shall, if the
Second Lien Administrative Agent so requests, collect, enforce and receive
payments on account of the Subordinated Obligations as trustee for the
Second Lien Secured Parties and deliver such payments to the Second Lien
Administrative Agent for application to the Guaranteed Obligations
(including all Post Petition Interest), together with any necessary
endorsements or other instruments of transfer, but without reducing or
affecting in any manner the liability of such Guarantor under the other
provisions of this Agreement.
(iv) After the occurrence and during the continuance of a
Default under Section 8.01(a) or (f) (including the commencement and
continuation of any proceeding under any Debtor Relief Law relating to any
other Loan Party) or an Event of Default, the Second Lien Administrative
Agent is authorized and empowered (but without any obligation to so do), in
its discretion, (A) in the name of any Guarantor, to collect and enforce,
and to submit claims in respect of, Subordinated Obligations and to apply
any amounts received thereon to the Guaranteed Obligations (including any
and all Post Petition Interest), and (B) to require any Guarantor (1) to
collect and enforce, and to submit claims in respect of, Subordinated
Obligations and (2) to pay any amounts received on such obligations to the
Second Lien Administrative Agent for application to the Guaranteed
Obligations (including any and all Post Petition Interest).
(v) In the event of any conflict between the provisions of this
Section 9.04(b) and the provisions of any Intercompany Note, the provisions
of this Section 9.04(b) shall govern.
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(c) If any amount shall be paid to any Guarantor in violation of this
Section 9.04 at any time prior to the Second Lien Termination Date for such
Guarantor, such amount shall be received and held in trust for the benefit of
the Second Lien Secured Parties, shall be segregated from other property and
funds of such Guarantor and shall forthwith be paid or delivered to the Second
Lien Administrative Agent in the same form as so received (with any necessary
endorsement or assignment) to be credited and applied to the Guaranteed
Obligations and all other amounts payable under this Agreement or any of the
other Second Lien Loan Documents, whether matured or unmatured, in accordance
with the terms of this Agreement or any of the other Second Lien Loan Documents,
or to be held as Collateral for any Guaranteed Obligations or other amounts
payable under this Agreement or any of the other Second Lien Loan Documents
thereafter arising.
(d) If the Second Lien Termination Date for any Guarantor shall have
occurred, the Second Lien Administrative Agent will, at such Guarantor's request
and expense, execute and deliver to such Guarantor appropriate documents,
without recourse and without representation or warranty, necessary to evidence
the transfer by subrogation to such Guarantor of an interest in the Guaranteed
Obligations resulting from such payment made by such Guarantor pursuant to this
Second Lien Guaranty.
SECTION 9.05 CONTINUING GUARANTY. This Second Lien Guaranty is a continuing
agreement of each Guarantor and shall: (a) remain in full force and effect until
the Second Lien Termination Date for such Guarantor, (b) be binding upon such
Guarantor, its successors and assigns and (c) inure to the benefit of and be
enforceable by the Second Lien Secured Parties and their successors, transferees
and assigns.
ARTICLE X
SECOND LIEN ADMINISTRATIVE AGENT
SECTION 10.01 APPOINTMENT AND AUTHORIZATION OF SECOND LIEN ADMINISTRATIVE
AGENT.
(a) Each of the Second Lien Lenders hereby irrevocably appoints Bank
of America to act on its behalf as the Second Lien Administrative Agent
hereunder and under the other Second Lien Loan Documents, including, without
limitation, acting in such capacity, to act on its behalf as the Second Lien
Collateral Agent under the Second Lien Mortgages and the other Second Lien
Collateral Documents, and authorizes the Second Lien Administrative Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Second Lien Administrative Agent or the Second Lien Collateral Agent, as the
case may be, by the terms hereof or thereof, together with such actions and
powers as are reasonably incidental thereto. For these purposes, each reference
to the "Second Lien Collateral Agent" in the Second Lien Mortgages or other
Second Lien Collateral Documents shall be deemed to be a reference to the
"Second Lien Administrative Agent". The provisions of this Article, other than
the provisions of Section 10.06, are solely for the benefit of the Second Lien
Administrative Agent, the Second Lien Collateral Agent, the Second Lien Lenders,
and, except as provided in Section 10.06, neither the Borrowers nor any other
Loan Party shall have rights as a third party beneficiary of any of such
provisions.
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SECTION 10.02 RIGHTS AS A SECOND LIEN LENDER. The Person serving as the
Second Lien Administrative Agent hereunder shall have the same rights and powers
in its capacity as a Second Lien Lender as any other Second Lien Lender and may
exercise the same as though it were not the Second Lien Administrative Agent and
the term "Second Lien Lender" or "Second Lien Lenders" shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Second Lien Administrative Agent hereunder in its individual
capacity. Such Person and its Affiliates may accept deposits from, lend money
to, act as the financial advisor or in any other advisory capacity for and
generally engage in any kind of business with the Loan Parties or any Subsidiary
or other Affiliate thereof as if such Person were not the Second Lien
Administrative Agent hereunder and without any duty to account therefor to the
Second Lien Lenders.
SECTION 10.03 EXCULPATORY PROVISIONS. The Second Lien Administrative Agent
shall not have any duties or obligations except those expressly set forth herein
and in the other Second Lien Loan Documents. Without limiting the generality of
the foregoing, the Second Lien Administrative Agent:
(a) shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing;
(b) shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby or by the other Second Lien Loan Documents that
the Second Lien Administrative Agent is required to exercise as directed in
writing by the Required Lenders (or such other number or percentage of the
Second Lien Lenders as shall be expressly provided for herein or in the other
Second Lien Loan Documents); provided that the Second Lien Administrative Agent
shall not be required to take any action that, in its opinion or the opinion of
its counsel, may expose the Second Lien Administrative Agent to liability or
that is contrary to any Second Lien Loan Document or applicable Law; and
(c) shall not, except as expressly set forth herein and in the other
Second Lien Loan Documents, have any duty to disclose, and shall not be liable
for the failure to disclose, any information relating to the Loan Parties or any
of their Affiliates that is communicated to or obtained by the Person serving as
the Second Lien Administrative Agent or any of its Affiliates in any capacity.
The Second Lien Administrative Agent shall not be liable for any action
taken or not taken by it (i) with the consent or at the request of the Required
Lenders (or such other number or percentage of the Second Lien Lenders as shall
be necessary, or as the Second Lien Administrative Agent shall believe in good
faith shall be necessary, under the circumstances as provided in Sections 11.01
and 8.02) or (ii) in the absence of its own gross negligence or willful
misconduct. The Second Lien Administrative Agent shall be deemed not to have
knowledge of any Default unless and until notice describing such Default is
given to the Second Lien Administrative Agent by the Loan Party Representative
or a Second Lien Lender.
The Second Lien Administrative Agent shall not be responsible for or have
any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection
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with this Agreement or any other Second Lien Loan Document, (ii) the contents of
any certificate, report or other document delivered hereunder or thereunder or
in connection herewith or therewith, (iii) the performance or observance of any
of the covenants, agreements or other terms or conditions set forth herein or
therein or the occurrence of any Default, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement, any other Second Lien Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Article IV or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the Second Lien
Administrative Agent.
SECTION 10.04 RELIANCE BY SECOND LIEN ADMINISTRATIVE AGENT. The Second Lien
Administrative Agent shall be entitled to rely upon, and shall not incur any
liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing (including any electronic
message, Internet or intranet website posting or other distribution) believed by
it to be genuine and to have been signed, sent or otherwise authenticated by the
proper Person. The Second Lien Administrative Agent also may rely upon any
statement made to it orally or by telephone and believed by it to have been made
by the proper Person, and shall not incur any liability for relying thereon. In
determining compliance with any condition hereunder to the making of a Second
Lien Loan that by its terms must be fulfilled to the satisfaction of a Second
Lien Lender, the Second Lien Administrative Agent may presume that such
condition is satisfactory to such Second Lien Lender unless the Second Lien
Administrative Agent shall have received notice to the contrary from such Second
Lien Lender prior to the making of such Second Lien Loan. The Second Lien
Administrative Agent may consult with legal counsel (who may be counsel for the
Loan Parties or the Loan Party Representative), independent accountants and
other experts selected by it, and shall not be liable for any action taken or
not taken by it in accordance with the advice of any such counsel, accountants
or experts.
SECTION 10.05 DELEGATION OF DUTIES. The Second Lien Administrative Agent
may perform any and all of its duties and exercise its rights and powers
hereunder or under any other Second Lien Loan Document by or through any one or
more sub-agents appointed by the Second Lien Administrative Agent. The Second
Lien Administrative Agent and any such sub-agent may perform any and all of its
duties and exercise its rights and powers by or through their respective Related
Parties. The exculpatory provisions of this Article shall apply to any such
sub-agent and to the Related Parties of the Second Lien Administrative Agent and
any such sub-agent, and shall apply to their respective activities in connection
with the syndication of the credit facilities provided for herein as well as
activities as Second Lien Administrative Agent.
SECTION 10.06 RESIGNATION OF SECOND LIEN ADMINISTRATIVE AGENT. The Second
Lien Administrative Agent may at any time give notice of its resignation to the
Second Lien Lenders and the Loan Party Representative. Upon receipt of any such
notice of resignation, the Required Lenders shall have the right, with the
consent, so long as no Event of Default then exists, of the Loan Party
Representative, which shall not be unreasonably withheld or delayed, to appoint
a successor, which shall be a bank with an office in the United States, or an
Affiliate of any such bank with an office in the United States. If no such
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Second Lien
Administrative Agent gives notice of its resignation, then the retiring Second
Lien Administrative Agent may on behalf of the Second Lien Lenders, appoint a
successor Second
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Lien Administrative Agent meeting the qualifications set forth above; provided
that if the Second Lien Administrative Agent shall notify the Loan Party
Representative and the Second Lien Lenders that no qualifying Person has
accepted such appointment, then such resignation shall nonetheless become
effective in accordance with such notice and (a) the retiring Second Lien
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Second Lien Loan Documents (except that in the
case of any collateral security held by the Second Lien Administrative Agent on
behalf of the Second Lien Lenders under any of the Second Lien Loan Documents,
the retiring Second Lien Administrative Agent shall continue to hold such
collateral security until such time as a successor Second Lien Administrative
Agent is appointed) and (b) all payments, communications and determinations
provided to be made by, to or through the Second Lien Administrative Agent shall
instead be made by or to each Second Lien Lender directly, until such time as
the Required Lenders, with the consent of the Loan Party Representative, if
applicable, appoint a successor Second Lien Administrative Agent as provided for
above in this Section. Upon the acceptance of a successor's appointment as
Second Lien Administrative Agent hereunder, such successor shall succeed to and
become vested with all of the rights, powers, privileges and duties of the
retiring (or retired) Second Lien Administrative Agent, and the retiring Second
Lien Administrative Agent shall be discharged from all of its duties and
obligations hereunder or under the other Second Lien Loan Documents (if not
already discharged therefrom as provided above in this Section). The fees
payable by the Borrowers to a successor Second Lien Administrative Agent shall
be the same as those payable to its predecessor unless otherwise agreed between
the Loan Party Representative and such successor. After the retiring Second Lien
Administrative Agent's resignation hereunder and under the other Second Lien
Loan Documents, the provisions of this Article and Section 11.04 shall continue
in effect for the benefit of such retiring Second Lien Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while the retiring Second Lien
Administrative Agent was acting as Second Lien Administrative Agent.
Any resignation by Bank of America as Second Lien Administrative Agent
pursuant to this Section shall also constitute its resignation as Second Lien
Collateral Agent. Upon the acceptance of a successor's appointment as Second
Lien Administrative Agent hereunder, (a) such successor shall succeed to and
become vested with all of the rights, powers, privileges and duties of the
retiring Second Lien Collateral Agent, (b) the retiring Second Lien Collateral
Agent shall be discharged from all of their respective duties and obligations
hereunder or under the other Second Lien Loan Documents.
SECTION 10.07 NON-RELIANCE ON SECOND LIEN ADMINISTRATIVE AGENT AND OTHER
SECOND LIEN LENDERS. Each Second Lien Lender acknowledges that it has,
independently and without reliance upon the Second Lien Administrative Agent or
any other Second Lien Lender or any of their Related Parties and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Second Lien Lender also
acknowledges that it will, independently and without reliance upon the Second
Lien Administrative Agent or any other Second Lien Lender or any of their
Related Parties and based on such documents and information as it shall from
time to time deem appropriate, continue to make its own decisions in taking or
not taking action under or based upon this Agreement, any other Second Lien Loan
Document or any related agreement or any document furnished hereunder or
thereunder.
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SECTION 10.08 NO OTHER DUTIES, ETC. Anything herein to the contrary
notwithstanding, none of the Second Lien Arrangers, the Second Lien Syndication
Agents or the Second Lien Document Agents listed on the cover page hereof shall
have any powers, duties or responsibilities under this Agreement or any of the
other Second Lien Loan Documents, except in its capacity, as applicable, as a
Second Lien Lender hereunder and except that each Second Lien Lender hereby
authorizes the Second Lien Arrangers to make the joint determinations in Section
4.01.
SECTION 10.09 SECOND LIEN ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM. In
case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Loan Party, the Second Lien Administrative Agent
(irrespective of whether the principal of any Second Lien Loan shall then be due
and payable as herein expressed or by declaration or otherwise and irrespective
of whether the Second Lien Administrative Agent shall have made any demand on
the Borrower) shall be entitled and empowered, by intervention in such
proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the principal
and interest owing and unpaid in respect of the Second Lien Loans and all other
Second Lien Obligations that are owing and unpaid and to file such other
documents as may be necessary or advisable in order to have the claims of the
Second Lien Lenders and the Second Lien Administrative Agent (including any
claim for the reasonable compensation, expenses, disbursements and advances of
the Second Lien Lenders and the Second Lien Administrative Agent and their
respective agents and counsel and all other amounts due the Second Lien Lenders
and the Second Lien Administrative Agent under Sections 2.07 and 11.04) allowed
in such judicial proceeding; and
(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Second Lien Lender
to make such payments to the Second Lien Administrative Agent and, in the event
that the Second Lien Administrative Agent shall consent to the making of such
payments directly to the Second Lien Lenders, to pay to the Second Lien
Administrative Agent any amount due for the reasonable compensation, expenses,
disbursements and advances of the Second Lien Administrative Agent and its
agents and counsel, and any other amounts due the Second Lien Administrative
Agent under Sections 2.07 and 11.04.
Nothing contained herein shall be deemed to authorize the Second Lien
Administrative Agent to authorize or consent to or accept or adopt on behalf of
any Second Lien Lender any plan of reorganization, arrangement, adjustment or
composition affecting the Second Lien Obligations or the rights of any Second
Lien Lender or to authorize the Second Lien Administrative Agent to vote in
respect of the claim of any Second Lien Lender in any such proceeding except as
provided in the Intercreditor Agreement.
SECTION 10.10 COLLATERAL AND GUARANTY MATTERS. (a) Each Second Lien Lender
irrevocably authorizes the Second Lien Administrative Agent, at its option and
in its discretion,
(i) to release any Lien on any property granted to or held by
the Second Lien Administrative Agent under any Second Lien Loan Document
(A) upon
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termination of the Commitment and payment in full of all Second Lien
Obligations (other than contingent indemnification obligations), (B) that
is sold or to be sold as part of or in connection with any sale permitted
hereunder or under any other Second Lien Loan Document, or (C) subject to
Section 11.01, if approved, authorized or ratified in writing by the
Required Lenders;
(ii) to subordinate any Lien on any property granted to or held
by the Second Lien Administrative Agent under any Second Lien Loan Document
to the holder of any Lien on such property that is permitted by Section
7.01(j);
(iii) to release any Loan Party from its obligations under the
Second Lien Loan Documents if such Person ceases to be a Restricted
Subsidiary as a result of a transaction permitted hereunder; and
(iv) to enter into the Intercreditor Agreement on behalf of
such Second Lien Lender and to perform the obligations of the Second Lien
Administrative Agent thereunder.
(b) Upon request by the Second Lien Administrative Agent at any time,
the Required Lenders will confirm in writing the Second Lien Administrative
Agent's authority to release or subordinate its interest in particular types or
items of property, or to release any Loan Party from its obligations under the
Second Lien Loan Documents pursuant to this Section 10.10 and to perform the
obligations of the Second Lien Administrative Agent under the Intercreditor
Agreement.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01 AMENDMENTS, ETC. No amendment or waiver of any provision of
this Agreement or any other Second Lien Loan Document, and no consent to any
departure by the Borrowers or any other Loan Party therefrom, shall in any event
be effective unless the same shall be in writing and signed by the Required
Lenders, the Loan Party Representative on behalf of all Loan Parties or the
applicable Loan Parties, as the case may be, and acknowledged by the Second Lien
Administrative Agent (which acknowledgement shall be provided at the direction
of the Required Lenders), then each such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given;
provided, however, that no such amendment, waiver or consent shall:
(a) waive any condition set forth in Section 4.01(a) without the
written consent of each Second Lien Lender;
(b) extend or increase the Commitment of any Second Lien Lender
without the written consent of such Second Lien Lender;
(c) postpone any date fixed by this Agreement or any other Second
Lien Loan Document for any scheduled payment of principal, interest, fees or
other amounts due to the Second Lien Lenders (or any of them) hereunder or under
any other Second Lien Loan Document or permit the election of an Interest Period
for Eurodollar Rate Loans which is longer
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than six months, in each case, without the written consent of each Second Lien
Lender directly affected thereby;
(d) reduce the principal of, or the rate of interest specified herein
on, any Second Lien Loan, or (subject to clause (iii) of the second proviso to
this Section 11.01) any fees or other amounts payable hereunder or under any
other Second Lien Loan Document without the written consent of each Second Lien
Lender directly affected thereby; provided, however, that only the consent of
the Required Lenders shall be necessary (i) to amend the definition of "Default
Rate" or to waive any obligation of the Borrowers to pay interest at the Default
Rate or (ii) to amend any financial covenant hereunder (or any defined term used
therein, including the definition of "Consolidated Total Leverage Ratio") even
if the effect of such amendment would be to reduce the rate of interest on any
Second Lien Loan;
(e) change Section 2.11 or Section 8.03 or the definition of
"Applicable Percentage" in a manner that would alter the pro rata sharing of
payments required thereby (or any other provision hereof regarding the pro rata
treatment and sharing of payments) without the written consent of each Second
Lien Lender;
(f) change any provision of this Section or the definition of
"Required Lenders" or any other provision hereof specifying the number or
percentage of Second Lien Lenders required to amend, waive or otherwise modify
any rights hereunder or make any determination or grant any consent hereunder,
without the written consent of each Second Lien Lender; or
(g) release all or substantially all of the Guarantors without the
written consent of each Second Lien Lender, or release all or substantially all
of the Collateral in any transaction or series of related transactions except in
each case as specifically permitted by the Second Lien Loan Documents without
the written consent of each Second Lien Lender;
provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Second Lien Administrative Agent in addition to the
Second Lien Lenders required above, affect the rights or duties of the Second
Lien Administrative Agent under this Agreement or any other Second Lien Loan
Document, (ii) no amendment, waiver or consent shall, unless in writing and
signed by any other Second Lien Agent in addition to the Second Lien Lenders
required above, affect the rights and duties of such other Second Lien Agent
under this Agreement or any other Second Lien Loan Document, and (iii) each of
the Fee Letter and the Commitment Letter may be amended, or rights or privileges
thereunder waived, in a writing executed only by the parties thereto.
Notwithstanding anything to the contrary herein, no Defaulting Second Lien
Lender shall have any right to approve or disapprove any amendment, waiver or
consent hereunder, except as provided in Section 11.01(b), (c), (d) or (e) (and,
except for such purposes, none of the Outstanding Amount of Second Lien Loans
owing to a Defaulting Second Lien Lender shall be deemed to be outstanding as
provided under the definition of "Required Lenders").
Upon delivery by the Loan Party Representative of each Compliance
Certificate, Perfection Certificate or certificate of one of its Responsible
Officers certifying supplements to the Schedules to this Agreement and the other
Second Lien Loan Documents pursuant to
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Sections 6.02(b) and 6.11, the schedule supplements attached to each such
certificate shall be incorporated into and become a part of and supplement
Schedules 5.08 and 5.12 hereto or Schedule I to the Second Lien Pledge and
Security Agreement or the Schedules to the Perfection Certificate for any Loan
Party, as applicable, and the Second Lien Administrative Agent may attach such
schedule supplements to such Schedules, and each reference to such Schedules
shall mean and be a reference to such Schedules, as supplemented pursuant
thereto.
In the event that: (a) the Senior Administrative Agent or the other Senior
Secured Parties and the relevant Loan Party enter into any amendment,
modification, waiver or consent in respect of any of the Senior Collateral
Documents for the purpose of adding to, or deleting from, or waiving or
consenting to any departures from any provisions of, any Senior Collateral
Document or changing in any manner the rights of the Senior Administrative
Agent, the Senior Secured Parties, Holdings or any other Loan Party (other than
any such amendment, modification, waiver or consent which is prohibited by the
Intercreditor Agreement), then such amendment, modification, waiver or consent
shall apply automatically to any comparable provision of this Agreement and the
Comparable Second Lien Collateral Document, in each case, without the consent of
any Second Lien Lender and without any action by the Second Lien Administrative
Agent, Holdings or any other Loan Party; or (b) the Senior Administrative Agent,
the requisite Senior Lenders and the Loan Parties enter into any amendment,
modification, waiver or consent in respect of any of the following provisions of
the Senior Credit Agreement for the following purposes, then (subject to the
limitations set forth below) such amendment, modification, waiver or consent
shall apply automatically to any comparable provision of this Agreement, in each
case, without the consent of any Second Lien Lender and without any action by
the Second Lien Administrative Agent, Holdings or any other Loan Party: (i) any
amendment, modification, waiver or consent with respect to any change in GAAP
pursuant to Section 1.03(b) of the Senior Credit Agreement (as contemplated by
the proviso to Section 1.03(b) to this Agreement); (ii) any amendment,
modification, waiver or consent which extends the date for delivery of the
financial statements or management forecast required to be delivered pursuant to
Section 6.01 of the Senior Credit Agreement or any of the certificates or other
reports required to be delivered pursuant to Section 6.02 of the Senior Credit
Agreement; provided, however, that no such extension shall be for a period in
excess of 45 days beyond the date otherwise required for the delivery thereof
under this Agreement; and (iii) any amendment, modification, waiver or consent
which extends the date for delivery of the items required to be delivered
pursuant to the further assurances covenants in Sections 6.11 and 6.12 of the
Senior Credit Agreement or which modifies or waives the requirements of such
delivery in any particular instance or instances.
SECTION 11.02 NOTICES; EFFECTIVENESS; ELECTRONIC COMMUNICATION.
(a) Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in subsection (b) below), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopier as
follows, and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows:
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(i) if to any Loan Party, the Loan Party Representative, the
Second Lien Administrative Agent or any other Second Lien Agent, to the
address, telecopier number, electronic mail address or telephone number
specified for such Person on Schedule 11.02; and
(ii) if to any Second Lien Lender, to the address, telecopier
number, electronic mail address or telephone number specified in its
Administrative Questionnaire.
Notices sent by hand or overnight courier service, or mailed, shall be
deemed to have been given when received; notices sent by telecopier shall be
deemed to have been given when sent (except that, if not given during normal
business hours for the recipient, shall be deemed to have been given at the
opening of business on the next business day for the recipient). Notices
delivered through electronic communications to the extent provided in subsection
(b) below, shall be effective as provided in such subsection (b).
(b) Electronic Communications. Notices and other communications to
the Second Lien Lenders hereunder may be delivered or furnished by electronic
communication (including e-mail and Internet or intranet websites) pursuant to
procedures approved by the Second Lien Administrative Agent; provided that the
foregoing shall not apply to notices to any Second Lien Lender pursuant to
Article II if such Second Lien Lender has notified the Second Lien
Administrative Agent that it is incapable of receiving notices under such
Article by electronic communication. The Second Lien Administrative Agent or the
Loan Party Representative may, in its discretion, agree to accept notices and
other communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may be
limited to particular notices or communications.
Unless the Second Lien Administrative Agent otherwise prescribes, (i)
notices and other communications sent to an e-mail address shall be deemed
received upon the sender's receipt of an acknowledgement from the intended
recipient (such as by the "return receipt requested" function, as available,
return e-mail or other written acknowledgement), provided that if such notice or
other communication is not sent during the normal business hours of the
recipient, such notice or communication shall be deemed to have been sent at the
opening of business on the next business day for the recipient, and (ii) notices
or communications posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail address
as described in the foregoing clause (i) of notification that such notice or
communication is available and identifying the website address therefor.
(c) Change of Address, Etc. Each of the Loan Parties, the Loan Party
Representative and the Second Lien Administrative Agent may change its address,
telecopier or telephone number for notices and other communications hereunder by
notice to the other such parties hereto. Each Second Lien Lender may change its
address, telecopier or telephone number for notices and other communications
hereunder by notice to the Loan Party Representative and the Second Lien
Administrative Agent.
(d) Reliance by Second Lien Administrative Agent and Second Lien
Lenders. The Second Lien Administrative Agent and the Second Lien Lenders shall
be entitled to rely and
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act upon any notices (including telephonic Second Lien Loan Notices) purportedly
given by or on behalf of any Loan Party or by the Loan Party Representative even
if (i) such notices were not made in a manner specified herein, were incomplete
or were not preceded or followed by any other form of notice specified herein,
or (ii) the terms thereof, as understood by the recipient, varied from any
confirmation thereof. The Borrowers shall indemnify the Second Lien
Administrative Agent, each Second Lien Lender and the Related Parties of each of
them from all losses, costs, expenses and liabilities resulting from the
reliance by such Person on each notice purportedly given by or on behalf of any
Loan Party or by the Loan Party Representative (in the absence of gross
negligence or willful misconduct by the applicable indemnitee). All telephonic
notices to and other telephonic communications with the Second Lien
Administrative Agent may be recorded by the Second Lien Administrative Agent,
and each of the parties hereto hereby consents to such recording.
SECTION 11.03 NO WAIVER; CUMULATIVE REMEDIES. No failure by any Second Lien
Lender or the Second Lien Administrative Agent to exercise, and no delay by any
such Person in exercising, any right, remedy, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by Law.
SECTION 11.04 EXPENSES; INDEMNITY; DAMAGE WAIVER.
(a) Costs and Expenses. The Borrowers shall pay (i) all reasonable
out-of-pocket expenses incurred by the Second Lien Administrative Agent and its
Affiliates (including the reasonable fees, charges and disbursements of counsel
for the Second Lien Administrative Agent), in connection with the syndication of
the credit facilities provided for herein, the preparation, negotiation,
execution, delivery and administration of this Agreement and the other Second
Lien Loan Documents or any amendments, modifications or waivers of the
provisions hereof or thereof, including all such out-of-pocket expenses incurred
during any workout, restructuring or negotiations in respect of the Second Lien
Loans (whether or not the transactions contemplated hereby or thereby shall be
consummated) and (ii) all reasonable out-of-pocket expenses incurred by the
Second Lien Administrative Agent or any Second Lien Lender (including the fees,
charges and disbursements of any counsel for the Second Lien Administrative
Agent or any Second Lien Lender), and shall pay all reasonable fees and time
charges for attorneys who may be employees of the Second Lien Administrative
Agent or any Second Lien Lender, in connection with the enforcement or
protection of its rights after the occurrence and during the continuance of an
Event of Default (A) in connection with this Agreement and the other Second Lien
Loan Documents, including its rights under this Section, or (B) in connection
with the Second Lien Loans (all of such expenses in this clause (iii) are
sometimes referred to herein as "Enforcement Expenses"); provided, however, that
in the case of reimbursement of outside counsel for Second Lien Lenders, other
than outside counsel for the Second Lien Administrative Agent, such
reimbursement shall be limited to one counsel for all such Second Lien Lenders.
(b) Indemnification by the Borrowers. The Borrowers shall indemnify
the Second Lien Administrative Agent (and any sub-agent thereof) and each Second
Lien Lender,
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and each Related Party of any of the foregoing Persons (each such
Person being called an "Indemnitee") against, and hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related expenses
(including the reasonable fees, charges and disbursements of any counsel for any
Indemnitee), and shall indemnify and hold harmless each Indemnitee from all
reasonable fees and time charges and disbursements for attorneys who may be
employees of any Indemnitee, incurred by any Indemnitee or asserted against any
Indemnitee by any third party or by the Borrowers or any other Loan Party
arising out of, in connection with, or as a result of any actual or prospective
claims, litigation, actions, proceedings or investigations arising out of or
relating to the following (whether based on contract, tort or any other theory,
whether brought by a third party or by any other Loan Party, and regardless of
whether any Indemnitee is a party thereto, in all cases, whether or not caused
by or arising, in whole or in part, out of the comparative, contributing or sole
negligence of the Indemnitee): (i) the execution or delivery of this Agreement,
any other Second Lien Loan Document or any agreement or instrument contemplated
hereby or thereby, the performance by the parties hereto of their respective
obligations hereunder or thereunder or the consummation of the transactions
contemplated hereby or thereby, (ii) any Second Lien Loan or the use or proposed
use of the proceeds therefrom, or (iii) any actual or alleged presence or
release of Hazardous Materials on or from any property owned or operated by
Holdings or any of its Subsidiaries, or any Environmental Liability related in
any way to Holdings or any of its Subsidiaries; provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses (x) are determined by a court
of competent jurisdiction by final and nonappealable judgment to have resulted
from the gross negligence or willful misconduct of such Indemnitee or (y) result
from a claim brought by any Loan Party against an Indemnitee for breach in bad
faith of such Indemnitee's obligations hereunder or under any other Second Lien
Loan Document, if such Loan Party has obtained a final and nonappealable
judgment in its favor on such claim as determined by a court of competent
jurisdiction.
(c) Reimbursement by Second Lien Lenders. To the extent that the
Borrowers for any reason fail to indefeasibly pay any amount required under
subsection (a) or (b) of this Section to be paid by them to the Second Lien
Administrative Agent (or any sub-agent thereof) or any Related Party of the
foregoing, each Second Lien Lender severally agrees to pay to the Second Lien
Administrative Agent (or any such sub-agent) or such Related Party, as the case
may be, such Second Lien Lender's Applicable Percentage (determined as of the
time that the applicable unreimbursed expense or indemnity payment is sought) of
such unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Second Lien Administrative Agent (or any such sub-agent)
or against any Related Party of any of the foregoing acting for the Second Lien
Administrative Agent (or any such sub-agent) in connection with such capacity
and; provided, further, that the Second Lien Lenders shall not be required to
pay any amount under this Section 11.04(c) in respect of any unpaid fees due to
the Second Lien Administrative Agent or any related Party under the Fee Letter
(and Section 2.07(b)). The obligations of the Second Lien Lenders under this
subsection (c) are subject to the provisions of Section 2.10(e).
(d) Waiver of Consequential Damages, Etc. To the fullest extent
permitted by applicable Law, the Loan Parties shall not assert, and hereby
waive, any claim against any Indemnitee, on any theory of liability, for
special, indirect, consequential or punitive damages (as
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opposed to direct or actual damages) arising out of, in connection with, or as a
result of, this Agreement, any other Second Lien Loan Document or any agreement
or instrument contemplated hereby, the transactions contemplated hereby or
thereby, any Second Lien Loan or the use of the proceeds thereof. No Indemnitee
referred to in subsection (b) above shall be liable for any damages arising from
the use by unintended recipients of any information or other materials
distributed by it through telecommunications, electronic or other information
transmission systems in connection with this Agreement or the other Second Lien
Loan Documents or the transactions contemplated hereby or thereby so long as
such Indemnitee has otherwise complied with the provisions of Section 11.07.
Without limiting the foregoing, and to the extent permitted by applicable Law,
the Loan Parties agree not to assert and to cause their Subsidiaries not to
assert, and hereby waive and agree to cause their Subsidiaries to waive, all
rights for contribution or any other rights of recovery with respect to all
claims, demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature, under or related to Environmental Laws,
that any of them might have by statute or otherwise against any Indemnitee
(other than any thereof determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee).
(e) Payments. All amounts due under this Section shall be payable not
later than ten Business Days after demand therefor.
(f) Survival. The agreements in this Section shall survive the
resignation of the Second Lien Administrative Agent, the replacement of any
Second Lien Lender, the termination of the Commitment and the repayment,
satisfaction or discharge of all the other Second Lien Obligations.
SECTION 11.05 PAYMENTS SET ASIDE. To the extent that any payment by or on
behalf of the Loan Parties is made to the Second Lien Administrative Agent or
any Second Lien Lender, or the Second Lien Administrative Agent or any Second
Lien Lender exercises its right of setoff, and such payment or the proceeds of
such setoff or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Second Lien Administrative Agent or such Second
Lien Lender in its discretion) to be repaid to a trustee, receiver or any other
party, in connection with any proceeding under any Debtor Relief Law or
otherwise, then (a) to the extent of such recovery, the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such setoff had
not occurred, and (b) each Second Lien Lender severally agrees to pay to the
Second Lien Administrative Agent upon demand its Applicable Percentage (without
duplication) of any amount so recovered from or repaid by the Second Lien
Administrative Agent, plus interest thereon from the date of such demand to the
date such payment is made at a rate per annum equal to the Federal Funds Rate
from time to time in effect. The obligations of the Second Lien Lenders under
clause (b) of the preceding sentence shall survive the payment in full of the
Second Lien Obligations and the termination of this Agreement.
SECTION 11.06 SUCCESSORS AND ASSIGNS.
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(a) Generally. The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns permitted hereby, except that none of the Loan Parties may assign or
otherwise transfer any of their rights or obligations hereunder without the
prior written consent of the Second Lien Administrative Agent and each Second
Lien Lender and no Second Lien Lender may assign or otherwise transfer any of
its rights or obligations hereunder except (i) to an Eligible Assignee in
accordance with the provisions of subsection (b) of this Section, (ii) by way of
participation in accordance with the provisions of subsection (d) of this
Section, or (iii) by way of pledge or assignment of a security interest subject
to the restrictions of subsections (f) or (h) of this Section (and any other
attempted assignment or transfer by any party hereto shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby, Participants to the extent provided in subsection (d)
of this Section and, to the extent expressly contemplated hereby, the Related
Parties of each of the Second Lien Administrative Agent and the Second Lien
Lenders) any legal or equitable right, remedy or claim under or by reason of
this Agreement. Except as expressly provided in Section 11.13, no Loan Party
shall be liable or responsible for any fees, costs or expenses arising out of or
related to any assignment or participation by a Second Lien Lender under this
Section 11.06.
(b) Assignments by Second Lien Lenders. Any Second Lien Lender may at
any time assign to one or more Eligible Assignees all or a portion of its rights
and obligations under this Agreement (including all or a portion of its
Commitment and the Second Lien Loans at the time owing to it); provided that
(i) except in the case of an assignment of the entire remaining
amount of the assigning Second Lien Lender's Commitment and the Second Lien
Loans at the time owing to it or in the case of an assignment to a Second
Lien Lender or an Affiliate of such a Second Lien Lender or an Approved
Fund with respect to such a Second Lien Lender, the aggregate amount of the
Commitment (which for this purpose includes Second Lien Loans outstanding
thereunder) or, if the applicable Commitment is not then in effect, the
outstanding principal balance of the Second Lien Loans of the assigning
Second Lien Lender subject to each such assignment, determined as of the
date the Second Lien Assignment and Assumption with respect to such
assignment is delivered to the Second Lien Administrative Agent or, if
"Trade Date" is specified in the Second Lien Assignment and Assumption, as
of the Trade Date, shall not be less than $1,000,000 unless the Second Lien
Administrative Agent, otherwise consents (such consent not to be
unreasonably withheld or delayed); provided, however, that concurrent
assignments to members of an Assignee Group and concurrent assignments from
members of an Assignee Group to a single Eligible Assignee (or to an
Eligible Assignee and members of its Assignee Group) will be treated as a
single assignment for purposes of determining whether such minimum amount
has been met;
(ii) each partial assignment shall be made as an assignment of
a proportionate part of all the assigning Second Lien Lender's rights and
obligations under this Agreement with respect to the Second Lien Loans or
the Commitment assigned; and
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(iii) the parties to each assignment shall execute and deliver
to the Second Lien Administrative Agent a Second Lien Assignment and
Assumption, together with the Assignment Fee (from the assigning Second
Lien Lender or the Eligible Assignee), and the Eligible Assignee, if it
shall not be a Second Lien Lender, shall deliver to the Second Lien
Administrative Agent an Administrative Questionnaire.
Subject to acceptance and recording thereof by the Second Lien
Administrative Agent pursuant to subsection (c) of this Section, from and after
the effective date specified in each Second Lien Assignment and Assumption, the
Eligible Assignee thereunder shall be a party to this Agreement and, to the
extent of the interest assigned by such Second Lien Assignment and Assumption,
have the rights and obligations of a Second Lien Lender under this Agreement,
and the assigning Second Lien Lender thereunder shall, to the extent of the
interest assigned by such Second Lien Assignment and Assumption, be released
from its obligations under this Agreement (and, in the case of a Second Lien
Assignment and Assumption covering all of the assigning Second Lien Lender's
rights and obligations under this Agreement, such Second Lien Lender shall cease
to be a party hereto but shall continue to be entitled to the benefits of
Sections 3.01, 3.04, 3.05, 11.04 and 11.05 with respect to facts and
circumstances occurring prior to the effective date of such assignment). Upon
request, the Borrowers (at their expense) shall execute and deliver the
applicable Notes to the assignee Second Lien Lender. Any assignment or transfer
by a Second Lien Lender of rights or obligations under this Agreement that does
not comply with this subsection shall be treated for purposes of this Agreement
as a sale by such Second Lien Lender of a participation in such rights and
obligations in accordance with subsection (d) of this Section.
(c) Register. The Second Lien Administrative Agent, acting solely for
this purpose as an agent of the Borrowers, shall maintain at the Second Lien
Administrative Agent's Office a copy of each Second Lien Assignment and
Assumption delivered to it and a register for the recordation of the names and
addresses of the Second Lien Lenders, and the Commitment of, and principal
amounts of the Second Lien Loans owing to, each Second Lien Lender pursuant to
the terms hereof from time to time (the "Register"). The entries in the Register
shall be conclusive, and the Borrowers, the Second Lien Administrative Agent and
the Second Lien Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Second Lien Lender hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary. The Register
shall be available for inspection by each of the Loan Party Representative at
any reasonable time and from time to time upon reasonable prior notice. In
addition, at any time that a request for a consent for a material or other
substantive change to the Second Lien Loan Documents is pending, any Second Lien
Lender wishing to consult with other Second Lien Lenders in connection therewith
may request and receive from the Second Lien Administrative Agent a copy of the
Register.
(d) Participations. Any Second Lien Lender may at any time, without
the consent of, or notice to, the Loan Parties, the Loan Party Representative or
the Second Lien Administrative Agent, sell participations to any Person (other
than a natural person or Holdings or any of Holdings' Affiliates or
Subsidiaries) (each, a "Participant") in all or a portion of such Second Lien
Lender's rights and/or obligations under this Agreement (including all or a
portion of its Commitment and/or the Second Lien Loans owing to it); provided
that (i) such Second Lien Lender's obligations under this Agreement shall remain
unchanged, (ii) such Second Lien
119
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Loan Parties, the Loan Party
Representative, the Second Lien Administrative Agent and the other Second Lien
Lenders shall continue to deal solely and directly with such Second Lien Lender
in connection with such Second Lien Lender's rights and obligations under this
Agreement. Any agreement or instrument pursuant to which a Second Lien Lender
sells such a participation shall provide that such Second Lien Lender shall
retain the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement and the other Second
Lien Loan Documents; provided that such agreement or instrument may provide that
such Second Lien Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
Section 11.01 that affects such Participant. Subject to subsection (e) of this
Section, the Loan Parties agree that each Participant shall be entitled to the
benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a
Second Lien Lender and had acquired its interest by assignment pursuant to
subsection (b) of this Section, provided such Participant agrees to be subject
to Section 3.06 as though it were a Second Lien Lender. To the extent permitted
by Law, each Participant also shall be entitled to the benefits of Section 11.08
as though it were a Second Lien Lender; provided such Participant agrees to be
subject to Section 2.11 as though it were a Second Lien Lender.
(e) A Participant shall not be entitled to receive any greater
payment under Section 3.01 or 3.04 than the applicable Second Lien Lender would
have been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Loan Party Representative's (on behalf of the Borrowers) prior written
consent. A Participant that would be a Non-Corporate Domestic Lender or a
Foreign Lender if it were a Second Lien Lender shall not be entitled to the
benefits of Section 3.01 unless the Loan Party Representative is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Loan Parties, to comply with Section 3.01 as though it were a
Second Lien Lender.
(f) Any Second Lien Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement
(including under its Note, if any) to secure obligations of such Second Lien
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank and including, in the case of any Second Lien Lender that is a
Fund, that such Second Lien Lender may pledge or collaterally assign all or any
portion of its rights under this Agreement (including under its Note, if any),
to any holder of, or trustee for, or any other representative of holders of,
obligations owed or securities issued by such Fund, as security for obligations
of such Fund or such securities; provided that no such pledge or assignment
shall release such Second Lien Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Second Lien Lender as a party
hereto.
(g) Electronic Execution of Assignments. The words "execution,"
"signed," "signature," and words of like import in any Second Lien Assignment
and Assumption shall be deemed to include electronic signatures or the keeping
of records in electronic form, each of which shall be of the same legal effect,
validity or enforceability as a manually executed signature or the use of a
paper-based recordkeeping system, as the case may be, to the extent and as
provided for in any applicable Law, including the Federal Electronic Signatures
in Global and
▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Electronic Signatures and Records Act,
or any other similar state Laws based on the Uniform Electronic Transactions
Act.
(h) Special Purpose Funding Vehicles. Notwithstanding anything to the
contrary contained herein, any Second Lien Lender (a "Granting Lender") may
grant to a special purpose funding vehicle identified as such in writing from
time to time by the Granting Lender to the Second Lien Administrative Agent and
the Loan Party Representative (an "SPC") the option to provide all or any part
of any Second Lien Loan that such Granting Lender would otherwise be obligated
to make pursuant to this Agreement; provided that (i) nothing herein shall
constitute a commitment by any SPC to fund any Second Lien Loan, and (ii) if an
SPC elects not to exercise such option or otherwise fails to make all or any
part of such Second Lien Loan, the Granting Lender shall be obligated to make
such Second Lien Loan pursuant to the terms hereof or, if it fails to do so, to
make such payment to the Second Lien Administrative Agent as is required under
Section 2.10(c). Each party hereto hereby agrees that (i) neither the grant to
any SPC nor the exercise by any SPC of such option shall increase the costs or
expenses or otherwise increase or change the obligations of the Loan Parties
under this Agreement (including their obligations under Sections 3.01 and 3.04),
(ii) no SPC shall be liable for any indemnity or similar payment obligation
under this Agreement for which a Second Lien Lender would be liable, and (iii)
the Granting Lender shall for all purposes, including the approval of any
amendment, waiver or other modification of any provision of any Second Lien Loan
Document, remain the lender of record hereunder. The making of a Second Lien
Loan by an SPC hereunder shall utilize the Commitment of the Granting Lender to
the same extent, and as if, such Second Lien Loan were made by such Granting
Lender. In furtherance of the foregoing, each party hereto hereby agrees (which
agreement shall survive the termination of this Agreement) that, prior to the
date that is one year and one day after the payment in full of all outstanding
commercial paper or other Second Lien debt of any SPC, it will not institute
against, or join any other Person in instituting against, such SPC any
bankruptcy, reorganization, arrangement, insolvency, or liquidation proceeding
under the Laws of the United States or any State thereof. Notwithstanding
anything to the contrary contained herein, any SPC may (i) with notice to the
Loan Party Representative and the Second Lien Administrative Agent, but without
prior consent of the Borrowers, the Loan Party Representative or the Second Lien
Administrative Agent and without the payment of any processing and recordation
fee, assign all or any portion of its right to receive payment with respect to
any Second Lien Loan to the Granting Lender and (ii) disclose on a confidential
basis any non-public information relating to its funding of Second Lien Loans to
any rating agency, commercial paper dealer or provider of any surety or
Guarantee or credit or liquidity enhancement to such SPC.
SECTION 11.07 TREATMENT OF CERTAIN INFORMATION; CONFIDENTIALITY. Each of
the Second Lien Administrative Agent, the other Second Lien Agents and the
Second Lien Lenders agrees to maintain the confidentiality of the Information
(as defined below), except that Information may be disclosed (a) to its
Affiliates and to its and its Affiliates' partners, directors, officers,
employees, advisors and representatives solely in connection with the
administration of its rights and performance of its obligations hereunder (it
being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information, instructed to keep such
Information confidential and informed that the Loan Parties will be permitted to
rely on their agreement to maintain such confidentiality as herein provided),
(b) to the extent requested by any regulatory authority purporting to have
authority over it (including
121
any self-regulatory authority, such as the National Association of Insurance
Commissioners), (c) to the extent required by applicable Law or regulations or
by any subpoena or similar legal process, (d) to any other party hereto, (e) in
connection with the exercise of any remedies hereunder or under any other Second
Lien Loan Document or any action or proceeding relating to this Agreement or any
other Second Lien Loan Document or the enforcement of rights hereunder or
thereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to (i) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement or (ii) any actual or prospective counterparty (or its
advisors) to any swap or derivative transaction relating to the Loan Parties and
their obligations, (g) with the consent of the Loan Party Representative on
behalf of the Borrowers or (h) to the extent such Information (x) becomes
publicly available other than as a result of a breach of this Section or (y)
becomes available to the Second Lien Administrative Agent or any Second Lien
Lender or any of their respective Affiliates on a nonconfidential basis from a
source other than the Loan Parties or any of their Subsidiaries or Affiliates.
For purposes of this Section, "Information" means all information received from
the Loan Parties or any Subsidiary or any of their Affiliates relating to any
Loan Party or any Subsidiary or any of their respective businesses, other than
any such information that is available to the Second Lien Administrative Agent
or any Second Lien Lender on a nonconfidential basis prior to disclosure by the
Loan Parties or any Subsidiary; provided that, in the case of information
received from the Loan Parties or any Subsidiary or any of their Affiliates
after the date hereof, such information is clearly identified at the time of
delivery as confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section 11.07 shall be considered to have
complied with its obligation to do so if such Person has exercised the same
degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
SECTION 11.08 RIGHT OF SETOFF. If an Event of Default shall have occurred
and be continuing, each Second Lien Lender and each of their respective
Affiliates is hereby authorized at any time and from time to time, after
obtaining the prior written consent of the Second Lien Administrative Agent, to
the fullest extent permitted by applicable Law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final, in whatever
currency) at any time held and other obligations (in whatever currency) at any
time owing by such Second Lien Lender or any such Affiliate to or for the credit
or the account of any Borrower or any other Loan Party against any and all of
the obligations of such Borrower or such Loan Party now or hereafter existing
under this Agreement or any other Second Lien Loan Document to such Second Lien
Lender, irrespective of whether or not such Second Lien Lender shall have made
any demand under this Agreement or any other Second Lien Loan Document and
although such obligations of such Borrower or such Loan Party may be contingent
or unmatured or are owed to a branch or office of such Second Lien Lender
different from the branch or office holding such deposit or obligated on such
indebtedness. The rights of each Second Lien Lender and its respective
Affiliates under this Section are in addition to other rights and remedies
(including other rights of setoff) that such Second Lien Lender or its
respective Affiliates may have. Each Second Lien Lender agrees to notify the
Loan Party Representative and the Second Lien Administrative Agent promptly
after any such setoff and application which it effects or which is effected by
its Affiliate; provided that the failure to give such notice shall not affect
the validity of such setoff and application.
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SECTION 11.09 INTEREST RATE LIMITATION. Notwithstanding anything to the
contrary contained in any Second Lien Loan Document, the interest paid or agreed
to be paid under the Second Lien Loan Documents shall not exceed the maximum
rate of non-usurious interest permitted by applicable Law (the "Maximum Rate").
If the Second Lien Administrative Agent or any Second Lien Lender shall receive
interest in an amount that exceeds the Maximum Rate, the excess interest shall
be applied to the principal of the Second Lien Loans or, if it exceeds such
unpaid principal, refunded to the Borrowers. In determining whether the interest
contracted for, charged, or received by the Second Lien Administrative Agent or
a Second Lien Lender exceeds the Maximum Rate, such Person may, to the extent
permitted by applicable Law, (a) characterize any payment that is not principal
as an expense, fee, or premium rather than interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) amortize, prorate, allocate, and
spread in equal or unequal parts the total amount of interest throughout the
contemplated term of the Second Lien Obligations hereunder.
SECTION 11.10 COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This Agreement may
be executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and the other
Second Lien Loan Documents constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Second Lien Administrative
Agent and when the Second Lien Administrative Agent shall have received
counterparts hereof that, when taken together, bear the signatures of each of
the other parties hereto. Delivery of an executed counterpart of a signature
page of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 11.11 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made hereunder and in any other Second Lien Loan
Document or other document delivered pursuant hereto or thereto or in connection
herewith or therewith shall survive the execution and delivery hereof and
thereof. Such representations and warranties have been or will be relied upon by
the Second Lien Administrative Agent and each Second Lien Lender, regardless of
any investigation made by the Second Lien Administrative Agent or any Second
Lien Lender or on their behalf and notwithstanding that the Second Lien
Administrative Agent or any Second Lien Lender may have had notice or knowledge
of any Default at the time of any Borrowing, and shall continue in full force
and effect as long as any Second Lien Loan or any other Second Lien Obligation
hereunder shall remain unpaid or unsatisfied.
SECTION 11.12 SEVERABILITY. If any provision of this Agreement or the other
Second Lien Loan Documents is held to be illegal, invalid or unenforceable, (a)
the legality, validity and enforceability of the remaining provisions of this
Agreement and the other Second Lien Loan Documents shall not be affected or
impaired thereby and (b) the parties shall endeavor in good faith negotiations
to replace the illegal, invalid or unenforceable provisions with valid
provisions the economic effect of which comes as close as possible to that of
the illegal, invalid or unenforceable provisions. The invalidity of a provision
in a particular jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
123
SECTION 11.13 REPLACEMENT OF SECOND LIEN LENDERS. If (i) any Second Lien
Lender requests compensation under Section 3.04, (ii) a Borrower is required to
pay any additional amount or indemnification to any Second Lien Lender or any
Governmental Authority for the account of any Second Lien Lender pursuant to
Section 3.01, (iii) any Second Lien Lender fails or refuses to consent to any
amendment, waiver or consent under the Second Lien Loan Documents which is
approved by the Required Lenders, (iv) any Second Lien Lender delivers a notice
pursuant to Section 3.02 with respect to circumstances that do not affect the
other Second Lien Lenders hereunder, or (v) any Second Lien Lender is a
Defaulting Second Lien Lender, then the Borrowers may, at their sole expense and
effort, upon notice from the Loan Party Representative to any such Second Lien
Lender and the Second Lien Administrative Agent, require such Second Lien Lender
to assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in, and consents required by, Section 11.06), all of its
interests, rights and obligations under this Agreement and the related Second
Lien Loan Documents to an assignee that shall assume such obligations (which
assignee may be another Second Lien Lender, if a Second Lien Lender accepts such
assignment), provided that:
(a) the Borrowers shall have paid to the Second Lien Administrative
Agent the assignment fee specified in Section 11.06(b);
(b) such Second Lien Lender shall have received payment of an amount
equal to the outstanding principal of its Second Lien Loans and accrued interest
thereon, accrued fees and all other amounts payable to it hereunder and under
the other Second Lien Loan Documents (including any amounts under Sections
2.03(d) and 3.05) from the assignee (to the extent of such outstanding principal
and accrued interest and fees) or the Borrowers (in the case of all other
amounts) and, except in the case of a sole Second Lien Lender that fails or
refuses to give its consent to any amendment, waiver or consent pursuant to
clause (iii) above, the Borrowers shall have paid to such Second Lien Lender an
amount equal to the Applicable Prepayment Premium on the Outstanding Amount of
the Second Lien Loans of such Senior Lender;
(c) in the case of any such assignment resulting from a claim for
compensation under Section 3.04 or payments required to be made pursuant to
Section 3.01, such assignment will result in a reduction in such compensation or
payments thereafter; and
(d) such assignment does not conflict with applicable Laws.
A Second Lien Lender shall not be required to make any such assignment or
delegation if, prior thereto, as a result of a waiver by such Second Lien Lender
or otherwise, the circumstances entitling the Borrowers to require such
assignment and delegation cease to apply.
SECTION 11.14 GOVERNING LAW; JURISDICTION; ETC.
(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
(b) SUBMISSION TO JURISDICTION. EACH LOAN PARTY IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF THE COURTS OF THE
▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ AND OF THE UNITED STATES DISTRICT
COURT OF THE SOUTHERN DISTRICT OF SUCH STATE, AND ANY APPELLATE COURT FROM ANY
THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER SECOND LIEN LOAN DOCUMENT, OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE
PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN
ANY OTHER SECOND LIEN LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE SECOND LIEN
ADMINISTRATIVE AGENT, ANY LENDER MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER SECOND LIEN LOAN DOCUMENT
AGAINST ANY LOAN PARTY OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
(c) WAIVER OF VENUE. EACH LOAN PARTY IRREVOCABLY AND UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER SECOND LIEN LOAN
DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (b) OF THIS SECTION. EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH
ACTION OR PROCEEDING IN ANY SUCH COURT.
(d) SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO
SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 11.02. NOTHING
IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.
SECTION 11.15 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER SECOND LIEN LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR
ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT
OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER SECOND LIEN
125
LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION.
SECTION 11.16 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER SECOND LIEN
LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES.
SECTION 11.17 USA PATRIOT ACT NOTICE. Each of the Second Lien
Administrative Agent (for itself and not on behalf of any Second Lien Lender)
and each Second Lien Lender hereby notifies the Loan Parties that pursuant to
the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)), it is required to obtain, verify and record
information that identifies the Loan Parties, which information includes the
names and addresses of the Loan Parties and other information that will allow
such Second Lien Lender or the Second Lien Administrative Agent, as applicable,
to identify the Loan Parties in accordance with such Act.
SECTION 11.18 BORROWERS' REPRESENTATIVE. The Loan Parties at all times
shall have designated one of the Loan Parties to act as their agent under this
Agreement and the other Second Lien Loan Documents (in such capacity, the "Loan
Party Representative") with such powers and discretion as are specifically
delegated to the Loan Party Representative by the terms of this Agreement and
the other Second Lien Loan Documents, together with such other powers as are
reasonably incidental thereto, including, without limitation, (a) to execute and
deliver on behalf of each Loan Party all notices required or permitted by the
terms of this Agreement and the other Second Lien Loan Documents to be delivered
by any Loan Party, including, without limitation, Second Lien Loan Notices on
behalf of each Applicable Borrower, (b) to receive notices on behalf of each of
the Loan Parties, (c) to disburse funds credited to the Borrowers' Account to
each Applicable Borrower or other Loan Party, as applicable, and (d) to give
consents and approvals and make elections on behalf of the Loan Parties. Any
action taken by the Loan Party Representative shall be deemed to bind the Loan
Parties and shall be deemed approved by the Loan Parties. The Second Lien
Administrative Agent, the other Second Lien Agents and the Second Lien Lenders
(i) may rely on any notice delivered by the Loan Party Representative on behalf
of any Loan Party and (ii) shall not have any responsibility for any actions as
are delegated to the Loan Party Representative hereunder. Any notice given by
the Second Lien Administrative Agent or any Second Lien Lender to the Loan Party
Representative shall be deemed given to each Loan Party. Each Loan Party hereby
appoints and authorizes Holdings to be and act as the initial Loan Party
Representative. Subject only to the final sentence of this Section, the Loan
Parties may at any time replace the Loan Party Representative with another Loan
Party by delivering to the Second Lien Administrative Agent an appointment and
authorization document executed by each Loan Party in form and substance
satisfactory to the Second Lien Administrative Agent. Upon such delivery and
approval the Loan Party named in such document shall become the Loan Party
Representative as if such Loan Party were named the Loan Party Representative
herein. The Loan Parties further agree that, until the Final Senior Termination
Date, the Person designated as the Loan Party Representative under this
Agreement shall be the same Person designated by the Loan Parties as the Loan
Party Representative under Section 11.18 of the Senior Credit Agreement.
126
SECTION 11.19 CONFLICTS WITH SECOND LIEN MORTGAGES. In the case of any
conflict between the terms and provisions of this Agreement and the terms and
provisions of any Second Lien Mortgage, as amended, the terms and provisions of
this Agreement shall govern.
[Signature pages follow.]
127
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
GUARANTORS: VALOR TELECOMMUNICATIONS, LLC
TELECOMMUNICATIONS SOUTHWEST, LLC
VALOR TELECOMMUNICATIONS SOUTHWEST II, LLC
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
By:
--------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Treasurer
BORROWERS VALOR TELECOMMUNICATIONS ENTERPRISES, LLC
AND
GUARANTORS: VALOR TELECOMMUNICATIONS INVESTMENTS, LLC
VALOR TELECOMMUNICATIONS OF TEXAS, LP
By: Valor Telecommunications Enterprises, LLC, its General Partner
VALOR TELECOMMUNICATIONS EQUIPMENT, LP
By: Valor Telecommunications Enterprises, LLC, its General Partner
VALOR TELECOMMUNICATIONS CORPORATE GROUP, LP
By: Valor Telecommunications Enterprises, LLC, its General Partner
VALOR TELECOMMUNICATIONS LD, LP
By: Valor Telecommunications Enterprises, LLC, its General Partner
VALOR TELECOMMUNICATIONS SERVICES, LP
By: Valor Telecommunications Enterprises, LLC, its General Partner
SOUTHWEST ENHANCED NETWORK SERVICES, LP
By: Valor Telecommunications Enterprises, LLC, its General Partner
WESTERN ACCESS SERVICES, LLC
WESTERN ACCESS SERVICES OF ARIZONA, LLC
WESTERN ACCESS SERVICES OF ARKANSAS, LLC
WESTERN ACCESS SERVICES OF COLORADO, LLC
WESTERN ACCESS SERVICES OF NEW MEXICO, LLC
WESTERN ACCESS SERVICES OF OKLAHOMA, LLC
WESTERN ACCESS SERVICES OF TEXAS, L.P.
By: Western Access Services, LLC, its General Partner
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
By:
--------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Treasurer
Signature Page
Second Lien Loan Agreement
BORROWERS VALOR TELECOMMUNICATIONS ENTERPRISES II, LLC
AND By: Valor Telecommunications Southwest II, LLC, its Sole Member
UARANTORS:
KERRVILLE COMMUNICATIONS CORPORATION
KERRVILLE COMMUNICATIONS MANAGEMENT, LLC
By: Kerrville Communications Corporation, its Sole Member
KERRVILLE COMMUNICATIONS ENTERPRISES, LLC
By: Kerrville Communications Corporation, its Sole Member
KERRVILLE TELEPHONE, L.P.
By: Kerrville Communications Management, LLC, its General Partner
▇▇▇▇▇▇ TELEPHONE, L.P.
By: Kerrville Communications Management, LLC, its General Partner
ADVANCED TEL-COM SYSTEMS, L.P.
By: Kerrville Communications Management, LLC, its General Partner
KCC TELCOM, L.P.
By: Kerrville Communications Management, LLC, its General Partner
KERRVILLE CELLULAR, L.P.
By: Kerrville Communications Management, LLC, its General Partner
KERRVILLE MOBILE HOLDINGS, INC.
KERRVILLE CELLULAR MANAGEMENT, LLC
By: Kerrville Cellular, L.P., its Sole Member
KERRVILLE CELLULAR HOLDINGS, LLC
By: Kerrville Cellular, L.P., its Sole Member
KERRVILLE WIRELESS HOLDINGS LIMITED PARTNERSHIP
By: Kerrville Cellular Management, LLC, its General Partner
By: Kerrville Cellular, L.P., its Sole Member
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
By:
-------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Treasurer
Signature Page
Second Lien Loan Agreement
BANK OF AMERICA, N.A., as
Second Lien Administrative Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
-----------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Assistant Vice-President
BANC OF AMERICA SECURITIES LLC, as a
Second Lien Lead Arranger and Second Lien
Book Manager
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Principal
BANK OF AMERICA, N.A., as a Second Lien Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
Signature Page
Second Lien Loan Agreement
WACHOVIA CAPITAL MARKETS LLC, as a
Second Lien Lead Arranger and Second Lien Book
Manager
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
WACHOVIA BANK, N.A., as a Second Lien
Syndication Agent
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
Signature Page
Second Lien Loan Agreement
JPMORGAN CHASE BANK, as a Second Lien
Syndication Agent By:
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
Signature Page
Second Lien Loan Agreement
CIBC WORLD MARKETS CORP., as a Second
Lien Documentation Agent
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Executive Director
CIBC World Markets Corp. As Agent
Signature Page
Second Lien Loan Agreement
MERRILL, LYNCH, ▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇ INCORPORATED, as a Second Lien
Documentation Agent
By: /s/ illegible
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Name: illegible
Title: Director
▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL
CORPORATION as a Second Lien Lender
By: /s/ illegible
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Name: illegible
Title: Director
Signature Page
Second Lien Loan Agreement