Exhibit 10.1
CREDIT AGREEMENT
among
DAVEL FINANCING COMPANY, L.L.C.,
as Borrower,
DAVEL COMMUNICATIONS, INC.
AND
THE DOMESTIC SUBSIDIARIES OF THE BORROWER
AND DAVEL COMMUNICATIONS, INC.,
as Guarantors,
THE LENDERS IDENTIFIED HEREIN,
NATIONSBANK, N.A.,
as Administrative Agent,
BANCBOSTON ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC.,
as Syndication Agent,
THE CHASE MANHATTAN BANK,
as Documentation Agent,
AND
NATIONSBANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES LLC,
as Lead Arranger
DATED AS OF DECEMBER 23, 1998
TABLE OF CONTENTS
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SECTION 1 DEFINITIONS AND ACCOUNTING TERMS 1
1.1 Definitions........................................................ 1
1.2 Computation of Time Periods and Other Definitional Provisions...... 28
1.3 Accounting Terms................................................... 28
SECTION 2 CREDIT FACILITIES................................................ 29
2.1 Revolving Loans.................................................... 29
2.2 Letter of Credit Subfacility....................................... 31
2.3 Tranche A Term Loans............................................... 37
2.4 Tranche B Term Loans............................................... 38
2.5 Continuations and Conversions...................................... 40
2.6 Minimum Amounts.................................................... 41
SECTION 3 GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT..... 41
3.1 Interest........................................................... 41
3.2 Place and Manner of Payments....................................... 42
3.3 Prepayments........................................................ 42
3.4 Fees............................................................... 44
3.5 Payment in full at Maturity........................................ 45
3.6 Computations of Interest and Fees.................................. 45
3.7 Pro Rata Treatment................................................. 46
3.8 Sharing of Payments................................................ 47
3.9 Capital Adequacy................................................... 48
3.10 Inability To Determine Interest Rate.............................. 49
3.11 Illegality........................................................ 49
3.12 Requirements of Law............................................... 50
3.13 Taxes............................................................. 51
3.14 Compensation...................................................... 53
3.15 Substitution of Lender............................................ 54
3.16 Evidence of Debt.................................................. 54
SECTION 4 GUARANTY......................................................... 55
4.1 Guaranty of Payment................................................ 55
4.2 Obligations Unconditional.......................................... 55
4.3 Modifications...................................................... 56
4.4 Waiver of Rights................................................... 57
4.5 Reinstatement...................................................... 57
4.6 Remedies........................................................... 57
4.7 Limitation of Guaranty............................................. 58
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4.8 Rights of Contribution............................................. 58
SECTION 5 CONDITIONS PRECEDENT............................................. 58
5.1 Closing Conditions................................................. 58
5.2 Conditions to All Extensions of Credit............................. 65
SECTION 6 REPRESENTATIONS AND WARRANTIES................................... 66
6.1 Financial Condition................................................ 66
6.2 No Material Change................................................. 66
6.3 Organization and Good Standing..................................... 67
6.4 Due Authorization.................................................. 67
6.5 No Conflicts....................................................... 67
6.6 Consents........................................................... 67
6.7 Enforceable Obligations............................................ 68
6.8 No Default......................................................... 68
6.9 Ownership.......................................................... 68
6.10 Indebtedness...................................................... 68
6.11 Litigation........................................................ 68
6.12 Taxes............................................................. 69
6.13 Compliance with Law............................................... 69
6.14 ERISA............................................................. 69
6.15 Subsidiaries...................................................... 70
6.16 Use of Proceeds................................................... 71
6.17 Government Regulation............................................. 71
6.18 Environmental Matters............................................. 72
6.19 Intellectual Property............................................. 73
6.20 Solvency.......................................................... 73
6.21 Investments....................................................... 74
6.22 Location of Collateral............................................ 74
6.23 Disclosure........................................................ 74
6.24 Licenses, etc..................................................... 74
6.25 Collateral Documents.............................................. 74
6.26 Year 2000 Compliance.............................................. 75
6.27 Labor Contracts and Disputes...................................... 75
6.28 Broker's Fees..................................................... 75
6.29 FCC and Telephone Matters......................................... 75
6.30 Location Contracts................................................ 76
SECTION 7 AFFIRMATIVE COVENANTS............................................ 76
7.1 Information Covenants.............................................. 76
7.2 Financial Covenants................................................ 80
7.3 Preservation of Existence and Franchises........................... 81
7.4 Books and Records.................................................. 81
7.5 Compliance with Law and Licenses................................... 81
7.6 Payment of Taxes and Claims........................................ 81
7.7 Insurance.......................................................... 82
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7.8 Maintenance of Property............................................ 83
7.9 Collateral......................................................... 83
7.10 Use of Proceeds................................................... 84
7.11 Audits/Inspections................................................ 84
7.12 Additional Credit Parties......................................... 84
7.13 Interest Rate Protection.......................................... 85
7.14 Location Contracts................................................ 85
7.15 Post Closing Matters.............................................. 85
SECTION 8 NEGATIVE COVENANTS............................................... 86
8.1 Indebtedness....................................................... 86
8.2 Liens.............................................................. 87
8.3 Nature of Business................................................. 87
8.4 Consolidation and Merger........................................... 87
8.5 Sale or Lease of Assets............................................ 88
8.6 Sale Leasebacks.................................................... 89
8.7 Investments........................................................ 89
8.8 Restricted Payments................................................ 89
8.9 Transactions with Affiliates....................................... 89
8.10 Fiscal Year; Organizational Documents............................. 90
8.11 No Limitations.................................................... 90
8.12 No Other Negative Pledges......................................... 90
8.13 Limitation on Foreign Operations.................................. 90
8.14 Capital Expenditures.............................................. 91
8.15 Parent............................................................ 91
SECTION 9 EVENTS OF DEFAULT................................................ 91
9.1 Events of Default.................................................. 91
9.2 Acceleration; Remedies............................................. 94
9.3 Allocation of Payments After Event of Default...................... 95
SECTION 10 AGENCY PROVISIONS............................................... 96
10.1 Appointment....................................................... 96
10.2 Delegation of Duties.............................................. 97
10.3 Exculpatory Provisions............................................ 97
10.4 Reliance on Communications........................................ 97
10.5 Notice of Default................................................. 98
10.6 Non-Reliance on Agents and Other Lenders.......................... 98
10.7 Indemnification................................................... 99
10.8 Agents in Their Individual Capacity............................... 99
10.9 Successor Agent................................................... 99
SECTION 11 MISCELLANEOUS................................................... 100
11.1 Notices........................................................... 100
11.2 Right of Set-Off.................................................. 100
11.3 Benefit of Agreement.............................................. 101
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11.4 No Waiver; Remedies Cumulative.................................... 103
11.5 Payment of Expenses; Indemnification.............................. 104
11.6 Amendments, Waivers and Consents.................................. 105
11.7 Counterparts/Telecopy............................................. 106
11.8 Headings.......................................................... 106
11.9 Defaulting Lender/Excluded Lender................................. 106
11.10 Survival of Indemnification and Representations and Warranties... 106
11.11 Governing Law; Jurisdiction...................................... 106
11.12 Waiver of Jury Trial; Waiver of Consequential Damages............ 107
11.13 Time............................................................. 107
11.14 Severability..................................................... 108
11.15 Further Assurances............................................... 108
11.16 Confidentiality.................................................. 108
11.17 Entirety......................................................... 108
11.18 Binding Effect; Continuing Agreement............................. 109
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SCHEDULES
---------
Schedule 1.1(a) Commitment Percentages
Schedule 1.1(b) Permitted Liens
Schedule 1.1(c) Peoples Merger Costs and Expenses
Schedule 2.2(c) Existing Letters of Credit
Schedule 6.10 Indebtedness
Schedule 6.14 ERISA
Schedule 6.15 Subsidiaries
Schedule 6.19 Intellectual Property
Schedule 6.21 Investments
Schedule 6.22(a) Real Property Locations
Schedule 6.22(b) Chief Executive Offices
Schedule 6.27 Labor Contracts and Disputes
Schedule 6.28 Broker's Fees
Schedule 7.7 Insurance
Schedule 8.9 Transaction with Affiliates
Schedule 11.1 Notices
EXHIBITS
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Exhibit 2.1(b) Form of Notice of Borrowing
Exhibit 2.1(e) Form of Revolving Note
Exhibit 2.3(d) Form of Tranche A Term Note
Exhibit 2.4(d) Form of Tranche B Term Note
Exhibit 2.5 Form of Notice of Continuation/Conversion
Exhibit 7.1(c) Form of Officer's Certificate
Exhibit 7.12 Form of Joinder Agreement
Exhibit 11.3(b) Form of Assignment Agreement
v
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Credit Agreement"), is entered into as of
December 23, 1998 among DAVEL FINANCING COMPANY, L.L.C., a Delaware limited
liability company (the "Borrower"), DAVEL COMMUNICATIONS, INC., a Delaware
Corporation (the "Parent") and each of the Domestic Subsidiaries of the Borrower
and the Parent (individually a "Guarantor" and collectively the "Guarantors"),
the Lenders (as defined herein), NATIONSBANK, N.A., as Administrative Agent for
the Lenders, BANCBOSTON ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ INC., as Syndication Agent, THE CHASE
MANHATTAN BANK, as Documentation Agent, NATIONSBANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES LLC,
as Lead Arranger, and the Issuing Lender (as defined herein).
RECITALS
WHEREAS, the Borrower and the Guarantors have requested the Lenders to
provide a senior secured credit facility in an amount up to $280 million; and
WHEREAS, the Lenders party hereto have agreed to make the requested senior
secured credit facility available to the Borrower on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS AND ACCOUNTING TERMS
--------------------------------
1.1 Definitions.
As used herein, the following terms shall have the meanings herein
specified unless the context otherwise requires. Defined terms herein shall
include in the singular number the plural and in the plural the singular:
"Acquisition", by any Person, means the acquisition by such Person of
the Capital Stock or all or substantially all of the Property of another
Person, whether or not involving a merger or consolidation with such
Person.
"Additional Credit Party" means each Person that becomes a Guarantor
after the Closing Date, as provided in Section 7.12.
"Adjusted Base Rate" means the Base Rate plus the Applicable
Percentage.
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"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the
Applicable Percentage.
"Administrative Agent" means NationsBank, N.A. (or any successor
thereto) or any successor administrative agent appointed pursuant to
Section 10.9.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all
directors and officers of such Person), controlled by or under direct or
indirect common control with such Person. A Person shall be deemed to
control a corporation if such Person possesses, directly or indirectly, the
power (a) to vote 10% or more of the securities having ordinary voting
power for the election of directors or trustees of such corporation or (b)
to direct or cause direction of the management and policies of such
corporation, whether through the ownership of voting securities, by
contract or otherwise.
"Agency Services Address" means NationsBank, N.A., TX1-492-14-12, ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attn: Agency Services, or such other
address as may be identified by written notice from the Administrative
Agent to the Borrower.
"Agents" mean the Administrative Agent and the Collateral Agent and
any successors and assigns in such capacity.
"Annualized Method" means in determining the Fixed Charge Coverage
Ratio and the Interest Coverage Ratio during the first three fiscal
quarters of 1999, cash income taxes, cash Interest Expense and Scheduled
Funded Debt Payments (collectively, the "Adjusted Items") shall be
calculated using the following adjustments and assumptions:
(a) for the fiscal quarter ended March 31, 1999, the Adjusted Items shall
be calculated by taking the actual amount for such quarter multiplied
by four (4);
(b) for the fiscal quarter ended June 30, 1999, the Adjusted Items shall
be calculated by taking the actual amount for the prior two fiscal
quarters multiplied by two (2); and
(c) for the fiscal quarter ending September 30, 1999, the Adjusted Items
shall be calculated by taking the actual amount for the prior three
fiscal quarters multiplied by one and one third (1 1/3).
"Applicable Percentage" means, for the Revolving Loans, Tranche A Term
Loans, Tranche B Term Loans, Letter of Credit Fees and Commitment Fees, the
appropriate applicable percentages, in each case, corresponding to the
Leverage Ratio in effect as of the most recent Calculation Date as shown
below:
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Pricing Applicable Percentage for Applicable Percentage for Applicable Applicable
Level Leverage Ratio Eurodollar Loans Base Rate Loans Percentage for Percentage for
---------------------------- -------------------------
Revolving Tranche B Revolving Tranche B Letter of Credit Commitment Fees
Loans and Term Loans Loans and Term Loans Fees
Tranche A Tranche A
Term Loans Term Loans
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I less than 2.50 to 1.0 2.00% 4.00% 0.50% 2.50% 2.00% .50%
------------------------------------------------------------------------------------------------------------------------------------
II less than 3.0 to 1.0 but 2.25% 4.00% 0.75% 2.50% 2.25% .50%
greater/= 2.50 to 1.0
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III less than 3.5 to 1.0 but 2.50% 4.00% 1.00% 2.50% 2.50% .50%
greater/= 3.0 to 1.0
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IV less than 4.0 to 1.0 but 2.75% 4.00% 1.25% 2.50% 2.75% .50%
greater/= 3.5 to 1.0
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V less than 4.5 to 1.0 but 3.00% 4.00% 1.50% 2.50% 3.00% .50%
greater/= 4.0 to 1.0
------------------------------------------------------------------------------------------------------------------------------------
VI greater/= 4.5 to 1.0 3.25% 4.00% 1.75% 2.50% 3.25% .50%
====================================================================================================================================
The Applicable Percentages shall be determined and adjusted quarterly
on the date (each a "Calculation Date") five Business Days after the date
by which the Borrower is required to provide the officer's certificate in
accordance with the provisions of Section 7.1(c); provided that the initial
Applicable Percentages shall be based on Pricing Level VI (as shown above)
and shall remain at Pricing Level VI until the first Calculation Date
subsequent to June 30, 1999, and, thereafter, the Pricing Level shall be
determined by the Leverage Ratio calculated as of the most recent
Calculation Date; and provided further that if the Borrower fails to
provide the officer's certificate required by Section 7.1(c) on or before
the most recent Calculation Date, the Applicable Percentages from such
Calculation Date shall be based on Pricing Level VI until such time that an
appropriate officer's certificate is provided whereupon the Pricing Level
shall be determined by the then current Leverage Ratio. Each Applicable
Percentage shall be effective from one Calculation Date until the next
Calculation Date. Any adjustment in the Applicable Percentages shall be
applicable to all existing Loans and Letters of Credit as well as any new
Loans made or Letters of Credit issued.
The Borrower shall promptly deliver to the Administrative Agent, at
the address set forth on Schedule 11.1 and at the Agency Services Address,
at the time the officer's certificate is required to be delivered by
Section 7.1(c), information regarding any change in the Leverage Ratio that
would change the existing Pricing Level pursuant to the preceding
paragraph.
"Approved Fund" means, with respect to any Lender that is a fund or
trust that makes, buys or invests in commercial loans, any other fund or
trust that makes, buys or invests in commercial loans and is managed by the
same investment advisor as such Lender or an Affiliate thereof.
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"Asset Disposition" means the disposition of any or all of the assets of a
Credit Party or any of its Subsidiaries whether by sale, lease, transfer,
condemnation or otherwise, other than (a) transfers of assets permitted by
Section 8.5 and (b) losses of assets or destroyed assets permitted by clauses
(a) and (b) of Section 7.7.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded or replaced from time to time.
"Base Rate" means, for any day, the rate per annum (rounded upwards, if
necessary, to the nearest whole multiple of 1/100 of 1%) equal to the greater of
(a) the Federal Funds Rate in effect on such day plus 1/2 of 1% or (b) the Prime
Rate in effect on such day. If for any reason the Administrative Agent shall
have determined (which determination shall be conclusive absent manifest error)
that it is unable after due inquiry to ascertain the Federal Funds Rate for any
reason, including the inability or failure of the Administrative Agent to obtain
sufficient quotations in accordance with the terms hereof, the Base Rate shall
be determined without regard to clause (a) of the first sentence of this
definition until the circumstances giving rise to such inability no longer
exist. Any change in the Base Rate due to a change in the Prime Rate or the
Federal Funds Rate shall be effective on the effective date of such change in
the Prime Rate or the Federal Funds Rate, respectively.
"Base Rate Loan" means any Loan bearing interest at a rate determined by
reference to the Base Rate.
"Borrower" means Davel Financing Company, L.L.C., a Delaware limited
liability company, together with any successors and permitted assigns.
"Business Day" means any day other than a Saturday, a Sunday, a legal
holiday or a day on which banking institutions are authorized or required by law
or other governmental action to close in Dallas, Texas or New York, New York;
provided that in the case of Eurodollar Loans, such day is also a day on which
dealings between banks are carried on in U.S. dollar deposits in the London
interbank market.
"Calculation Date" has the meaning set forth in the definition of
Applicable Percentage.
"Capital Expenditures" means all expenditures (other than expenditures
incurred in connection with a Permitted Acquisition) of the Credit Parties and
their Subsidiaries which, in accordance with GAAP, would be classified as
capital expenditures, including, without limitation, Capital Leases.
"Capital 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 that Person and the amount of such obligation shall be the capitalized amount
thereof determined in accordance with GAAP.
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"Capital Stock" means (a) in the case of a corporation, all classes of
capital stock of such corporation, (b) in the case of a partnership, partnership
interests (whether general or limited), (c) in the case of a limited liability
company, membership interests and (d) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing 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 months from the date of acquisition, (b) U.S. dollar denominated
time and demand deposits and certificates of deposit of (i) any Lender, (ii)
Farmers State Bank and Trust Company, Jacksonville, Illinois, (iii) any domestic
commercial bank having capital and surplus in excess of $500,000,000 or (iv) any
bank whose short-term commercial paper rating from S&P is at least A-1 or the
equivalent thereof or from ▇▇▇▇▇'▇ is at least P-1 or the equivalent thereof
(any such bank being an "Approved Bank"), in each case with maturities of not
more than twelve months from the date of acquisition, (c) commercial paper and
variable or fixed rate notes issued by any Approved Bank (or by the parent
company thereof) or any variable rate notes issued by, or guaranteed by, any
domestic corporation rated A-1 (or the equivalent thereof) or better by S&P or
P-1 (or the equivalent thereof) or better by Moody's and maturing within twelve
months of the date of acquisition, (d) repurchase agreements with a bank or
trust company (including any of the Lenders) or recognized securities dealer
having capital and surplus in excess of $500,000,000 for direct obligations
issued by or fully guaranteed by the United States of America in which the
Borrower shall have a perfected first priority security interest (subject to no
other Liens) and having, on the date of purchase thereof, a fair market value of
at least 100% of the amount of the repurchase obligations and (e) Investments,
classified in accordance with GAAP as current assets, in money market investment
programs registered under the Investment Company Act of 1940, as amended, which
are administered by reputable financial institutions having capital of at least
$500,000,000 and the portfolios of which are limited to Investments of the
character described in the foregoing subdivisions (a) through (d).
"Change of Control" means any of the following: (a) with respect to the
Borrower, the Parent shall cease to own and control 100% of the membership or
limited liability company interests of the Borrower; or (b) with respect to the
Parent, (i) other than the Hill Group, Samstock L.L.C., EGI-Davel Investors,
L.L.C. or any other entity controlled by ▇▇▇▇▇▇ ▇▇▇▇ (collectively, the
"Investor Group"), any "person" or "group" (within the meaning of Section 13(d)
or 14(d) of the Exchange Act) has become, directly or indirectly, the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a Person shall be deemed to have "beneficial ownership" of all
shares that any such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), by way of merger,
consolidation or otherwise, of 30% or more of the Voting Stock of the Parent on
a fully-diluted basis, after giving effect to the conversion and exercise of all
outstanding warrants, options and other securities of the Parent (whether or not
such securities are then currently convertible or exercisable), (ii) the members
of the Investor Group, in the aggregate, fail to own
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more of the Voting Stock of the Parent than any other Person or (iii)
during any period of two consecutive calendar years, individuals who at the
beginning of such period constituted the board of directors of the Parent
cease for any reason to constitute a majority of the directors of the
Parent then in office unless such new directors were elected or designated
by the directors of the Parent who constituted the board of directors of
the Parent at the beginning of such period or such directors were elected
by shareholders to fill vacant seats for resigning or retiring directors
that were not replaced at the time of such resignation or retirement.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute thereto, as interpreted by the rules and regulations
promulgated thereunder, in each case as in effect from time to time.
References to sections of the Code should be construed to also refer to any
successor sections.
"Collateral" means all assets of the Credit Parties in which, pursuant
to the Collateral Documents, a Lien has been granted in favor of the
Collateral Agent for the benefit of the Lenders.
"Collateral Agent" means NationsBank, N.A. (or any successor thereto)
or any successor collateral agent appointed pursuant to Section 10.9.
"Collateral Documents" means the Security Agreement, the Pledge
Agreements, and such other documents executed and delivered in connection
with the attachment and perfection of the Lenders' security interests in
the assets of the Credit Parties, including without limitation, the
Mortgage Policies, UCC financing statements and patent and trademark
filings.
"Commitment Fees" means the fees payable to the Lenders pursuant
to Section 3.4(a).
"Commitments" means (a) with respect to each Lender, the Revolving
Loan Commitment of such Lender, the Tranche A Term Loan Commitment of such
Lender and the Tranche B Term Loan Commitment of such Lender, and (b) with
respect to the Issuing Lender, the LOC Commitment.
"Communications Law" means the Communications Act of 1934, as amended
(including, without limitation, the Telecommunications Act of 1996), and
all rules and regulations thereunder, or any successor statute or statutes,
and all rules and regulations of the FCC or any other applicable
Governmental Authority related to the provision of communication or
broadcast services, each as amended or supplemented from time to time.
"Credit Documents" means this Credit Agreement, the Notes, any Joinder
Agreement, the Collateral Documents, the LOC Documents, and all other
related agreements and documents issued or delivered hereunder or
thereunder or pursuant hereto or thereto.
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"Credit Parties" means the Borrower and the Guarantors and "Credit Party"
means any one of them.
"Credit Party Obligations" means, without duplication, (a) all of the
obligations of the Credit Parties to the Lenders (including the Issuing Lender)
and the Agents, whenever arising, under this Credit Agreement, the Notes, the
Collateral Documents or any of the other Credit Documents to which any Credit
Party is a party and (b) all liabilities and obligations owing from such Credit
Party to any Lender, or any Affiliate of a Lender, arising under Hedging
Agreements.
"Davel" means Davel Communications Group, Inc., a Delaware corporation.
"Debt Issuance" means the issuance of any Indebtedness for borrowed money
by a Credit Party or any of its Subsidiaries, other than Indebtedness permitted
by Section 8.1.
"Default" means any event, act or condition which with notice or lapse of
time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that, (a) has failed to
make a Loan or purchase a Participation Interest required pursuant to the terms
of this Credit Agreement when due (but only for so long as such Loan is not made
or such Participation Interest is not purchased), (b) other than as set forth in
the preceding clause (a), has failed to pay to the Agents or any Lender an
amount owed by such Lender pursuant to the terms of this Credit Agreement when
due (but only for so long as such amount has not been paid) or (c) has been
deemed insolvent or has become subject to a bankruptcy or insolvency proceeding
or with respect to which (or with respect to any assets of which) a receiver,
trustee or similar official has been appointed.
"Dollars" and "$" means dollars in lawful currency of the United States of
America.
"Domestic Subsidiary" means each direct and indirect Subsidiary of the
Borrower that is incorporated or organized under the laws of any state of the
United States or the District of Columbia whether existing as of the date hereof
or hereafter created or acquired. As of the Closing Date, the Domestic
Subsidiaries are as set forth on Schedule 6.15.
"EBITDA" means, for any period, with respect to the Credit Parties and
their Subsidiaries on a consolidated basis, an amount equal to (a) Net Income
for such period (excluding the effect of any extraordinary or other non-
recurring gains (including any gain from the sale of property not in the
ordinary course of business) or non-cash losses) plus (b) an amount which, in
the determination of Net Income for such period has been deducted for (i)
Interest Expense (inclusive of amortization of deferred financing fees and any
original issue discount) for such period, (ii) total Federal, state, foreign or
other income or franchise taxes for such period, (iii) all depreciation and
amortization for such period, all as determined in accordance with GAAP, (iv)
any non-cash charges related to the issuance of stock, warrants or
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options to management (or the exercise of such warrants or options), (v) costs
and expenses identified on Schedule 1.1(c) incurred by the Credit Parties in
connection with the Peoples Merger, (vi) the Peoples Restructuring Charge and
all other restructuring charges incurred in connection with a Permitted
Acquisition not to exceed, in the aggregate, $5,000,000 during the term of this
Credit Agreement, (vii) any purchase accounting adjustments required or
permitted by APB 16 (including non-cash write-ups and non-cash charges relating
to inventory, fixed assets and in-process research and development, in each case
arising in connection with any Permitted Acquisition) and APB 17 (including non-
cash charges relating to intangibles and goodwill arising in connection with any
Permitted Acquisition), (viii) any unrealized losses or gains resulting from
▇▇▇▇-to-market of Hedging Agreements (to the extent reflected in Net Income),
(ix) any tender premiums or consent fees paid and any write-off of deferred
financing costs incurred as a result of the refinancing of Indebtedness of any
Credit Party on the Closing Date and (x) other non-cash charges to the extent
reflected in Net Income other than write-offs related to account receivables in
connection with dial-around revenues recognized subsequent to the Closing Date
minus (c) any cash expenditures relating to the non-cash charges set forth in
clause (b) above (whether for this period or a prior period).
"Effective Date" means the date on which the conditions set forth in
Section 5.1 shall have been fulfilled (or waived in the sole discretion of the
Administrative Agent with the consent of the Required Lenders) and on which the
initial Loans shall have been made and/or the initial Letters of Credit shall
have been issued.
"Eligible Assignee" means (a) any Lender; (b) an Affiliate of a Lender; and
(c) any other Person approved by the Administrative Agent and the Borrower (such
approval not to be unreasonably withheld or delayed); provided that (i) the
Borrower's consent is not required during the existence and continuation of an
Event of Default and (ii) approval by the Borrower shall be deemed given if no
objection is received by the assigning Lender and the Administrative Agent from
the Borrower within five Business Days after notice of such proposed assignment
has been received by the Borrower.
"Environmental Claim" means any written notice, notice of violation,
written demand, written allegation, action, suit, injunction, judgment, order,
consent decree, penalty, fine, lien, proceeding, or written claim (whether
administrative, judicial, or private in nature) arising (a) pursuant to, or in
connection with, an actual or alleged violation of, any Environmental Law, (b)
in connection with any Hazardous Material, (c) from any assessment, abatement,
removal, remedial, corrective, or other response action in connection with an
Environmental Law or (d) from any actual or alleged damage, injury, threat, or
harm to occupational health or safety, natural resources, or the environment.
"Environmental Laws" means any current or future legal requirement of any
Governmental Authority pertaining to (a) the protection of occupational health
or safety, and the environment, (b) the protection of natural resources and
wildlife, (c) the protection or use of surface water and groundwater or (d) the
management, manufacture, possession, presence, use, generation, transportation,
treatment, storage, disposal, release, threatened release, abatement,
-8-
removal, remediation or handling of, or exposure to, any hazardous or toxic
substance or material or (e) pollution (including any release to land surface
water and groundwater) and includes, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986, 42 USC 9601 et seq.,
Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery
Act of 1976 and Hazardous and Solid Waste Amendments of 1984, 42 USC 6901 et
seq., Federal Water Pollution Control Act, as amended by the Clean Water Act of
1977, 33 USC 1251 et seq., Clean Air Act of 1966, as amended, 42 USC 7401 et
seq., Toxic Substances Control Act of 1976, 15 USC 2601 et seq., Hazardous
Materials Transportation Act, 49 USC App. 1801 et seq., Occupational Safety and
Health Act of 1970, as amended, 29 USC 651 et seq., Oil Pollution Act of 1990,
33 USC 2701 et seq., Emergency Planning and Community Right-to-Know Act of 1986,
42 USC 11001 et seq., National Environmental Policy Act of 1969, 42 USC 4321 et
seq., Safe Drinking Water Act of 1974, as amended, 42 USC 300(f) et seq., any
analogous implementing or successor law, and any amendment, rule, regulation,
order, or directive issued thereunder.
"Equity Issuance" means any issuance by a Credit Party to any Person (other
than the Hill Group, Samstock L.L.C., EGI-Davel Investors, L.L.C. or their
Affiliates or any Credit Party) of (a) shares of its Capital Stock, (b) any
shares of its Capital Stock pursuant to the exercise of options or warrants or
(c) any shares of its Capital Stock pursuant to the conversion of any debt
securities to equity; provided that Equity Issuance shall not include (i) the
issuance of Capital Stock or options as compensation in the ordinary course to
management or pursuant to any director or employee option plan or incentive or
restrictive stock plan or (ii) the issuance of Capital Stock or Parent PIK Debt
in connection with any Permitted Acquisition.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
"ERISA Affiliate" means an entity, whether or not incorporated, which is
under common control with any Credit Party or any of its Subsidiaries within the
meaning of Section 4001(a)(14) of ERISA, or is a member of a group which
includes any Credit Party or any of its Subsidiaries and which is treated as a
single employer under Sections 414(b), (c), (m), or (o) of the Code.
"Eurodollar Loan" means a Loan bearing interest based at a rate determined
by reference to the Eurodollar Rate.
"Eurodollar Rate" means, for the Interest Period for each Eurodollar Loan
comprising part of the same borrowing (including conversions, extensions and
renewals), a per annum interest rate determined pursuant to the following
formula:
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Eurodollar Rate = London Interbank Offered Rate
----------------------------------------
1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" means for any day, that percentage
(expressed as a decimal) which is in effect from time to time under Regulation D
of the Board of Governors of the Federal Reserve System (or any successor), as
such regulation may be amended from time to time or any successor regulation, as
the maximum reserve requirement (including, without limitation, any basic,
supplemental, emergency, special, or marginal reserves) applicable with respect
to Eurocurrency liabilities as that term is defined in Regulation D (or against
any other category of liabilities that includes deposits by reference to which
the interest rate of Eurodollar Loans is determined), whether or not a Lender
has any Eurocurrency liabilities subject to such reserve requirement at that
time. Eurodollar Loans shall be deemed to constitute Eurocurrency liabilities
and as such shall be deemed subject to reserve requirements without benefits of
credits for proration, exceptions or offsets that may be available from time to
time to a Lender. The Eurodollar Rate shall be adjusted automatically on and as
of the effective date of any change in the Eurodollar Reserve Percentage.
"Event of Default" means any of the events or circumstances specified in
Section 9.1.
"Excess Cash Flow" means, with respect to the Credit Parties and their
Subsidiaries on a consolidated basis, for any period of determination, an amount
equal to (a) EBITDA for such period, minus (b) Capital Expenditures for such
period, except to the extent financed with Indebtedness (other than Indebtedness
under the Credit Documents) or pursuant to a Capital Lease, minus (c) cash
Interest Expense for such period, minus (d) Federal, state and other income or
franchise taxes actually paid during such period, minus (e) Principal
Amortization Payments made during such period, minus (f) voluntary prepayments
made during such period with respect to the Term Loans or with respect to the
Revolving Loans if a corresponding reduction in the Revolving Committed Amount
is made, minus (g) increases in (or plus any decreases in) Working Capital
during such period, minus (h) cash expenditures made during such period related
to the Peoples Restructuring Charge or other charges incurred in connection with
a Permitted Acquisition (whether in this or a prior period) to the extent not
deducted from Net Income for such period and not to exceed, in the aggregate,
$5,000,000 minus (i) amounts not used for Capital Expenditures during such
period but allowed to be added to permitted Capital Expenditures during the next
succeeding fiscal year pursuant to Section 8.14 minus (j) non-cash charges for
non-current liabilities added in calculating EBITDA for such period in which the
cash expenditures in connection with such non-cash charge are going to be
required to be repaid in the immediate succeeding annual period.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder, as amended, modified,
succeeded or replaced from time to time.
"Excluded Lender" means any Lender that is the Borrower or an Affiliate of
the Borrower.
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"Existing Letters of Credit" means the letters of credit described on
Schedule 2.2(c).
"Extension of Credit" means, as to any Lender, the making of a Loan by such
Lender (or a participation therein by a Lender) or the issuance of, or
participation in, a Letter of Credit by such Lender.
"FCC" means the Federal Communications Commission and any successor
governmental agency performing functions similar to those performed by the
Federal Communications Commission on the date hereof.
"FCC Consent" means the written action or actions of the FCC approving the
change in ownership of Peoples and the resulting transfer of FCC Licenses held
by Peoples prior to the Peoples Merger and used in connection with the
Telephones owned and operated by Peoples.
"FCC License" means any of the licenses, permits or other authorizations
issued by the FCC relating to the Telephones owned and operated by the Credit
Parties and all other licenses, authorizations, waivers and permits required
under Communications Law for the Credit Parties to own and operate such
Telephones and to carry on their business.
"Federal Funds Rate" means for any day the rate of interest per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (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 and (b) if no such rate is so published on such
next preceding Business Day, the Federal Funds Rate for such day shall be the
average rate quoted to the Administrative Agent on such day on such transactions
as determined by the Administrative Agent.
"Fee Letters" means (a) that certain Agents Fee Letter, dated as of
November 9, 1998 (the "Agents Fee Letter"), among Davel, NationsBank, N.A.,
BankBoston, N.A., The Chase Manhattan Bank, BancBoston ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Inc.
and NMS and (b) that certain Administrative Agent Fee Letter, dated as of
November 9, 1998 (the "Administrative Agent Fee Letter") among Davel, NMS and
the Administrative Agent.
"First Tier Foreign Subsidiary" means each Foreign Subsidiary in which any
one or more of the Credit Parties owns directly more than 50%, in the aggregate,
of the Voting Stock of such Foreign Subsidiary.
"Fixed Charge Coverage Ratio" means the ratio of (a) EBITDA for the prior
twelve month period less Capital Expenditures for the prior twelve month period
less cash income taxes for the prior twelve month period to (b) cash Interest
Expense for the prior twelve month period plus Scheduled Funded Debt Payments
for the prior twelve month period; provided that in
-11-
determining the Fixed Charge Coverage Ratio for the first three fiscal quarters
ending in 1999, cash income taxes, cash Interest Expense and Scheduled Funded
Debt Payments shall be calculated using the Annualized Method.
"Foreign Subsidiary" means any Subsidiary of the Borrower or any other
Credit Party that is not a Domestic Subsidiary.
"Funded Debt" means, without duplication, the sum of (a) all outstanding
Indebtedness of the Credit Parties and their Subsidiaries for borrowed money,
(b) all purchase money Indebtedness of the Credit Parties and their
Subsidiaries, (c) the principal portion of all obligations of the Credit Parties
and their Subsidiaries under Capital Leases, (d) all obligations, contingent or
otherwise, relative to the face amount of all letters of credit (other than
letters of credit supporting inventory purchases in the ordinary course of
business), whether or not drawn, and banker's acceptances issued for the account
of a Credit Party or its Subsidiaries (it being understood that, to the extent
an undrawn letter of credit supports another obligation consisting of
Indebtedness, in calculating aggregated Indebtedness only such other obligation
shall be included), (e) all Guaranty Obligations of the Credit Parties and their
Subsidiaries with respect to Funded Debt of another Person, (f) all Funded Debt
of another entity secured by a Lien on any property of the Credit Parties and
their Subsidiaries whether or not such Funded Debt has been assumed by a Credit
Party or any of its Subsidiaries, (g) all Funded Debt of any partnership or
unincorporated joint venture to the extent a Credit Party or one of its
Subsidiaries is legally obligated or has a reasonable expectation of being
liable with respect thereto, net of any assets of such partnership or joint
venture and (h) the principal balance outstanding under any synthetic lease, tax
retention operating lease, off-balance sheet loan or similar off-balance sheet
financing product where such transaction is considered borrowed money
indebtedness for tax purposes but is classified as an operating lease in
accordance with GAAP.
"GAAP" means generally accepted accounting principles in the United States
applied on a consistent basis and subject to Section 1.3.
"Governmental Approvals" means all authorizations, consents, approvals,
permits, licenses and exemptions of, registrations and filings with, and reports
to, all Governmental Authorities, including without limitation all FCC Licenses
and State Licenses.
"Governmental Authority" means any Federal, state, local, provincial or
foreign court, governmental agency, authority, instrumentality or regulatory
body, or any securities exchange or self-regulatory organization.
"Guarantor" means the Parent and each of the Domestic Subsidiaries of the
Borrower and the Parent and each Additional Credit Party which has executed a
Joinder Agreement or otherwise become a Guarantor hereunder, together with their
successors and assigns.
"Guaranty Obligations" means, with respect to any Person, without
duplication, any obligations (other than endorsements in the ordinary course of
business of negotiable
-12-
instruments for deposit or collection and standard contractual indemnities
entered into in the ordinary course of business) guaranteeing any Indebtedness
of any other Person in any manner, whether direct or indirect, and including
without limitation any obligation, whether or not contingent, (a) to purchase
any such Indebtedness or other obligation or any property constituting security
therefor, (b) to advance or provide funds or other support for the payment or
purchase of such Indebtedness or obligation or to maintain working capital,
solvency or other balance sheet condition of such other Person (including,
without limitation, maintenance agreements, comfort letters, take or pay
arrangements, put agreements or similar agreements or arrangements) for the
benefit of the holder of Indebtedness of such other Person, (c) to lease or
purchase property, securities or services primarily for the purpose of assuring
the owner of such Indebtedness or (d) to otherwise assure or hold harmless the
owner of such Indebtedness or obligation against loss in respect thereof. The
amount of any Guaranty Obligation hereunder shall (subject to any limitations
set forth therein) be deemed to be an amount equal to the outstanding principal
amount (or maximum principal amount, if larger) of the Indebtedness in respect
of which such Guaranty Obligation is made unless such primary obligation in
respect of which such Guaranty Obligation is made is not stated or determinable,
in which case the amount of such Guaranty Obligation shall be the maximum
reasonably anticipated liability in respect thereof (assuming the guaranteeing
person is required to perform).
"Hazardous Materials" means any substance, material or waste defined in or
regulated under any Environmental Laws.
"Hedging Agreements" means any interest rate protection agreements, foreign
currency exchange agreements, or other interest or exchange rate hedging
agreements, in each case, entered into or purchased by a Credit Party.
"Hill Group" means ▇▇▇▇▇ ▇. ▇▇▇▇, his spouse and descendants and any
corporation, partnership, limited liability company, trust or other entity
controlled by ▇▇▇▇▇ ▇. ▇▇▇▇ and wholly-owned beneficially and of record by ▇▇▇▇▇
▇. ▇▇▇▇ and/or his spouse, children, grandchildren, parents, siblings, in-laws,
nephews and/or nieces or a trust established for any of their benefit, provided
such trust is controlled by ▇▇▇▇▇ ▇. ▇▇▇▇ or his representative, principal heir
or legatee.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, or upon
which interest payments are customarily made (c) all obligations of such Person
under conditional sale or other title retention agreements relating to property
purchased by such Person to the extent of the value of such property (other than
customary reservations or retentions of title under agreements with suppliers
entered into in the ordinary course of business), (d) all obligations, other
than intercompany items, of such Person issued or assumed as the deferred
purchase price of property or services purchased by such Person which would
appear as liabilities on a balance sheet of such Person, (e) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on, or payable out of
the proceeds of
-13-
production from, property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (f) all Guaranty Obligations of
such Person, (g) the principal portion of all obligations of such Person under
(i) Capital Leases and (ii) any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product of such
Person where such transaction is considered borrowed money indebtedness for tax
purposes but is classified as an operating lease in accordance with GAAP, (h)
all net obligations of such Person in respect of hedging agreements, foreign
currency exchange obligations, and commodity futures agreements, (i) the maximum
amount of all performance and standby letters of credit issued or bankers'
acceptances facilities created for the account of such Person and, without
duplication, all drafts drawn thereunder (to the extent unreimbursed), (j) all
preferred stock issued by such Person and required by the terms thereof to be
redeemed, or for which mandatory sinking fund payments are due by a fixed date,
(k) the aggregate amount of uncollected accounts receivable of such Person
subject at such time to a sale of receivables (or similar transaction)
regardless of whether such transaction is effected without recourse to such
Person or in a manner that would not be reflected on the balance sheet of such
Person in accordance with GAAP, and (l) all obligations of such Person to
repurchase any securities which repurchase obligation is related to the issuance
thereof, including, without limitation, obligations commonly known as residual
equity appreciation potential shares. The Indebtedness of any Person shall
include the Indebtedness of any partnership or unincorporated joint venture in
which such Person is legally obligated.
"Interest Coverage Ratio" means, with respect to the Credit Parties and
their Subsidiaries on a consolidated basis, the ratio of (a) EBITDA for the
prior twelve month period to (b) cash Interest Expense for the prior twelve
month period; provided that in determining the Interest Coverage Ratio for the
first three fiscal quarters ending in 1999, cash Interest Expense shall be
calculated using the Annualized Method.
"Interest Expense" means, for any period, with respect to the Credit
Parties and their Subsidiaries on a consolidated basis, all interest expense
(paid or accrued to be paid), including the interest component under Capital
Leases, as determined in accordance with GAAP.
"Interest Payment Date" means (a) as to Base Rate Loans, the last day of
each calendar quarter and the Revolving Loan Maturity Date or the Tranche B Term
Loan Maturity Date, as applicable, and (b) as to Eurodollar Loans, the last day
of each applicable Interest Period and the Revolving Loan Maturity Date or the
Tranche B Term Loan Maturity Date, as applicable, and in addition, where the
applicable Interest Period for a Eurodollar Loan is greater than three months,
then also the date three months from the beginning of the Interest Period and
each three months thereafter.
"Interest Period" means, as to Eurodollar Loans, a period of one, two,
three, six or twelve months' duration (provided that twelve month Interest
Periods shall be subject to availability (as determined by the Administrative
Agent) and shall not be available with respect to Eurodollar Loans that are
Tranche B Term Loans), as the Borrower may elect, commencing, in each case, on
the date of the borrowing (including continuations and conversions thereof);
-14-
provided, however, (a) if any Interest Period would end on a day which is not a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day (except that where the next succeeding Business Day falls in the
next succeeding calendar month, then on the next preceding Business Day), (b) no
Interest Period shall extend beyond the Revolving Loan Maturity Date or the
Tranche B Term Loan Maturity Date, as applicable, (c) with regard to Term Loans,
no Interest Period shall extend beyond any Principal Amortization Payment Date
unless the portion of applicable Term Loans comprised of Base Rate Loans,
together with the portion of applicable Term Loans comprised of Eurodollar Loans
with Interest Periods expiring prior to such Principal Amortization Payment
Date, is greater than or equal to the Principal Amortization Payment due on such
Principal Amortization Payment Date and (d) where an Interest Period begins on a
day for which there is no numerically corresponding day in the calendar month in
which the Interest Period is to end, such Interest Period shall end on the last
Business Day of such calendar month.
"Investment" in any Person means (a) the acquisition (whether for cash,
property, services, assumption of Indebtedness, securities or otherwise) of
assets, shares of Capital Stock, bonds, notes, debentures, partnership, joint
ventures or other ownership interests or other securities of such other Person
or (b) any deposit with, or advance, loan or other extension of credit to, such
Person (other than deposits made in connection with the purchase of equipment or
other assets or to secure the performance of leases in the ordinary course of
business) or (c) any other capital contribution to or investment in such Person,
including, without limitation, any Guaranty Obligation (including any support
for a Letter of Credit issued on behalf of such Person) incurred for the benefit
of such Person.
"Issuing Lender" means NationsBank, N.A. or any successor Administrative
Agent.
"Issuing Lender Fees" has the meaning set forth in Section 3.4(c).
"Joinder Agreement" means a Joinder Agreement substantially in the form of
Exhibit 7.12.
"Lender" means any of the Persons identified as a "Lender" on the signature
pages hereto, and any Eligible Assignee which may become a Lender by way of
assignment in accordance with the terms hereof, together with their successors
and permitted assigns.
"Letter of Credit" means a letter of credit issued for the account of a
Credit Party by the Issuing Lender pursuant to Section 2.2 or any Existing
Letter of Credit, as such letter of credit may be amended, modified, extended,
renewed or replaced.
"Letter of Credit Fees" has the meaning set forth in Section 3.4(c).
"Leverage Ratio" means, as of the end of each fiscal quarter, the ratio of
(a) total Funded Debt on such date minus cash of the Credit Parties and their
Subsidiaries in excess of $7,000,000 on such date to (b) EBITDA for the twelve
month period ending on such date.
-15-
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, security interest, encumbrance, lien (statutory or otherwise),
preference, priority or charge of any kind, including, without limitation, any
agreement to give any of the foregoing, any conditional sale or other title
retention agreement, and any lease in the nature thereof.
"Loan" or "Loans" means the Revolving Loans and the Term Loans (or a
portion of any Revolving Loan or Term Loan), individually or collectively, as
appropriate.
"Location Contract" means a location agreement between a Credit Party and
an owner or operator of land with respect to the placement of Telephones in
which a Credit Party pays a fee to such owner or operator for the opportunity to
place its Telephones on such land. All Location Contracts with the same owner or
operator (or any Affiliates or franchises controlled by such owner or operator
thereof) shall be considered to be one Location Contract.
"LOC Commitment" means the commitment of the Issuing Lender to issue
Letters of Credit for the account of a Credit Party in an aggregate face amount
any time outstanding (together with the amounts of any unreimbursed drawings
thereon) of up to the LOC Committed Amount.
"LOC Committed Amount" shall have the meaning assigned to such term in
Section 2.2(a).
"LOC Documents" means, with respect to any Letter of Credit, such Letter of
Credit, any amendments thereto, any documents delivered in connection therewith,
any application therefor, and any agreements, instruments, guarantees or other
documents (whether general in application or applicable only to such Letter of
Credit) governing or providing for (a) the rights and obligations of the parties
concerned or at risk or (b) any collateral security for such obligations.
"LOC Obligations" means, at any time, the sum of (a) the maximum amount
which is, or at any time thereafter may become, available to be drawn under
Letters of Credit (including the Existing Letters of Credit) then outstanding,
assuming compliance with all requirements for drawings referred to in such
Letters of Credit plus (b) the aggregate amount of all drawings under Letters of
Credit honored by the Issuing Lender but not theretofore reimbursed.
"LOC Participants" means the Revolving Lenders.
"London Interbank Offered Rate" means, with respect to any Eurodollar Loan
for the Interest Period applicable thereto, the rate of interest per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Telerate Page 3750 (or any successor page) as the London interbank offered rate
for deposits in Dollars at approximately 11:00 A.M. (London time) two Business
Days prior to the first day of such Interest Period and having an advance date
and a maturity date comparable to such Interest Period; provided, however, if
more than one rate is specified on Telerate Page 3750, the applicable rate shall
be the arithmetic mean of all such
-16-
rates. If, for any reason, such rate is not available, the term "London
Interbank Offered Rate" shall mean, with respect to any Eurodollar Loan for
the Interest Period applicable thereto, the rate of interest per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Reuters Screen LIBO Page as the London interbank offered rate for deposits
in Dollars at approximately 11:00 A.M. (London time) two Business Days
prior to the first day of such Interest Period and having an advance date
and a maturity date comparable to such Interest Period; provided, however,
if more than one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates (rounded
upwards, if necessary, to the nearest 1/100 of 1%).
"Mandatory Borrowing" has the meaning set forth in Section 2.2(e).
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, prospects or financial condition of the
Credit Parties and their Subsidiaries taken as a whole, (b) the ability of
the Credit Parties and their Subsidiaries taken as a whole to perform their
obligations under this Credit Agreement or any of the other Credit
Documents, or (c) the validity or enforceability of this Credit Agreement,
any of the other Credit Documents, or the rights and remedies of the
Lenders hereunder or thereunder taken as a whole.
"Material First Tier Foreign Subsidiary" means any First Tier Foreign
Subsidiary that, together with its Subsidiaries, owns assets in excess of
$1,000,000.
"Merger Agreement" means the Amended and Restated Agreement and Plan
of Merger and Reorganization dated as of October 22, 1998 among Davel
Holdings, Inc., Davel, Miami Merger Corp., D Subsidiary, Inc., and Peoples,
pursuant to which the transactions associated with the Peoples Merger were
consummated.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or any successor or
assignee of the business of such company in the business of rating
securities.
"Miami Facility" means the real property and improvements owned by a
Subsidiary of the Borrower located at ▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇.
"Multiemployer Plan" means a Plan covered by Title IV of ERISA which
is a multiemployer plan as defined in Section 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Single Employer Plan to which any
Credit Party or any of its Subsidiaries or any ERISA Affiliate and at least
one employer other than a Credit Party or any of its Subsidiaries or any
ERISA Affiliate are contributing sponsors.
"NationsBank" means NationsBank, N.A. or any successor thereto.
"Net Cash Proceeds" means the aggregate cash proceeds (including,
without limitation, insurance and condemnation proceeds) received from an
Asset Disposition, an Equity Issuance,
-17-
a Debt Issuance or an issuance of Parent PIK Debt net of (a) actual
transaction costs payable to third parties, (b) taxes paid or a good faith
estimate of the taxes payable with respect to such proceeds, and (c) in
connection with an Asset Disposition only, (i) any reserve for adjustment
in respect of the sale price of such asset or assets established in
accordance with GAAP; provided that any subsequent reversal or reduction of
such reserves shall constitute additional Net Cash Proceeds, and (ii) any
amounts paid to holders of existing Permitted Liens on any such assets to
satisfy and discharge such Permitted Liens.
"Net Income" means, for any period, the net income after taxes for
such period of the Credit Parties and their Subsidiaries on a consolidated
basis, as determined in accordance with GAAP.
"NMS" means NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC.
"Non-Excluded Taxes" has the meaning set forth in Section 3.13.
"Note" or "Notes" means the Revolving Loan Notes and the Term Notes,
individually or collectively, as appropriate.
"Notice of Borrowing" means a request by the Borrower for a Revolving
Loan, in the form of Exhibit 2.1(b).
"Notice of Continuation/Conversion" means a request by the Borrower to
continue an existing Eurodollar Loan to a new Interest Period or to convert
a Eurodollar Loan to a Base Rate Loan or a Base Rate Loan to a Eurodollar
Loan, in the form of Exhibit 2.5.
"Parent" means Davel Communications, Inc., a Delaware corporation
f/k/a Davel Holdings, Inc., a Delaware corporation.
"Parent PIK Debt" means Indebtedness of the Parent that (a) does not
require or permit cash payments of principal or interest until at least one
year following the Tranche B Term Loan Maturity Date and (b) is fully
subordinated to the Credit Party Obligations on terms reasonably acceptable
to the Administrative Agent.
"Participation Interest" means the Extension of Credit by a Lender by
way of a purchase of a participation in Letters of Credit or LOC
Obligations as provided in Section 2.2 or in any Loans as provided in
Section 2.3 or Section 3.8.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereto.
"Peoples" means Peoples Telephone Company, Inc., a New York
corporation.
-18-
"Peoples Merger" means the merger of a Subsidiary of the Borrower with
and into Peoples and the exchange of the stock of Peoples for the stock of
Davel Holdings, Inc. and the transactions necessary or incidental thereto.
"Peoples Restructuring Charge" means the one time restructuring
charges incurred in connection with the Peoples Merger.
"Permitted Acquisitions" means an Acquisition by the Borrower or any
Subsidiary of the Borrower; provided that (a) the Capital Stock or Property
acquired in such Acquisition are in, or used or useful in, the same or
similar or related line of business as the Credit Parties were engaged in
on the Closing Date, or any reasonable extensions or expansions thereof,
(b) the Administrative Agent shall have received all items in respect of
the Capital Stock or Property acquired in such Acquisition (and/or the
seller thereof) required to be delivered by the terms of Section 7.9 and/or
Section 7.12, (c) in the case of an Acquisition of the Capital Stock of
another Person, the board of directors (or other comparable governing body)
of such other Person shall have duly approved such Acquisition, (d) the
Borrower shall have delivered to the Administrative Agent a Pro Forma
Compliance Certificate demonstrating that, upon giving effect to such
Acquisition on a Pro Forma Basis, the Credit Parties shall be in compliance
with all of the financial covenants set forth in Section 7.2, (e) the
representations and warranties made by the Credit Parties in any Credit
Document shall be true and correct in all material respects at and as if
made as of the date of such Acquisition (after giving effect thereto)
except to the extent such representations and warranties expressly relate
to an earlier date, (f) after giving effect to such Acquisition, no Default
or Event of Default shall exist, (g) after giving effect to such
Acquisition, the amount of availability existing under the Revolving
Committed Amount plus the amount of cash of the Credit Parties and their
Subsidiaries in excess of $7,000,000 shall be greater than or equal to
$10,000,000 and (h) the cash consideration for all such Acquisitions shall
not exceed $15,000,000 individually and $30,000,000 in the aggregate for
any twelve month period subsequent to the Closing Date.
"Permitted Investments" means Investments which are (a) cash or Cash
Equivalents, (b) accounts receivable created, acquired or made in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms, (c) inventory, raw materials and general intangibles
acquired in the ordinary course of business, (d) Investments by a Credit
Party in or to another Credit Party and Investments by a Foreign Subsidiary
in or to another Foreign Subsidiary, (e) loans to directors, officers or
employees in the ordinary course of business not to exceed, in the
aggregate, $2,500,000 at any one time, (f) Investments in Capital
Expenditures, (g) Permitted Acquisitions, (h) Investments in Foreign
Subsidiaries not to exceed, in the aggregate, $1,000,000 at any one time,
(i) investments acquired in the bankruptcy/reorganization of suppliers or
customers of a Credit Party, (j) Investments existing as of the Closing
Date and set forth on Schedule 6.21 and (k) other Investments (in addition
to those set forth above) not to exceed at any one time, the sum of
$5,000,000 plus the proceeds received by the Credit Parties (and not
required to be paid to the Lenders pursuant to Section 3.3(b)) from Excess
Cash Flow, Equity Issuances, or the issuance of Parent PIK Debt; provided
that the amount of Investments made pursuant to this clause (k) shall not
exceed, in the aggregate, $15,000,000.
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"Permitted Liens" means (a) Liens securing Credit Party Obligations,
(b) Liens for taxes not yet due or Liens for taxes being contested in good
faith by appropriate proceedings for which adequate reserves determined in
accordance with GAAP have been established (and as to which the property
subject to any such Lien is not yet subject to foreclosure, sale,
collection, levy or loss on account thereof), (c) Liens in respect of
property imposed by law arising in the ordinary course of business such as
materialmen's, mechanics', warehousemen's, carrier's, landlords' and other
nonconsensual statutory Liens which are not yet due and payable or which
are being contested in good faith by appropriate proceedings for which
adequate reserves determined in accordance with GAAP have been established
(and as to which the property subject to any such Lien is not yet subject
to foreclosure, sale or loss on account thereof), (d) pledges or deposits
made in the ordinary course of business to secure payment of worker's
compensation insurance, unemployment insurance, pensions or social security
programs, (e) Liens arising from good faith deposits in connection with or
to secure performance of (i) tenders, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations or (ii)
leases of real property, in each case incurred in the ordinary course of
business (other than obligations in respect of the payment of borrowed
money), (f) Liens arising from good faith deposits in connection with or to
secure performance of statutory obligations and surety and appeal bonds,
(g) easements, rights-of-way, restrictions (including zoning restrictions),
matters of plat, minor defects or irregularities in title and other similar
charges or encumbrances not, in any material respect, impairing the use of
the encumbered property for its intended purposes, (h) judgment Liens that
would not constitute an Event of Default, (i) Liens in connection with
Indebtedness permitted by Section 8.1(c) and Liens in connection with up to
$1,000,000 of Indebtedness permitted by Section 8.1(j), (j) Liens arising
by virtue of any statutory or common law provision relating to banker's
liens, rights of setoff or similar rights as to deposit accounts or other
funds maintained with a creditor depository institution, (k) Liens existing
on the date hereof and identified on Schedule 1.1(b); provided that no such
Lien shall extend to any property other than the property subject thereto
on the Closing Date, (l) any precautionary filings of financing statements
under the UCC made in relation to leases of equipment which leases are
otherwise permitted by this Credit Agreement, (m) Liens of a collecting
bank arising under Section 4-210 of the UCC on items in the course of
collection and (n) any interest of a licensor, licensee, lessor, lessee,
sublessor or sublessee in the ordinary course to the extent such interest
could be characterized as a Lien.
"Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust, fund or other
enterprise (whether or not incorporated), or any Governmental Authority.
"Plan" means any defined employee plan (as defined in Section 3(3) of
ERISA) which is covered by ERISA and with respect to which any Credit Party
or any of its Subsidiaries or any ERISA Affiliate is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed to be)
an "employer" within the meaning of Section 3(5) of ERISA.
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"Pledge Agreements" means the Pledge Agreements executed and delivered
by each of the Credit Parties in favor of the Collateral Agent, for the
benefit of the Lenders, to secure its respective obligations under the
Credit Documents, as amended, modified, extended, renewed or replaced from
time to time.
"Prime Rate" means the per annum rate of interest established from
time to time by the Administrative Agent as its prime rate in effect at its
principal office in Dallas, Texas (or such other principal office of the
Administrative Agent as communicated in writing to the Borrower and the
Lenders). Any change in the interest rate resulting from a change in the
Prime Rate shall become effective as of 12:01 a.m. of the Business Day on
which each change in the Prime Rate is announced by the Administrative
Agent. The Prime Rate is a reference rate used by the Administrative Agent
in determining interest rates on certain loans and is not intended to be
the lowest rate of interest charged on any extension of credit to any
debtor.
"Principal Amortization Payment" means a principal payment on the Term
Loans as set forth in Sections 2.3(c) and 2.4(c).
"Principal Amortization Payment Date" means the date a Principal
Amortization Payment is due.
"Pro Forma Basis" means, for purposes of calculating (utilizing the
principles set forth in the second paragraph of Section 1.3) compliance
with each of the financial covenants set forth in Section 7.2 in respect of
a proposed Acquisition as referred to in clause (d) of the definition of
"Permitted Acquisition" set forth in this Section 1.1, that such
Acquisition shall be deemed to have occurred as of the first day of the
four fiscal-quarter period ending as of the most recent fiscal quarter end
preceding the date of such Acquisition with respect to which the
Administrative Agent has received the financial statements and officer's
certificate required to be delivered pursuant to Section 7.1(a) or (b), as
applicable, and Section 7.1(c). In connection with any calculation of the
financial covenants set forth in Section 7.2 and upon giving effect on a
Pro Forma Basis to any Acquisition, (a) any Indebtedness incurred by any
Credit Party or any of its Subsidiaries in connection with such Acquisition
(i) shall be deemed to have been incurred as of the first day of the
applicable period and (ii) if such Indebtedness has a floating or formula
rate, such Indebtedness shall have an implied rate of interest for the
applicable period for purposes of this definition determined by utilizing
the rate which is or would be in effect with respect to such Indebtedness
as at the relevant date of determination and (b) income statement items
(whether positive or negative) attributable to the Capital Stock or
Property acquired in such Acquisition shall be included to the extent
relating to the relevant period and to the extent, and in the same manner,
as such items are included for the Credit Parties.
"Pro Forma Compliance Certificate" means a certificate of a
Responsible Officer of the Borrower delivered to the Administrative Agent
in connection with any Acquisition as referred to in clause (d) of the
definition of "Permitted Acquisition" set forth in this Section 1.1 and
containing reasonably detailed calculations, upon giving effect to such
Acquisition
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on a Pro Forma Basis, of each of the financial covenants set forth in
Section 7.2 as of the most recent fiscal quarter end preceding the date of
such Acquisition with respect to which the Administrative Agent shall have
received the financial statements and officer's certificate required to be
delivered pursuant to Section 7.1(a) or (b), as applicable, and Section
7.1(c).
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Real Properties" means the real properties that the Credit Parties
may own, operate or lease (as lessee or sublessee) from third parties from
time to time.
"Regulation D, U, or X" means Regulation D, U or X, respectively, of
the Board of Governors of the Federal Reserve System as from time to time
in effect and any successor to all or a portion thereof.
"Reportable Event" means a "reportable event" as defined in Section
4043 of ERISA with respect to which the 30-day notice requirements to the
PBGC have not been waived.
"Required Lenders" means Lenders whose aggregate Credit Exposure (as
hereinafter defined) constitutes more than 51% of the Credit Exposure of
all Lenders at such time; provided, however, that if any Lender shall be a
Defaulting Lender or an Excluded Lender at such time then there shall be
excluded from the determination of Required Lenders the aggregate principal
amount of Credit Exposure of such Lender at such time. For purposes of the
preceding sentence, the term "Credit Exposure" as applied to each Lender
shall mean (a) at any time prior to the termination of the Commitments, the
sum of (i) the Revolving Loan Commitment Percentage of such Lender
multiplied by the Revolving Committed Amount plus (ii) the Tranche A Term
Loan Commitment Percentage of such Lender multiplied by aggregate Tranche A
Term Loans outstanding at such time plus (iii) the Tranche B Term Loan
Commitment Percentage of such Lender multiplied by the aggregate Tranche B
Term Loans outstanding at such time, and (b) at any time after the
termination of the Commitments, the sum of (i) the principal balance of the
outstanding Loans of such Lender plus (ii) such Lender's Participation
Interests in the face amount of the outstanding Letters of Credit.
"Requirement of Law" means, as to any Person, the articles or
certificate of incorporation and by-laws or other organizational or
governing documents of such Person, and any law, treaty, rule or regulation
or final, non-appealable determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such
Person or to which any of its material property is subject.
"Responsible Officer" means the chief executive officer, president,
chief financial officer, treasurer, or any other senior officer of a Credit
Party designated as such to the Administrative Agent by such Credit Party.
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"Revolving Committed Amount" means SIXTY MILLION DOLLARS ($60,000,000)
or such lesser amount to which the Revolving Committed Amount may be
reduced pursuant to Section 2.1(d) or 3.3(c).
"Revolving Lender" means any Lender holding a Revolving Loan
Commitment, as identified on Schedule 1.1(a), greater than zero, together
with its permitted successors and assigns.
"Revolving Loan Commitment" means, with respect to each Revolving
Lender, the commitment of such Lender to make its portion of the Revolving
Loans in a principal amount equal to such Lender's Revolving Loan
Commitment Percentage of the Revolving Committed Amount.
"Revolving Loan Commitment Percentage" means, for each Lender, the
percentage identified as its Revolving Loan Commitment Percentage on
Schedule 1.1(a), as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 11.3.
"Revolving Loan Maturity Date" means, as to the Revolving Loans,
Letters of Credit (and the related LOC Obligations) and Tranche A Term
Loans, December 23, 2003.
"Revolving Loans" means the Revolving Loans made to the Borrower by
the Revolving Lenders pursuant to Section 2.1.
"Revolving Note" or "Revolving Notes" means the promissory notes of
the Borrower in favor of each of the Revolving Lenders evidencing the
Revolving Loans provided pursuant to Section 2.1, individually or
collectively, as appropriate, as such promissory notes may be amended,
modified, supplemented, extended, renewed or replaced from time to time and
as evidenced in the form of Exhibit 2.1(e).
"S&P" means Standard & Poor's Rating Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. or any successor or assignee of the business of
such division in the business of rating securities.
"Scheduled Funded Debt Payments" means, as of the end of each fiscal
quarter of the Borrower, for the Credit Parties and their Subsidiaries on a
consolidated basis, the sum of all scheduled payments of principal on
Funded Debt for the applicable period ending on such date (including the
principal component of payments due on Capital Leases during the applicable
period ending on such date); it being understood that Scheduled Funded Debt
Payments shall not include voluntary prepayments or the mandatory
prepayments required pursuant to Section 3.3.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
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"Security Agreement" means the security agreement executed and delivered by
each of the Credit Parties in favor of the Collateral Agent for the benefit of
the Lenders to secure its respective obligations under the Credit Documents, as
such may be amended, modified, extended, renewed, restated or replaced from time
to time.
"Single Employer Plan" means any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"Solvent" means, with respect to any Person as of a particular date, that
on such date (a) such Person is able to pay its debts and other liabilities,
contingent obligations and other commitments as they mature in the normal course
of business, (b) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person's ability to pay as such
debts and liabilities mature in their ordinary course, (c) such Person is not
engaged in a business or a transaction, and is not about to engage in a business
or a transaction, for which such Person's assets would constitute unreasonably
small capital after giving due consideration to the prevailing practice in the
industry in which such Person is engaged or is to engage, (d) the fair value as
a going concern of the assets of such Person is greater than the total amount of
liabilities, including, without limitation, contingent liabilities, of such
Person and (e) the present fair saleable value as a going concern of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured. In computing the amount of contingent liabilities at any time, it is
intended that such liabilities will be computed at the amount which, in light of
all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability.
"State Communications Law" means the statutes and administrative rules
related to common carriers, telecommunications, and pay telephones in the states
in which the Telephones are located.
"State Consent" means the written action or actions of any state in which a
Telephone is located approving the change in ownership of Peoples and the
resulting transfer of State Licenses held by Peoples prior to the Peoples Merger
and used in connection with the Telephones owned and operated by Peoples.
"State License" means any of the licenses, permits or other authorizations
issued by any state relating to the Telephones owned and operated by the Credit
Parties and all other licenses, authorizations, waivers, and permits required
under state law for the Credit Parties to own and operate such Telephones and to
carry on their business.
"Subsidiary" means, as to any Person, (a) any corporation more than 50% of
whose stock of any class or classes having by the terms thereof ordinary voting
power to elect a majority of the directors of such corporation (irrespective of
whether or not at the time, any class or classes of such corporation shall have
or might have voting power by reason of the happening
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of any contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries, and (b) any partnership, association,
joint venture or other entity in which such person directly or indirectly
through Subsidiaries has more than a 50% equity interest at any time.
"Telephones" means, collectively, the public telephones owned by the
Credit Parties and "Telephone" means any one of them.
"Term Loans" means, collectively, the Tranche A Term Loans and the
Tranche B Term Loans.
"Term Note" means any of the Tranche A Term Notes and the Tranche B
Term Notes and "Term Notes" means, collectively, the Tranche A Term Notes
and the Tranche B Term Notes.
"Termination Event" means (a) with respect to any Single Employer
Plan, the occurrence of a Reportable Event or the substantial cessation of
operations (within the meaning of Section 4062(e) of ERISA); (b) the
withdrawal of any Credit Party or any of its Subsidiaries or any ERISA
Affiliate from a Multiple Employer Plan during a plan year in which it was
a substantial employer (as such term is defined in Section 4001(a)(2) of
ERISA), or the termination of a Multiple Employer Plan; (c) the
distribution of a notice of intent to terminate or the actual termination
of a Plan pursuant to Section 4041(a)(2) or 4041A of ERISA; (d) the
institution of proceedings to terminate or the actual termination of a Plan
by the PBGC under Section 4042 of ERISA; (e) any event or condition which
is reasonably expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Plan; or (f) the complete or partial withdrawal of any Credit Party or any
of its Subsidiaries or any ERISA Affiliate from a Multiemployer Plan.
"Total Assets" means all items which in accordance with GAAP would be
classified as assets of the Credit Parties and their Subsidiaries on a
consolidated basis.
"Tranche A Term Lender" means any Lender holding a Tranche A Term Loan
Commitment greater than zero, as identified on Schedule 1.1(a), together
with permitted successors and assigns.
"Tranche A Term Loan Commitment" means, with respect to each Tranche A
Term Lender, the commitment of such Lender to make its portion of the
Tranche A Term Loans in a principal amount equal to such Lender's Tranche A
Term Loan Commitment Percentage of the Tranche A Term Loan Committed
Amount.
"Tranche A Term Loan Commitment Percentage" means, for any Tranche A
Term Lender, the percentage identified as its Tranche A Term Loan
Commitment Percentage on Schedule 1.1(a), as such percentage may be
modified in connection with any assignment made in accordance with the
provisions of Section 11.3.
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"Tranche A Term Loan Committed Amount" means ONE HUNDRED TWENTY-FIVE
MILLION DOLLARS ($125,000,000).
"Tranche A Term Loans" means the term loans made to the Borrower by
the Tranche A Term Lenders pursuant to Section 2.3.
"Tranche A Term Note" or "Tranche A Term Notes" means the promissory
notes of the Borrower in favor of each of the Tranche A Term Lenders
evidencing the Tranche A Term Loans provided pursuant to Section 2.3,
individually or collectively, as appropriate, as such promissory notes may
be amended, modified, restated, supplemented, extended, renewed, or
replaced from time to time, as evidenced in the form of Exhibit 2.3 (d).
"Tranche B Term Lender" means any Lender holding a Tranche B Term Loan
Commitment, as identified on Schedule 1.1(a), greater than zero, together
with permitted successors and assigns.
"Tranche B Term Loan Commitment" means, with respect to each Tranche B
Term Lender, the commitment of such Lender to make its portion of the
Tranche B Term Loans in a principal amount equal to such Lender's Tranche B
Term Loan Commitment Percentage of the Tranche B Term Loan Committed
Amount.
"Tranche B Term Loan Commitment Percentage" means, for any Tranche B
Term Lender, the percentage identified as its Tranche B Term Loan
Commitment Percentage on Schedule 1.1(a), as such percentage may be
modified in connection with any assignment made in accordance with the
provisions of Section 11.3.
"Tranche B Term Loan Committed Amount" means NINETY-FIVE MILLION
DOLLARS ($95,000,000).
"Tranche B Term Loan Maturity Date" means, as to the Tranche B Term
Loans, June 23, 2005.
"Tranche B Term Loans" means the term loans made to the Borrower by
the Tranche B Term Lenders pursuant to Section 2.4.
"Tranche B Term Note" or "Tranche B Term Notes" means the promissory
notes of the Borrower in favor of each of the Tranche B Term Lenders
evidencing the Tranche B Term Loans provided pursuant to Section 2.4,
individually or collectively, as appropriate, as such promissory notes may
be amended, modified, restated, supplemented, extended, renewed, or
replaced from time to time, as evidenced in the form of Exhibit 2.4 (d).
"Unused Commitment" means, for any period, the amount by which (a) the
then applicable aggregate Revolving Committed Amount exceeds (b) the daily
average sum for such
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period of the outstanding aggregate principal amount of all Revolving Loans
plus the aggregate amount of LOC Obligations outstanding with respect to
Letters of Credit.
"Voting Stock" of a corporation means all classes of the capital stock
of such corporation then outstanding and normally entitled to vote in the
election of directors.
"Working Capital" means, at any time, the excess of current assets
(excluding cash and Cash Equivalents and deferred taxes) over current
liabilities (excluding the current portion of Funded Debt and deferred
taxes), as determined in accordance with GAAP.
"Year 2000 Problem" means any risk (a) that any computer hardware,
software or other equipment used by a Credit Party or any of its
Subsidiaries (or by any of its suppliers, vendors or customers that is
material to the business of such Credit Party or Subsidiary) will not
function as effectively and reliably on and after January 1, 2000 as it
does prior to January 1, 2000 or (b) that any computer applications used by
a Credit Party may not be able to recognize and properly perform date-
sensitive functions after December 31, 1999, to the extent any such risk
specified in items (a) or (b) above would cause or be reasonably expected
to cause a Material Adverse Effect.
1.2 Computation of Time Periods and Other Definitional Provisions.
For purposes of computation of periods of time hereunder, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding." References in this Agreement to "Articles", "Sections", "Schedules"
or "Exhibits" shall be to Articles, Sections, Schedules or Exhibits of or to
this Agreement unless otherwise specifically provided.
1.3 Accounting Terms.
Except as otherwise expressly provided herein, all accounting terms used
herein shall be interpreted, and all financial statements and certificates and
reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All calculations made for the purposes of determining compliance with
this Credit Agreement shall (except as otherwise expressly provided herein) be
made by application of GAAP applied on a basis consistent with the most recent
annual or quarterly financial statements delivered pursuant to Section 7.1 (or,
prior to the delivery of the first financial statements pursuant to Section 7.1,
consistent with the financial statements described in Section 5.1(d); provided,
however, if (a) the Borrower shall object to determining such compliance on such
basis at the time of delivery of such financial statements due to any change in
GAAP or the rules promulgated with respect thereto or (b) the Administrative
Agent or the Required Lenders shall so object in writing within 30 days after
delivery of such financial statements, then such calculations shall be made on a
basis consistent with GAAP as in effect as of the date of the most recent
financial statements delivered by the Borrower to the Lenders to which no such
objection shall have been made.
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Notwithstanding the above, the parties hereto acknowledge and agree that, for
purposes of all calculations made under the financial covenants set forth in
Section 7.2 (including the definitions used therein) and also for purposes of
calculating the Leverage Ratio in connection with the definition of "Applicable
Percentage" set forth in Section 1.1, (i)(A) income statement items (whether
positive or negative) attributable to the property disposed of in any Asset
Disposition as contemplated by Section 8.5 shall be excluded to the extent
relating to any period occurring prior to the date of such transaction and (B)
Indebtedness which is retired in connection with any such Asset Disposition
shall be excluded and deemed to have been retired as of the first day of the
applicable period and (ii)(A) income statement items (whether positive or
negative) attributable to any Person or property acquired in any Acquisition
contemplated by the definition of "Permitted Acquisition" set forth in Section
1.1 shall, to the extent not otherwise included in such income statement items
for the Credit Parties in accordance with GAAP or in accordance with any defined
terms set forth in Section 1.1, be included to the extent relating to any period
applicable in such calculations and to the extent and in the same manner as such
items are included for the Credit Parties and (B) an adjustment shall be made to
EBITDA for factually supportable and identifiable pro forma cost savings and/or
increases for such period that are directly attributable to such Acquisition;
provided that with respect to clause (B), (x) any such adjustments must be
demonstrated in writing by the Borrower (with written support therefor) to the
Administrative Agent at the time of the Acquisition and (y) cost savings in
connection with an Acquisition (together with cost savings in connection with
other Acquisitions consummated during the prior twelve months) shall not exceed
ten percent (10%) of the last twelve months' EBITDA of the Credit Parties and
their Subsidiaries (inclusive of permitted cost savings) without the consent of
the Required Lenders.
SECTION 2
CREDIT FACILITIES
-----------------
2.1 Revolving Loans.
(a) Revolving Loan Commitment. Subject to the terms and conditions
set forth herein, each Lender severally agrees to make revolving loans
(each a "Revolving Loan" and collectively the "Revolving Loans") to the
Borrower, in Dollars, at any time and from time to time, during the period
from and including the Effective Date to but not including the Revolving
Loan Maturity Date (or such earlier date if the Revolving Committed Amount
has been terminated as provided herein); provided, however, that (i) the
sum of the aggregate amount of Revolving Loans outstanding plus the
aggregate amount of LOC Obligations outstanding shall not exceed the
Revolving Committed Amount and (ii) with respect to each individual
Lender, the Lender's pro rata share of outstanding Revolving Loans plus
such Lender's pro rata share of outstanding LOC Obligations shall not
exceed such Lender's Revolving Loan Commitment Percentage of the Revolving
Committed Amount. Subject to the terms of this Credit Agreement (including
Section 3.3), the Borrower may borrow, repay and reborrow Revolving Loans.
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(b) Method of Borrowing for Revolving Loans. By no later than 11:00
a.m. (i) on the date of the requested borrowing of Revolving Loans that
will be Base Rate Loans or (ii) three Business Days prior to the date of
the requested borrowing of Revolving Loans that will be Eurodollar Loans,
the Borrower shall telephone the Administrative Agent with the information
described below as well as submit a written Notice of Borrowing in the form
of Exhibit 2.1(b) to the Administrative Agent setting forth (A) the amount
requested, (B) whether such Revolving Loans shall accrue interest at the
Adjusted Base Rate or the Adjusted Eurodollar Rate, (C) with respect to
Revolving Loans that will be Eurodollar Loans, the Interest Period
applicable thereto and (D) certification that the Borrower has complied in
all respects with Section 5.2. All Revolving Loans made on the Effective
Date shall be Base Rate Loans unless the Lenders consent otherwise.
Thereafter, all or any portion of such Revolving Loans may be converted
into Eurodollar Loans in accordance with the terms of Section 2.5.
(c) Funding of Revolving Loans. Upon receipt of a Notice of
Borrowing, the Administrative Agent shall promptly inform the Lenders as to
the terms thereof. Each Lender shall make its Revolving Loan Commitment
Percentage of the requested Revolving Loans available to the Administrative
Agent by 1:00 p.m. on the date specified in the Notice of Borrowing by
deposit, in Dollars, of immediately available funds at the offices of the
Administrative Agent at its principal office in Dallas, Texas or at such
other address as the Administrative Agent may designate in writing. The
amount of the requested Revolving Loans will then be made available to the
Borrower by the Administrative Agent by crediting the account of the
Borrower on the books of such office of the Administrative Agent, to the
extent the amount of such Revolving Loans are made available to the
Administrative Agent.
No Lender shall be responsible for the failure or delay by any other
Lender in its obligation to make Revolving Loans hereunder; provided,
however, that the failure of any Lender to fulfill its obligations
hereunder shall not relieve any other Lender of its obligations hereunder.
Unless the Administrative Agent shall have been notified by any Lender
prior to the date of any such Revolving Loan that such Lender does not
intend to make available to the Administrative Agent its portion of the
Revolving Loans to be made on such date, the Administrative Agent may
assume that such Lender has made such amount available to the
Administrative Agent on the date of such Revolving Loans, and the
Administrative Agent in reliance upon such assumption, may (in its sole
discretion but without any obligation to do so) make available to the
Borrower a corresponding amount. If such corresponding amount is not in
fact made available to the Administrative Agent, the Administrative Agent
shall be able to recover such corresponding amount from such Lender. If
such Lender does not pay such corresponding amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent will
promptly notify the Borrower, and the Borrower shall immediately pay such
corresponding amount to the Administrative Agent. The Administrative Agent
shall also be entitled to recover from the Lender or the Borrower, as the
case may be, interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by the
Administrative Agent to the Borrower to the date such corresponding amount
is recovered by the Administrative Agent at a per annum rate equal to (i)
from the
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Borrower at the applicable rate for such Revolving Loan pursuant
to the Notice of Borrowing and (ii) from a Lender at the Federal Funds
Rate.
(d) Reductions of Revolving Committed Amount. Upon at least three
Business Days' notice, the Borrower shall have the right to permanently
reduce, without premium or penalty, all or part of the aggregate unused
amount of the Revolving Committed Amount at any time or from time to time;
provided that (i) each partial reduction shall be in an aggregate amount at
least equal to $5,000,000 and in integral multiples of $1,000,000 above
such amount and (ii) no reduction shall be made which would reduce the
Revolving Committed Amount to an amount less than the aggregate amount of
outstanding Revolving Loans plus the aggregate amount of outstanding LOC
Obligations. Any reduction in (or termination of) the Revolving Committed
Amount shall be permanent and may not be reinstated. The Administrative
Agent shall immediately notify the Lenders of any reduction in the
Revolving Committed Amount.
(e) Revolving Notes. The Revolving Loans made by each Revolving
Lender shall be evidenced by a duly executed promissory note of the
Borrower to such Lender in an original principal amount equal to such
Lender's Revolving Commitment Percentage of the Revolving Committed Amount
and in substantially the form of Exhibit 2.1(e).
2.2 Letter of Credit Subfacility.
(a) Issuance. Subject to the terms and conditions hereof and of the
LOC Documents, if any, the Issuing Lender shall from time to time upon
request issue (from the Effective Date to the Revolving Loan Maturity Date
and in a form reasonably acceptable to the Issuing Lender), in Dollars, and
the LOC Participants shall participate in, Letters of Credit for the
account of a Credit Party; provided, however, that (i) the aggregate amount
of LOC Obligations shall not at any time exceed TEN MILLION DOLLARS
($10,000,000) (the "LOC Committed Amount"), (ii) the sum of the aggregate
amount of LOC Obligations outstanding plus Revolving Loans outstanding
shall not exceed the Revolving Committed Amount and (iii) with respect to
each individual LOC Participant, the LOC Participant's pro rata share of
outstanding Revolving Loans plus its pro rata share of outstanding LOC
Obligations shall not exceed such LOC Participant's Revolving Loan
Commitment Percentage of the Revolving Committed Amount. The Issuing
Lender may require the issuance and expiry date of each Letter of Credit to
be a Business Day. Each Letter of Credit shall be either (i) a standby
letter of credit issued to support the obligations (including pension or
insurance obligations), contingent or otherwise, of a Credit Party or any
of its Subsidiaries or (ii) a commercial letter of credit in respect of the
purchase of goods or services by a Credit Party in the ordinary course of
business. Except as otherwise expressly agreed upon by all the LOC
Participants, no Letter of Credit shall have an original expiry date more
than one year from the date of issuance, or as extended, shall have an
expiry date extending beyond the Revolving Loan Maturity Date. Each Letter
of Credit shall comply with the related LOC Documents.
(b) Notice and Reports. The request for the issuance of a Letter of
Credit shall be submitted to the Issuing Lender at least three Business
Days prior to the requested date of
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issuance (or such shorter period as may be reasonably acceptable to the
Issuing Lender). The Issuing Lender will, at least quarterly and more
frequently upon request, provide to the Administrative Agent for
dissemination to the Lenders a detailed report specifying the Letters of
Credit which are then issued and outstanding and any activity with respect
thereto which may have occurred since the date of the prior report, and
including therein, among other things, the account party, the beneficiary,
the face amount, and the expiry date as well as any payments or expirations
which may have occurred. The Issuing Lender will further provide to the
Administrative Agent, promptly upon request, copies of the Letters of
Credit and the other LOC Documents.
(c) Participations.
(i) Each LOC Participant acknowledges and confirms that it has a
Participation Interest in the liability of the Issuing Lender under
each Existing Letter of Credit in an amount equal to its Revolving
Loan Commitment Percentage of such Existing Letter of Credit. The
Borrower's reimbursement obligations in respect of each Existing
Letter of Credit, and each LOC Participant's obligations in connection
therewith, shall be governed by the terms of this Credit Agreement.
(ii) Each LOC Participant, upon issuance of a Letter of Credit,
shall be deemed to have purchased without recourse a risk
participation from the Issuing Lender in such Letter of Credit and
each LOC Document related thereto and the rights and obligations
arising thereunder and any collateral relating thereto, in each case
in an amount equal to its Revolving Loan Commitment Percentage of the
obligations under such Letter of Credit, and shall absolutely,
unconditionally and irrevocably assume, as primary obligor and not as
surety, and be obligated to pay to the Issuing Lender therefor and
discharge when due, its Revolving Loan Commitment Percentage of the
obligations arising under such Letter of Credit. Without limiting the
scope and nature of each LOC Participant's participation in any Letter
of Credit, to the extent that the Issuing Lender has not been
reimbursed as required hereunder or under any such Letter of Credit,
each such LOC Participant shall pay to the Issuing Lender its
Revolving Loan Commitment Percentage of such unreimbursed drawing in
same day funds on the day of notification by the Issuing Lender of an
unreimbursed drawing pursuant to the provisions of subsection (d) or
(e) hereof. The obligation of each LOC Participant to so reimburse
the Issuing Lender shall be absolute and unconditional and shall not
be affected by the occurrence of a Default, an Event of Default or any
other occurrence or event. Any such reimbursement shall not relieve
or otherwise impair the obligation of the Borrower or any other Credit
Party to reimburse the Issuing Lender under any Letter of Credit,
together with interest as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any Letter of
Credit, the Issuing Lender will promptly (but, in any event, not later than
one Business Day after such drawing) notify the Borrower. Unless the
Borrower shall upon receipt of such notice by the Issuing Lender notify the
Issuing Lender of its intent to otherwise reimburse the Issuing Lender,
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the Borrower shall be deemed to have requested a Revolving Loan at the
Adjusted Base Rate in the amount of the drawing, the proceeds of which will
be used to satisfy the reimbursement obligations. The Borrower shall
reimburse the Issuing Lender on the day it receives notice from the Issuing
Lender of a drawing under any Letter of Credit with the proceeds of such
Revolving Loan obtained hereunder or otherwise in same day funds as
provided herein or in the LOC Documents. If the Borrower shall fail to
reimburse the Issuing Lender as provided hereinabove, the unreimbursed
amount of such drawing shall bear interest at a per annum rate equal to the
Base Rate plus the Applicable Percentage for the Base Rate Loans that are
Revolving Loans plus an additional two percent (2%). The Borrower's
reimbursement obligations hereunder shall be absolute and unconditional
under all circumstances irrespective of (but without waiver of) any rights
of set-off, counterclaim or defense to payment the applicable account party
or the Borrower may claim or have against an Issuing Lender, an Agent, the
Lenders, the beneficiary of the Letter of Credit drawn upon or any other
Person, including without limitation, any defense based on any failure of
the applicable account party, the Borrower or any other Credit Party to
receive consideration or the legality, validity, regularity or
unenforceability of the Letter of Credit. The Issuing Lender will promptly
notify the LOC Participants of the amount of any unreimbursed drawing and
each LOC Participant shall promptly pay to the Issuing Lender, in Dollars
and in immediately available funds, the amount of such LOC Participant's
Revolving Loan Commitment Percentage of such unreimbursed drawing. Such
payment shall be made on the day such notice is received by such Lender
from the Issuing Lender if such notice is received at or before 12:00 Noon,
otherwise such payment shall be made at or before 12:00 Noon on the
Business Day next succeeding the day such notice is received. If such LOC
Participant does not pay such amount to the Issuing Lender in full upon
such request, such LOC Participant shall, on demand, pay to the Issuing
Lender interest on the unpaid amount during the period from the date the
LOC Participant received the notice regarding the unreimbursed drawing
until such LOC Participant pays such amount to the Issuing Lender in full
at a rate per annum equal to, if paid within two Business Days of the date
of drawing, the Federal Funds Rate and thereafter at a rate equal to the
Base Rate. Each LOC Participant's obligation to make such payment to the
Issuing Lender, and the right of the Issuing Lender to receive the same,
shall be absolute and unconditional, shall not be affected by any
circumstance whatsoever and without regard to the termination of this
Credit Agreement or the Commitments hereunder, the existence of a Default
or Event of Default or the acceleration of the obligations hereunder and
shall be made without any offset, abatement, withholding or reduction
whatsoever. Simultaneously with the making of each such payment by a LOC
Participant to the Issuing Lender, such LOC Participant shall,
automatically and without any further action on the part of the Issuing
Lender or such LOC Participant, acquire a participation in an amount equal
to such payment (excluding the portion of such payment constituting
interest owing to the Issuing Lender) in the related unreimbursed drawing
portion of the LOC Obligation and in the interest thereon and in the
related LOC Documents, and shall have a claim against the Borrower and the
other Credit Parties with respect thereto.
(e) Repayment with Revolving Loans. On any day on which the Borrower
shall have requested, or been deemed to have requested, a Revolving Loan
borrowing to reimburse a drawing under a Letter of Credit (as set forth in
clause (d) above), the Administrative Agent
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shall give notice to the applicable Lenders that a Revolving Loan has been
requested or deemed requested in connection with a drawing under a Letter
of Credit, in which case a Revolving Loan borrowing comprised solely of
Base Rate Loans (each such borrowing, a "Mandatory Borrowing") shall be
immediately made from all applicable Lenders (without giving effect to any
termination of the Commitments pursuant to Section 9.2) pro rata based on
each Lender's respective Revolving Loan Commitment Percentage and the
proceeds thereof shall be paid directly to the Issuing Lender for
application to the respective LOC Obligations. Each such Lender hereby
irrevocably agrees to make such Revolving Loans immediately upon any such
request or deemed request on account of each such Mandatory Borrowing in
the amount and in the manner specified in the preceding sentence and on the
same such date notwithstanding (i) the amount of Mandatory Borrowing may
not comply with the minimum amount for borrowings of Revolving Loans
otherwise required hereunder, (ii) whether any conditions specified in
Section 5.2 are then satisfied, (iii) whether a Default or Event of Default
then exists, (iv) failure of any such request or deemed request for
Revolving Loans to be made by the time otherwise required hereunder, (v)
the date of such Mandatory Borrowing, or (vi) any reduction in the
Revolving Committed Amount or any termination of the Commitments. In the
event that any Mandatory Borrowing cannot for any reason be made on the
date otherwise required above (including, without limitation, as a result
of the commencement of a proceeding under the Bankruptcy Code with respect
to the Borrower or any other Credit Party), then each such Lender hereby
agrees that it shall forthwith fund (as of the date the Mandatory Borrowing
would otherwise have occurred, but adjusted for any payments received from
the Borrower on or after such date and prior to such purchase) its
Participation Interest in the outstanding LOC Obligations; provided,
further, that in the event any Lender shall fail to fund its Participation
Interest on the day the Mandatory Borrowing would otherwise have occurred,
then the amount of such Lender's unfunded Participation Interest therein
shall bear interest payable to the Issuing Lender upon demand, at the rate
equal to, if paid within two Business Days of such date, the Federal Funds
Rate, and thereafter at a rate equal to the Base Rate.
(f) Modification and Extension. The issuance of any supplement,
modification, amendment, renewal, or extensions to any Letter of Credit
shall, for purposes hereof, be treated in all respects the same as the
issuance of a new Letter of Credit hereunder.
(g) Uniform Customs and Practices. The Issuing Lender may have the
Letters of Credit be subject to The Uniform Customs and Practice for
Documentary Credits, as published as of the date of issue by the
International Chamber of Commerce (Publication No. 500 or the most recent
publication, the "UCP"), in which case the UCP may be incorporated therein
and deemed in all respects to be a part thereof.
(h) Responsibility of Issuing Lender. It is expressly understood and
agreed as between the Lenders that the obligations of the Issuing Lender
hereunder to the LOC Participants are only those expressly set forth in
this Credit Agreement and that the Issuing Lender shall be entitled to
assume that the conditions precedent set forth in Section 5.2 have been
satisfied unless it shall have acquired actual knowledge that any such
condition precedent has not been satisfied; provided, however, that nothing
set forth in this Section 2.2 shall be
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deemed to prejudice the right of any LOC Participant to recover from the
Issuing Lender any amounts made available by such LOC Participant to the
Issuing Lender pursuant to this Section 2.2 in the event that it is
determined by a court of competent jurisdiction that the payment with
respect to a Letter of Credit constituted gross negligence or willful
misconduct on the part of the Issuing Lender.
(i) Conflict with LOC Documents. In the event of any conflict between
this Credit Agreement and any LOC Document, this Credit Agreement shall
govern.
(j) Indemnification of Issuing Lender.
(i) In addition to its other obligations under this Credit
Agreement, the Borrower hereby agrees to protect, indemnify, pay and
save the Issuing Lender harmless from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees) that the Issuing Lender may
incur or be subject to as a consequence, direct or indirect, of (A)
the issuance of any Letter of Credit or (B) the failure of the Issuing
Lender to honor a drawing under a Letter of Credit as a result of any
act or omission, whether rightful or wrongful, of any present or
future de jure or de facto Governmental Authority (all such acts or
omissions, herein called "Government Acts").
(ii) As between the Borrower and the Issuing Lender, the Borrower
shall assume all risks of the acts, omissions or misuse of any Letter
of Credit by the beneficiary thereof. The Issuing Lender shall not be
responsible for (except in the case of (A), (B) and (C) below if the
Issuing Lender has actual knowledge to the contrary): (A) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for
and issuance of or the presentation for payment and honoring of any
Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (B)
the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any Letter of Credit or
the rights or benefits thereunder or proceeds thereof, in whole or in
part, that may prove to be invalid or ineffective for any reason; (C)
failure of the beneficiary of a Letter of Credit to comply fully with
conditions required in order to draw upon a Letter of Credit; (D)
errors, omissions, interruptions or delays in transmission or delivery
of any messages, by mail, cable, telegraph, telex or otherwise,
whether or not they be in cipher; (E) errors in interpretation of
technical terms; (F) any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under a
Letter of Credit or of the proceeds thereof; and (G) any consequences
arising from causes beyond the control of the Issuing Lender,
including, without limitation, any Government Acts. None of the above
shall affect, impair, or prevent the vesting of the Issuing Lender's
rights or powers hereunder.
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(iii) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted
by the Issuing Lender, under or in connection with any Letter of
Credit or the related certificates, if taken or omitted in good faith,
shall not put the Issuing Lender under any resulting liability to the
Borrower or any other Credit Party. It is the intention of the
parties that this Credit Agreement shall be construed and applied to
protect and indemnify the Issuing Lender against any and all risks
involved in the issuance of the Letters of Credit, all of which risks
are hereby assumed by the Borrower, including, without limitation, any
and all risks of the acts or omissions, whether rightful or wrongful,
of any present or future Government Acts. The Issuing Lender shall
not, in any way, be liable for any failure by the Issuing Lender or
anyone else to pay any drawing under any Letter of Credit as a result
of any Government Acts or any other cause beyond the control of the
Issuing Lender.
(iv) Nothing in this subsection (j) is intended to limit the
reimbursement obligation of the Borrower contained in this Section
2.2. The obligations of the Borrower under this subsection (j) shall
survive the termination of this Credit Agreement. No act or omission
of any current or prior beneficiary of a Letter of Credit shall in any
way affect or impair the rights of the Issuing Lender to enforce any
right, power or benefit under this Credit Agreement.
(v) Notwithstanding anything to the contrary contained in this
subsection (j), the Borrower shall have no obligation to indemnify the
Issuing Lender in respect of any liability incurred by the Issuing
Lender arising out of the bad faith, gross negligence or willful
misconduct of the Issuing Lender, as determined by a court of
competent jurisdiction. Nothing in this Agreement shall relieve the
Issuing Lender of any liability to the Borrower in respect of any
action taken by the Issuing Lender which action constitutes bad faith,
gross negligence or willful misconduct of the Issuing Lender or a
violation of the UCP or Uniform Commercial Code (as applicable), as
determined by a court of competent jurisdiction.
2.3 Tranche A Term Loans.
(a) Tranche A Term Loans. Subject to the terms and conditions set
forth herein, each Tranche A Term Lender severally agrees, on the Effective
Date, to make a term loan to the Borrower, in Dollars, in an amount equal
to such Lender's Tranche A Term Loan Commitment Percentage of the Tranche A
Term Loan Committed Amount; provided that the aggregate amount of such
Tranche A Term Loans made on the Effective Date shall not exceed the
Tranche A Term Loan Committed Amount. Once repaid, Tranche A Term Loans
cannot be reborrowed.
(b) Funding of Tranche A Term Loans. On the Effective Date, each
Tranche A Term Lender will make its Tranche A Term Loan Commitment
Percentage of the Tranche A Term Loan Committed Amount available to the
Administrative Agent by deposit, in Dollars and in immediately available
funds, at the offices of the Administrative Agent at its principal office
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in Dallas, Texas or at such other address as the Administrative Agent may
designate in writing. The amount of the Tranche A Term Loans will then be
made available to the Borrower by the Administrative Agent by crediting the
account of the Borrower on the books of such office of the Administrative
Agent, to the extent the amount of such Tranche A Term Loans are made
available to the Administrative Agent. All Tranche A Term Loans on the
Effective Date shall be Base Rate Loans unless consented to otherwise by
the Lenders. Thereafter, all or any portion of the Tranche A Term Loans may
be converted into Eurodollar Loans in accordance with the terms of Section
2.5.
No Tranche A Term Lender shall be responsible for the failure or delay
by any other Tranche A Term Lender in its obligation to make a Tranche A
Term Loan hereunder; provided, however, that the failure of any Tranche A
Term Lender to fulfill its obligations hereunder shall not relieve any
other Tranche A Term Lender of its obligations hereunder. If the
Administrative Agent shall have received an executed signature page to this
Credit Agreement (whether an original or via telecopy) from a Tranche A
Term Lender, the Administrative Agent may assume that such Tranche A Term
Lender has or will make the amount of its Tranche A Term Loans available to
the Administrative Agent on the Effective Date, and the Administrative
Agent in reliance upon such assumption, may (in its sole discretion but
without any obligation to do so) make available to the Borrower a
corresponding amount. If such corresponding amount is not in fact made
available to the Administrative Agent, the Administrative Agent shall be
able to recover such corresponding amount from such Tranche A Term Lender.
If such Tranche A Term Lender does not pay such corresponding amount
forthwith upon the Administrative Agent's demand therefor, the
Administrative Agent will promptly notify the Borrower, and the Borrower
shall immediately pay such corresponding amount to the Administrative
Agent. The Administrative Agent shall also be entitled to recover from the
Tranche A Term Lender or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative Agent to the
Borrower to the date such corresponding amount is recovered by the
Administrative Agent at a per annum rate equal to (i) from the Borrower at
the applicable rate for such Tranche A Term Loan and (ii) from a Tranche A
Term Lender at the Federal Funds Rate.
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(c) Amortization. The principal amount of the Tranche A Term Loans
shall be repaid in quarterly payments on the dates set forth below, with
the remaining outstanding balance of the Tranche A Term Loans being due and
payable on the Revolving Loan Maturity Date:
Principal Amortization Tranche A Term Loan Principal
Payment Dates Amortization Payment
---------------------- --------------------
June 30, 1999 $2,500,000
September 30, 1999 $2,500,000
December 31, 1999 $5,000,000
March 31, 2000 $5,000,000
June 30, 2000 $5,000,000
September 30, 2000 $5,000,000
December 31, 2000 $5,000,000
March 31, 2001 $7,500,000
June 30, 2001 $7,500,000
September 30, 2001 $7,500,000
December 31,2001 $7,500,000
March 31, 2002 $7,500,000
June 30, 2002 $7,500,000
September 30, 2002 $7,500,000
December 31,2002 $7,500,000
March 31, 2003 $8,750,000
June 30, 2003 $8,750,000
September 30, 2003 $8,750,000
Revolving Loan Maturity Date $8,750,000
(d) Tranche A Term Notes. The portion of the Tranche A Term Loans
made by each Tranche A Term Lender shall be evidenced by a duly executed
promissory note of the Borrower to such Lender in an original principal
amount equal to such Lender's Tranche A Term Loan Commitment Percentage of
the Tranche A Term Loan Committed Amount, and substantially in the form of
Exhibit 2.3(d).
2.4 Tranche B Term Loans.
(a) Tranche B Term Loans. Subject to the terms and conditions set
forth herein, each Tranche B Term Lender severally agrees, on the Effective
Date, to make a term loan to the Borrower, in Dollars, in an amount equal
to such Lender's Tranche B Term Loan Commitment Percentage of the Tranche B
Term Loan Committed Amount; provided that the aggregate amount of such
Tranche B Term Loans made on the Effective Date shall not exceed the
Tranche B Term Loan Committed Amount. Once repaid, Tranche B Term Loans
cannot be reborrowed.
(b) Funding of Tranche B Term Loans. On the Effective Date, each
Tranche B Term Lender will make its Tranche B Term Loan Commitment
Percentage of the Tranche B Term Loan Committed Amount available to the
Administrative Agent by deposit, in Dollars and in immediately available
funds, at the offices of the Administrative Agent at its principal office
in Dallas, Texas or at such other address as the Administrative Agent may
designate in writing. The amount of the Tranche B Term Loans will then be
made available to the Borrower by the Administrative Agent by crediting the
account of the Borrower on the books of such office of the Administrative
Agent, to the extent the amount of such Tranche B Term Loans are made
available to the Administrative Agent. All Tranche B Term Loans on the
Effective Date shall be Base Rate Loans unless consented to otherwise by
the Lenders. Thereafter, all or any portion
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of the Tranche B Term Loans may be converted into Eurodollar Loans in
accordance with the terms of Section 2.5.
No Tranche B Term Lender shall be responsible for the failure or delay
by any other Tranche B Term Lender in its obligation to make a Tranche B
Term Loan hereunder; provided, however, that the failure of any Tranche B
Term Lender to fulfill its obligations hereunder shall not relieve any
other Tranche B Term Lender of its obligations hereunder. If the
Administrative Agent shall have received an executed signature page to this
Credit Agreement (whether an original or via telecopy) from a Tranche B
Term Lender, the Administrative Agent may assume that such Tranche B Term
Lender has or will make the amount of its Tranche B Term Loans available to
the Administrative Agent on the Effective Date, and the Administrative
Agent in reliance upon such assumption, may (in its sole discretion but
without any obligation to do so) make available to the Borrower a
corresponding amount. If such corresponding amount is not in fact made
available to the Administrative Agent, the Administrative Agent shall be
able to recover such corresponding amount from such Tranche B Term Lender.
If such Tranche B Term Lender does not pay such corresponding amount
forthwith upon the Administrative Agent's demand therefor, the
Administrative Agent will promptly notify the Borrower, and the Borrower
shall immediately pay such corresponding amount to the Administrative
Agent. The Administrative Agent shall also be entitled to recover from the
Tranche B Term Lender or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative Agent to the
Borrower to the date such corresponding amount is recovered by the
Administrative Agent at a per annum rate equal to (i) from the Borrower at
the applicable rate for such Tranche B Term Loan and (ii) from a Tranche B
Term Lender at the Federal Funds Rate.
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(c) Amortization. The principal amount of the Tranche B Term Loans
shall be repaid in quarterly payments on the dates set forth below, with
the remaining outstanding balance of the Tranche B Term Loans being due and
payable on the Tranche B Term Loan Maturity Date:
Principal Amortization Tranche B Term Loan Principal
Payment Dates Amortization Payment
---------------------- --------------------
June 30, 1999 $ 316,667
September 30, 1999 $ 316,667
December 31, 1999 $ 316,667
March 31, 2000 $ 237,500
June 30, 2000 $ 237,500
September 30, 2000 $ 237,500
December 31, 2000 $ 237,500
March 31, 2001 $ 237,500
June 30, 2001 $ 237,500
September 30, 2001 $ 237,500
December 31,2001 $ 237,500
March 31, 2002 $ 237,500
June 30, 2002 $ 237,500
September 30, 2002 $ 237,500
December 31,2002 $ 237,500
March 31, 2003 $ 237,500
June 30, 2003 $ 237,500
September 30, 2003 $ 237,500
December 31,2003 $ 237,500
March 31, 2004 $15,041,667
June 30, 2004 $15,041,667
September 30, 2004 $15,041,667
December 31, 2004 $15,041,667
March 31, 2005 $15,041,667
Tranche B Term Loan Maturity Date $15,041,664
(d) Tranche B Term Notes. The portion of the Tranche B Term Loans made
by each Tranche B Term Lender shall be evidenced by a duly executed
promissory note of the Borrower to such Lender in an original principal
amount equal to such Lender's Tranche B Term Loan Commitment Percentage of
the Tranche B Term Loan Committed Amount, and substantially in the form of
Exhibit 2.4(d).
2.5 Continuations and Conversions.
The Borrower shall have the option, on any Business Day, to continue
existing Eurodollar Loans for a subsequent Interest Period, to convert Base Rate
Loans into Eurodollar Loans or to convert Eurodollar Loans into Base Rate Loans;
provided, however, that (i) each such continuation or conversion must be
requested by the Borrower by telephone to the Administrative Agent followed by
prompt submission of a written Notice of Continuation/Conversion, in the form of
Exhibit 2.5, in compliance with the terms set forth below, (ii) except as
provided in Section 3.11, Eurodollar Loans may only be continued or converted
into Base Rate Loans on the last day of the Interest Period applicable thereto,
(iii) Eurodollar Loans may not be continued nor may Base Rate Loans be converted
into Eurodollar Loans during the existence and continuation of a Default or an
Event of Default and (iv) any request to continue a Eurodollar Loan that fails
to comply with the terms hereof or any failure to request a continuation of a
Eurodollar Loan at the end of an Interest Period shall constitute a conversion
to a Base Rate Loan on the last day of the applicable Interest Period. Each
continuation or conversion must be requested by the Borrower no later than
11:00 a.m. (A) on the date for a requested conversion of a
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Eurodollar Loan to a Base Rate Loan or (B) three Business Days prior to the date
for a requested continuation of a Eurodollar Loan or conversion of a Base Rate
Loan to a Eurodollar Loan, in each case by telephone to the Administrative Agent
followed by a written Notice of Continuation/Conversion promptly submitted to
the Administrative Agent which shall set forth (x) whether the Borrower intends
to continue or convert such Loans and (y) if the request is to continue a
Eurodollar Loan or convert a Base Rate Loan to a Eurodollar Loan, the Interest
Period applicable thereto.
2.6 Minimum Amounts.
Each request for a borrowing, conversion or continuation shall be subject
to the requirements that (a) each Eurodollar Loan shall be in a minimum amount
of $1,000,000 and in integral multiples of $500,000 in excess thereof, (b) each
Base Rate Loan shall be in a minimum amount of the lesser of $250,000 (and
integral multiples of $100,000 in excess thereof) or the remaining amount
available under the Revolving Committed Amount, and (c) no more than ten (10)
Eurodollar Loans shall be outstanding hereunder at any one time. For the
purposes of this Section, all Eurodollar Loans with the same Interest Periods
that begin and end on the same date shall be considered as one Eurodollar Loan,
but Eurodollar Loans with different Interest Periods, even if they begin on the
same date, shall be considered as separate Eurodollar Loans.
SECTION 3
GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT
------------------------------------------------------------
3.1 Interest.
(a) Interest. Subject to the provisions of Section 3.1(b):
(i) Base Rate Loans. During such periods as Loans shall be
comprised in whole or in part of Base Rate Loans, such Base Rate Loans
shall bear interest at a per annum rate equal to the Adjusted Base
Rate.
(ii) Eurodollar Loans. During such periods as Loans shall be
comprised in whole or in part of Eurodollar Loans, such Eurodollar
Loans shall bear interest at a per annum rate equal to the Adjusted
Eurodollar Rate.
(b) Default Rate of Interest. Upon the occurrence, and during the
continuance, of an Event of Default, the principal of and, to the extent
permitted by law, interest on the Loans and any other amounts owing (but
not timely paid) hereunder or under the other Credit Documents (including
without limitation fees and expenses) shall, at the election of the
Required Lenders, bear interest, payable on demand, at a per annum rate
equal to 2% plus the rate which would otherwise be applicable (or if no
rate is applicable, then the rate for Revolving Loans that are Base Rate
Loans plus two percent (2%) per annum).
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(c) Interest Payments. Interest on Loans shall be due and payable in
arrears on each Interest Payment Date. If an Interest Payment Date falls on
a date which is not a Business Day, such Interest Payment Date shall be
deemed to be the next succeeding Business Day, except that in the case of
Eurodollar Loans where the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding Business Day.
3.2 Place and Manner of Payments.
All payments of principal, interest, fees, expenses and other amounts to be
made by a Credit Party under this Agreement shall be received not later than
2:00 p.m. on the date when due, in Dollars and in immediately available funds,
by the Administrative Agent at its offices in Dallas, Texas. Payments received
after such time shall be deemed to have been received on the next Business Day.
The Borrower shall, at the time it makes any payment under this Credit
Agreement, specify to the Administrative Agent, the Loans, Letters of Credit,
fees or other amounts payable by the Borrower hereunder to which such payment is
to be applied (and in the event that it fails to specify, or if such application
would be inconsistent with the terms hereof, the Administrative Agent shall,
subject to Section 3.7, distribute such payment to the Lenders in such manner as
the Administrative Agent may reasonably deem appropriate). The Administrative
Agent will distribute such payments to the applicable Lenders on the same
Business Day if any such payment is received prior to 2:00 p.m.; otherwise the
Administrative Agent will distribute such payment to the applicable Lenders on
the next succeeding Business Day. Whenever any payment hereunder shall be stated
to be due on a day which is not a Business Day, the due date thereof shall be
extended to the next succeeding Business Day (subject to accrual of interest and
fees for the period of such extension), except that in the case of Eurodollar
Loans, if the extension would cause the payment to be made in the next following
calendar month, then such payment shall instead be made on the next preceding
Business Day.
3.3 Prepayments.
(a) Voluntary Prepayments. The Borrower shall have the right to
prepay Loans in whole or in part from time to time without premium or
penalty; provided, however, that (i) Eurodollar Loans may only be prepaid
on three Business Days' prior written notice to the Administrative Agent,
(ii) each such partial prepayment of Loans shall be in the minimum
principal amount of $1,000,000 and integral multiples of $100,000 in excess
thereof, and (iii) voluntary prepayments with respect to the Term Loans (A)
shall be applied pro rata to the outstanding Tranche A Term Loans and the
Tranche B Term Loans and (B) within each tranche, shall be applied pro rata
with respect to each remaining Principal Amortization Payment; provided,
however, one or more holders of the Tranche B Term Loans may decline to
accept a voluntary prepayment under this Section 3.3(a) to the extent there
are sufficient Tranche A Term Loans outstanding to be paid with such
prepayment, in which case such declined prepayments shall be allocated (x)
pro rata among the Tranche A Term Loans and the Tranche B Term Loans held
by Lenders accepting such prepayments and (y) within each tranche, shall be
applied pro rata with respect to each remaining Principal Amortization
Payment. All prepayments under this Section shall be subject to Section
3.14 and be accompanied by interest on the principal amount prepaid through
the date of prepayment.
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(b) Mandatory Prepayments.
(i) Revolving Committed Amount. If at any time the sum of
the aggregate amount of Revolving Loans outstanding plus LOC
Obligations outstanding exceeds the Revolving Committed Amount, the
Borrower shall immediately make a principal payment to the
Administrative Agent in the manner and in an amount such that the sum
of the aggregate amount of Revolving Loans outstanding plus LOC
Obligations outstanding is less than or equal to the Revolving
Committed Amount (to be applied as set forth in Section 3.3(c) below).
(ii) Excess Cash Flow. Within 120 days after the end of each
fiscal year of the Credit Parties, (A) for the fiscal year ending
December 31, 1999, the Borrower shall make a prepayment of the Loans
in an amount equal to 50% of the Excess Cash Flow earned during such
fiscal year, and (B) for the fiscal year ending December 31, 2000 and
thereafter, (x) if the Leverage Ratio as of the end of such fiscal
year is greater than or equal to 3.0 to 1.0, the Borrower shall make a
prepayment of the Loans in an amount equal to 50% of Excess Cash Flow
earned during such fiscal year and (y) if the Leverage Ratio as of the
end of such fiscal year is less than 3.0 to 1.0, the Borrower shall
make a prepayment of the Loans in an amount equal to 25% of Excess
Cash Flow earned during such fiscal year (all such prepayments to be
applied as set forth in Section 3.3(c) below).
(iii) Asset Sales. Immediately upon receipt by a Credit Party
or any of its Subsidiaries of proceeds from any Asset Disposition, the
Borrower shall forward an amount equal to 100% of the Net Cash
Proceeds of such Asset Disposition to the Lenders as a prepayment of
the Loans (to be applied as set forth in Section 3.3(c) below).
(iv) Issuances of Equity or Parent PIK Debt. Immediately upon
receipt by a Credit Party or any of its Subsidiaries of proceeds from
any Equity Issuance or the issuance of Parent PIK Debt (A) if the
Leverage Ratio as of the most recent fiscal quarter end is greater
than or equal to 3.0 to 1.0, the Borrower shall forward 50% of the Net
Cash Proceeds of such Equity Issuance or Parent PIK Debt to the
Lenders as a prepayment of the Loans and (B) if the Leverage Ratio as
of the most recent fiscal quarter end is less than 3.0 to 1.0, the
Borrower shall forward 25% of the Net Cash Proceeds of such Equity
Issuance or Parent PIK Debt to the Lenders as a prepayment of the
Loans (all such prepayments to be applied as set forth in Section
3.3(c) below).
(v) Issuance of Debt. Immediately upon receipt by a Credit
Party or any of its Subsidiaries of proceeds from any Debt Issuance,
the Borrower shall forward 100% of the Net Cash Proceeds of such Debt
Issuance to the Lenders as a prepayment of the Loans (to be applied as
set forth in Section 3.3(c) below).
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(c) Application of Prepayments. All amounts required to be paid
pursuant to Section 3.3(b)(i) shall be applied first to Revolving Loans and
second to a cash collateral account in respect of LOC Obligations. All
amounts required to be paid pursuant to Sections 3.3(b)(ii), (iv), and (v)
above shall be applied first, pro rata to the outstanding Tranche A Term
Loans and the Tranche B Term Loans and within each tranche pro rata with
respect to each remaining Principal Amortization Payment, until the Term
Loans have been paid in full, second to the Revolving Loans (with a
corresponding reduction in the Revolving Committed Amount), and third, to a
cash collateral account in respect of LOC Obligations. All amounts required
to be paid pursuant to Section 3.3(b)(iii) above shall be applied first,
pro rata to (i) the outstanding Tranche A Term Loans and the Tranche B Term
Loans and within each tranche pro rata with respect to each remaining
Principal Amortization Payment, and (ii) the outstanding Revolving Loans
(with a corresponding reduction in the Revolving Committed Amount), and
second, to a cash collateral account in respect of LOC Obligations. Within
the parameters of the applications set forth above, prepayments shall be
applied first to Base Rate Loans and then to Eurodollar Loans in direct
order of Interest Period maturities. All prepayments hereunder shall be
subject to Section 3.14 and shall be accompanied by interest on the
principal amount prepaid through the date of prepayment. One or more
holders of the Tranche B Term Loans may decline to accept a mandatory
prepayment under Sections 3.3(b)(ii), (iii), (iv), or (v) to the extent
there are sufficient Tranche A Term Loans outstanding to be paid with such
prepayment, in which case such declined prepayments shall be allocated pro
rata among the Tranche A Term Loans and the Tranche B Term Loans held by
Lenders accepting such prepayments.
3.4 Fees.
(a) Commitment Fees. In consideration of the Revolving Committed
Amount being made available by the Lenders hereunder, the Borrower agrees
to pay to the Administrative Agent, for the pro rata benefit of each
applicable Lender (based on each Lender's Revolving Loan Commitment
Percentage of the Revolving Committed Amount), a per annum fee equal to the
Applicable Percentage for Commitment Fees multiplied by the Unused
Commitment (the "Commitment Fees"). The Commitment Fees shall commence to
accrue on the Effective Date and shall be due and payable in arrears on the
last day of each fiscal quarter of the Borrower (as well as on the
Revolving Loan Maturity Date and on any date that the Revolving Committed
Amount is reduced) for the immediately preceding fiscal quarter (or portion
thereof), beginning with the first of such dates to occur after the Closing
Date.
(b) Letter of Credit Fees. In consideration of the issuance of
Letters of Credit hereunder, the Borrower agrees to pay to the Issuing
Lender for the pro rata benefit of the applicable Lenders (based on each
Lender's Revolving Loan Commitment Percentage of the Revolving Committed
Amount), a per annum fee (the "Letter of Credit Fees") equal to the
Applicable Percentage for the Letter of Credit Fees on the average daily
maximum amount available to be drawn under each such Letter of Credit from
the date of issuance to the date of expiration. The Letter of Credit Fees
will be payable in arrears on the last day of each fiscal quarter of the
Borrower (as well as on the Revolving Loan Maturity Date) for the
immediately
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preceding fiscal quarter (or portion thereof), beginning with the first of
such dates to occur after the Closing Date.
(c) Issuing Lender Fees. In addition to the Letter of Credit Fees
payable pursuant to clause (b) above, the Borrower shall pay to the Issuing
Lender for its own account, without sharing by the other Lenders, (i) the
customary charges from time to time to the Issuing Lender for its services
in connection with the issuance, amendment, payment, transfer,
administration, cancellation and conversion of, and drawings under, Letters
of Credit, and (ii) a letter of credit fronting fee of 0.25% of the face
amount of each Letter of Credit (collectively, the "Issuing Lender Fees").
(d) Administrative Fees. The Borrower agrees to pay to the
Administrative Agent, for its own account, an annual fee in accordance with
the terms of the Administrative Agent Fee Letter.
3.5 Payment in full at Maturity.
On the Revolving Loan Maturity Date, the entire outstanding principal
balance of all Revolving Loans, Tranche A Term Loans and LOC Obligations,
together with accrued but unpaid interest and all other sums owing with respect
thereto, shall be due and payable in full, unless accelerated sooner pursuant to
Section 9.2. On the Tranche B Term Loan Maturity Date, the entire outstanding
principal balance of all Tranche B Term Loans, together with accrued but unpaid
interest and all other sums owing with respect thereto, shall be due and payable
in full, unless accelerated sooner pursuant to Section 9.2.
3.6 Computations of Interest and Fees.
(a) Except for Base Rate Loans, in which case interest shall be
computed on the basis of a 365 or 366 day year as the case may be, all
computations of interest and fees hereunder shall be made on the basis of
the actual number of days elapsed over a year of 360 days. Interest shall
accrue from and include the date of borrowing (or continuation or
conversion) but exclude the date of payment.
(b) It is the intent of the Lenders and the Credit Parties to conform
to and contract in strict compliance with applicable usury law from time to
time in effect. All agreements between the Lenders and the Borrower are
hereby limited by the provisions of this paragraph which shall override and
control all such agreements, whether now existing or hereafter arising and
whether written or oral. In no way, nor in any event or contingency
(including but not limited to prepayment or acceleration of the maturity of
any obligation), shall the interest taken, reserved, contracted for,
charged, or received under this Credit Agreement, under the Notes or
otherwise, exceed the maximum nonusurious amount permissible under
applicable law. If, from any possible construction of any of the Credit
Documents or any other document, interest would otherwise be payable in
excess of the maximum nonusurious amount, any such construction
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shall be subject to the provisions of this paragraph and such documents
shall be automatically reduced to the maximum nonusurious amount permitted
under applicable law, without the necessity of execution of any amendment
or new document. If any Lender shall ever receive anything of value which
is characterized as interest on the Loans under applicable law and which
would, apart from this provision, be in excess of the maximum lawful
amount, an amount equal to the amount which would have been excessive
interest shall, without penalty, be applied to the reduction of the
principal amount owing on the Loans and not to the payment of interest, or
refunded to the Borrower or the other payor thereof if and to the extent
such amount which would have been excessive exceeds such unpaid principal
amount of the Loans. The right to demand payment of the Loans or any other
indebtedness evidenced by any of the Credit Documents does not include the
right to accelerate the payment of any interest which has not otherwise
accrued on the date of such demand, and the Lenders do not intend to charge
or receive any unearned interest in the event of such demand. All interest
paid or agreed to be paid to the Lenders with respect to the Loans shall,
to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term (including any
renewal or extension) of the Loans so that the amount of interest on
account of such indebtedness does not exceed the maximum nonusurious amount
permitted by applicable law.
3.7 Pro Rata Treatment.
Except to the extent otherwise provided herein:
(a) Loans. Each Revolving Loan borrowing (including, without
limitation, each Mandatory Borrowing), each payment or prepayment of
principal of any Loan, each payment of fees (other than the Issuing Lender
Fees retained by the Issuing Lender for its own account and the
Administrative Fees retained by the Administrative Agent for its own
account), each reduction of the Revolving Committed Amount, and each
conversion or continuation of any Loan, shall (except as otherwise provided
in Section 3.11) be allocated pro rata among the relevant Lenders in
accordance with the respective Revolving Loan Commitment Percentages,
Tranche A Term Loan Commitment Percentages or Tranche B Term Loan
Commitment Percentages of such Lenders (or, if the Commitments of such
Lenders have expired or been terminated, in accordance with the respective
principal amounts of the outstanding Loans and Participation Interests of
such Lenders); provided that, if any Lender shall have failed to pay its
applicable pro rata share of any Loan, then any amount to which such Lender
would otherwise be entitled pursuant to this subsection (a) shall instead
be payable to the Administrative Agent until the share of such Loan not
funded by such Lender has been repaid; provided further, that in the event
any amount paid to any Lender pursuant to this subsection (a) is rescinded
or must otherwise be returned by the Administrative Agent, each Lender
shall, upon the request of the Administrative Agent, repay to the
Administrative Agent the amount so paid to such Lender, with interest for
the period commencing on the date such payment is returned by the
Administrative Agent until the date the Administrative Agent receives such
repayment at a rate per annum equal to, during the period to but excluding
the date two Business Days after such request, the Federal Funds Rate, and
thereafter, the Base Rate plus two percent (2%) per annum; and
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(b) Letters of Credit. Each payment of unreimbursed drawings in
respect of LOC Obligations shall be allocated to each LOC Participant pro
rata in accordance with its Revolving Loan Commitment Percentage; provided
that, if any LOC Participant shall have failed to pay its applicable pro
rata share of any drawing under any Letter of Credit, then any amount to
which such LOC Participant would otherwise be entitled pursuant to this
subsection (b) shall instead be payable to the Issuing Lender until the
share of such unreimbursed drawing not funded by such Lender has been
repaid; provided further, that in the event any amount paid to any LOC
Participant pursuant to this subsection (b) is rescinded or must otherwise
be returned by the Issuing Lender, each LOC Participant shall, upon the
request of the Issuing Lender, repay to the Administrative Agent for the
account of the Issuing Lender the amount so paid to such LOC Participant,
with interest for the period commencing on the date such payment is
returned by the Issuing Lender until the date the Issuing Lender receives
such repayment at a rate per annum equal to, during the period to but
excluding the date two Business Days after such request, the Federal Funds
Rate, and thereafter, the Base Rate plus two percent (2%) per annum.
3.8 Sharing of Payments.
The Lenders agree among themselves that, except to the extent otherwise
provided herein, in the event that any Lender shall obtain payment in respect of
any Loan, unreimbursed drawing with respect to any LOC Obligations or any other
obligation owing to such Lender under this Credit Agreement through the exercise
of a right of setoff, banker's lien or counterclaim, or pursuant to a secured
claim under Section 506 of the Bankruptcy Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, in excess of its pro rata share of such payment as provided for
in this Credit Agreement, such Lender shall promptly pay in cash or purchase
from the other Lenders a participation in such Loans, LOC Obligations, and other
obligations in such amounts, and make such other adjustments from time to time,
as shall be equitable to the end that all Lenders share such payment in
accordance with their respective ratable shares as provided for in this Credit
Agreement. The Lenders further agree among themselves that if payment to a
Lender obtained by such Lender through the exercise of a right of setoff,
banker's lien, counterclaim or other event as aforesaid shall be rescinded or
must otherwise be restored, each Lender which shall have shared the benefit of
such payment shall, by payment in cash or a repurchase of a participation
theretofore sold, return its share of that benefit (together with its share of
any accrued interest payable with respect thereto) to each Lender whose payment
shall have been rescinded or otherwise restored. The Borrower agrees that any
Lender so purchasing such a participation may, to the fullest extent permitted
by law, exercise all rights of payment, including setoff, banker's lien or
counterclaim, with respect to such participation as fully as if such Lender were
a holder of such Loan, LOC Obligation or other obligation in the amount of such
participation. Except as otherwise expressly provided in this Credit Agreement,
if any Lender or an Agent shall fail to remit to an Agent or any other Lender an
amount payable by such Lender or such Agent to such Agent or such other Lender
pursuant to this Credit Agreement on the date when such amount is due, such
payments shall be made together with interest thereon for each date from the
date such amount is due until the date such amount is paid to such Agent or such
other Lender at a rate per annum equal to the Federal Funds Rate. If under any
applicable bankruptcy, insolvency or other similar
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law, any Lender receives a secured claim in lieu of a setoff to which this
Section 3.8 applies, such Lender shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of the Lenders under this Section 3.8 to share in the benefits of any recovery
on such secured claim.
3.9 Capital Adequacy.
(a) If, after the date hereof, any Lender has determined that the
adoption or the becoming effective of, or any change in, or any change by
any Governmental Authority, central bank or comparable agency charged with
the interpretation or administration thereof in the interpretation or
administration of, any applicable law, rule or regulation regarding capital
adequacy, or compliance by such Lender, or its parent corporation, with any
request or directive regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable agency, has
or would have the effect of reducing the rate of return on such Lender's
(or parent corporation's) capital or assets as a consequence of its
commitments or obligations hereunder to a level below that which such
Lender, or its parent corporation, could have achieved but for such
adoption, effectiveness, change or compliance (taking into consideration
such Lender's (or parent corporation's) policies with respect to capital
adequacy), then, upon written notice from such Lender to the Borrower
(together with documentation supporting such claim; provided that failure
to provide such documentation shall not impair a Lender's claim hereunder),
the Borrower shall be obligated to pay to such Lender such additional
amount or amounts as will compensate such Lender on an after-tax basis
(after taking into account applicable deductions and credits in respect of
the amount indemnified) for such reduction. Each determination by any such
Lender of amounts owing under this Section shall, absent manifest error, be
conclusive and binding on the parties hereto. This covenant shall survive
the termination of this Credit Agreement and the payment of the Loans and
all other amounts payable hereunder.
(b) Each Lender shall promptly notify the Borrower and the
Administrative Agent of any event of which it has knowledge, occurring
after the Closing Date, which will entitle such Lender to compensation
pursuant to this Section and will designate a different lending office if
such designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the reasonable judgment of such Lender, be
otherwise disadvantageous to it. Any Lender claiming compensation under
this Section shall furnish to the Borrower and the Administrative Agent a
statement setting forth the additional amount or amounts to be paid to it
hereunder which shall be conclusive in the absence of manifest error. In
determining such amount, such Lender may use any reasonable averaging and
attribution methods. Notwithstanding anything to the contrary contained
herein, the Borrower shall not be required to make any payments to any
Lender or the Administrative Agent pursuant to this Section relating to any
period of time which is greater than 180 days prior to such Person's
request for additional payment except for retroactive application of such
law, rule or regulation, in which case the Borrower is required to make
such payments so long as such Person makes a request therefor within 180
days after the public announcement of such retroactive application.
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3.10 Inability To Determine Interest Rate.
If prior to the first day of any Interest Period, the Administrative Agent
shall have determined in good faith (which determination shall be conclusive and
binding upon the Borrower) that, by reason of circumstances affecting the
relevant market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period, the Administrative Agent shall give
telecopy or telephonic notice thereof to the Borrower and the Lenders as soon as
practicable thereafter, and will also give prompt written notice to the Borrower
when such conditions no longer exist. If such notice is given (a) any
Eurodollar Loans requested to be made on the first day of such Interest Period
shall be made as Base Rate Loans, (b) any Loans that were to have been converted
on the first day of such Interest Period to or continued as Eurodollar Loans
shall be converted to or continued as Base Rate Loans and (c) any outstanding
Eurodollar Loans shall be converted, on the first day of such Interest Period,
to Base Rate Loans. Until such notice is withdrawn by the Administrative Agent,
no further Eurodollar Loans shall be made or continued as such, nor shall the
Borrower have the right to convert Base Rate Loans to Eurodollar Loans.
3.11 Illegality.
Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
occurring after the Closing Date shall make it unlawful for any Lender to make
or maintain Eurodollar Loans as contemplated by this Credit Agreement, (a) such
Lender shall promptly give written notice of such circumstances to the Borrower
and the Administrative Agent (which notice shall be withdrawn whenever such
circumstances no longer exist), (b) the commitment of such Lender hereunder to
make Eurodollar Loans, continue Eurodollar Loans as such and convert a Base Rate
Loan to Eurodollar Loans shall forthwith be canceled and, until such time as it
shall no longer be unlawful for such Lender to make or maintain Eurodollar
Loans, such Lender shall then have a commitment only to make a Base Rate Loan
when a Eurodollar Loan is requested and (c) such Lender's Loans then outstanding
as Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans
on the respective last days or the then current Interest Periods with respect to
such Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the last day of the
then current Interest Period with respect thereto, the Borrower shall pay to
such Lender such amounts, if any, as may be required pursuant to Section 3.14.
3.12 Requirements of Law.
If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof applicable to any Lender, or compliance by
any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority, in each case made
subsequent to the Closing Date (or, if later, the date on which such Lender
becomes a Lender):
(a) shall subject such Lender to any tax of any kind whatsoever with
respect to any Letter of Credit, any Eurodollar Loans made by it or its
obligation to make Eurodollar Loans, or
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change the basis of taxation of payments to such Lender in respect thereof
(except for Non-Excluded Taxes covered by Section 3.13 (including Non-
Excluded Taxes imposed solely by reason of any failure of such Lender to
comply with its obligations under Section 3.13(b)) and changes in taxes
measured by or imposed upon the overall net income, or franchise taxes,
branch taxes, taxes on doing business or taxes on capital or net worth
(imposed in lieu of such net income tax), of such Lender or its applicable
lending office, branch, or any affiliate thereof);
(b) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender which is not otherwise included in the determination
of the Eurodollar Rate hereunder; or
(c) shall impose on such Lender any other condition (excluding any tax
of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, upon notice to the Borrower from such Lender,
through the Administrative Agent, in accordance herewith, the Borrower shall be
obligated to promptly pay such Lender, upon its demand, any additional amounts
necessary to compensate such Lender on an after-tax basis (after taking into
account applicable deductions and credits in respect of the amount indemnified)
for such increased cost or reduced amount receivable, provided that, in any such
case, the Borrower may elect to convert the Eurodollar Loans made by such Lender
hereunder to Base Rate Loans by giving the Administrative Agent at least one
Business Day's notice of such election, in which case the Borrower shall
promptly pay to such Lender, upon demand, without duplication, such amounts, if
any, as may be required pursuant to Section 3.14. If any Lender becomes
entitled to claim any additional amounts pursuant to this Section 3.12, it shall
provide prompt notice thereof to the Borrower, through the Administrative Agent,
certifying (x) that one of the events described in this Section 3.12 has
occurred and describing in reasonable detail the nature of such event, (y) as to
the increased cost or reduced amount resulting from such event and (z) as to the
additional amount demanded by such Lender and a reasonably detailed explanation
of the calculation thereof. Such a certificate as to any additional amounts
payable pursuant to this Section 3.12 submitted by such Lender, through the
Administrative Agent, to the Borrower shall be conclusive and binding on the
parties hereto in the absence of manifest error. This covenant shall survive
the termination of this Credit Agreement and the payment of the Loans and all
other amounts payable hereunder. Notwithstanding anything to the contrary
contained herein, the Borrower shall not be required to make any payments to any
Lender or the Administrative Agent pursuant to this Section relating to any
period of time which is greater than 180 days prior to such Person's request for
payment, except for retroactive application of such law, rule or regulation, in
which case the Borrower is required to make such payments so long as such Person
makes a request therefor within 180 days after the public announcement of such
retroactive application.
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3.13 Taxes.
(a) Except as provided below in this Section 3.13, all payments made
by the Borrower under this Credit Agreement and any Notes shall be made
free and clear of, and without deduction or withholding for or on account
of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any court, or
governmental body, agency or other official, excluding taxes measured by or
imposed upon the net income of any Lender or its applicable lending office,
or any branch or affiliate thereof, and all franchise taxes, branch taxes,
taxes on doing business or taxes on the capital or net worth of any Lender
or its applicable lending office, or any branch or affiliate thereof, in
each case imposed in lieu of net income taxes: (i) by the jurisdiction
under the laws of which such Lender, applicable lending office, branch or
affiliate is organized or is located, or in which its principal executive
office is located, or any nation within which such jurisdiction is located
or any political subdivision thereof; or (ii) by reason of any connection
between the jurisdiction imposing such tax and such Lender, applicable
lending office, branch or affiliate other than a connection arising solely
from such Lender having executed, delivered or performed its obligations,
or received payment under or enforced, this Credit Agreement or any Notes.
If any such non-excluded taxes, levies, imposts, duties, charges, fees,
deductions or withholdings ("Non-Excluded Taxes") are required to be
withheld from any amounts payable to an Agent or any Lender hereunder or
under any Notes, (A) the amounts so payable to an Agent or such Lender
shall be increased to the extent necessary to yield to an Agent or such
Lender (after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Credit Agreement and any Notes, provided, however, that the Borrower shall
be entitled to deduct and withhold any Non-Excluded Taxes and shall not be
required to increase any such amounts payable to any Lender that is not
organized under the laws of the United States of America or a state thereof
if such Lender fails to comply with the requirements of paragraph (b) of
this Section 3.13 whenever any Non-Excluded Taxes are payable by the
Borrower, and (B) as promptly as possible after requested the Borrower
shall send to such Agent for its own account or for the account of such
Lender, as the case may be, a certified copy of an original official
receipt received by the Borrower showing payment thereof or other
documentation reasonably acceptable to such Agent. If the Borrower fails
to pay any Non-Excluded Taxes when due to the appropriate taxing authority
or fails to remit to the Administrative Agent the required receipts or
other required documentary evidence, the Borrower shall indemnify the
Agents and any Lender for any incremental Non-Excluded Taxes, interest or
penalties that may become payable by an Agent or any Lender as a result of
any such failure. The agreements in this subsection shall survive the
termination of this Credit Agreement and the payment of the Loans and all
other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof shall:
(i) (A) on or before the date of any payment by the Borrower
under this Credit Agreement or Notes to such Lender, deliver to the
Borrower and the
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Administrative Agent (x) two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224, or successor applicable
form, as the case may be, certifying that it is entitled to receive
payments under this Credit Agreement and any Notes without deduction
or withholding of any United States federal income taxes and (y) an
Internal Revenue Service Form W-8 or W-9, or successor applicable
form, as the case may be, certifying that it is entitled to an
exemption from United States backup withholding tax;
(B) deliver to the Borrower and the Administrative Agent two
further copies of any such form or certification on or before the date
that any such form or certification expires or becomes obsolete and
after the occurrence of any event requiring a change in the most
recent form previously delivered by it to the Borrower; and
(C) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by the
Borrower or the Administrative Agent; or
(ii) in the case of any such Lender that is not a "bank" within
the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (A)
represent to the Borrower (for the benefit of the Borrower and the
Agents) that it is not a bank within the meaning of Section
881(c)(3)(A) of the Internal Revenue Code, (B) agree to furnish to the
Borrower, on or before the date of any payment by the Borrower, with a
copy to the Administrative Agent, two accurate and complete original
signed copies of Internal Revenue Service Form W-8, or successor
applicable form certifying to such Lender's legal entitlement at the
date of such certificate to an exemption from U.S. withholding tax
under the provisions of Section 881(c) of the Internal Revenue Code
with respect to payments to be made under this Credit Agreement and
any Notes (and to deliver to the Borrower and the Administrative Agent
two further copies of such form on or before the date it expires or
becomes obsolete and after the occurrence of any event requiring a
change in the most recently provided form and, if necessary, obtain
any extensions of time reasonably requested by the Borrower or the
Administrative Agent for filing and completing such forms), and (C)
agree, to the extent legally entitled to do so, upon reasonable
request by the Borrower, to provide to the Borrower (for the benefit
of the Borrower and the Agents) such other forms as may be reasonably
required in order to establish the legal entitlement of such Lender to
an exemption from withholding with respect to payments under this
Credit Agreement and any Notes.
Notwithstanding the above, if any change in treaty, law or regulation has
occurred after the date such Person becomes a Lender hereunder which
renders all such forms inapplicable or which would prevent such Lender from
duly completing and delivering any such form with respect to it and such
Lender so advises the Borrower and the Administrative Agent, then such
Lender shall be exempt from such requirements. Each Person that shall
become a Lender or a participant of a Lender pursuant to Section 11.3
shall, upon the effectiveness of the related
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transfer, be required to provide all of the forms, certifications and
statements required pursuant to this subsection (b); provided that in the
case of a participant of a Lender, the obligations of such participant of a
Lender pursuant to this subsection (b) shall be determined as if the
participant of a Lender were a Lender except that such participant of a
Lender shall furnish all such required forms, certifications and statements
to the Lender from which the related participation shall have been
purchased.
3.14 Compensation.
The Borrower promises to indemnify each Lender and to hold each Lender
harmless from any loss or expense which such Lender may sustain or incur as a
consequence of (a) default by the Borrower in making a borrowing of, conversion
into or continuation of Eurodollar Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Credit Agreement,
(b) default by the Borrower in making any prepayment of a Eurodollar Loan after
the Borrower has given a notice thereof in accordance with the provisions of
this Credit Agreement and (c) the making of a prepayment of Eurodollar Loans on
a day which is not the last day of an Interest Period with respect thereto.
Such indemnification may include an amount equal to (i) the amount of interest
which would have accrued on the amount so prepaid, or not so borrowed, converted
or continued, for the period from the date of such prepayment or of such failure
to borrow, convert or continue to the last day of the applicable Interest Period
(or, in the case of a failure to borrow, convert or continue, the Interest
Period that would have commenced on the date of such failure) in each case at
the applicable rate of interest for such Eurodollar Loans provided for herein
(excluding, however, the Applicable Percentage included therein, if any) minus
(ii) the amount of interest (as reasonably determined by such Lender) which
would have accrued to such Lender on such amount by placing such amount on
deposit for a comparable period with leading banks in the interbank Eurodollar
market. Upon the request of the Borrower, any Lender requesting indemnification
under this Section 3.14 shall provide written support for such claim; provided
that failure to provide such written support shall not impair a Lender's claim
hereunder. The agreements in this Section shall survive the termination of this
Credit Agreement and the payment of the Loans and all other amounts payable
hereunder.
3.15 Substitution of Lender.
If (a) the obligation of any Lender to make Eurodollar Loans has been
suspended pursuant to Section 3.11, (b) any Lender has demanded compensation
under Section 3.9, 3.11, 3.12 or 3.13, (c) any Lender has failed to fund its pro
rata portion of a Loan in accordance with the terms of Sections 2.1(c), 2.3(b)
or 2.4(b) or (d) any Lender fails to otherwise fulfill its obligations under the
Credit Documents (as such obligations may be amended from time to time in
accordance with Section 11.6), the Borrower shall have the right, with the
assistance of the Administrative Agent, to seek a mutually satisfactory
substitute lender or lenders. Any substitution under this Section 3.15 may be
accomplished, at the Borrower's option, either (i) by the replaced Lender
assigning its rights and obligations hereunder to a replacement lender or
lenders pursuant to Section 11.3(b) at a mutually agreeable price or (ii) by the
Borrower's prepaying all outstanding Loans and LOC Obligations from the replaced
Lender and terminating such Lender's Commitment on a date specified in a notice
delivered to the Administrative Agent and the replaced Lender at least three
Business Days before the date so specified (and
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compensating such Lender for any resulting funding losses as provided in Section
3.14 but otherwise without premium or penalty) and concurrently a replacement
Lender or Lenders assuming a Commitment in an amount equal to the Commitment
being terminated and making Loans in the same aggregate amount and having the
same maturity date or dates, respectively, as the Loans being prepaid, all
pursuant to documents reasonably satisfactory to the Administrative Agent (and
in the case of any document to be signed by the replaced Lender, reasonably
satisfactory to such Lender). No such substitution shall relieve the Borrower of
its obligations to compensate and/or indemnify the replaced Lender as required
by Section 3.9, 3.11, 3.12, 3.13 or 3.14 with respect to the period before it is
replaced and to pay all accrued interest, accrued fees and other amounts owing
to the replaced Lender hereunder (subject to offset for amounts paid by Borrower
in connection with a Lender's failure to fund). Notwithstanding anything to the
contrary contained herein, the Borrower shall not be required to make any
payments to any Lender or the Administrative Agent pursuant to this Section
relating to any period of time which is greater than 180 days prior to such
Person's request for payment.
3.16 Evidence of Debt.
(a) Each Lender shall maintain an account or accounts evidencing each
Loan made by such Lender to the Borrower from time to time, including the
amounts of principal and interest payable and paid to such Lender from time
to time under this Credit Agreement. Each Lender will make reasonable
efforts to maintain the accuracy of its account or accounts and to promptly
update its account or accounts from time to time, as necessary.
(b) The Administrative Agent shall maintain the Register pursuant to
Section 11.3(c), and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount, type and
Interest Period of each such Loan hereunder, (ii) the amount of any
principal or interest due and payable or to become due and payable to each
Lender hereunder, and (iii) the amount of any sum received by the
Administrative Agent hereunder from or for the account of the Borrower and
each Lender's share thereof, if any. The Administrative Agent will make
reasonable efforts to maintain the accuracy of the subaccounts referred to
in the preceding sentence and to promptly update such subaccounts from time
to time, as necessary.
(c) The entries made in the accounts, Register and subaccounts
maintained pursuant to subsection (b) of this Section 3.16 (and, if
consistent with the entries of the Administrative Agent, subsection (a))
shall be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain such account,
such Register, or such subaccount, as applicable, or any error therein,
shall not in any manner affect the obligation of the Borrower to repay the
Loans made by such Lender in accordance with the terms hereof.
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SECTION 4
GUARANTY
4.1 Guaranty of Payment.
Subject to Section 4.7 below, each of the Guarantors hereby, jointly and
severally, unconditionally guarantees to each Lender, each Affiliate of Lender
that enters into a Hedging Agreement and the Agents the prompt payment of the
Credit Party Obligations in full when due (whether at stated maturity, as a
mandatory prepayment, by acceleration or otherwise). This Guaranty is a guaranty
of payment and not of collection and is a continuing guaranty and shall apply to
all Credit Party Obligations whenever arising.
4.2 Obligations Unconditional.
The obligations of the Guarantors hereunder are absolute and unconditional,
irrespective of the value, genuineness, validity, regularity or enforceability
of any of the Credit Documents or the Hedging Agreements, or any other agreement
or instrument referred to therein, to the fullest extent permitted by applicable
law, irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor.
Each Guarantor agrees that this Guaranty may be enforced by the Lenders without
the necessity at any time of resorting to or exhausting any other security or
collateral and without the necessity at any time of having recourse to the Notes
or any other of the Credit Documents or any collateral, if any, hereafter
securing the Credit Party Obligations or otherwise and each Guarantor hereby
waives the right to require the Lenders to proceed against the Borrower or any
other Person (including a co-guarantor) or to require the Lenders to pursue any
other remedy or enforce any other right. Each Guarantor further agrees that it
shall have no right of subrogation, indemnity, reimbursement or contribution
against the Borrower or any other Guarantor of the Credit Party Obligations for
amounts paid under this Guaranty until such time as the Lenders (and any
Affiliates of Lenders entering into Hedging Agreements) have been paid in full,
all Commitments under the Credit Agreement have been terminated and no Person or
Governmental Authority shall have any right to request any return or
reimbursement of funds from the Lenders in connection with monies received under
the Credit Documents. Each Guarantor further agrees that nothing contained
herein shall prevent the Lenders from suing on the Notes or any of the other
Credit Documents or any of the Hedging Agreements or foreclosing its security
interest in or Lien on any collateral, if any, securing the Credit Party
Obligations or from exercising any other rights available to it under this
Credit Agreement, the Notes, any other of the Credit Documents, or any other
instrument of security, if any, and the exercise of any of the aforesaid rights
and the completion of any foreclosure proceedings shall not constitute a
discharge of any of any Guarantor's obligations hereunder; it being the purpose
and intent of each Guarantor that its obligations hereunder shall be absolute,
independent and unconditional under any and all circumstances. Neither any
Guarantor's obligations under this Guaranty nor any remedy for the enforcement
thereof shall be impaired, modified, changed or released in any manner
whatsoever by an impairment, modification, change, release or limitation of the
liability of the Borrower or by reason of the bankruptcy or insolvency of the
Borrower. Each Guarantor waives any and all notice of the creation, renewal,
extension or accrual of any of the Credit Party Obligations and notice of or
proof of
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reliance of by any Agent or any Lender upon this Guarantee or acceptance of this
Guarantee. The Credit Party Obligations, and any of them, shall conclusively be
deemed to have been created, contracted or incurred, or renewed, extended,
amended or waived, in reliance upon this Guarantee. All dealings between the
Borrower and any of the Guarantors, on the one hand, and the Agents and the
Lenders, on the other hand, likewise shall be conclusively presumed to have been
had or consummated in reliance upon this Guarantee. The Guarantors further agree
to all rights of set-off as set forth in Section 11.2.
4.3 Modifications.
Each Guarantor agrees that (a) all or any part of the Collateral now or
hereafter held for the Credit Party Obligations, if any, may be exchanged,
compromised or surrendered from time to time; (b) the Lenders shall not have any
obligation to protect, perfect, secure or insure any such security interests,
liens or encumbrances now or hereafter held, if any, for the Credit Party
Obligations or the properties subject thereto; (c) the time or place of payment
of the Credit Party Obligations may be changed or extended, in whole or in part,
to a time certain or otherwise, and may be renewed or accelerated, in whole or
in part; (d) the Borrower and any other party liable for payment under the
Credit Documents may be granted indulgences generally; (e) any of the provisions
of the Notes or any of the other Credit Documents may be modified, amended or
waived; (f) any party (including any co-guarantor) liable for the payment
thereof may be granted indulgences or be released; and (g) any deposit balance
for the credit of the Borrower or any other party liable for the payment of the
Credit Party Obligations or liable upon any security therefor may be released,
in whole or in part, at, before or after the stated, extended or accelerated
maturity of the Credit Party Obligations, all without notice to or further
assent by such Guarantor, which shall remain bound thereon, notwithstanding any
such exchange, compromise, surrender, extension, renewal, acceleration,
modification, indulgence or release.
4.4 Waiver of Rights.
Each Guarantor expressly waives to the fullest extent permitted by
applicable law: (a) notice of acceptance of this Guaranty by the Lenders and of
all extensions of credit to the Borrower by the Lenders; (b) presentment and
demand for payment or performance of any of the Credit Party Obligations; (c)
protest and notice of dishonor or of default (except as specifically required in
the Credit Agreement) with respect to the Credit Party Obligations or with
respect to any security therefor; (d) notice of the Lenders obtaining, amending,
substituting for, releasing, waiving or modifying any security interest, lien or
encumbrance, if any, hereafter securing the Credit Party Obligations, or the
Lenders' subordinating, compromising, discharging or releasing such security
interests, liens or encumbrances, if any; (e) all other notices to which such
Guarantor might otherwise be entitled; and (f) demand for payment under this
Guaranty.
4.5 Reinstatement.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit Party
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and
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each Guarantor agrees that it will indemnify the Agents and each Lender promptly
upon demand for all reasonable costs and expenses (including, without
limitation, reasonable fees of counsel) incurred by an Agent or such Lender in
connection with such rescission or restoration, including any such costs and
expenses incurred in defending against any claim alleging that such payment
constituted a preference, fraudulent transfer or similar payment under any
bankruptcy, insolvency or similar law. Upon the request of the Borrower, an
Agent or a Lender will provide written support for any claim made pursuant to
this Section 4.5; provided that failure to provide such written support shall
not impair a Lender's or an Agent's claim hereunder.
4.6 Remedies.
The Guarantors agree that, as between the Guarantors, on the one hand, and
the Agents and the Lenders, on the other hand, the Credit Party Obligations may
be declared to be forthwith due and payable as provided in Section 9 (and shall
be deemed to have become automatically due and payable in the circumstances
provided in Section 9) notwithstanding any stay, injunction or other prohibition
preventing such declaration (or preventing such Credit Party Obligations from
becoming automatically due and payable) as against any other Person and that, in
the event of such declaration (or such Credit Party Obligations being deemed to
have become automatically due and payable), such Credit Party Obligations
(whether or not due and payable by any other Person) shall forthwith become due
and payable by the Guarantors. The Guarantors acknowledge and agree that their
obligations hereunder are secured in accordance with the terms of the Security
Agreement and the other Collateral Documents and that the Lenders may exercise
their remedies thereunder in accordance with the terms thereof.
4.7 Limitation of Guaranty.
Notwithstanding any provision to the contrary contained herein or in any of
the other Credit Documents, to the extent the obligations of any Guarantor shall
be adjudicated to be invalid or unenforceable for any reason (including, without
limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of such Guarantor
hereunder shall be limited to the maximum amount that is permissible under
applicable law (whether federal or state and including, without limitation, the
Bankruptcy Code).
4.8 Rights of Contribution.
The Credit Parties agree among themselves that, in connection with payments
made hereunder, each Credit Party shall have contribution rights against the
other Credit Parties as permitted under applicable law. Such contribution
rights shall be subordinate and subject in right of payment to the obligations
of the Credit Parties under the Credit Documents and no Credit Party shall
exercise such rights of contribution until all Credit Party Obligations (other
than any such obligations which by the terms thereof are stated to survive
termination of the Credit Documents) have been paid in full and the Commitments
terminated.
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SECTION 5
CONDITIONS PRECEDENT
--------------------
5.1 Closing Conditions.
The obligation of the Lenders to enter into this Credit Agreement and make
the initial Extension of Credit is subject to satisfaction (or waiver by the
Administrative Agent with the consent of the Required Lenders) of the following
conditions:
(a) Executed Credit Documents. Receipt by the Administrative Agent of
duly executed copies of: (i) this Credit Agreement; (ii) the Notes; (iii)
the Collateral Documents; and (iv) all other Credit Documents, each in form
and substance reasonably acceptable to the Administrative Agent and the
Lenders; provided that, receipt by the Administrative Agent of an executed
signature page to this Credit Agreement from a Lender shall be deemed
approval by such Lender of the form and substance of the Credit Documents.
(b) Authority Documents.
(i) With respect to each Credit Party that is a corporation,
receipt by the Administrative Agent of the following:
(A) Charter Documents. Copies of the articles or
certificates of incorporation or other charter documents of such
Credit Party certified to be true and complete as of a recent
date by the appropriate Governmental Authority of the state or
other jurisdiction of its incorporation and certified by a
secretary or assistant secretary of such Credit Party to be true
and correct as of the Effective Date.
(B) Bylaws. A copy of the bylaws of such Credit Party
certified by a secretary or assistant secretary of such Credit
Party to be true and correct as of the Effective Date.
(C) Resolutions. Copies of resolutions of the Board of
Directors of such Credit Party approving and adopting the Credit
Documents to which it is a party, the transactions contemplated
therein and authorizing execution and delivery thereof, certified
by a secretary or assistant secretary of such Credit Party to be
true and correct and in force and effect as of the Effective
Date.
(D) Good Standing. Copies of certificates of good standing,
existence or its equivalent with respect to such Credit Party
certified as of a recent date by the appropriate Governmental
Authorities of the state or other jurisdiction of incorporation
and each other jurisdiction in which the failure to so qualify
and be in good standing could reasonably be expected to have a
Material
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Adverse Effect on the business or operations of such
Credit Party in such jurisdiction.
(E) Incumbency. An incumbency certificate of such Credit
Party certified by a secretary or assistant secretary of such
Credit Party to be true and correct as of the Effective Date.
(ii) With respect to each Credit Party that is a limited
liability company, receipt by the Administrative Agent of the
following:
(A) Certificate of Formation. A copy of the certificate of
formation of such Credit Party certified to be true and complete
as of a recent date by the appropriate Governmental Authority of
the state or jurisdiction of its formation and certified by the
sole member of such Credit Party to be true and correct as of the
Effective Date.
(B) LLC Agreement. A copy of the limited liability company
or operating agreement of such Credit Party certified by the sole
member of such Credit Party to be true and correct as of the
Effective Date.
(C) Resolutions. Copies of resolutions approving and
adopting the Credit Documents to which it is a party, the
transactions contemplated therein and authorizing execution and
delivery thereof, certified by the sole member of such Credit
Party to be true and correct and in force and effect as of the
Effective Date.
(D) Good Standing. Copies of certificates of good standing,
existence or its equivalent with respect to such Credit Party
certified as of a recent date by the appropriate Governmental
Authorities of the state or other jurisdiction of formation and
each other jurisdiction in which the failure to so qualify and be
in good standing could have a Material Adverse Effect on the
business or operations of such Credit Party in such jurisdiction.
(E) Incumbency. An incumbency certificate of such Credit
Party certified by the sole member of such Credit Party to be
true and correct as of the Effective Date.
(c) Opinion of Counsel. Receipt by the Administrative Agent of an
opinion or opinions from legal counsel to the Credit Parties (which shall
cover, among other things, authority, legality, validity, binding effect,
and enforceability of the Credit Documents and the Merger Agreement and the
attachment, perfection, and validity of Liens), reasonably satisfactory to
the Administrative Agent, addressed to the Administrative Agent and the
Lenders and dated as of the Effective Date.
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(d) Financial Statements. Receipt by the Lenders of such financial
information regarding the Credit Parties and their Subsidiaries (including
without limitation Peoples) as they may request, including, but not limited
to, (i) the consolidated financial statements of the Borrower and its
Subsidiaries and Peoples and its Subsidiaries for their three most recently
ended fiscal years, including balance sheets, income statements and cash
flow statements audited by independent public accountants of recognized
national standing and prepared in accordance with GAAP, (ii) the Form 10-Q
filed with the Securities Exchange Commission by the Borrower and its
Subsidiaries and Peoples and its Subsidiaries for the three-month, six-
month and nine-month periods ended March 31, 1998, June 30, 1998 and
September 30, 1998, as applicable, (iii) interim unaudited monthly
financial statements for the Borrower and its Subsidiaries and Peoples and
its Subsidiaries, prepared in accordance with GAAP (subject to normal year-
end adjustments and the absence of footnotes), for the trailing twelve-
months ended as of the most recently available month end prior to the
Closing Date, and (iv) pro forma projected quarterly financial statements
of the Borrower and its Subsidiaries and Peoples and its Subsidiaries for
the first four fiscal quarters following the Closing Date, which (A) assume
that the Peoples Merger has been consummated, (B) give effect to the Loans
contemplated hereby and (C) reflect estimated accounting adjustments as a
consequence thereof.
(e) Peoples Merger. (i) Receipt by the Administrative Agent of
evidence that the Borrower or a Subsidiary of the Borrower has merged with
Peoples and that the shares of the Parent have been exchanged for the
shares of Peoples for consideration acceptable to the Administrative Agent;
(ii) the Administrative Agent's satisfactory review of the executed Merger
Agreement (including all exhibits and schedules thereto), which shall not
be altered, amended or supplemented, or any condition or provision waived,
without the prior written consent of the Administrative Agent, such consent
not to be unreasonably withheld; (iii) the Merger Agreement shall have been
consummated in accordance with the terms thereof and in compliance with
applicable law and all necessary regulatory approvals; and (iv) receipt and
satisfactory review by the Administrative Agent of such other information
regarding the Peoples Merger and Peoples as the Administrative Agent may
reasonably require.
(f) Ownership and Capital Structure. Receipt of evidence and
information satisfactory to the Administrative Agent regarding (i) the
documentation to be entered into by and among the Credit Parties, their
shareholders, and/or any officers, directors or managers of any Credit
Parties relating to the Peoples Merger and the transactions in connection
therewith and with this Agreement, and (ii) the capital and ownership
structure of the Credit Parties and their Subsidiaries after giving effect
to the Peoples Merger and the transactions in connection therewith and with
this Agreement.
(g) Peoples' 12.25% Senior Notes Due 2002. Receipt of evidence
satisfactory to the Administrative Agent that 100% of the $100 million
aggregate outstanding principal amount of Peoples' 12.25% Senior Notes due
2002 have been tendered pursuant to a tender offer on terms reasonably
satisfactory to the Administrative Agent in its reasonable discretion.
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(h) Personal Property Collateral. The Collateral Agent shall have
received, in form and substance reasonably satisfactory to the Collateral
Agent:
(i) searches of Uniform Commercial Code ("UCC") filings in the
jurisdiction of the chief executive office of each Credit Party and
each jurisdiction where any Collateral is located and where a filing
would need to be made in order to perfect the Lenders' security
interest in the Collateral, copies of the financing statements on file
in such jurisdictions and evidence that no Liens exist other than
Permitted Liens;
(ii) duly executed UCC financing statements for each appropriate
jurisdiction as is necessary, in the Collateral Agent's sole
discretion, to perfect the Lenders' security interest in the
Collateral;
(iii) searches of ownership of intellectual property in the
appropriate governmental offices as requested by the Collateral Agent
and such patent, trademark and copyright filings as requested by the
Collateral Agent;
(iv) all stock certificates evidencing the stock pledged to the
Collateral Agent pursuant to the Pledge Agreements (other than the
shares evidencing the ownership of Peoples), together with duly
executed in blank undated stock powers attached thereto (it being
understood that such pledged stock shall not include the shares of
common stock of Global Telecommunications Solutions and of Shared
Technologies Cellular, Inc. owned by Peoples immediately prior to the
Peoples Merger); and
(v) all instruments and chattel paper in the possession of a
Credit Party, as required by the Security Agreement, together with
allonges or assignments as may be necessary to perfect the Lenders'
security interest in such Collateral.
(i) Evidence of Insurance. Receipt by the Collateral Agent of copies
of certificates of insurance of the Credit Parties evidencing liability and
casualty insurance meeting the requirements set forth in the Credit
Documents, including, but not limited to, naming the Collateral Agent as
additional insured or loss payee on behalf of the Lenders.
(j) Consents. Receipt by the Administrative Agent of evidence that
(A) all governmental, shareholder and third party consents (including ▇▇▇▇-
▇▇▇▇▇-▇▇▇▇▇▇ clearance) and approvals necessary in connection with the
Peoples Merger and the related financings and transactions contemplated
thereby and hereby have been received, (B) all waiting periods applicable
to any of the Credit Parties in connection with the Peoples Merger have
expired without any action being taken by any Person that could restrain,
prevent or impose any material adverse condition on any Credit Party
(including, without limitation, Peoples), and (C) no condition or
Requirement of Law exists which could reasonably be likely to restrain,
prevent or impose any material adverse conditions on the Peoples Merger or
ownership of Peoples by the Borrower or the financings or other
transactions contemplated hereby.
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(k) Litigation. There shall not exist any pending or, to the
knowledge of any Credit Party, threatened action, suit, investigation or
proceeding against a Credit Party or any of their Subsidiaries that could
reasonably be expected to have a Material Adverse Effect; provided,
however, (i) the pendency, prior to final determination, of any appeal or
reconsideration on remand of the Second Report and Order issued by the
Federal Communications Commission in CC Docket No. 96-128, Implementation
of Pay Telephone Reclassification and Compensation Provisions of the
Telecommunications Act of 1996, which was released on October 9, 1997, and
(ii) the existence (based on the facts known to the Lenders as of the
Closing Date), in and of itself, of the litigation between Davel, Davel
Holdings, Inc., Peoples Telephone Company, Inc. and Phonetel Technologies,
Inc. (Docket ▇▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ of Delaware, Newcastle
County) shall not constitute a Material Adverse Effect for purposes of this
Section 5.1(k) or Section 5.1(p).
(l) Officer's Certificates. The Administrative Agent shall have
received a certificate or certificates executed by a Responsible Officer of
the Borrower as of the Effective Date stating that, among other things, (i)
the Credit Parties and each of their Subsidiaries are in compliance with
all existing material financial obligations after giving effect to the
Peoples Merger and the transactions contemplated hereby, (ii) no action,
suit, investigation or proceeding is pending or, to the knowledge of any
Credit Party, threatened in any court or before any arbitrator or
governmental instrumentality that purports to affect the Credit Parties,
any of their Subsidiaries or any transaction contemplated by the Credit
Documents, if such action, suit, investigation or proceeding could
reasonably be expected to have a Material Adverse Effect; provided,
however, (a) the pendency, prior to final determination, of any appeal or
reconsideration on remand of the Second Report and Order issued by the
Federal Communications Commission in CC Docket No. 96-128, Implementation
of Pay Telephone Reclassification and Compensation Provisions of the
Telecommunications Act of 1996, which was released on October 9, 1997, and
(b) the existence (based on the facts known to the Lenders as of the
Closing Date), in and of itself, of the litigation between Davel, Davel
Holdings, Inc., Peoples Telephone Company, Inc. and Phonetel Technologies,
Inc. (Docket ▇▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ of Delaware, Newcastle
County) shall not constitute a Material Adverse Effect, (iii) the financial
statements and information delivered to the Administrative Agent on or
before the Effective Date were prepared in good faith and in accordance
with GAAP (subject, for financial statements other than year-end financial
statements, to normal year-end adjustments and the absence of footnotes),
(iv) since December 31, 1997, there has been no development or event
relating to or affecting a Credit Party or any of its Subsidiaries which
has had or would be reasonably expected to have a Material Adverse Effect;
provided, however, (a) the pendency, prior to final determination, of any
appeal or reconsideration on remand of the Second Report and Order issued
by the Federal Communications Commission in CC Docket No. 96-128,
Implementation of Pay Telephone Reclassification and Compensation
Provisions of the Telecommunications Act of 1996, which was released on
October 9, 1997, and (b) the existence (based on the facts known to the
Lenders as of the Closing Date), in and of itself, of the litigation
between Davel, Davel Holdings, Inc., Peoples Telephone Company, Inc. and
Phonetel Technologies, Inc. (Docket ▇▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ of
Delaware, Newcastle County) shall not constitute a Material Adverse Effect,
(v) the Peoples Merger has been
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consummated in accordance with the terms of the Merger Agreement and is
effective, (vi) as of the Effective Date, each of the representations and
warranties made in the Merger Agreement by each of the parties thereto is
true and correct in all material respects and (vii) immediately after
giving effect to the Peoples Merger, this Credit Agreement, the other
Credit Documents and all the transactions contemplated therein to occur on
such date, (A) each Credit Party and each of their Subsidiaries is Solvent,
(B) no Default or Event of Default exists, (C) all representations and
warranties contained herein and in the other Credit Documents are true and
correct in all material respects, and (D) the Credit Parties are in
compliance with each of the financial covenants set forth in Section 7.2.
(m) Transfers of FCC Licenses and State Licenses. Unless the failure
to do so would not cause or be reasonably expected to cause a Material
Adverse Effect, (i) all necessary FCC Licenses and State Licenses with
respect to the Telephones to be acquired in connection with the Peoples
Merger shall be in full force and effect and all conditions to the transfer
of such FCC Licenses and State Licenses shall have been satisfied, (ii) the
FCC Consents and State Consents shall have been obtained and (iii) the FCC
Consents and State Consents and all other Governmental Approvals from the
FCC and any state in which a Telephone is located required in connection
with the Peoples Merger shall not have been reversed, stayed, enjoined, set
aside, annulled or suspended and the time for filing a request for
administrative or judicial relief with respect to such consent, or for
instituting administrative review thereof sua sponte, shall have expired
without any such filing having been made or notice of such review having
been issued, or, in the event of such filing or review sua sponte, such
filing or review sua sponte shall have been disposed of favorably to the
grant of such consent and the time for seeking further relief with respect
thereto shall have expired without any request for such further relief
having been filed.
(n) Fees and Expenses. Payment by the Credit Parties of the fees and
expenses owed by them, as set forth in the Fee Letters.
(o) Compliance with Regulations U, T and X. Receipt by the
Administrative Agent of evidence that the Credit Parties and their
Subsidiaries are in compliance with all applicable requirements of
Regulations U, T and X of the Board of Governors of the Federal Reserve
System.
(p) Material Adverse Effect. No Material Adverse Effect and no
material adverse change in the facts and information regarding the Credit
Parties and their Subsidiaries provided to the Agents and the Lenders shall
have occurred since December 31, 1997.
(q) Prior Credit Agreements. Receipt by the Administrative Agent of
evidence that: (i) (A) the Credit Agreement, dated as of February 3, 1998,
among Davel, NationsBank, N.A., as administrative agent, SunTrust Bank,
Tampa Bay, as documentation agent, LaSalle National Bank, as co-agent and
the lenders party thereto and (B) the Fourth Amended and Restated Loan and
Security Agreement, dated as of July 10, 1995, among Peoples, Bank Austria
Creditanstalt Corporate Finance, Inc., the assignee of Creditanstalt-
Bankverein, as agent and
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the lenders party thereto (as amended or modified from time to time,
collectively the "Prior Credit Agreements"), and all documents executed or
delivered in connection with the Prior Credit Agreements, have been
terminated, and (ii) all amounts owing in connection with the Prior Credit
Agreements have been paid in full on the Effective Date and all liens
granted in connection therewith have been or are agreed to be released upon
such repayment in full.
(r) Other. Receipt and satisfactory review by the Administrative
Agent and its counsel of such other documents, instruments, agreements or
information as reasonably and timely requested by the Administrative Agent
or its counsel or any Lender, including, but not limited to, shareholder
agreements and information regarding management of the Credit Parties and
their Subsidiaries, litigation, tax, accounting, labor, insurance, pension
liabilities (actual or contingent), real estate leases, material contracts,
debt agreements, property ownership and contingent liabilities of the
Credit Parties and their Subsidiaries (including without limitation such
information regarding Peoples as the Administrative Agent or its counsel
may reasonably request).
5.2 Conditions to All Extensions of Credit.
--------------------------------------
In addition to the conditions precedent stated elsewhere herein, the
Lenders shall not be obligated to make Loans nor shall an Issuing Lender be
required to issue or extend a Letter of Credit unless:
(a) Notice. The Borrower shall have delivered (i) in the case of any
new Revolving Loan, a Notice of Borrowing, duly executed and completed, by
the time specified in Section 2.1 and (ii) in the case of any Letter of
Credit, the Issuing Lender shall have received an appropriate request for
issuance in accordance with the provisions of Section 2.2.
(b) Representations and Warranties. The representations and
warranties made by the Credit Parties in any Credit Document are true and
correct in all material respects at and as if made as of such date except
to the extent they expressly relate to an earlier date;
(c) No Default. No Default or Event of Default shall exist or be
continuing either prior to or after giving effect thereto; and
(d) Availability. Immediately after giving effect to the making of a
Loan (and the application of the proceeds thereof) or to the issuance of a
Letter of Credit, as the case may be, the sum of the Revolving Loans
outstanding plus LOC Obligations outstanding shall not exceed the Revolving
Commitment Amount.
The delivery of each Notice of Borrowing and each request for a Letter of Credit
shall constitute a representation and warranty by the Borrower of the
correctness of the matters specified in subsections (b), (c) and (d) above.
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SECTION 6
REPRESENTATIONS AND WARRANTIES
------------------------------
The Credit Parties hereby represent to the Administrative Agent and each
Lender that:
6.1 Financial Condition.
-------------------
(a) The financial statements delivered to the Lenders prior to the
Effective Date and pursuant to Section 7.1(a) and (b): (i) have been
prepared in accordance with GAAP (subject, in the case of financial
statements other than year-end financial statements, to normal year-end
adjustments and the absence of footnotes), and (ii) present fairly in all
material respects (on the basis disclosed in the footnotes to such
financial statements, if any) the consolidated and consolidating (as
applicable) financial condition, results of operations and cash flows of
the Credit Parties and their Subsidiaries as of such date and for such
periods.
(b) Since December 31, 1997, there has been no sale, transfer or other
disposition by any Credit Party or any of their Subsidiaries of any
material part of the business or Property of the Credit Parties, taken as a
whole, and no purchase or other Acquisition (other than the Peoples Merger
and the acquisition of Communications Central Inc.) by any of them of any
business or Property (including any Capital Stock of any other Person)
material in relation to the consolidated financial condition of the Credit
Parties, taken as a whole, in each case which is not (i) reflected in the
most recent financial statements delivered to the Lenders pursuant to
Section 7.1 or in the notes thereto or (ii) otherwise permitted by the
terms of this Credit Agreement and communicated to the Administrative
Agent.
6.2 No Material Change.
------------------
Since December 31, 1997, there has been no development or event relating to
or affecting a Credit Party or any of their Subsidiaries which has had or would
be reasonably expected to have a Material Adverse Effect; provided, however, (a)
the pendency, prior to final determination, of any appeal or reconsideration on
remand of the Second Report and Order issued by the Federal Communications
Commission in CC Docket No. 96-128, Implementation of Pay Telephone
Reclassification and Compensation Provisions of the Telecommunications Act of
1996, which was released on October 9, 1997, and (b) the existence (based on the
facts known to the Lenders as of the Closing Date), in and of itself, of the
litigation between Davel, Davel Holdings, Inc., Peoples Telephone Company, Inc.
and Phonetel Technologies, Inc. (Docket ▇▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ of
Delaware, Newcastle County) shall not constitute a Material Adverse Effect for
purposes of this Section 6.2.
6.3 Organization and Good Standing.
------------------------------
Each Credit Party (a) is a corporation or limited liability company duly
incorporated or organized, validly existing and in good standing under the laws
of the State (or other jurisdiction) of its incorporation or organization, (b)
is duly qualified and in good standing as a foreign corporation or
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limited liability company and authorized to do business in every jurisdiction
unless the failure to be so qualified, in good standing or authorized could
reasonably be expected to have a Material Adverse Effect and (c) has the
requisite corporate or limited liability company power and authority to own its
properties and to carry on its business as now conducted and as proposed to be
conducted.
6.4 Due Authorization.
-----------------
Each Credit Party (a) has the requisite corporate or limited liability
company power and authority to execute, deliver and perform this Credit
Agreement and the other Credit Documents to which it is a party and to incur the
obligations herein and therein provided for and (b) is duly authorized to, and
has been authorized by all necessary corporate or limited liability company
action, to execute, deliver and perform this Credit Agreement and the other
Credit Documents to which it is a party.
6.5 No Conflicts.
------------
Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor performance of and
compliance with the terms and provisions thereof by such Credit Party will (a)
violate or conflict with any provision of its articles or certificate of
incorporation, operating agreement, articles of organization or bylaws, (b)
violate, contravene or materially conflict with any Requirement of Law or any
other law, regulation (including, without limitation, Regulation U, Regulation T
or Regulation X), order, writ, judgment, injunction, decree or permit applicable
to it, (c) violate, contravene or conflict with contractual provisions of, or
cause an event of default under, any indenture, loan agreement, mortgage, deed
of trust, contract or other agreement or instrument to which it is a party or by
which it may be bound, the violation of which could reasonably be expected to
have a Material Adverse Effect, or (d) result in or require the creation of any
Lien (other than those contemplated in or created in connection with the Credit
Documents) upon or with respect to its properties.
6.6 Consents.
--------
Except for consents, approvals, authorizations and filings and
registrations which have been obtained, no consent, approval, authorization or
order of, or filing, registration or qualification with, any court or
Governmental Authority or third party in respect of any Credit Party is required
in connection with the execution, delivery or performance of this Credit
Agreement or any of the other Credit Documents by such Credit Party.
6.7 Enforceable Obligations.
-----------------------
This Credit Agreement and the other Credit Documents have been duly
executed and delivered and constitute legal, valid and binding obligations of
each Credit Party enforceable against such Credit Party in accordance with their
respective terms, except as may be limited by bankruptcy, insolvency,
reorganization or moratorium laws or similar laws relating to or affecting
creditors' rights generally or by general equitable principles.
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6.8 No Default.
----------
No Credit Party, nor any of their Subsidiaries, is in default in any
respect under any contract, lease, loan agreement, indenture, mortgage, security
agreement or other agreement or obligation to which it is a party or by which
any of its properties is bound which default could reasonably be expected to
have a Material Adverse Effect. No Default or Event of Default has occurred or
exists except as previously disclosed in writing to the Lenders.
6.9 Ownership.
---------
Each Credit Party, and each of its Subsidiaries, is the owner of, and has
good and marketable title to, or has a valid license or lease to use all of its
respective assets (including, without limitation, its Intellectual Property (as
defined in Section 6.19)) and none of such assets is subject to any Lien other
than Permitted Liens.
6.10 Indebtedness.
------------
The Credit Parties and their Subsidiaries have no Indebtedness except (a)
as disclosed in the financial statements referenced in Section 6.1, (b) as set
forth on Schedule 6.10 and (c) as otherwise permitted by this Credit Agreement.
6.11 Litigation.
----------
There are no actions, suits or legal, equitable, arbitration or
administrative proceedings, pending or, to the knowledge of any Credit Party,
threatened against, any Credit Party or any of its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect; provided, however, (a)
the pendency, prior to final determination, of any appeal or reconsideration on
remand of the Second Report and Order issued by the Federal Communications
Commission in CC Docket No. 96-128, Implementation of Pay Telephone
Reclassification and Compensation Provisions of the Telecommunications Act of
1996, which was released on October 9, 1997, and (b) the existence (based on the
facts known to the Lenders as of the Closing Date), in and of itself, of the
litigation between Davel, Davel Holdings, Inc., Peoples Telephone Company, Inc.
and Phonetel Technologies, Inc. (Docket ▇▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ of
Delaware, Newcastle County) shall not constitute a Material Adverse Effect for
purposes of this Section 6.11.
6.12 Taxes.
-----
Each Credit Party, and each of its Subsidiaries, has filed, or caused to be
filed, all material tax returns (federal, state, local and foreign) required to
be filed and paid or caused to be paid (a) all material amounts of taxes shown
thereon to be due and payable (including interest and penalties) and (b) all
material other taxes, fees, assessments and other governmental charges
(including mortgage recording taxes, documentary stamp taxes and intangibles
taxes) that are due and payable, except for such taxes (i) which are not yet
delinquent or (ii) that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP. To the knowledge of
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the Credit Parties, there are no material amounts claimed to be due against any
of them by any Governmental Authority.
6.13 Compliance with Law.
-------------------
Each Credit Party, and each of its Subsidiaries, is in compliance with all
Requirements of Law and all other laws, rules, regulations, orders and decrees
(including without limitation Environmental Laws) applicable to it, or to its
properties, unless such failure to comply could not reasonably be expected to
have a Material Adverse Effect.
6.14 ERISA.
-----
Except as would not result or be reasonably expected to result in a
Material Adverse Effect:
(a) During the five-year period prior to the date on which this
representation is made or deemed made: (i) no Termination Event has
occurred, and, to the knowledge of the Credit Parties, no event or
condition has occurred or exists as a result of which any Termination Event
is reasonably expected to occur, with respect to any Plan; (ii) no
"accumulated funding deficiency," as such term is defined in Section 302 of
ERISA and Section 412 of the Code, whether or not waived, has occurred with
respect to any Plan; (iii) each Plan has been maintained, operated, and
funded in compliance with its own terms and in material compliance with the
provisions of ERISA, the Code, and any other applicable federal or state
laws; and (iv) no lien in favor or the PBGC or a Plan has arisen or is
reasonably expected to arise on account of any Plan.
(b) The actuarial present value of all "benefit liabilities" (within
the meaning of Section 4001 of ERISA) under each Single Employer Plan
(determined, utilizing the actuarial assumptions used to fund such Plans),
whether or not vested, did not, as of the last annual valuation date prior
to the date on which this representation is made or deemed made, exceed the
fair market current value as of such date of the assets of such Plan
allocable to such accrued liabilities.
(c) Except as described in Schedule 6.14, neither the Borrower nor any
ERISA Affiliate has incurred, or, to the knowledge of the Credit Parties,
is reasonably expected to incur, any withdrawal liability under ERISA to
any Multiemployer Plan or Multiple Employer Plan. Neither the Borrower nor
any ERISA Affiliate has received any notification pursuant to ERISA that
any Multiemployer Plan is in reorganization (within the meaning of Section
4241 of ERISA), is insolvent (within the meaning of Section 4245 of ERISA),
or has been terminated (within the meaning of Title IV of ERISA), and, to
the best knowledge of the Credit Parties, no Multiemployer Plan is
reasonably expected to be in reorganization, insolvent, or terminated.
(d) No nonexempt prohibited transaction (within the meaning of Section
406 of ERISA or Section 4975 of the Code) or breach of fiduciary
responsibility has occurred with respect to a Plan which has subjected or
is reasonably expected to subject the Borrower or any
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ERISA Affiliate to any liability under Sections 406, 409, 502(i), or 502(l)
of ERISA or Section 4975 of the Code, or under any agreement or other
instrument pursuant to which the Borrower or any ERISA Affiliate has agreed
or is required to indemnify any person against any such liability.
(e) The present value of the liability of the Borrower and its
Subsidiaries and each ERISA Affiliate for post-retirement welfare benefits
to be provided to their current and former employees under Plans which are
welfare benefit plans (as defined in Section 3(1) of ERISA), net of all
assets under all such Plans allocable to such benefits, are reflected on
the Financial Statements in accordance with FASB 106.
(f) Each Plan which is a welfare plan (as defined in Section 3(1) of
ERISA) to which Sections 601-609 of ERISA and Section 4980B of the Code
apply has been administered in material compliance with such sections.
6.15 Subsidiaries.
------------
Set forth on Schedule 6.15 is a complete and accurate list of all
Subsidiaries of each Credit Party. Information on Schedule 6.15 includes
jurisdiction of incorporation or organization, the number of shares of each
class of Capital Stock or other equity interests outstanding, the number and
percentage of outstanding shares of each class owned (directly or indirectly) by
such Credit Party; and the number and effect, if exercised, of all outstanding
options, warrants, rights of conversion or purchase and all other similar rights
with respect thereto. The outstanding Capital Stock and other equity interests
of all such Subsidiaries is validly issued, fully paid and, with respect to any
Subsidiary that is a corporation, non-assessable and is owned by each such
Credit Party, directly or indirectly, free and clear of all Liens (other than
those arising under or contemplated in connection with the Credit Documents).
Other than as set forth in Schedule 6.15, neither any Credit Party nor any
Subsidiary thereof has outstanding any securities convertible into or
exchangeable for its Capital Stock nor does any such Person have outstanding any
rights to subscribe for or to purchase or any options for the purchase of, or
any agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to its Capital Stock.
Schedule 6.15 may be updated from time to time by the Borrower by giving written
notice thereof to the Administrative Agent.
6.16 Use of Proceeds.
---------------
The proceeds of the Loans hereunder will be used solely for the purposes
specified in Section 7.10. No proceeds of the Loans hereunder have been or
will be used (a) other than in connection with the Peoples Merger, to acquire,
directly or indirectly, any security in any transaction which is subject to
Sections 13 or 14 of the Securities Exchange Act of 1934, as amended,
(including, without limitation, Sections 13(d) and 14(d) thereof) or to
refinance any Indebtedness used to acquire any such securities or (b) for the
acquisition of another Person unless the board of directors (or other comparable
governing body) or stockholders, as appropriate, of such Person has approved
such acquisition.
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6.17 Government Regulation.
---------------------
(a) No part of the Letters of Credit or proceeds of the Loans will be
used, directly or indirectly, for the purpose of purchasing or carrying any
"margin stock" within the meaning of Regulation U, or for the purpose of
purchasing or carrying or trading in any securities. If requested by any
Lender or the Administrative Agent, the Borrower will furnish to the
Administrative Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form U-1 referred to in Regulation
U. No Indebtedness being reduced or retired out of the proceeds of the
Loans was or will be incurred for the purpose of purchasing or carrying any
margin stock within the meaning of Regulation U or any "margin security"
within the meaning of Regulation T. "Margin stock" within the meaning of
Regulation U does not constitute more than 25% of the value of the
consolidated assets of the Credit Parties and their Subsidiaries. None of
the transactions contemplated by the Credit Documents (including, without
limitation, the direct or indirect use of the proceeds of the Loans) will
violate or result in a violation of the Securities Act of 1933, as amended,
or the Securities Exchange Act of 1934, as amended, or regulations issued
pursuant thereto, or Regulation T, U or X.
(b) No Credit Party, nor any of their Subsidiaries, is subject to
regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act or the Investment Company Act of 1940, each as amended.
In addition, no Credit Party, nor any of their Subsidiaries, is (i) an
"investment company" registered or required to be registered under the
Investment Company Act of 1940, as amended, and is not controlled by such a
company, or (ii) a "holding company", or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or of a
"subsidiary" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
(c) No director, executive officer or principal shareholder of any
Credit Party or any of their Subsidiaries is a director, executive officer
or principal shareholder of any Lender. For the purposes hereof the terms
"director", "executive officer" and "principal shareholder" (when used with
reference to any Lender) have the respective meanings assigned thereto in
Regulation O issued by the Board of Governors of the Federal Reserve
System.
(d) Each Credit Party and each Subsidiary of a Credit Party is current
with all material reports and documents, if any, required to be filed with
any state or federal securities commission or similar agency and is in full
compliance in all material respects with all applicable rules and
regulations of such commissions.
6.18 Environmental Matters.
---------------------
Except as would not cause or reasonably be expected to cause a Material
Adverse Effect:
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(a) Each of the Credit Parties are in compliance with all applicable
Environmental Laws.
(b) Each of the Real Properties that a Credit Party owns or leases and
all operations at such Real Properties are in compliance with all
applicable Environmental Laws, and there is no violation of any
Environmental Law with respect to such Real Properties or the businesses
operated by the Credit Parties or any of their Subsidiaries (the
"Businesses"), and there are no conditions relating to the Businesses or
such Real Properties that would reasonably be expected to give rise to
liability under any applicable Environmental Laws.
(c) No Credit Party has received any written notice of, or inquiry
from any Governmental Authority regarding, any violation, alleged
violation, non-compliance, liability or potential liability regarding
Hazardous Materials or compliance with Environmental Laws with regard to
any of the Real Properties or the Businesses, nor, to the knowledge of a
Credit Party or any of its Subsidiaries, is any such notice being
threatened.
(d) Hazardous Materials have not been transported or disposed of from
the Real Properties that a Credit Party owns or leases, or generated,
treated, stored or disposed of at, on or under any of such Real Properties
or any other location, in each case by, or on behalf or with the permission
of, a Credit Party or any of its Subsidiaries in a manner that would give
rise to liability under any applicable Environmental Laws.
(e) No judicial proceeding or governmental or administrative action is
pending or, to the knowledge of a Credit Party or any of its Subsidiaries,
threatened, under any Environmental Law to which a Credit Party or any of
its Subsidiaries 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 a Credit Party or any of its
Subsidiaries, the Real Properties or the Businesses.
(f) There has been no release (including, without limitation,
disposal) or threat of release of Hazardous Materials at or from the Real
Properties that a Credit Party owns or leases, or arising from or related
to the operations of a Credit Party or any of its Subsidiaries in
connection with such Real Properties or otherwise in connection with the
Businesses where such release constituted a violation of, or would give
rise to liability under, any applicable Environmental Laws.
(g) None of the Real Properties that a Credit Party owns or leases
contains, or has previously contained, any Hazardous Materials at, on or
under such Real Properties in amounts or concentrations that, if released,
constitute or constituted a violation of, or could give rise to liability
under, Environmental Laws.
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(h) No Credit Party, nor any of its Subsidiaries, has assumed any
liability of any Person (other than another Credit Party, or one of its
Subsidiaries) under any Environmental Law.
6.19 Intellectual Property.
---------------------
Each Credit Party owns, or has the legal right to use, all patents,
trademarks, tradenames, copyrights, technology, know-how and processes (the
"Intellectual Property") necessary for each of them to conduct its business as
currently conducted except for those the failure to own or have such legal right
to use would not have or be reasonably expected to have a Material Adverse
Effect. Except as could not reasonably be expected to have a Material Adverse
Effect, (a) no holding, decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question the validity of any
Intellectual Property and (b) no action or proceeding is pending seeking to
limit, cancel or question the validity of any Intellectual Property, or which,
if adversely determined, would have a Material Adverse Effect on the value of
any Intellectual Property. Set forth on Schedule 6.19 is a list of all patents,
registered and material unregistered trademarks, tradenames and registered
copyrights owned by each Credit Party or that any Credit Party has the right to
use. Except as provided on Schedule 6.19, no claim has been asserted against
any Credit Party or its Subsidiaries in writing and is pending by any Person
challenging a Credit Party's right to use any Intellectual Property, which is
owned by such Credit Party or its Subsidiaries or that such Credit Party or its
Subsidiaries has a right to use, or the validity of any such Intellectual
Property, nor does any Credit Party have knowledge of any such claim, and to the
Credit Parties' knowledge, neither the Credit Parties nor any of their
Subsidiaries infringes any Intellectual Property of any other Person, except for
such claims that in the aggregate, could not reasonably be expected to have a
Material Adverse Effect. Schedule 6.19 may be updated from time to time by the
Borrower by giving written notice thereof to the Administrative Agent.
6.20 Solvency.
--------
Each Credit Party is and, after consummation of the transactions
contemplated by this Credit Agreement, will be Solvent.
6.21 Investments.
-----------
All Investments of each Credit Party and its Subsidiaries are (a) as set
forth on Schedule 6.21 or (b) other Permitted Investments.
6.22 Location of Collateral.
----------------------
Set forth on Schedule 6.22(a) is a list of all Real Properties with street
address, county and state where located. Set forth on Schedule 6.22(b) is a list
of the chief executive office and principal place of business of each Credit
Party. All personal property of the Credit Parties is located within the fifty
states of the United States and the District of Columbia unless a Credit Party
informs the Administrative Agent in writing otherwise. All personal property of
a Credit Party located in any of the following states is located in at least two
counties within such state: Arkansas, Massachusetts, Mississippi, Missouri, New
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Hampshire, New York, North Carolina, Ohio, Pennsylvania, Virginia and West
Virginia. Schedules 6.22(a) and 6.22(b) may be updated from time to time by the
Borrower by giving written notice thereof to the Administrative Agent. As of
the Closing Date, none of the Credit Parties owns any Real Properties other than
the Miami Facility.
6.23 Disclosure.
----------
Neither this Agreement nor any financial statements delivered to the
Lenders nor any other document, certificate or statement furnished to the
Lenders by or on behalf of any Credit Party in connection with the transactions
contemplated hereby contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained
therein or herein, taken as a whole, not misleading in light of the
circumstances under which such information was provided.
6.24 Licenses, etc.
--------------
The Credit Parties have obtained and hold in full force and effect, all
franchises, licenses, permits, certificates, authorizations, qualifications,
accreditations, easements, rights of way and other rights, consents and
approvals which are necessary for the operation of their respective businesses
as presently conducted, except where the failure to obtain same could not
reasonably be expected to have a Material Adverse Effect.
6.25 Collateral Documents.
--------------------
The Collateral Documents create valid security interests in, and Liens on,
the Collateral purported to be covered thereby, which security interests and
Liens are currently (or will be, upon the filing of appropriate financing
statements in favor of NationsBank, as Collateral Agent for the Lenders)
perfected security interests and Liens, prior to all other Liens other than
Permitted Liens.
6.26 Year 2000 Compliance.
--------------------
Each Credit Party reasonably believes that the Year 2000 Problem has been
appropriately addressed by it, through the development of appropriate software
programs or applications or through its acquisition of any necessary hardware,
and the Year 2000 Problem will not exist with respect to it or any of its
Subsidiaries on and after January 1, 2000, to the extent such Year 2000 Problem
could reasonably be expected to cause a Material Adverse Effect.
6.27 Labor Contracts and Disputes.
----------------------------
Except as disclosed on Schedule 6.27, (a) there is no collective bargaining
agreement or other labor contract covering employees of any Credit Party; (b) no
union or other labor organization is seeking to organize, or be recognized as, a
collective bargaining unit of employees of any Credit Party; and (c) there is no
pending, or to any Credit Party's knowledge, threatened,
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strike, work stoppage, material unfair labor practice claim or other material
labor dispute against or affecting any Credit Party or its employees.
6.28 Broker's Fees.
-------------
Except as disclosed on Schedule 6.28, no Credit Party will pay or agree to
pay, or reimburse any other Person with respect to, any finder's, broker's,
investment banking or other similar fee in connection with any of the
transactions contemplated under the Credit Documents.
6.29 FCC and Telephone Matters.
-------------------------
(a) Each Credit Party possesses or has the right to use all FCC
Licenses and State Licenses necessary in the operation of its business
unless the failure to do so could not reasonably be expected to cause a
Material Adverse Effect.
(b) Each Credit Party has duly filed in a timely manner all filings
that are required to be filed by each such Credit Party under
Communications Law and is in all material respects in substantial
compliance with Communications Law, including, without limitation, the
rules and regulations of the FCC relating to the ownership and operation of
public telephones and the provision of operator and communications
services, unless the failure to make such filing or to comply could not
reasonably be expected to cause a Material Adverse Effect.
(c) Each Credit Party has duly filed in a timely manner all filings
that are required to be filed by each such Credit Party under State
Communications Law and is in all material respects in substantial
compliance with State Communications Law, including, without limitation,
the rules and regulations of the pertinent state regulatory agencies
relating to the ownership and operation of public telephones and the
provision of operator and communications services, unless the failure to
comply could not reasonably be expected to cause a Material Adverse Effect.
(d) The location of each of the Telephones does not violate in any
respect the provisions of any applicable governmental ordinances, orders,
or regulations to the extent such violation could reasonably be expected to
have a Material Adverse Effect.
6.30 Location Contracts.
------------------
As of the Closing Date, there is no Location Contract which accounts for
more than seven and one-half percent (7 1/2%) of the consolidated revenues of
the Credit Parties and their Subsidiaries.
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SECTION 7
AFFIRMATIVE COVENANTS
---------------------
Each Credit Party hereby covenants and agrees that so long as this Credit
Agreement is in effect and until the Loans and LOC Obligations, together with
interest and fees and other obligations then due and payable hereunder, have
been paid in full (other than any such obligations which by the terms thereof
are stated to survive termination of the Credit Documents) and the Commitments
and Letters of Credit hereunder shall have terminated:
7.1 Information Covenants.
---------------------
The Credit Parties will furnish, or cause to be furnished, to the
Administrative Agent and each of the Lenders:
(a) Annual Financial Statements. As soon as available, and in any
event within 90 days after the close of each fiscal year of the Borrower, a
consolidated balance sheet and income statement of the Credit Parties and
their Subsidiaries, as of the end of such fiscal year, together with
related consolidated statements of cash flows for such fiscal year, setting
forth in comparative form, if practical, consolidated figures for the
preceding fiscal year, all such consolidated financial information
described above to be in reasonable form and detail and audited by
independent certified public accountants of recognized national standing
reasonably acceptable to the Administrative Agent and whose opinion shall
be to the effect that such financial statements have been prepared in
accordance with GAAP (except for changes with which such accountants
concur) and shall not be limited as to the scope of the audit or qualified
in any manner.
(b) Quarterly Financial Statements. As soon as available, and in any
event within 45 days after the close of each fiscal quarter of the Borrower
(other than the fourth fiscal quarter, in which case 90 days after the end
thereof) a consolidated balance sheet and income statement of the Credit
Parties and their Subsidiaries as of the end of such fiscal quarter,
together with related consolidated statements of cash flows for such fiscal
quarter, in the case of the income statement and statement of cash flow
setting forth in comparative form, if practical, consolidated figures for
the corresponding period of the preceding fiscal year and in the case of
the balance sheet setting forth in comparative form, if practical,
consolidated figures for the corresponding last date of the prior fiscal
year, all such financial information described above to be in reasonable
form and detail and reasonably acceptable to the Administrative Agent, and
accompanied by a certificate of the chief financial officer of the Borrower
to the effect that such quarterly financial statements fairly present in
all material respects the financial condition of the Credit Parties and
their Subsidiaries and have been prepared in accordance with GAAP (subject
to normal year-end adjustments and the absence of footnotes).
(c) Officer's Certificate. At the time of delivery of the financial
statements provided for in Sections 7.1(a) and 7.1(b) above, a certificate
of the chief financial officer of the Borrower
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substantially in the form of Exhibit 7.1(c), (i) demonstrating compliance
with the financial covenants contained in Section 7.2 by calculation
thereof as of the end of each such period, (ii) demonstrating compliance
with any other terms of this Credit Agreement as reasonably requested by
the Administrative Agent and (iii) stating that no Default or Event of
Default exists, or if any Default or Event of Default does exist,
specifying the nature and extent thereof and what action the Borrower
proposes to take with respect thereto. If necessary, the Borrower shall
deliver financial statements prepared in accordance with GAAP as of the
Closing Date, to the extent GAAP has changed since the Closing Date, in
order to show compliance with the terms of this Credit Agreement, including
Section 7.2.
(d) Annual Business Plan and Budgets. As soon as available, and in
any event within 90 days after the end of each fiscal year of the Borrower
(other than the fiscal year ending December 31, 1998), an annual business
plan and budget of the Credit Parties and their Subsidiaries on a
consolidated basis containing, among other things, pro forma quarterly
financial projections for the next fiscal year.
(e) Accountant's Certificate. Within the period for delivery of the
annual financial statements provided in Section 7.1(a), a certificate of
the accountants conducting the annual audit stating that they have reviewed
this Credit Agreement and stating further whether, in the course of their
audit, they have become aware of any Default or Event of Default of a
financial nature and, if any such Default or Event of Default exists,
specifying the nature and extent thereof.
(f) Auditor's Reports. Promptly upon receipt thereof, a copy of any
"management letter" submitted by independent accountants to the Credit
Parties and their Subsidiaries in connection with any annual, interim or
special audit of the books of any such Person.
(g) Reports. Promptly upon transmission or receipt thereof, (a)
copies of any public filings and registrations with, and reports to or
from, the Securities and Exchange Commission, or any successor agency, and
copies of all financial statements, proxy statements, notices and reports
as the Credit Parties and their Subsidiaries shall send to its shareholders
generally in their capacity as shareholders and (b) upon the written
request of the Administrative Agent, all material reports and written
information to and from the United States Environmental Protection Agency,
or any state or local agency responsible for environmental matters, the
United States Occupational Health and Safety Administration, or any state
or local agency responsible for health and safety matters, or any successor
agencies or authorities concerning material environmental, health or safety
matters.
(h) Notices. Upon a Responsible Officer of a Credit Party obtaining
knowledge thereof, the Borrower will give written notice to the
Administrative Agent promptly (and in any event within five Business Days)
of (i) the occurrence of an event or condition consisting of a Default or
Event of Default, specifying the nature and existence thereof and what
action the Credit Parties propose to take with respect thereto, and (ii)
the occurrence of any of the following with respect to the Credit Parties
or any of their Subsidiaries: (A) the pendency or
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commencement of any litigation, arbitral or governmental proceeding against
a Credit Party or any of its Subsidiaries which if adversely determined
could reasonably be expected to have a Material Adverse Effect, (B) the
institution of any proceedings against a Credit Party or any of its
Subsidiaries with respect to, or the receipt of written notice by such
Person of potential liability or responsibility for violation, or alleged
violation of any federal, state or local law, rule or regulation (including
but not limited to, Environmental Laws) the violation of which could
reasonably be expected to have a Material Adverse Effect, (C) any
information that a Credit Party may have a Year 2000 Problem, (D) any loss
of or damage to any Property of a Credit Party or its Subsidiaries or the
commencement of any proceeding for the condemnation or other taking of any
Property of a Credit Party or its Subsidiaries, if such loss, damage or
proceeding has had or could reasonably be expected to have a Material
Adverse Effect, (E) if it could cause or be reasonably expected to cause a
Material Adverse Effect, any (x) non-renewal, cancellation, termination,
revocation, suspension, impairment or material modification of any FCC
License or State License or the occurrence of any event or the existence of
any circumstances which, in the reasonable judgment of a Credit Party, is
likely to lead to any non-renewal, cancellation, termination, revocation,
suspension, impairment or material modification of any FCC License or State
License, (y) default or forfeiture with respect to any FCC License or State
License or (z) hearing designation order concerning any FCC or State
application filed by any Credit Party or any FCC License or State License
held by any Credit Party or (F) any order or decision by the FCC that would
have a significant impact on the business of the Credit Parties and their
Subsidiaries, taken as a whole.
(i) ERISA. Upon any of the Credit Parties or any of their
Subsidiaries or any ERISA Affiliate obtaining knowledge thereof, the
Borrower will give written notice to the Administrative Agent promptly (and
in any event within five Business Days) of: (i) any event or condition,
including, but not limited to, any Reportable Event, that constitutes, or
is reasonably expected to result in, a Termination Event; (ii) with respect
to any Multiemployer Plan, the receipt of notice as prescribed in ERISA or
otherwise of any withdrawal liability assessed against the Credit Parties
or any of their Subsidiaries or any of their ERISA Affiliates, or of a
determination that any Multiemployer Plan is in reorganization or insolvent
(both within the meaning of Title IV of ERISA); (iii) the failure to make
full payment on or before the due date (including extensions) thereof of
all amounts which a Credit Party or any of its Subsidiaries or any of its
ERISA Affiliates is required to contribute to each Plan pursuant to such
Plan's terms and as required to meet the minimum funding standard set forth
in Section 302 of ERISA and Section 412 of the Code with respect thereto;
or (iv) any change in the funding status of any Plan that could have a
Material Adverse Effect; together, with a description of any such event or
condition or a copy of any such notice and a statement by the principal
financial officer of the Borrower briefly setting forth the details
regarding such event, condition, or notice, and the action, if any, which
has been or is being taken or is proposed to be taken by the Credit Parties
or any of their Subsidiaries with respect thereto. Promptly upon request,
the Credit Parties or any of their Subsidiaries shall furnish the
Administrative Agent and each of the Lenders with such additional
information concerning any Plan as may be reasonably requested by the
Administrative Agent, including, but not limited to, copies of each annual
report/return (Form 5500 series), as well as all schedules and attachments
thereto required to be filed with the
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Department of Labor and/or the Internal Revenue Service pursuant to ERISA and
the Code, respectively, for each "plan year" (within the meaning of Section
3(39) of ERISA).
(j) Environmental.
(i) Subsequent to a notice from any Governmental Authority
where the subject matter of such notice could reasonably be expected
to have a Material Adverse Effect, or during the existence of an Event
of Default, upon the reasonable written request of Administrative
Agent, the Credit Parties will furnish or cause to be furnished to the
Administrative Agent, at the Credit Parties' expense, a report of an
environmental assessment of reasonable scope, form and depth,
including, where appropriate, invasive soil or groundwater sampling,
by a consultant reasonably acceptable to the Administrative Agent
addressing the subject of such notice or, if during the existence of
an Event of Default, regarding any release or threat of release of
Hazardous Materials on any Real Property and the compliance by the
Credit Parties with Environmental Laws. If the Credit Parties fail to
deliver such an environmental report within sixty (60) days after
receipt of such written request, then the Administrative Agent may
arrange for same, and the Credit Parties hereby grant to the
Administrative Agent and its representatives reasonable access to the
Real Properties and a license of a scope reasonably necessary to
undertake such an assessment (including, where appropriate, invasive
soil or groundwater sampling). The reasonable cost of any assessment
arranged for by the Administrative Agent pursuant to this provision
will be payable by the Credit Parties on demand and added to the
obligations secured by the Collateral Documents.
(ii) Each Credit Party will conduct and complete all
investigations, studies, sampling, and testing and all remedial,
removal, and other actions required under the Environmental Laws to
address all Hazardous Materials on, from, or affecting any Real
Property to the extent necessary to be in compliance with all
Environmental Laws and all other applicable federal, state and local
laws, regulations, rules and policies and with the orders and
directives of all Governmental Authorities exercising jurisdiction
over such real property to the extent any failure would have or be
reasonably expected to have a Material Adverse Effect.
(k) Other Information. With reasonable promptness upon any such
request, such other information regarding the business, properties or
financial condition of the Credit Parties and their Subsidiaries as the
Administrative Agent may reasonably request.
7.2 Financial Covenants.
-------------------
(a) Leverage Ratio. The Leverage Ratio, as of the last day of each
fiscal quarter of the Borrower, shall be less than or equal to the ratio
shown below for the period corresponding thereto:
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Period Ratio
------ -----
January 1, 1999 through March 31, 1999 5.10 to 1.0
April 1, 1999 through June 30, 1999 4.90 to 1.0
July 1, 1999 through September 30, 1999 4.60 to 1.0
October 1, 1999 through December 31, 1999 4.10 to 1.0
January 1, 2000 through March 31, 2000 3.75 to 1.0
April 1, 2000 and thereafter 3.50 to 1.0
(b) Interest Coverage Ratio. The Interest Coverage Ratio, for the
twelve month period ending on the last day of each fiscal quarter of the
Borrower, shall be greater than or equal to the ratio shown below for the
period corresponding thereto:
Period Ratio
------ -----
January 1, 1999 through June 30, 1999 2.00 to 1.0
July 1, 1999 through September 30, 1999 2.20 to 1.0
October 1, 1999 through December 31, 1999 2.50 to 1.0
January 1, 2000 through March 31, 2000 2.75 to 1.0
April 1, 2000 through June 30, 2000 3.00 to 1.0
July 1, 2000 through September 30, 2000 3.25 to 1.0
October 1, 2000 through December 31, 2000 3.50 to 1.0
January 1, 2001 through December 31, 2001 3.75 to 1.0
January 1, 2002 and thereafter 4.00 to 1.0
(c) Fixed Charge Coverage Ratio. The Fixed Charge Coverage Ratio,
for the twelve month period ending on the last day of each fiscal quarter
of the Borrower, shall be greater than or equal to the ratio shown below
for the period corresponding thereto:
Period Ratio
------ -----
January 1, 1999 to March 31, 2000 1.05 to 1.0
April 1, 2000 and thereafter 1.10 to 1.0
7.3 Preservation of Existence and Franchises.
----------------------------------------
Each of the Credit Parties will do all things necessary to preserve and
keep in full force and effect its existence, rights, franchises and authority
except as permitted by Section 8.4.
7.4 Books and Records.
-----------------
Each of the Credit Parties will, and will cause its Subsidiaries to, keep
complete and accurate books and records of its transactions in accordance with
GAAP (including the establishment and maintenance of appropriate reserves).
7.5 Compliance with Law and Licenses.
--------------------------------
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Each of the Credit Parties will, and will cause its Subsidiaries to, (a)
comply with all laws, rules, regulations and orders, and all applicable
restrictions imposed by all Governmental Authorities, applicable to it and its
property (including, without limitation, Environmental Laws), and (b) comply
with and maintain all FCC Licenses and State Licenses, unless such noncompliance
or nonmaintenance could not reasonably be expected to have a Material Adverse
Effect.
7.6 Payment of Taxes and Claims.
---------------------------
Each of the Credit Parties will pay, settle or discharge (a) all taxes,
assessments and governmental charges or levies imposed upon it, or upon its
income or profits, or upon any of its properties, before they shall become
delinquent and (b) all lawful claims (including claims for labor, materials and
supplies) which, if unpaid, might give rise to a Lien upon any of its
properties; provided, however, that a Credit Party shall not be required to pay
any such tax, assessment, charge, levy, claim or Indebtedness which is being
contested in good faith by appropriate proceedings and as to which adequate
reserves therefor have been established in accordance with GAAP, unless the
failure to make any such payment (i) would give rise to an immediate right to
foreclose or collect on a Lien securing such amounts or (ii) could reasonably be
expected to have a Material Adverse Effect.
7.7 Insurance.
---------
Each of the Credit Parties will at all times maintain in full force and
effect insurance (including worker's compensation insurance, liability
insurance, casualty insurance and business interruption insurance) from
insurance companies having a rating of at least A by Best's Rating Services, in
such amounts, covering such risks and liabilities and with such deductibles or
self-insurance retentions as are in accordance with normal industry practice.
All liability and casualty policies shall have the Administrative Agent, on
behalf of the Lenders, named as an additional insured and loss payee.
In the event there occurs any material loss, damage to or destruction of
the Collateral of any Credit Party or any part thereof, such Credit Party shall
promptly give written notice thereof to the Administrative Agent generally
describing the nature and extent of such loss, damage or destruction. Subsequent
to any loss, damage to or destruction of the Collateral of any Credit Party or
any part thereof, such Credit Party, whether or not the insurance proceeds if
any, received on account of such damage or destruction shall be sufficient for
that purpose, at such Credit Party's cost and expense, will promptly repair or
replace the Collateral of such Credit Party so lost, damaged or destroyed;
provided, however, that such Credit Party need not repair or replace the
Collateral of such Credit Party so lost, damaged or destroyed to the extent the
failure to make such repair or replacement (a) is desirable to the proper
conduct of the business of such Credit Party in the ordinary course and
otherwise is in the best interest of such Credit Party and (b) would not
materially impair the rights and benefits of the Agents or the Lenders under
this Credit Agreement or any other Credit Document.
The Administrative Agent is authorized, but not obligated, as the attorney-
in-fact of the Borrower and for the benefit of the Lenders, upon the occurrence
of an Event of Default, without Borrower's consent, (i) to adjust and compromise
proceeds payable under such insurance policies, (ii)
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to collect, receive and give receipts for such insurance proceeds in the name of
the Borrower, the Administrative Agent and the Lenders and (iii) to endorse the
Borrower's name upon any instrument in payment thereof. In the event a Credit
Party or the Administrative Agent shall receive any insurance proceeds, as a
result of any loss, damage or destruction of Collateral, (A) in a net amount of
$5,000,000 or less, the Administrative Agent shall take such action as requested
by the Borrower to release such proceeds to such Credit Party or (B) in a net
amount in excess of $5,000,000, such Credit Party will immediately pay over such
proceeds to the Administrative Agent as cash collateral for the Credit Party
Obligations. The Administrative Agent agrees to release insurance proceeds
received in accordance with clause (B) of the immediately prior sentence to such
Credit Party for replacement or restoration of the portion of the Collateral of
such Credit Party lost, damaged or destroyed if (x) within 180 days from the
date the Administrative Agent receives such insurance proceeds, the
Administrative Agent has received written request for such release from such
Credit Party together with evidence reasonably satisfactory to it that the
Collateral lost, damaged or destroyed has been or will be replaced or restored
to its condition (or by Collateral having a value at least equal to the
condition of the asset subject to the loss, damage or destruction) immediately
prior to the loss, destruction or other event giving rise to the payment of such
insurance proceeds, or that such Credit Party shall acquire such other assets
useful in the business of such Credit Party with such insurance proceeds, and
(y) on the date of such release no Default or Event of Default exists. If the
conditions in the preceding sentence are not met, the Administrative Agent may
or, upon the request of the Required Lenders, shall at any time after the first
Business Day subsequent to the date 180 days after it received such insurance
proceeds, apply such insurance proceeds as a mandatory prepayment of the Credit
Party Obligations for application in accordance with the terms of Section
3.3(b)(iii) and the second sentence of Section 3.3(c). All insurance proceeds
shall be subject to the security interest of the Lenders under the Collateral
Documents. All insurance policies maintained hereunder shall contain a clause
providing that such policies may not be canceled, reduced in coverage or
otherwise modified without 30 days prior written notice to the Administrative
Agent.
The present insurance coverage of the Credit Parties and their Subsidiaries
is outlined as to carrier, policy number, expiration date, type and amount on
Schedule 7.7. Schedule 7.7 shall be amended and updated by the Credit Parties on
an annual basis or upon the request of the Administrative Agent.
7.8 Maintenance of Property.
-----------------------
Each of the Credit Parties will maintain and preserve its properties and
equipment in good repair, working order and condition, normal wear and tear
excepted (subject to casualty events), and will make, or cause to be made, in
such properties and equipment from time to time all repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto as may
be needed or proper, to the extent and in the manner customary for companies in
similar businesses.
7.9 Collateral.
----------
(a) If, subsequent to the Closing Date, a Credit Party shall (i)
acquire any real property, any patented, registered or applied for
intellectual property or any securities or (ii)
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acquire any other personal property required to be delivered to the
Collateral Agent as Collateral hereunder or under any of the Collateral
Documents, the Borrower shall immediately notify the Collateral Agent of
same.
(b) Each Credit Party shall (within 30 days of such request) take
such action, as reasonably requested by the Collateral Agent and at its own
expense, to ensure that the Lenders have a perfected Lien in all owned real
property and such personal property of the Credit Parties as set forth in
the Security Agreements and the Pledge Agreements (whether now owned or
hereafter acquired), subject only to Permitted Liens. Such actions to be
required by the Collateral Agent may include, but are not limited to,
delivery of mortgages, real estate title insurance policies, surveys, flood
certificates, zoning certificates, environmental reports, valuations, UCC
financing statements, patent, trademark or copyright filings and legal
opinions with respect thereto. Upon the request of the Collateral Agent,
the Borrower shall provide such information as to the location of the
personal property of the Credit Parties as reasonably requested by the
Collateral Agent.
7.10 Use of Proceeds.
---------------
The Credit Parties will use the proceeds of the Loans solely (a) to finance
the Peoples Merger, (b) to refinance the existing Indebtedness of the Credit
Parties in an approximate amount not to exceed $200 million (collectively, the
"Refinancings"), (c) to pay related fees and expenses in connection with the
Peoples Merger and the Refinancings, (d) to make Permitted Acquisitions, (e) to
provide working capital for the Borrower and its Domestic Subsidiaries and (f)
for general corporate purposes of the Credit Parties. The Credit Parties will
use the Letters of Credit solely for the purposes set forth in Section 2.2(a).
7.11 Audits/Inspections.
------------------
Upon reasonable notice and during normal business hours, each Credit Party
will permit representatives appointed by Administrative Agent, including,
without limitation, independent accountants, agents, attorneys and appraisers to
visit and inspect such Credit Party's property, including its books and records,
its accounts receivable and inventory, its facilities and its other business
assets, and to make photocopies or photographs thereof and to write down and
record any information such representative obtains and shall permit the
Administrative Agent or its representatives to investigate and verify the
accuracy of information provided to the Lenders, including, without limitation,
the performance of collateral valuation reviews from time to time and to discuss
all such matters with the officers, employees and representatives of the Credit
Parties. The Credit Parties shall reimburse the Administrative Agent for all
costs and expenses actually incurred by it in conducting each such review;
provided that, if an Event of Default has not occurred, the Credit Parties shall
not be required to reimburse the Administrative Agent more than, in any one
fiscal year, the lesser of $7,500 per year or $500 per person per day plus
actual out of pocket expenses.
7.12 Additional Credit Parties.
-------------------------
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At the time any Person becomes a Subsidiary of a Credit Party, the Borrower
shall so notify the Administrative Agent and promptly thereafter (but in any
event within 30 days after the date thereof) shall cause such Person to (a) if
it is a Domestic Subsidiary, execute a Joinder Agreement in substantially the
same form as Exhibit 7.12, (b) cause all of the Capital Stock of such Person (if
it is a Domestic Subsidiary) or 65% of the Capital Stock of such Person (if it
is a Material First Tier Foreign Subsidiary) to be delivered to the Collateral
Agent (together with undated stock powers signed in blank) and pledged to the
Collateral Agent pursuant to an appropriate pledge agreement in substantially
the form of the Pledge Agreements (or a joinder to the appropriate existing
Pledge Agreement) and otherwise in a form reasonably acceptable to the
Collateral Agent, (c) if such Person is a Domestic Subsidiary, pledge all of its
assets to the Collateral Agent pursuant to a security agreement in substantially
the form of the Security Agreement (or a joinder to the existing Security
Agreement) and otherwise in a form reasonably acceptable to the Collateral
Agent, (d) if such Person is a Domestic Subsidiary and has any Subsidiaries, (A)
deliver all of the Capital Stock of such Domestic Subsidiaries owned by it and
65% of the stock of the Material First Tier Foreign Subsidiaries owned by it
(together with undated stock powers signed in blank) to the Collateral Agent and
(B) execute a pledge agreement in substantially the form of the Pledge
Agreements (or a joinder to the appropriate existing Pledge Agreement) and
otherwise in a form acceptable to the Collateral Agent, (e) if such Person is a
Domestic Subsidiary and owns or leases any real property, execute any and all
necessary mortgages, deeds of trust, deeds to secure debt or other appropriate
real estate collateral documentation in a form acceptable to the Collateral
Agent (or, if reasonably requested by the Collateral Agent, cause to be
delivered in a commercially reasonable manner a landlord waiver or estoppel
letter with respect thereto in a form acceptable to the Collateral Agent), (f)
deliver such other documentation as the Collateral Agent may reasonably request
in connection with the foregoing, including, without limitation, appropriate
UCC-1 financing statements, real estate title insurance policies, surveys,
environmental reports, valuations, flood certificates, zoning certificates,
certified resolutions and other organizational and authorizing documents of such
Person and favorable opinions of counsel to such Person (which shall cover,
among other things, the legality, validity, binding effect and enforceability of
the documentation referred to above), all in form, content and scope reasonably
satisfactory to the Collateral Agent and (g) provide to the Administrative Agent
(i) a new Schedule 6.15 which shall reflect the information regarding such new
Subsidiary required by Section 6.15, and (ii) if applicable, a new Schedule 2(a)
to the appropriate Pledge Agreement which shall reflect the pledge of the
Capital Stock of such new Subsidiary.
7.13 Interest Rate Protection.
------------------------
Within 60 days following the Closing Date, the Borrower shall enter into
interest rate protection agreements, in form and substance satisfactory to the
Administrative Agent in its reasonable discretion, covering at least 40% of the
outstanding principal amount of the Term Loans at any time and shall maintain
such agreements in effect for at least three years after the Closing Date.
7.14 Location Contracts.
------------------
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The Borrower shall notify the Collateral Agent if at any time a Location
Contract evidences more than seven and one-half percent (7 1/2%) of the
consolidated revenues of the Credit Parties and their Subsidiaries. The
Borrower shall take such action as reasonably requested by the Collateral Agent
to ensure that either (a) any such Location Contract is assignable or (b) the
land owner or operator that is party to such Location Contract has consented in
writing to the security interest of the Lenders therein.
7.15 Post Closing Matters.
--------------------
(a) Peoples Shares. Within five Business Days subsequent to the
Effective Date, the Borrower shall provide to the Collateral Agent all
stock certificates evidencing the pledged stock of Peoples, together with
duly executed in blank undated stock powers attached thereto and updated
legal opinions with respect thereto.
(b) Landlord Waivers. Within 60 days subsequent to the Effective
Date, the Borrower shall provide to the Collateral Agent (unless the
Collateral Agent agrees that such landlord waiver is not necessary) a
landlord waiver, in form and substance reasonably acceptable to the
Collateral Agent, for each of the following locations leased by a Credit
Party: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇.
SECTION 8
NEGATIVE COVENANTS
------------------
Each Credit Party hereby covenants and agrees that so long as this Credit
Agreement is in effect and until the Loans and LOC Obligations, together with
interest, fees and other obligations then due and payable hereunder (other than
any such obligations which by the terms thereof are stated to survive the
termination of the Credit Documents), have been paid in full and the Commitments
and Letters of Credit hereunder shall have terminated:
8.1 Indebtedness.
------------
No Credit Party will, nor will it permit any of its Subsidiaries to,
contract, create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement and the other
Credit Documents;
(b) Indebtedness existing as of the Closing Date as referenced in
Section 6.10 (and renewals, refinancings, replacements or extensions
thereof on terms and conditions no more favorable, in the aggregate, to
such creditor than such existing Indebtedness and in a principal
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amount not in excess of that outstanding as of the date of such renewal,
refinancing, replacement or extension);
(c) purchase money Indebtedness (including Capital Leases) to finance
the purchase of fixed assets (including equipment); provided that (i) the
total of all such Indebtedness for all such Persons taken together shall
not exceed an aggregate principal amount of $10,000,000 at any one time
outstanding (in addition to any such Indebtedness referred to in subsection
(b) above); (ii) such Indebtedness when incurred shall not exceed the
purchase price of the asset(s) financed; and (iii) no such Indebtedness
shall be refinanced for a principal amount in excess of the principal
balance outstanding thereon at the time of such refinancing;
(d) Indebtedness arising from Hedging Agreements entered into in the
ordinary course of business and not for speculative purposes;
(e) Indebtedness in respect of current accounts payable and accrued
expenses incurred in the ordinary course of business and to the extent not
current, accounts payable and accrued expenses that are subject to bona
fide dispute;
(f) Indebtedness owing by (i) a Credit Party to another Credit Party,
(ii) a Credit Party to a Foreign Subsidiary, (iii) a Foreign Subsidiary to
another Foreign Subsidiary or (iv) a Foreign Subsidiary to a Credit Party
if it constitutes a Permitted Investment;
(g) Indebtedness arising from judgments that do not cause an Event of
Default;
(h) the Parent PIK Debt not to exceed $50,000,000 in the aggregate;
(i) Indebtedness evidencing the financing of insurance premiums not to
exceed $1,000,000 at any one time; and
(j) other Indebtedness (including, without limitation, Indebtedness
assumed or incurred in connection with a Permitted Acquisition) up to
$25,000,000 in the aggregate at any one time outstanding, on terms
reasonably satisfactory to the Administrative Agent.
8.2 Liens.
-----
No Credit Party will, nor will it permit its Subsidiaries to, contract,
create, incur, assume or permit to exist any Lien with respect to any of its
property or assets of any kind (whether real or personal, tangible or
intangible), whether now owned or after acquired, except for Permitted Liens.
8.3 Nature of Business.
------------------
No Credit Party will, nor will it permit its Subsidiaries to, alter the
character of its business from that conducted as of the Effective Date or engage
in any business other than the business
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conducted as of the Effective Date and activities which are substantially
similar or related thereto or logical extensions thereof.
8.4 Consolidation and Merger.
------------------------
No Credit Party will, nor will it permit any Subsidiary to, enter into any
transaction of merger or consolidation or liquidate, wind up or dissolve itself;
provided that a Credit Party or a Subsidiary of a Credit Party may merge or
consolidate with or into another Credit Party if the following conditions are
satisfied:
(a) the Administrative Agent is given prior written notice of such
action;
(b) if the merger or consolidation involves a Credit Party, the Person
formed by such consolidation or into which a Credit Party is merged shall
either (i) be such Credit Party or (ii) be a Domestic Subsidiary and
expressly assume in writing all of the obligations of such Credit Party
under the Credit Documents; provided that if the transaction is between the
Borrower and another Person, the Borrower must be the surviving entity;
(c) the Credit Parties execute and deliver such documents, instruments
and certificates as the Administrative Agent may reasonably request
(including, if necessary, to maintain its perfection and priority in the
Collateral pledged pursuant to the Collateral Documents);
(d) immediately after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing; and
(e) the Borrower delivers to the Administrative Agent an officer's
certificate demonstrating compliance with clause (b) or (c) above, as
applicable, and an opinion of counsel stating that such consolidation or
merger and any written agreement entered into in connection therewith,
comply with this Section 8.4.
8.5 Sale or Lease of Assets.
-----------------------
No Credit Party will, nor will it permit its Subsidiaries to, convey, sell,
lease, transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any part of its business or assets whether now owned or
hereafter acquired, including, without limitation, inventory, receivables,
equipment, real property interests (whether owned or leasehold), and securities,
other than (a) any inventory sold or otherwise disposed of in the ordinary
course of business; (b) the sale, lease, transfer or other disposal by a Credit
Party (other than the Borrower and the Parent) of any or all of its assets to
another Credit Party; (c) obsolete, slow-moving, idle or worn-out assets no
longer used or useful in its business or the trade in of equipment for equipment
in better condition or of better quality; (d) the transfer of assets which
constitute a Permitted Investment; (e) subject to the prepayment provisions in
Section 3.3(b)(iv), the issuance of Capital Stock by a Credit Party; (f) the
lease or sublease of real property interests in the ordinary course of business;
(g) the license of intellectual property in the
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ordinary course of business; (h) the Miami Facility, (i) the shares of Common
Stock of Global Telecommunications Solutions and of Shared Technology owned by
Peoples immediately prior to the Peoples Merger; (j) the discount in the
ordinary course of business of an account receivable from an account debtor of a
Credit Party; (k) the sale of non-core assets received in connection with a
Permitted Acquisition if such assets are sold (or contracted to be sold) within
180 days of when acquired and if such sales do not exceed, in the aggregate,
$10,000,000; and (l) other sales of assets not to exceed $5,000,000, in the
aggregate, during the term of this Credit Agreement; provided that the proceeds
from such sales of assets in this clause (l) must either (A) be reinvested (or a
contract evidencing reinvestment must be entered into) by the Credit Parties
within 180 days of such sale in similar assets or such other assets as are
useful in the ordinary conduct of the business of the Credit Parties or (B) paid
to the Lenders as a prepayment of the Loans (to be applied in the manner set
forth in the second sentence of Section 3.3(c)).
Upon a sale of assets permitted by this Section 8.5, the Collateral Agent
shall promptly deliver to the Borrower, upon the Borrower's request and at the
Borrower's expense, such documentation as is reasonably necessary to evidence
the release of the Lenders' security interest in such assets, including, without
limitation, amendments or terminations of UCC financing statements and if
applicable, the return of such assets if they are in the possession of the
Collateral Agent.
8.6 Sale Leasebacks.
---------------
Except for the Miami Facility, no Credit Party will, nor will it permit its
Subsidiaries to, directly or indirectly become or remain liable as lessee or as
guarantor or other surety with respect to any lease of any property (whether
real or personal or mixed), whether now owned or hereafter acquired, (a) which
such Credit Party or its Subsidiary has sold or transferred or is to sell or
transfer to any other Person other than a Credit Party or (b) which such Credit
Party or its Subsidiary intends to use for substantially the same purpose as any
other property which has been sold or is to be sold or transferred by such
Credit Party to any Person in connection with such lease.
8.7 Investments.
-----------
No Credit Party will, nor will it permit its Subsidiaries to, make any
Investments except for Permitted Investments.
8.8 Restricted Payments.
-------------------
No Credit Party will, nor will it permit its Subsidiaries to, directly or
indirectly, (a) declare or pay any dividends or make any other distribution upon
any shares of its Capital Stock of any class (other than dividends payable
solely in Capital Stock), (b) purchase, redeem or otherwise acquire or retire or
make any provisions for redemption, acquisition or retirement of any shares of
its Capital Stock of any class or any warrants or options to purchase any such
shares; provided that (i) any Subsidiary of the Borrower may pay dividends to
its parent, (ii) the Borrower may pay dividends to the Parent (A) for general
and administrative expenses in the ordinary course and (B) for the payment of
taxes, and (iii) a Credit Party may redeem the Capital Stock of a member of
management in the case of death, disability
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or termination of such member of management, not to exceed, in the aggregate,
$2,500,000 during the term of this Credit Agreement or (c) make any prepayment
of Indebtedness (except in connection with refinancing such Indebtedness) other
than Indebtedness arising under this Credit Agreement, the other Credit
Documents and any Hedging Agreement.
8.9 Transactions with Affiliates.
----------------------------
Except as set forth on Schedule 8.9 and other than transactions between or
among Credit Parties, no Credit Party will, nor will it permit its Subsidiaries
to, enter into any transaction or series of transactions, whether or not in the
ordinary course of business, with any officer, director, shareholder, Subsidiary
or Affiliate other than on terms and conditions substantially as favorable as
would be obtainable in a comparable arm's-length transaction with a Person other
than an officer, director, shareholder, Subsidiary or Affiliate.
8.10 Fiscal Year; Organizational Documents.
-------------------------------------
No Credit Party will, nor will it permit its Subsidiaries to, (a) change
its fiscal year or (b) in any manner that would reasonably be likely to
materially adversely affect the rights of the Lenders, change its articles or
certificate of incorporation, operating agreement, articles of organization or
its bylaws.
8.11 No Limitations.
--------------
No Credit Party will, nor will it permit its Subsidiaries to, directly or
indirectly, create or otherwise cause, incur, assume, suffer or permit to exist
or become effective any consensual encumbrance or restriction of any kind on the
ability of any such Person to (a) pay dividends or make any other distribution
on any of such Person's Capital Stock, (b) pay any Indebtedness owed to any
other Credit Party, (c) make loans or advances to any other Credit Party or (d)
transfer any of its property to any other Credit Party, except for encumbrances
or restrictions existing under or by reason of (i) applicable law, (ii)
customary restrictions restricting assignment of any licensing agreement, (iii)
customary non-assignment or net worth provisions in any lease governing a
leasehold interest, (iv) any agreement or other instrument of a Person existing
at the time it becomes a Subsidiary of a Credit Party; provided that such
encumbrance or restriction is not applicable to any other Person, or any
property of any other Person, other than such Person becoming a Subsidiary of a
Credit Party and was not entered into in contemplation of such Person becoming a
Subsidiary of a Credit Party, (v) customary financial covenant provisions in any
agreement entered into in connection with the Indebtedness permitted by Section
8.1(c) or (j) as long as such financial covenants are not more restrictive than
the financial covenants set forth in this Credit Agreement and (vi) this Credit
Agreement and the other Credit Documents.
8.12 No Other Negative Pledges.
-------------------------
No Credit Party will, nor will it permit its Subsidiaries to, enter into,
assume or become subject to any agreement prohibiting or otherwise restricting
the creation or assumption of any Lien upon its properties or assets, whether
now owned or hereafter acquired, or requiring the grant of any security for
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such obligation if security is given for some other obligation except (a) as set
forth in the Credit Documents and (b) agreements entered into in connection with
Indebtedness permitted by Section 8.1(c) as long as such agreements do not
prohibit Liens in favor of the Lenders.
8.13 Limitation on Foreign Operations.
--------------------------------
The Credit Parties will not, nor will they permit any of their Subsidiaries
to, allow the Foreign Subsidiaries to own assets which in the aggregate
constitute more than five percent (5%) of Total Assets at any time.
8.14 Capital Expenditures.
--------------------
The Credit Parties will not permit Capital Expenditures (a) for the fiscal
year ending December 31, 1999 to exceed, in the aggregate, $15,000,000 and (b)
for any fiscal year thereafter to exceed, in the aggregate, $20,000,000 plus up
to $5,000,000 of any amounts permitted to be but not used for Capital
Expenditures during the most recent fiscal year.
8.15 Parent.
------
The Parent will not engage in any business activity or operation other than
(a) owning and holding the Capital Stock of the Borrower, (b) guaranteeing the
Credit Party Obligations, (c) pledging all of its Property (including without
limitation the Capital Stock of the Borrower) to the Collateral Agent, on behalf
of the Lenders, pursuant to the Collateral Documents, (d) incurring and holding
the Parent PIK Debt, (e) issuing equity securities, (f) prepare filings required
by the Securities Act or the Exchange Act, (g) prepare tax filings required by
federal or state law and (h) other miscellaneous legal, tax and accounting
activities related to the foregoing. Furthermore, the Parent will not (i) sell,
transfer or otherwise dispose of any shares of Capital Stock of the Borrower,
(ii) merge with or into any other Person, (iii) hold any Property other than (A)
the Capital Stock of the Borrower, and (B) such amounts allowed to be
transferred to the Parent pursuant to Section 8.8, or (iv) possess any
liabilities other than the liabilities under the Credit Documents, the Parent
PIK Debt, tax liabilities and other liabilities in the ordinary course of
business.
SECTION 9
EVENTS OF DEFAULT
-----------------
9.1 Events of Default.
-----------------
An Event of Default shall exist upon the occurrence, and during the
continuance, of any of the following specified events (each an "Event of
Default"):
(a) Payment. Any Credit Party shall default in the payment (i) when
due of any principal of any of the Loans or any reimbursement obligation
arising from drawings under
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Letters of Credit or (ii) within three Business Days of when due of any
interest on the Loans or any fees or other amounts owing hereunder, under
any of the other Credit Documents or in connection herewith.
(b) Representations. Any representation, warranty or statement made
or deemed to be made by any Credit Party herein, in any of the other Credit
Documents, or in any statement or certificate delivered or required to be
delivered pursuant hereto or thereto shall prove untrue in any material
respect on the date as of which it was made or deemed to have been made.
(c) Covenants. Any Credit Party shall:
(i) default in the due performance or observance of any term,
covenant or agreement contained in Sections 7.2, 7.3, 7.5, 7.9(b),
7.10, 7.11, 7.12, 7.13 or 8.1 through 8.15 inclusive;
(ii) default in the due performance or observance by it of any
term, covenant or agreement contained in Section 7.1 and such default
shall continue unremedied for a period of five Business Days;
(iii) default in the due performance or observance by it of any
term, covenant or agreement (other than those referred to in
subsections (a), (b) or (c)(i) or (ii) of this Section 9.1) contained
in this Credit Agreement and such default shall continue unremedied
for a period of at least 30 days after the earlier of a Credit Party
becoming aware of such default or notice thereof given by the
Administrative Agent.
(d) Other Credit Documents. (i) Any Credit Party shall default in the
due performance or observance of any term, covenant or agreement in any of
the other Credit Documents and such default shall continue unremedied for a
period of at least 30 days after the earlier of a Credit Party becoming
aware of such default or notice thereof given by the Administrative Agent,
or (ii) other than because of acts or failure to act by the Lenders, the
Administrative Agent or the Collateral Agent, any Credit Document shall
fail to be in full force and effect or any Credit Party shall so assert or
any Credit Document shall fail to give the Collateral Agent and/or the
Lenders the security interests, liens, rights, powers and privileges
purported to be created thereby.
(e) Guaranties. The guaranty given by the Credit Parties hereunder or
by any Additional Credit Party hereafter or any provision thereof shall
cease to be in full force and effect, or any guarantor thereunder or any
Person acting by or on behalf of such guarantor shall deny or disaffirm
such Guarantor's obligations under such guaranty.
(f) Bankruptcy, etc. The occurrence of any of the following: (i) a
court or governmental agency having jurisdiction in the premises shall
enter a decree or order for relief in respect of any Credit Party or any of
its Subsidiaries in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or appoint a
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receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of any Credit Party or any of its Subsidiaries or for any
substantial part of its property or ordering the winding up or liquidation
of its affairs; or (ii) an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect is
commenced against any Credit Party or any of its Subsidiaries and such
petition remains unstayed and in effect for a period of 60 consecutive
days; or (iii) any Credit Party or any of its Subsidiaries shall commence a
voluntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or consent to the entry of an order for
relief in an involuntary case under any such law, or consent to the
appointment or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of such Person or any
substantial part of its property or make any general assignment for the
benefit of creditors; or (iv) any Credit Party or any of its Subsidiaries
shall admit in writing its inability to pay its debts generally as they
become due or any action shall be taken by such Person in furtherance of
any of the aforesaid purposes.
(g) Defaults under Other Agreements.
-------------------------------
(i) A Credit Party or any of its Subsidiaries shall default in
the due performance or observance (beyond the applicable grace period
with respect thereto) of any material obligation or condition of any
contract or lease to which it is a party (including, without
limitation, any Hedging Agreement, but excluding the Credit
Documents), if such default could reasonably be expected to have a
Material Adverse Effect; or
(ii) With respect to any Indebtedness (other than Indebtedness
outstanding under this Credit Agreement) of a Credit Party or any of
its Subsidiaries in a principal amount in excess of $2,000,000
individually, or $4,000,000 in the aggregate (A) such Person shall (x)
default in any payment (beyond the applicable grace period with
respect thereto, if any) with respect to any such Indebtedness, or (y)
default (after giving effect to any applicable grace period) in the
observance or performance relating to such Indebtedness or contained
in any instrument or agreement evidencing, securing or relating
thereto, or any other event or condition shall occur or condition
exist, the effect of which default or other event or condition is to
cause or permit the holder or holders of such Indebtedness (or trustee
or agent on behalf of such holders) to cause (determined without
regard to whether any notice or lapse of time is required) any such
Indebtedness to become due prior to its stated maturity; or (B) any
such Indebtedness shall be declared due and payable, or required to be
prepaid other than by a regularly scheduled required prepayment prior
to the stated maturity thereof; or (C) any such Indebtedness shall
mature and remain unpaid.
(h) Judgments. One or more judgments, orders, or decrees (including,
without limitation, any judgment, order, or decree with respect to any
litigation disclosed pursuant to the Credit Documents) shall be entered
against any one or more of the Credit Parties and its Subsidiaries
involving a liability of $3,500,000 or more, in the aggregate, (to the
extent not paid or covered by insurance provided by a carrier who has
acknowledged coverage) and such
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judgments, orders or decrees (i) are the subject of any enforcement
proceeding commenced by any creditor or (ii) shall continue unsatisfied,
undischarged and unstayed for a period ending on the first to occur of (A)
the last day on which such judgment, order or decree becomes final and
unappealable or (B) 60 days.
(i) ERISA. The occurrence of any of the following events or
conditions which could reasonably be expected to have a Material Adverse
Effect: (A) any "accumulated funding deficiency," as such term is defined
in Section 302 of ERISA and Section 412 of the Code, whether or not waived,
shall exist with respect to any Plan, or any Lien shall arise on the assets
of any Credit Party or any ERISA Affiliate in favor of the PBGC or a Plan;
(B) a Termination Event shall occur with respect to a Single Employer Plan,
which is likely to result in the termination of such Plan for purposes of
Title IV of ERISA; (C) a Termination Event shall occur with respect to a
Multiemployer Plan or Multiple Employer Plan, which is likely to result in
(i) the termination of such Plan for purposes of Title IV of ERISA, or (ii)
any Credit Party or any ERISA Affiliate incurring any liability in
connection with a withdrawal from, reorganization of (within the meaning of
Section 4241 of ERISA), or insolvency (within the meaning of Section 4245
of ERISA) of such Plan; or (D) any prohibited transaction (within the
meaning of Section 406 of ERISA or Section 4975 of the Code) or breach of
fiduciary responsibility shall occur which may subject any Credit Party or
any ERISA Affiliate to any liability under Sections 406, 409, 502(i), or
502(l) of ERISA or Section 4975 of the Code, or under any agreement or
other instrument pursuant to which any Credit Party or any ERISA Affiliate
has agreed or is required to indemnify any person against any such
liability.
(j) Ownership. There shall occur a Change of Control.
(k) Material Loss of Collateral. There shall occur any loss, theft,
damage or destruction of any item or items of Collateral which either (i)
has had or is reasonably expected to have a Material Adverse Effect or (ii)
materially and adversely affects the operation of the Credit Parties'
business, taken as a whole, and is not covered by insurance as required
herein.
9.2 Acceleration; Remedies.
----------------------
Upon the occurrence and during the continuance of an Event of Default and
at any time thereafter unless and until such Event of Default has been waived in
writing by the Required Lenders (or the Lenders as may be required hereunder),
the Administrative Agent shall, upon the request and direction of the Required
Lenders, by written notice to the Borrower, take the following actions without
prejudice to the rights of the Agents or any Lender to enforce its claims
against the Credit Parties, except as otherwise specifically provided for
herein:
(a) Termination of Commitments. Declare the Commitments terminated
whereupon the Commitments shall be immediately terminated.
(b) Acceleration of Loans. Declare the unpaid principal of and any
accrued interest in respect of all Loans, any reimbursement obligations
arising from drawings under Letters of
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Credit and any and all other indebtedness or obligations of any and every
kind owing by a Credit Party to any of the Lenders hereunder to be due
whereupon the same shall be immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Credit Parties.
(c) Cash Collateral. Direct the Borrower to pay (and the Borrower
agrees that upon receipt of such notice or upon the occurrence of an Event
of Default under Section 9.1(f), it will immediately pay) to the
Administrative Agent additional cash to be held by the Administrative
Agent, for the benefit of the Lenders, in a cash collateral account as
additional security for the LOC Obligations in respect of subsequent
drawings under all then outstanding Letters of Credit in an amount equal to
the maximum aggregate amount which may be drawn under all Letters of
Credits then outstanding.
(d) Enforcement of Rights. Enforce any and all rights and interests
created and existing under the Credit Documents, including, without
limitation, all rights and remedies existing under the Collateral
Documents, all rights and remedies against a Guarantor and all rights of
set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(f) shall occur, then the Commitments shall automatically terminate and all
Loans, all reimbursement obligations under Letters of Credit, all accrued
interest in respect thereof, all cash necessary to collateralize the LOC
Obligations pursuant to Section 9.2(c), all accrued and unpaid fees and other
indebtedness or obligations owing to the Lenders hereunder shall immediately
become due and payable without the giving of any notice or other action by the
Agents or the Lenders, which notice or other action is expressly waived by the
Credit Parties.
Notwithstanding the fact that enforcement powers reside primarily with the
Administrative Agent, each Lender has, to the extent permitted by law, a
separate right of payment and shall be considered a separate "creditor" holding
a separate "claim" within the meaning of Section 101(5) of the Bankruptcy Code
or any other insolvency statute.
9.3 Allocation of Payments After Event of Default.
---------------------------------------------
Notwithstanding any other provisions of this Credit Agreement, after the
occurrence and during the continuance of an Event of Default, all amounts
collected or received by an Agent or any Lender on account of amounts
outstanding under any of the Credit Documents or in respect of the Collateral
shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of the
Agents or any of the Lenders in connection with enforcing the rights of the
Lenders under the Credit Documents and any protective advances made by the
Agents or any of the Lenders with respect to the Collateral under or
pursuant to the terms of the Collateral Documents;
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SECOND, to payment of any fees owed to an Agent, the Issuing Lender or
any Lender;
THIRD, to the payment of all accrued interest payable to the Lenders
hereunder and all other obligations (other than those obligations to be
paid pursuant to clause "FOURTH" below) which shall have become due and
payable under the Credit Documents and not repaid pursuant to clauses
"FIRST" and "SECOND" above;
FOURTH, to the payment of the outstanding principal amount of the
Loans and unreimbursed drawings under Letters of Credit, to the payment or
cash collateralization of the outstanding LOC Obligations and to any
principal amounts outstanding under Hedging Agreements between a Credit
Party and a Lender, pro rata as set forth below; and
FIFTH, the payment of the surplus, if any, to whoever may be lawfully
entitled to receive such surplus.
In carrying out the foregoing, (a) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (b) each of the Lenders shall receive an amount equal to
its pro rata share (based on the proportion that the then outstanding Loans, LOC
Obligations and obligations under Hedging Agreements held by such Lender bears
to the aggregate then outstanding Loans, LOC Obligations and obligations under
Hedging Agreements) of amounts available to be applied; and (c) to the extent
that any amounts available for distribution pursuant to clause "FOURTH" above
are attributable to the issued but undrawn amount of outstanding Letters of
Credit, such amounts shall be held by the Collateral Agent in a cash collateral
account and applied (x) first, to reimburse the Issuing Lender from time to time
for any drawings under such Letters of Credit and (y) then, following the
expiration of all Letters of Credit, to all other obligations of the types
described in clause "FOURTH" above in the manner provided in this Section 9.3.
SECTION 10
AGENCY PROVISIONS
-----------------
10.1 Appointment.
-----------
Each Lender hereby designates and appoints NationsBank, N.A. as
Administrative Agent and Collateral Agent of such Lender to act as specified
herein and the other Credit Documents, and each such Lender hereby authorizes
the Agents, as the agents for such Lender, to take such action on its behalf
under the provisions of this Credit Agreement and the other Credit Documents and
to exercise such powers and perform such duties as are expressly delegated by
the terms hereof and of the other Credit Documents, together with such other
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary elsewhere herein and in the other Credit Documents, the Agents
shall not have any duties or responsibilities, except those expressly set forth
herein and therein, or any fiduciary relationship with any Lender, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Credit Agreement or any of the other Credit
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Documents, or shall otherwise exist against the Agents. The provisions of this
Section are solely for the benefit of the Agents and the Lenders and none of the
Credit Parties shall have any rights as a third party beneficiary of the
provisions hereof. In performing its functions and duties under this Credit
Agreement and the other Credit Documents, each Agent shall act solely as an
agent of the Lenders and does not assume and shall not be deemed to have assumed
any obligation or relationship of agency or trust with or for any Credit Party.
10.2 Delegation of Duties.
--------------------
An Agent may execute any of its duties hereunder or under the other Credit
Documents by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. An Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
10.3 Exculpatory Provisions.
----------------------
Neither the Agents nor any of their officers, directors, employees, agents,
attorneys-in-fact or affiliates shall be liable for any action lawfully taken or
omitted to be taken by it or such Person under or in connection herewith or in
connection with any of the other Credit Documents (except for its or such
Person's own gross negligence or willful misconduct) or responsible in any
manner to any of the Lenders for any recitals, statements, representations or
warranties made by any of the Credit Parties contained herein or in any of the
other Credit Documents or in any certificate, report, document, financial
statement or other written or oral statement referred to or provided for in, or
received by an Agent under or in connection herewith or in connection with the
other Credit Documents, or enforceability or sufficiency therefor of any of the
other Credit Documents, or for any failure of the Borrower to perform its
obligations hereunder or thereunder. The Agents shall not be responsible to any
Lender for the effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency of this Credit Agreement, or any of the other
Credit Documents or for any representations, warranties, recitals or statements
made herein or therein or made by a Borrower or any Credit Party in any written
or oral statement or in any financial or other statements, instruments, reports,
certificates or any other documents in connection herewith or therewith
furnished or made by an Agent to the Lenders or by or on behalf of the Credit
Parties to the Agents or any Lender or be required to ascertain or inquire as to
the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained herein or therein or as to the use of the
proceeds of the Loans or the use of the Letters of Credit or of the existence or
possible existence of any Default or Event of Default or to inspect the
properties, books or records of the Credit Parties. The Agents are not trustees
for the Lenders and owe no fiduciary duty to the Lenders.
10.4 Reliance on Communications.
--------------------------
The Agents shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation reasonably believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon
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advice and statements of legal counsel (including, without limitation, counsel
to any of the Credit Parties, independent accountants and other experts selected
by the Agents with reasonable care). The Agents may deem and treat the Lenders
as the owner of its interests hereunder for all purposes unless a written notice
of assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent in accordance with Section 11.3(b). The Agents shall be
fully justified in failing or refusing to take any action under this Credit
Agreement or under any of the other Credit Documents unless it shall first
receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agents shall in all cases
be fully protected in acting, or in refraining from acting, hereunder or under
any of the other Credit Documents in accordance with a request of the Required
Lenders (or to the extent specifically provided in Section 11.6, all the
Lenders) and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders (including their successors and
assigns).
10.5 Notice of Default.
-----------------
An Agent shall not be deemed to have knowledge or notice of the occurrence
of any Default or Event of Default hereunder unless such Agent has received
notice from a Lender or a Credit Party referring to the Credit Document,
describing such Default or Event of Default and stating that such notice is a
"notice of default." In the event that the Administrative Agent receives such a
notice, the Administrative Agent shall give prompt notice thereof to the
Lenders. The Administrative Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the Required
Lenders and as is permitted by the Credit Documents.
10.6 Non-Reliance on Agents and Other Lenders.
----------------------------------------
Each Lender expressly acknowledges that neither the Agents, NMS nor any of
their officers, directors, employees, agents, attorneys-in-fact or affiliates
has made any representations or warranties to it and that no act by the Agents
or any affiliate thereof hereinafter taken, including any review of the affairs
of any Credit Party, shall be deemed to constitute any representation or
warranty by the Agents to any Lender. Each Lender represents to the Agents and
NMS that it has, independently and without reliance upon the Agents or NMS or
any other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
assets, operations, property, financial and other conditions, prospects and
creditworthiness of the Credit Parties and made its own decision to make its
Loans hereunder and enter into this Credit Agreement. Each Lender also
represents that it will, independently and without reliance upon the Agents or
NMS or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Credit
Agreement, and to make such investigation as it deems necessary to inform itself
as to the business, assets, operations, property, financial and other
conditions, prospects and creditworthiness of the Credit Parties. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Administrative Agent hereunder, the Agents and NMS shall not have
any duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, assets, property, financial or
other conditions, prospects or creditworthiness of the Credit
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Parties which may come into the possession of the Agents, NMS or any of their
officers, directors, employees, agents, attorneys-in-fact or affiliates.
10.7 Indemnification.
---------------
The Lenders agree to indemnify each Agent in its capacity as such (to the
extent not reimbursed by the Borrower and without limiting the obligation of the
Borrower to do so), ratably according to their respective Commitments (or if the
Commitments have expired or been terminated, in accordance with the respective
principal amounts of outstanding Loans and Participation Interest of the
Lenders), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including without limitation at
any time following payment in full of the Credit Party Obligations) be imposed
on, incurred by or asserted against an Agent in its capacity as such in any way
relating to or arising out of this Credit Agreement or the other Credit
Documents or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by an Agent under or in connection with any of the foregoing; provided that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the gross negligence or willful
misconduct of an Agent. If any indemnity furnished to an Agent for any purpose
shall, in the opinion of such Agent, be insufficient or become impaired, such
Agent may call for additional indemnity and cease, or not commence, to do the
acts indemnified against until such additional indemnity is furnished. The
agreements in this Section shall survive the payment of the Credit Party
Obligations and all other amounts payable hereunder and under the other Credit
Documents.
10.8 Agents in Their Individual Capacity.
-----------------------------------
Each Agent and its affiliates may make loans to, accept deposits from and
generally engage in any kind of business with a Borrower or any other Credit
Party as though such Agent were not an Agent hereunder. With respect to the
Loans made and Letters of Credit issued and all obligations owing to it, an
Agent shall have the same rights and powers under this Credit Agreement as any
Lender and may exercise the same as though they were not an Agent, and the terms
"Lender" and "Lenders" shall include each Agent in its individual capacity.
10.9 Successor Agent.
---------------
Any Agent may, at any time, resign upon 20 days written notice to the
Lenders. Upon any such resignation, the Required Lenders shall have the right to
appoint a successor Agent; provided, however, that in the absence of any
continuing Event of Default, such appointment of a successor Agent shall be
consented to by the Borrower, which consent shall not be unreasonably withheld.
If no successor Agent shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within 60 days after the notice of
resignation, then the retiring Agent shall select a successor Agent, with the
consent of the Borrower (such consent not to be unreasonably withheld) provided
such successor is an Eligible Assignee. Upon the acceptance of any appointment
as an Agent hereunder by a successor, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and
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duties of the retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations as an Agent, as appropriate, under this Credit
Agreement and the other Credit Documents and the provisions of this Section 10.9
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was an Agent under this Credit Agreement.
SECTION 11
MISCELLANEOUS
-------------
11.1 Notices.
-------
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business Day following the day on which the same
has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address or telecopy numbers set forth on Schedule
11.1, or at such other address as such party may specify by written notice to
the other parties hereto.
11.2 Right of Set-Off.
----------------
In addition to any rights now or hereafter granted under applicable law or
otherwise, and not by way of limitation of any such rights, upon the occurrence
of an Event of Default and the commencement of remedies described in Section
9.2, each Lender is authorized at any time and from time to time, without
presentment, demand, protest or other notice of any kind (all of which rights
being hereby expressly waived), to set-off and to appropriate and apply any and
all deposits (general or special) and any other indebtedness at any time held or
owing by such Lender (including, without limitation, branches, agencies or
Affiliates of such Lender wherever located) to or for the credit or the account
of any Credit Party against obligations and liabilities of such Credit Party to
the Lenders hereunder, under the Notes, the other Credit Documents or otherwise,
irrespective of whether the Administrative Agent or the Lenders shall have made
any demand hereunder and although such obligations, liabilities or claims, or
any of them, may be contingent or unmatured, and any such set-off shall be
deemed to have been made immediately upon the occurrence of an Event of Default
even though such charge is made or entered on the books of such Lender
subsequent thereto. The Credit Parties hereby agree that any Person purchasing a
participation in the Loans and Commitments hereunder pursuant to Section 11.3(e)
or 3.8 may exercise all rights of set-off with respect to its participation
interest as fully as if such Person were a Lender hereunder.
11.3 Benefit of Agreement.
--------------------
(a) Generally. This Credit Agreement shall be binding upon and inure
to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided that none of the Credit Parties may
assign and transfer any of its interests (except as permitted
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by Section 8.4 or 8.5) without the prior written consent of the Lenders;
and provided further that the rights of each Lender to transfer, assign or
grant participations in its rights and/or obligations hereunder shall be
limited as set forth below in this Section 11.3.
(b) Assignments. Each Lender may assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Credit
Agreement (including, without limitation, all or a portion of its Loans,
its Notes, and its Commitments); provided, however, that:
(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of an assignment to another Lender or
an Approved Fund or an assignment of all of a Lender's rights and
obligations under this Credit Agreement, any such partial assignment
shall be in an amount at least equal to $5,000,000 (or, if less, the
remaining amount of the Commitment being assigned by such Lender) or
an integral multiple of $1,000,000 in excess thereof;
(iii) each such assignment by a Lender shall be of a constant,
and not varying, percentage of all of its rights and obligations under
this Credit Agreement and the Notes; and
(iv) the parties to such assignment shall execute and deliver
to the Administrative Agent for its acceptance an Assignment Agreement
in substantially the form of Exhibit 11.3(b), together with a
processing fee from the assignor of $3,500.
Upon execution, delivery and acceptance of such Assignment Agreement, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender
hereunder and the assigning Lender shall, to the extent of such assignment,
relinquish its rights and be released from its obligations under this
Credit Agreement. Upon the consummation of any assignment pursuant to this
Section 11.3(b), the assignor, the Administrative Agent and the Borrower
shall make appropriate arrangements so that, if required, new Notes are
issued to the assignor and the assignee. If the assignee is not
incorporated under the laws of the United States of America or a state
thereof, it shall deliver to the Borrower and the Administrative Agent
certification as to exemption from deduction or withholding of taxes in
accordance with Section 3.13.
By executing and delivering an assignment agreement in accordance with this
Section 11.3(b), the assigning Lender thereunder and the assignee
thereunder shall be deemed to confirm to and agree with each other and the
other parties hereto as follows: (A) such assigning Lender warrants that it
is the legal and beneficial owner of the interest being assigned thereby
free and clear of any adverse claim and the assignee warrants that it is an
Eligible Assignee; (B) except as set forth in clause (A) above, such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in
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or in connection with this Credit Agreement, any of the other Credit
Documents or any other instrument or document furnished pursuant hereto or
thereto, or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Credit Agreement, any of the other Credit
Documents or any other instrument or document furnished pursuant hereto or
thereto or the financial condition of any Credit Party or the performance
or observance by any Credit Party of any of its obligations under this
Credit Agreement, any of the other Credit Documents or any other instrument
or document furnished pursuant hereto or thereto; (C) such assignee
represents and warrants that it is legally authorized to enter into such
assignment agreement; (D) such assignee confirms that it has received a
copy of this Credit Agreement, the other Credit Documents and such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such assignment agreement; (E)
such assignee will independently and without reliance upon the Agents, such
assigning Lender or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Credit
Agreement and the other Credit Documents; (F) such assignee appoints and
authorizes the Agents to take such action on its behalf and to exercise
such powers under this Credit Agreement or any other Credit Document as are
delegated to the Agents by the terms hereof or thereof, together with such
powers as are reasonably incidental thereto; and (G) such assignee agrees
that it will perform in accordance with their terms all the obligations
which by the terms of this Credit Agreement and the other Credit Documents
are required to be performed by it as a Lender.
(c) Register. The Administrative Agent shall maintain a copy of each
Assignment Agreement delivered to and accepted by it and a register for the
recordation of the names and addresses of the Lenders and the Commitment
of, and principal amount of the Loans owing to, each Lender from time to
time (the "Register"). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Credit Agreement. The Register shall be available for inspection by the
Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(d) Acceptance. Upon its receipt of an Assignment Agreement executed
by the parties thereto, together with any Note subject to such assignment
and payment of the processing fee, the Administrative Agent shall, if such
Assignment Agreement has been completed and is in substantially the form of
Exhibit 11.3(b) hereto, (i) accept such Assignment Agreement, (ii) record
the information contained therein in the Register and (iii) give prompt
notice thereof to the parties thereto.
(e) Participations. Each Lender may sell participations to one or
more Persons in all or a portion of its rights, obligations or rights and
obligations under this Credit Agreement (including all or a portion of its
Commitments and its Loans); provided, however, that (i) such Lender's
obligations under this Credit Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) the participant shall be entitled to
the benefit of
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the yield protection provisions contained in Sections 3.9 through 3.14,
inclusive, and the right of set-off contained in Section 11.2, (iv) the
Borrower shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Credit
Agreement, and such Lender shall retain the sole right to enforce the
obligations of the Borrower relating to its Loans and its Notes and to
approve any amendment, modification, or waiver of any provision of this
Credit Agreement (other than amendments, modifications, or waivers
decreasing the amount of principal of or the rate at which interest is
payable on such Loans or Notes, extending any scheduled principal payment
date or date fixed for the payment of interest on such Loans or Notes, or
extending its Commitments) and (v) such Lender shall provide written notice
of any participation to the Borrower and the Administrative Agent.
(f) Nonrestricted Assignments. Notwithstanding any other provision
set forth in this Credit Agreement, (i) any Lender may at any time assign
and pledge all or any portion of its Loans and its Notes to any Federal
Reserve Bank as collateral security pursuant to Regulation A and any
Operating Circular issued by such Federal Reserve Bank and (ii) any Lender
which is an investment fund that invests in Loans may assign or pledge all
or any portion of its Loans, Notes or the other Credit Party Obligations
owed to such Lender to its trustee or any other representative of holders
of obligations owed or securities issued by such Lender as security for
such obligations or securities. The foregoing assignments and pledges shall
not be subject to the provisions of Section 11.3(b). No such assignment or
pledge shall release the assigning Lender from its obligations hereunder.
(g) Information. Any Lender may furnish any information concerning
the Borrower or any of its Subsidiaries in the possession of such Lender
from time to time to assignees and participants (including prospective
assignees and participants), subject, however, to the provisions of Section
11.16 hereof.
11.4 No Waiver; Remedies Cumulative.
------------------------------
No failure or delay on the part of an Agent or any Lender in exercising any
right, power or privilege hereunder or under any other Credit Document and no
course of dealing between the Borrower or any Credit Party and the Agents or any
Lender shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights and remedies
provided herein are cumulative and not exclusive of any rights or remedies which
the Agents or any Lender would otherwise have. No notice to or demand on any
Credit Party in any case shall entitle any Credit Party to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the Agents or the Lenders to any other or further action in any
circumstances without notice or demand.
11.5 Payment of Expenses; Indemnification.
------------------------------------
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The Credit Parties agree to: (a) pay all reasonable out-of-pocket costs
and expenses of the Agents and NMS (including, without limitation, the
reasonable fees and expenses of ▇▇▇▇▇ & ▇▇▇ ▇▇▇▇▇, PLLC, special counsel to the
Agents and NMS, and any other special counsel to the Agents and NMS) in
connection with (i) the negotiation, preparation, execution and delivery and
administration of this Credit Agreement and the other Credit Documents and the
documents and instruments referred to therein, (ii) any amendment, waiver or
consent relating hereto and thereto including, but not limited to, any such
amendments, waivers or consents resulting from or related to any work-out,
renegotiation or restructure relating to the performance by the Credit Parties
under this Credit Agreement, (iii) enforcement of the Credit Documents and the
documents and instruments referred to therein; provided that the Credit Parties
shall be responsible for the reasonable fees and disbursements of counsel for
the Agents in connection with any such enforcement action only if the Agents and
the Lenders prevail in such enforcement action, and (iv) any bankruptcy or
insolvency proceeding of a Credit Party or any of its Subsidiaries and (b)
indemnify each Agent, NMS and each Lender, its officers, directors, trustees,
investment advisors, employees, representatives and agents from and hold each of
them harmless against any and all losses, liabilities, claims, damages or
expenses incurred by any of them as a result of, or arising out of, or in any
way related to, or by reason of, any investigation, litigation or other
proceeding (whether or not any Agent, NMS or Lender is a party thereto) related
to (i) the entering into and/or performance of any Credit Document or the use of
proceeds of any Loans (including other extensions of credit) hereunder or the
consummation of any other transactions contemplated in any Credit Document,
including, without limitation, the reasonable fees and disbursements of counsel
incurred in connection with any such investigation, litigation or other
proceeding, (ii) any Environmental Claim, (iii) any claims for Non-Excluded
Taxes and (iv) the Peoples Merger and the transactions contemplated by the
Merger Agreement (but excluding in the case of (i), (ii), (iii) and (iv) above,
any such losses, liabilities, claims, damages or expenses to the extent it is
finally judicially determined that such losses, liabilities, claims, damages or
expenses were incurred by reason of bad faith, gross negligence or willful
misconduct on the part of the Person to be indemnified).
11.6 Amendments, Waivers and Consents.
--------------------------------
Subject to Section 11.18(b), neither this Credit Agreement nor any other
Credit Document nor any of the terms hereof or thereof may be amended, changed,
waived, discharged or terminated unless such amendment, change, waiver,
discharge or termination is in writing and signed by the Required Lenders and
the Borrower; provided that no such amendment, change, waiver, discharge or
termination shall without the consent of each Lender affected thereby:
(a) extend the Revolving Loan Maturity Date or the Tranche B Term Loan
Maturity Date or postpone or extend or waive any Principal Amortization
Payment of any Loan or any portion thereof;
(b) reduce the rate or extend the time of payment of interest (other
than as a result of waiving the applicability of any post-default increase
in interest rates) thereon or fees hereunder;
(c) reduce or waive the principal amount of any Loan;
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(d) increase or extend any Commitment of a Lender (it being understood
and agreed that a waiver of any Default or Event of Default or a waiver of
any mandatory reduction in the Commitments shall not constitute a change in
the terms of any Commitment of any Lender);
(e) release all or substantially all of the Collateral securing the
Credit Party Obligations hereunder (provided that the Collateral Agent may,
without consent from any other Lender, release any Collateral that is sold
or transferred by a Credit Party in conformance with Section 8.5);
(f) release the Borrower from its obligations or release all or
substantially all of the other Credit Parties from their respective
obligations under the Credit Documents;
(g) amend, modify or waive any provision of this Section, Sections
3.4(a), 3.4(b), 3.7 or 3.8, or the definition of Interest Period;
(h) reduce any percentage specified in, or otherwise modify, the
definition of Required Lenders; or
(i) consent to the assignment or transfer by the Borrower of any of
its rights and obligations under (or in respect of) the Credit Documents.
No amendment or change that affects the application of prepayments pursuant to
Section 3.3(c) or the allocation of payments between the Tranche A Term Loans
and Tranche B Terms Loans shall be effective unless Lenders holding in the
aggregate at least 51% of the outstanding Tranche A Term Loans and at least 51%
of the Tranche B Term Loans shall consent to such amendment or change in
allocation of payments.
Notwithstanding the above, no provisions of Section 10 may be amended or
modified without the consent of the Agents. No provisions affecting the Issuing
Lender's rights to (a) reimbursement or indemnity under Section 2.2 or (b) any
Issuing Lender Fees may be amended without the consent of the Issuing Lender.
Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, (x) each Lender is entitled to vote as
such Lender sees fit on any reorganization plan that affects the Loans or the
Letters of Credit, and each Lender acknowledges that the provisions of Section
1126(c) of the Bankruptcy Code supersede the unanimous consent provisions set
forth herein and (y) the Required Lenders may consent to allow a Credit Party to
use cash collateral in the context of a bankruptcy or insolvency proceeding.
11.7 Counterparts/Telecopy.
---------------------
This Credit Agreement may be executed in any number of counterparts, each
of which where so executed and delivered shall be an original, but all of which
shall constitute one and the same
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instrument. Delivery of executed counterparts by telecopy shall be as effective
as an original and shall constitute a representation that an original will be
delivered.
11.8 Headings.
--------
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 Defaulting Lender/Excluded Lender.
---------------------------------
Each Lender understands and agrees that if such Lender is a Defaulting
Lender or an Excluded Lender then notwithstanding the provisions of Section 11.6
it shall not be entitled to vote on any matter requiring the consent of the
Required Lenders or to object to any matter requiring the consent of all the
Lenders; provided, however, that all other benefits and obligations under the
Credit Documents shall apply to such Defaulting Lender or Excluded Lender.
11.10 Survival of Indemnification and Representations and Warranties.
--------------------------------------------------------------
All indemnities set forth herein and all representations and warranties
made herein shall survive the execution and delivery of this Credit Agreement,
the making of the Loans, the issuance of the Letters of Credit and the repayment
of the Loans, LOC Obligations and other obligations and the termination of the
Commitments hereunder.
11.11 Governing Law; Jurisdiction.
---------------------------
(a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK (other than any real estate collateral documents which shall be
governed by the laws of the state where the real property is located that
is covered by such real estate collateral document). Any legal action or
proceeding with respect to this Agreement or any other Credit Document may
be brought in the courts of the State of North Carolina or of the United
States for the Western District of North Carolina, and, by execution and
delivery of this Credit Agreement, each Credit Party hereby irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of such courts. Each Credit Party
further irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to it at
the address for notices pursuant to Section 11.1, such service to become
effective 10 days after such mailing. Nothing herein shall affect the
right of a Lender to serve process in any other manner permitted by law or
to commence legal proceedings or to otherwise proceed against a Credit
Party in any other jurisdiction. Each Credit Party agrees that a final
judgment in any action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other
-103-
manner provided by law; provided that nothing in this Section 11.11(a) is
intended to impair a Credit Party's right under applicable law to appeal or
seek a stay of any judgment.
(b) Each Credit Party hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Agreement
or any other Credit Document brought in the courts referred to in
subsection (a) hereof and hereby further irrevocably waives and agrees not
to plead or claim in any such court that any such action or proceeding
brought in any such court has been brought in an inconvenient forum.
11.12 Waiver of Jury Trial; Waiver of Consequential Damages.
-----------------------------------------------------
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY. Each Credit Party agrees not to assert any
claim against the Administrative Agent, the Issuing Lender, any Lender, any of
their Affiliates, or any of their respective directors, officers, employees,
attorneys or agents, on any theory of liability, for special, indirect,
consequential or punitive damages arising out of or otherwise relating to any of
the transactions contemplated herein.
11.13 Time.
----
All references to time herein shall be references to Central Standard Time
or Central Daylight time, as the case may be, unless specified otherwise.
11.14 Severability.
------------
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.15 Further Assurances.
------------------
The Credit Parties agree, upon the request of the Administrative Agent, to
promptly take such actions, as reasonably requested, as is necessary to carry
out the intent of this Credit Agreement and the other Credit Documents,
including, but not limited to, such actions as are necessary to ensure that the
Lenders have a perfected security interest in the Collateral subject to no Liens
other than Permitted Liens.
11.16 Confidentiality.
---------------
-104-
Each Lender agrees that it will use its reasonable best efforts to keep
confidential and to cause any representative designated under Section 7.11 to
keep confidential any non-public information from time to time supplied to it
under any Credit Document; provided, however, that nothing herein shall prevent
the disclosure of any such information to (a) the extent a Lender in good faith
believes such disclosure is required by Requirement of Law, (b) counsel for a
Lender or to its accountants, (c) bank examiners or auditors or comparable
Persons, (d) any affiliate of a Lender, (e) any other Lender, or any assignee,
transferee or participant, or any potential assignee, transferee or participant,
of all or any portion of any Lender's rights under this Agreement who is
notified of the confidential nature of the information and agrees to such
confidentiality, (f) any other Person in connection with any litigation to which
any one or more of the Lenders is a party or (g) to any direct or indirect
contractual counterparty in any swap agreement or such contractual
counterparty's professional advisor (so long as such contractual counterparty or
professional advisor to such contractual counterparty agrees to be bound by the
provisions of this Section 11.16); and provided further that no Lender shall
have any obligation under this Section 11.16 to the extent any such information
becomes available on a non-confidential basis from a source other than a Credit
Party or that any information becomes publicly available other than by a breach
of this Section 11.16 by any Lender or representative thereof.
11.17 Entirety.
--------
This Credit Agreement together with the other Credit Documents and the Fee
Letter represent the entire agreement of the parties hereto and thereto, and
supersede all prior agreements and understandings, oral or written, if any,
including any commitment letters or correspondence relating to the Credit
Documents or the transactions contemplated herein and therein.
11.18 Binding Effect; Continuing Agreement.
------------------------------------
(a) This Credit Agreement shall become effective at such time when
all of the conditions set forth in Section 5.1 have been satisfied or
waived by the Administrative Agent (with the consent of the Required
Lenders) and it shall have been executed by the Borrower, the Guarantors
and the Agents, and the Agents shall have received copies hereof (telefaxed
or otherwise) which, when taken together, bear the signatures of each
Lender, and thereafter this Credit Agreement shall be binding upon and
inure to the benefit of the Borrower, the Guarantors, the Agents and each
Lender and their respective successors and assigns.
(b) This Credit Agreement shall be a continuing agreement and shall
remain in full force and effect until all Loans, LOC Obligations, interest,
fees and other Credit Party Obligations (other than any obligations which
by the terms thereof are stated to survive the termination of the Credit
Documents) have been paid in full and all Commitments and Letters of Credit
have been terminated. Upon termination, the Credit Parties shall have no
further obligations (other than the indemnification provisions that
survive) under the Credit Documents and the Collateral Agent shall, at the
request and expense of the Borrower, deliver all Collateral in its
possession to the Borrower and release all Liens on Collateral; provided
that should any payment, in whole or in part, of the Credit Party
Obligations be rescinded or otherwise required
-105-
to be restored or returned by an Agent or any Lender, whether as a result
of any proceedings in bankruptcy or reorganization or otherwise, then the
Credit Documents shall automatically be reinstated and all Liens of the
Lenders shall reattach to the Collateral and all amounts required to be
restored or returned and all costs and expenses incurred by an Agent or
Lender in connection therewith shall be deemed included as part of the
Credit Party Obligations.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-106-
Each of the parties hereto has caused a counterpart of this Credit
Agreement to be duly executed and delivered as of the date first above
written.
BORROWER: DAVEL FINANCING COMPANY, L.L.C.,
-------- a Delaware limited liability company
By: DAVEL COMMUNICATIONS, INC.,
its sole managing member
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
PARENT GUARANTOR: DAVEL COMMUNICATIONS, INC.,
---------------- a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President and
Chief Financial Officer
SUBSIDIARY GUARANTORS: DAVEL COMMUNICATIONS GROUP, INC.,
--------------------- a Delaware corporation
PEOPLES TELEPHONE COMPANY, INC.,
a New York corporation
PEOPLES TELEPHONE COMPANY, INC.,
a New Hampshire corporation
PEOPLES COLLECTORS, INC.,
a Delaware corporation
PTC CELLULAR, INC.,
a Delaware corporation
PTC SECURITY SYSTEMS, INC.,
a Florida corporation
TELINK TELEPHONE SYSTEMS, INC.,
a Georgia corporation
SILVERADO COMMUNICATIONS, INC.,
a Colorado corporation
PEOPLES ACQUISITION CORP.,
a Pennsylvania corporation
TELALEASING ENTERPRISES, INC.,
an Illinois corporation
ADTEC COMMUNICATIONS, INC.,
a Florida corporation
INTERSTATE COMMUNICATIONS, INC.,
a Georgia corporation
T.R.C.A., INC.,
an Illinois corporation
DAVELTEL, INC.,
an Illinois corporation
DAVEL MEXICO, LTD.,
an Illinois corporation
COMMUNICATIONS CENTRAL INC.,
a Georgia corporation
CENTRAL PAYPHONE SERVICES, INC.,
a Georgia corporation
COMMUNICATIONS CENTRAL
OF GEORGIA, INC.,
a Georgia corporation
INVISION TELECOM, INC.,
a Georgia corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Treasurer of each of the
above-referenced Subsidiary Guarantors
LENDERS:
-------
NATIONSBANK, N.A.,
individually in its capacity as a Lender, in its
capacity as the Administrative Agent and Collateral
Agent, and in its capacity as the Issuing Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
______________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
____________________________
Title: Senior Vice President
___________________________
SIGNATURE PAGE TO DAVEL FINANCING COMPANY, L.L.C. CREDIT AGREEMENT
BANKBOSTON, N.A.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------
Title: Vice President
------------------------
SIGNATURE PAGE TO DAVEL FINANCING COMPANY, L.L.C. CREDIT AGREEMENT
THE CHASE MANHATTAN BANK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------
Title: Vice President
-------------------------
SIGNATURE PAGE TO DAVEL FINANCING COMPANY, L.L.C. CREDIT AGREEMENT
PARIBAS
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Title: DIRECTOR
----------------------------
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------
Title: VICE PRESIDENT
----------------------------
SIGNATURE PAGE TO DAVEL FINANCING COMPANY, L.L.C. CREDIT AGREEMENT
U.S. BANK NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
Title: Vice President
---------------------------
SIGNATURE PAGE TO DAVEL FINANCING COMPANY, L.L.C. CREDIT AGREEMENT
THE FIRST NATIONAL BANK
OF CHICAGO
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Title: Vice President
---------------------------
SIGNATURE PAGE TO DAVEL FINANCING COMPANY, L.L.C. CREDIT AGREEMENT
DRESDNER BANK AG NEW YORK AND
GRAND CAYMAN BRANCHES
By: /s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Title: Assistant Vice President
---------------------------
By: /s/ Brigitte Sacin
-------------------------------
Name: BRIGITTE SACIN
---------------------------
Title: Assistant Treasurer
---------------------------
SIGNATURE PAGE TO DAVEL FINANCING COMPANY, L.L.C. CREDIT AGREEMENT
FLEET BANK, N.A.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Title: VICE PRESIDENT
---------------------------
SIGNATURE PAGE TO DAVEL FINANCING COMPANY, L.L.C. CREDIT AGREEMENT
LASALLE NATIONAL BANK
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------
Title: VICE PRESIDENT
---------------------------
SIGNATURE PAGE TO DAVEL FINANCING COMPANY, L.L.C. CREDIT AGREEMENT
PNC BANK, NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Title: VICE PRESIDENT
---------------------------
SIGNATURE PAGE TO DAVEL FINANCING COMPANY, L.L.C. CREDIT AGREEMENT
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
PRIME INCOME TRUST
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
Title: VICE PRESIDENT
---------------------------
SIGNATURE PAGE TO DAVEL FINANCING COMPANY, L.L.C. CREDIT AGREEMENT
KZH CYPRESSTREE-1 LLC
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------
Title: Authorized Agent
---------------------------
SIGNATURE PAGE TO DAVEL FINANCING COMPANY, L.L.C. CREDIT AGREEMENT
CYPRESSTREE INVESTMENT FUND, LLC
By: CypressTree Investment Management Company, Inc.
its Managing Member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Title: MANAGING DIRECTOR
---------------------------
CYPRESSTREE INSTITUTIONAL FUND, LLC
By: CypressTree Investment Management Company, Inc.
its Managing Member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Title: MANAGING DIRECTOR
---------------------------
NORTH AMERICAN SENIOR FLOATING RATE
FUND
By: CypressTree Investment Management Company, Inc.
as Portfolio Manager
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Title: MANAGING DIRECTOR
---------------------------
SIGNATURE PAGE TO DAVEL FINANCING COMPANY, L.L.C. CREDIT AGREEMENT
▇▇▇▇▇▇ FINANCIAL, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------
Title: Vice President
---------------------------
SIGNATURE PAGE TO DAVEL FINANCING COMPANY, L.L.C. CREDIT AGREEMENT
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
Title: Authorized Signatory
------------------------
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------------
Title: Authorized Signatory
------------------------
SIGNATURE PAGE TO DAVEL FINANCING COMPANY, L.L.C. CREDIT AGREEMENT
CREDIT AGRICOLE INDOSUEZ
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇ EVP
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇ EVP
----------------------------------
Title: HEAD OF CORPORATE BANKING
---------------------------------
CHICAGO
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
Title: First Vice President &
---------------------------------
Deputy Chief Credit Officer-USA
SIGNATURE PAGE TO DAVEL FINANCING COMPANY, L.L.C. CREDIT AGREEMENT
THE BANK OF NEW YORK
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Title: Vice President
---------------------------------