Exhibit 10.1
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement")
is being entered into, as of the 17th day of May, 2002, by and among TELETOUCH
COMMUNICATIONS, INC., a corporation duly organized and validly existing under
the laws of the State of Delaware (the "Company"), ING PRIME RATE TRUST, a
Massachusetts business trust formerly known as Pilgrim America Prime Rate Trust
("Pilgrim"), each other Person that hereafter becomes a "Lender" pursuant to
Section 11.06(b) hereof (together with Pilgrim, individually, a "Lender" and
collectively, the "Lenders"), and ING PRIME RATE TRUST, a Massachusetts business
trust formerly known as Pilgrim America Prime Rate Trust, as administrative
agent for the Lenders (in such capacity, together with its successors and
assigns in such capacity, the "Administrative Agent").
The Company, Pilgrim, the predecessor-in-interest to the
Administrative Agent and certain other lenders (together with Pilgrim, the
"Original Lenders") entered into that certain Credit Agreement dated as of July
24, 1996 (as heretofore amended and extended, the "Existing Credit Agreement"),
upon and subject to the terms and conditions of which several loans and
extensions of credit were made to the Company for the purposes of financing the
acquisition of various assets and businesses integrally related to the Company's
primary line of business involving paging systems, refinancing certain
then-existing indebtedness of the Company and its Subsidiaries and providing
funds for the working capital needs and capital expenditures of the Company and
its Subsidiaries. Immediately prior to the execution hereof, the Company has
repaid in full, or otherwise satisfactorily discharged, the loans and extensions
of credit made by the Original Lenders (other than the loans and extensions of
credit made by Pilgrim, which are being modified as provided for herein)
pursuant to the Existing Credit Agreement, and the original administrative agent
has assigned to the Administrative Agent all of its rights, title and interests,
as administrative agent, in, to and under the Existing Credit Agreement and all
of the original loan and security documents relating thereto. The parties
hereto, being all of the remaining parties to the Existing Credit Agreement,
desire to reflect the foregoing, to amend the Existing Credit Agreement in
various additional respects and, as so amended, to restate the Existing Credit
Agreement in its entirety. Accordingly, the parties hereto agree that, subject
to satisfaction of the conditions set forth in Article VI below, the Existing
Credit Agreement shall be amended and restated in its entirety to read as
follows (as so amended and restated, the "Credit Agreement"):
ARTICLE I DEFINITIONS AND ACCOUNTING MATTERS
1.01 Certain Defined Terms. As used herein, the following terms
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shall have the following meanings (all terms defined in this Section 1.01 or in
other provisions of this Agreement in the singular to have the same meanings
when used in the plural and vice versa):
"Acquisition" shall mean any acquisition of Property of
another Person (whether by purchase, contribution, gift or any other means, and
whether directly or indirectly through acquisition of ownership interests in
another Person or otherwise) by the Company or any of its Subsidiaries.
"Acquisition Agreement" shall mean each agreement pursuant to
which an Acquisition shall be consummated, as the same may, subject to the
provisions of Section 8.18 hereof, be modified and supplemented and in effect
from time to time.
"Act of Insolvency" shall mean, with respect to any Person,
the performance of any of the following acts or the occurrence of any of the
following events: (a) the commencement or filing by such Person of voluntary
proceedings or a petition seeking relief or protection under any Bankruptcy Law;
or (b)
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the adjudication of such Person as a bankrupt or insolvent; or (c) the
commencement of an involuntary proceeding under any Bankruptcy Law against such
Person and the failure of such Person to have such proceedings finally dismissed
within sixty (60) days thereafter; or (d) the seeking, consenting to or
acquiescence by such Person in the appointment of any trustee, receiver or
similar official for itself or for all or any substantial portion of its assets;
or (e) the appointment of a trustee, receiver or similar official for such
Person or for all or any substantial portion of its assets and the failure of
such Person to have such appointment finally dismissed or vacated within sixty
(60) days thereafter; or (f) the making by such Person of an assignment for the
benefit of its creditors; or (g) the admission by such Person in writing of its
inability to pay its debts generally as the same become due and payable; or (h)
the adoption by such Person's creditors of a general plan of arrangement,
recomposition or other action pursuant to a general meeting of the creditors of
such Person.
"Affiliate" shall mean, with respect to any Person, (a) any
other Person who, whether directly or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with such
Person, (b) any other Person owning or controlling five percent (5%) or more of
the outstanding voting or beneficial ownership interests of such Person, (c) any
other Person who shares a director, executive officer, general partner or
controlling shareholder or member with such Person, (d) any director, executive
officer, general partner or controlling shareholder or member of such Person,
(e) any spouse, parent, child, grandparent, grandchild, sibling or first degree
collateral of such Person or of any other Person falling within any of the
categories described in clauses (a), (b), (c) or (d) of this definition and/or
(f) any trust the principal beneficiary of which is such Person or one or more
of the Persons falling within any of the categories described in clauses (a),
(b), (c), (d) or (e) of this definition and/or any Person who is controlled by
any such member or trust. For the purposes of this definition, "controls", "is
controlled by", or "is under common control with" shall mean the ability and/or
power (whether through direct or indirect ownership of voting or beneficial
ownership interests in such Person, or otherwise) to direct or cause the
direction of the management and policies of such Person, provided, however, that
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in any event any Person that owns directly or indirectly securities having 5% or
more of the voting power for the election of directors or other governing body
of a corporation or 5% or more of the partnership or other ownership interests
of any other Person (other than as a limited partner of such other Person) will
be deemed to control such corporation or other Person. Without limiting the
generality of the foregoing, it is understood and agreed that each of the
Company, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, J. ▇▇▇▇▇▇ ▇▇▇▇▇▇, Progressive Concepts
Communications, Inc., Rainbow Resources, Inc. and the TLL Group, and each of
their respective constituent entities, are Affiliates of each other for all
purposes of this Agreement and the other Loan Documents.
"Agreement" shall mean this Second Amended and Restated
Credit Agreement, as the same may be amended, supplemented, replaced or
otherwise modified from time to time in accordance with the provisions hereof.
"Amended and Restated Note" shall mean, provided the Closing
occurs, the promissory note provided for in Section 2.02(a) hereof and all
promissory notes delivered in substitution or exchange therefor, in each case as
the same shall be modified and supplemented and in effect from time to time. The
term "Amended and Restated Note" also shall include any Registered Note or Notes
evidencing the Loan executed and delivered pursuant to Section 2.02(c) hereof.
"Applicable Lending Office" shall mean, for each Lender, the
"Lending Office" of such Lender (or of an Affiliate of such Lender) so
designated on the signature pages hereof or such other office of such Lender (or
of an Affiliate of such Lender) as such Lender may from time to time specify to
the Administrative Agent and the Company as the office of such Lender
responsible for administering its
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interests in the Loan.
"Auction Licenses" shall mean any FCC Licenses acquired
through the competitive bidding process in the FCC Paging Auctions (FCC Auction
Event Nos. 26 and 40).
"Authorizations" shall mean all applications, filings,
reports, documents, recordings and registrations with, and all validations,
exemptions, franchises, waivers, approvals, orders, authorizations, consents,
licenses, certificates and permits from, the FCC or any other federal, state or
local regulatory or governmental bodies and authorities, including any
subdivision thereof.
"Bankruptcy Law" shall mean the United States Bankruptcy Code
of 1978, as the same now exists or hereafter may be amended, any and all future
federal bankruptcy codes, and any and all present and future federal and state
insolvency, reorganization, arrangement, composition, recapitalization,
readjustment, moratorium, liquidation, dissolution, debtor relief or similar
Laws, or any corresponding provisions of succeeding Law.
"Basic Documents" shall mean, collectively, the Loan
Documents, the License Management Agreement, the Capitalization Documents, the
First Community Bank Loan Documents, the TLL Note, the Junior Subordinated Notes
and the Material Contracts.
"Business Day" shall mean any day other than a Saturday,
Sunday or legal holiday in the State of Arizona.
"Capital Expenditures" shall mean, for any period, the
aggregate amount of expenditures (including, without limitation, the aggregate
amount of Capital Lease Obligations incurred during such period) made by the
Company or any of its Subsidiaries during such period to acquire, construct or
lease (pursuant to a capital lease) plant, equipment, fixed assets or other
types of Property (including additions, renewals, improvements and replacements,
but excluding repairs other than repairs which are required by GAAP to be
capitalized) which, in accordance with GAAP, should be capitalized on the
consolidated balance sheet of the Company and its Subsidiaries as at the end of
such period; provided, however, that such term shall not include any such
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expenditures made in connection with an Acquisition or Casualty Event.
Notwithstanding the foregoing, "Capital Expenditures" for any period shall
include all pagers and other equipment purchased during such period for use by
the Company and its Subsidiaries, or for lease by the Company and its
Subsidiaries to customers, but shall exclude all pagers and other equipment
purchased during such period for resale by the Company and its Subsidiaries.
"Capital Lease Obligations" shall mean, for any Person, all
obligations of such Person to pay rent or other amounts under any (a) lease of
(or other arrangement conveying the right to use) Property, which obligations
are required to be classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP and, for the purposes of this Agreement, the
amount of such obligations at any time shall be the capitalized amount thereof
at such time, determined in accordance with GAAP, and (b) any lease financing
arrangements set forth on the balance sheet of such Person.
"Capitalization Documents" shall mean, collectively: (a) the
Amended and Restated Subordinated Note, Preferred Stock and Warrant Purchase
Agreement, dated as of August 3, 1995, among the Company, Continental Illinois
Venture Corporation, CIVC Partners I, GM Holdings, LLC and each of the other
parties listed on the signature pages thereto, as amended by (i) Amendment No. 1
to Amended and Restated Subordinated Note, Preferred Stock and Warrant Purchase
Agreement, dated as of July 24, 1996,
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among the Company, Continental Illinois Venture Corporation and CIVC Partners I,
and (ii) Amendment Agreement containing Amendment No. 2 to Amended and Restated
Subordinated Note, Preferred Stock and Warrant Purchase Agreement and Amendment
No. 1 to Amended and Restated Junior Subordinated Notes, dated as of January 26,
1998, among the Company, Continental Illinois Venture Corporation, CIVC Partners
I and each of the other parties listed on the signature pages thereto (as so
amended, the "Amended and Restated Subordinated Note, Preferred Stock and
Warrant Purchase Agreement"), including the Junior Subordinated Notes, Series A
Preferred Stock, Series B Preferred Stock, Capital Stock and/or Stock Purchase
Warrants from time to time issued thereunder, accurate, current and complete
copies of each of which are attached hereto, collectively, as Exhibit "I" and
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thereby made a part hereof; (b) each of the Executive Employment Agreements,
Underwriting Agreement, Warrant Agreement, Stockholders Agreement, Registration
Agreement and other Agreements, Schedules and Exhibits (all of which are dated
as of August 3, 1995) referred to in or attached to said Amended and Restated
Subordinated Note, Preferred Stock and Warrant Purchase Agreement), accurate,
current and complete copies of each of which also are attached hereto,
collectively, as Exhibit "J" and thereby made a part hereof; (c) the Option and
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Securities Purchase Agreement, dated as of August 24, 2001, among TLL Partners,
L.L.C., Continental Illinois Venture Corporation, CIVC Partners I and each of
the other parties listed on the signature pages thereto, together with each of
the closing documents, Schedules and Exhibits referred to in or attached to said
Option and Securities Purchase Agreement, accurate, current and complete copies
of each of which are attached hereto, collectively, as Exhibit "K" and thereby
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made a part hereof; (d) the Restructuring Agreement, dated as of May 17, 2002,
by and among the Company, TLL Partners, L.L.C. and GM Holdings, LLC, together
with each of the closing documents, Schedules and Exhibits referred to in or
attached to said Restructuring Agreement, accurate, current and complete copies
of each of which are attached hereto, collectively, as Exhibit "L" and thereby
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made a part hereof; (e) the Certificate of Designation, Preferences and Rights
of Preferred Stock (relating to the Series A Preferred Stock and the Series B
Preferred Stock), dated as of August 3, 1995, as will be amended by that certain
Certificate of Amendment of Certificate of Incorporation of Teletouch
Communications, Inc., accurate, current and complete copies of each of which are
attached hereto, collectively, as Exhibit "M" and thereby made a part hereof;
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and (f) the Termination Agreement, dated as of May 17, 2002, by and among the
Company, GM Holdings, LLC, Continental Illinois Venture Corporation, CIVC
Partners I and each of the other parties listed on the signature pages to the
Amended and Restated Subordinated Note, Preferred Stock and Warrant Purchase
Agreement, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and Rainbow Resources, Inc., an accurate, current
and complete copy of which is attached hereto as Exhibit "O" and thereby made a
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part hereof; in the case of each of the instruments and agreements referred to
in the foregoing clauses (a), (b), (c), (d), (e) and (f), as the same may,
subject to the provisions of Section 8.18 hereof, be modified and supplemented
and in effect from time to time.
"Capital Stock" shall mean any and all shares, interests,
participations or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person (other than
a corporation) and any and all warrants, rights or options to purchase any of
the foregoing.
"Cash Equivalents" shall mean, collectively, cash on hand and
Permitted Investments.
"Cash Flow" shall mean, for any period, the excess, for the
Company and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of: (a) gross operating revenue (whether
recurring or non-recurring) of the Company and its Subsidiaries derived in the
ordinary course of business during such period (including, without limitation,
all service charges and all revenues realized from the sale or lease of mobile
radio or paging equipment but excluding interest income and unusual or
extraordinary items); over (b) gross operating expenses (whether recurring or
non
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recurring) of the Company and its Subsidiaries (including, without limitation,
all site rental charges, maintenance expenses, general administration expenses
and general corporate overhead expenditures) for such period, but excluding
Interest Expense and also excluding depreciation, amortization of intangibles,
other non-cash charges and any unusual or extraordinary items. Notwithstanding
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the foregoing, if during any period for which Cash Flow is being determined the
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Company shall have consummated any Acquisition or Disposition, then, for all
purposes of this Agreement (other than for purposes of the definition of Excess
Cash Flow), Cash Flow shall be determined on a pro forma basis as if such
Acquisition or Disposition had been made or consummated on the first day of such
period.
"Casualty Event" shall mean, with respect to any Property of
any Person, any destruction or loss of or damage to, or any condemnation or
other taking (including, without limitation, by agreement in lieu thereof) by
Governmental Authority of, such Property.
"CIVC Group" shall mean, collectively, Continental Illinois
Venture Corporation, a Delaware corporation, CIVC Partners I, a Delaware general
partnership, each of the signatories (other than Continental Illinois Venture
Corporation, CIVC Partners I, GM Holdings, LLC and the Company) to the Amended
and Restated Subordinated Note, Preferred Stock and Warrant Purchase Agreement,
and any of their respective Affiliates.
"CIVC Interests" shall mean, on any date, the Junior
Subordinated Notes, the Series A Preferred Stock, the Series B Preferred Stock,
the Warrants and the "Underlying Stock" (as such term is defined in the Amended
and Restated Subordinated Note, Preferred Stock and Warrant Purchase Agreement
referred to in the definition of "Capitalization Documents" in Section 1.01
hereof) owned or voting control over which is held by Continental Illinois
Venture Corporation, a Delaware corporation, or any other member of the CIVC
Group on such date.
"Closing Date" shall mean the date upon which all of the
conditions precedent set forth in Article VI below either shall have been
satisfied in the sole and absolute determination of the Administrative Agent and
the Lenders or waived by the Lenders and the Administrative Agent in writing.
"Code" shall mean the United States Internal Revenue Code of
1986, as the same now exists or hereafter may be amended, or any corresponding
provisions of succeeding Law.
"Collateral" shall mean: (a) those certain parcels of land
located in the City of Tyler, County of ▇▇▇▇▇, State of Texas more particularly
described on Exhibit "H" attached hereto and thereby made a part hereof,
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together with all rights, privileges, easements and appurtenances in any way
relating thereto or incident to the ownership thereof, all buildings, building
systems, building machinery and equipment, fixtures and other improvements and
structures now or hereafter situated thereon or thereunder or forming a part
thereof, and all alterations, additions and betterments thereto, substitutions
therefor and restorations and replacements thereof (collectively, the "Tyler
Texas Real Property"); (b) all of the Capital Stock of Teletouch Licenses, Inc.,
a Delaware corporation and a Wholly-Owned Subsidiary of the Company; (c) all of
the respective rights, title and interests of both the Company and Teletouch
Licenses, Inc. in, to and under the License Management Agreement; (d) any and
all additions, accessories and accessions to, substitutions for and products and
replacements of each of the Property described in clauses (a), (b) and (c) of
this definition; and (e) any and all proceeds of the foregoing; in each case
whether now owned or hereafter acquired and whether or not the Lien thereon has
in fact been perfected.
"Compliance Certificate" shall mean, as applicable, the
certificate of the Chief Executive Officer or of the Chief Financial Officer of
the Company or, with the prior written approval of
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the Administrative Agent, of another senior officer of the Company, in each case
in substantially the form (as applicable) of Exhibit "E-1", Exhibit "E-2",
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Exhibit "E-3" or Exhibit "E-4" attached hereto and thereby made a part hereof.
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The current Chief Financial Officer of the Company is J. ▇▇▇▇▇▇ ▇▇▇▇▇▇, who is
also its President, while the current Chairman of the Board of Directors of the
Company is ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, who is also President of the Company's sole
subsidiary, Teletouch Licenses, Inc., a Delaware corporation and a Wholly-Owned
Subsidiary.
"Debt Issuance" shall mean any issuance or sale by the Company or
any of its Subsidiaries after the Closing Date of any debt securities.
"Debt Service" shall mean, for any period, the sum, for the
Company and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following: (a) all regularly
scheduled payments or regularly scheduled prepayments of principal of any
Indebtedness (including, without limitation, the Loan and the principal
component of any payments in respect of Capital Lease Obligations) made during
such period; plus (b) all Interest Expense for such period.
"Default" shall mean an Event of Default or any of the events,
conditions or circumstances described in Article IX below that with notice or
lapse of time or both would become an Event of Default.
"Disposition" shall mean any sale, assignment, conveyance, lease,
sale-leaseback, transfer or other disposition of any Property (whether now owned
or hereafter acquired) by the Company or any of its Subsidiaries to any other
Person.
"Disposition Investment" shall mean, with respect to any
Disposition, any promissory notes or other evidences of Indebtedness or
Investments received by the Company or any of its Subsidiaries in connection
with such Disposition.
"Dividend Payment" shall mean any declaration or payment of
dividends (in cash, Property or obligations) on, or any other payment or
distribution on account of, or the setting apart of any money for a sinking or
other analogous fund for, or the purchase, redemption, retirement or other
acquisition of, any shares of any class of stock of the Company or of any
warrants, options or other rights to acquire the same (or to make any payments
to any Person, such as "phantom stock" payments, where the amount thereof is
calculated with reference to the fair market or equity value of the Company or
any of its Subsidiaries), but excluding (a) dividends payable solely in shares
of common stock of the Company and (b) the acquisition by the Company of
warrants, options or other rights to acquire shares of stock of the Company that
are tendered to the Company in lieu of the cash payment of the exercise price of
such warrants, options or other rights.
"Dollars" and "$" shall mean lawful money of the United States of
America.
"EBITDA" shall mean, with respect to the Company and its
Subsidiaries for any fiscal period, the excess of (a) the sum of (without
duplication) (i) the consolidated Net Income of the Company and its Subsidiaries
for such fiscal period (determined on a consolidated basis without duplication
in accordance with GAAP), plus (ii) the amounts deducted by the Company and its
Subsidiaries in determining consolidated Net Income for such period representing
(A) non-cash minority interest expense, (B) non-cash charges such as
amortization (including amortization of deferred financing fees), depreciation,
non-cash restructuring charges, non-cash reserves and non-recurring charges, (C)
all federal, state and
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local taxes (whether paid in cash or deferred) computed on the basis of income,
(D) Interest Expense (whether cash or non-cash) of the Company and its
Subsidiaries, (E) expenses or charges incurred in connection with the issuance
of debt or equity securities and up-front fees paid with respect to credit
facilities provided by banks and other financial institutions, (F) transaction
costs, (G) expenses or charges incurred in connection with real estate
financings consummated during such period and (H) fees and expenses paid in
connection with Acquisitions permitted to be and actually consummated, and
Investments permitted to be and actually made, during such period, over (b) the
amounts included by the Company and its Subsidiaries in determining consolidated
Net Income for such period representing (i) non-cash gains and (ii)
non-recurring gains; provided, however, that (without duplication) for any
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applicable period "EBITDA" shall be (X) determined on the basis that any
Acquisitions which were consummated during such period were consummated on the
first day of such period; and (Y) shall be increased or decreased, as the case
may be, to reflect the projected good faith identifiable and supportable net
cost savings or additional net costs, as the case may be, resulting from any
Acquisition permitted to be and actually consummated during such period by
combining the operations of such acquisition with the operations of the Company
and its Subsidiaries (as determined by the Company based on reasonable
assumptions and computations set forth in sufficient detail and which are
reasonably acceptable, in substance, to the Administrative Agent, and which
determination shall be made on each date on which a Compliance Certificate for
such applicable period is delivered, all in compliance with the requirements of
Regulation S-X for a Form S-1 registration statement under the Securities Act of
1933, as amended); provided, further, that so long as such net cost savings or
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additional net costs will be realizable at any time during such period, it may
be assumed, for the purpose of this clause, that such net cost savings or
additional net costs will be realizable during the entire period.
"Environmental Claim" shall mean, with respect to any Person, any
written or oral notice, claim, demand or other communication (collectively, a
"claim") by any other Person alleging or asserting such Person's liability for
investigatory costs, cleanup costs, governmental response costs, damages to
natural resources or other Property, personal injuries, fines or penalties
arising out of, based on or resulting from (a) the presence, or Release into the
environment, of any Hazardous Material at any location, whether or not owned by
such Person, or (b) circumstances forming the basis of any violation, or alleged
violation, of any Environmental Law. The term "Environmental Claim" shall
include, without limitation, any claim by any Governmental Authority for
enforcement, cleanup, removal, response, remediation or other actions or damages
pursuant to any applicable Environmental Law, and any claim by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from the presence or Release of Hazardous Materials
or arising from alleged injury or threat of injury to health, safety or the
environment.
"Environmental Laws" shall mean any and all present and future
federal, state, local and/or foreign laws, statutes, codes, ordinances, rules,
regulations, orders, decrees and/or other legally enforceable requirements
(including, without limitation, common law), in each case as now or hereafter in
effect, regulating, relating to or imposing liability or standards of conduct
concerning protection of the environment or of human health or safety or to
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals or toxic or hazardous substances or wastes into the
indoor or outdoor environment, including, without limitation, ambient air, soil,
surface water, ground water, wetlands, land or subsurface strata, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants, chemicals or toxic
or hazardous substances or wastes.
"Environmental Permits" shall mean any and all permits, licenses,
approvals, registrations, notifications, exemptions and other Authorizations
required under any Environmental Law.
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"Equity Issuance" shall mean (a) any issuance or sale by the
Company or any of its Subsidiaries after the Closing Date of (i) any of its
Capital Stock, (ii) any warrants or options exercisable in respect of its
Capital Stock (other than any warrants or options issued to directors, officers
or employees of the Company or any of its Subsidiaries pursuant to employee
benefit plans established in the ordinary course of business and any Capital
Stock of the Company issued upon the exercise of such warrants or options) or
(iii) any other security or instrument representing an equity interest (or the
right to obtain any equity interest) in the Company or any of its Subsidiaries
or (b) the receipt by the Company or any of its Subsidiaries after the Closing
Date of any capital contribution (whether or not evidenced by any equity
security issued by the recipient of such contribution).
"Equity Rights" shall mean, with respect to any Person, any
subscriptions, options, calls, warrants, commitments, preemptive rights or
agreements of any kind or nature whatsoever (including, without limitation, any
stockholders' or voting trust agreements) for the issuance, sale, registration
or voting of, or securities convertible into, any additional shares of Capital
Stock of any class, or partnership or other ownership interests of any type in,
such Person.
"ERISA" shall mean the federal Employee Retirement Income
Security Act of 1974, as the same now exists or hereafter may be amended, or any
corresponding provisions of succeeding Law.
"ERISA Affiliate" shall mean any corporation or trade or business
that is a member of any group of organizations (a) described in Section 414(b)
or (c) of the Code of which the Company is a member and (b) solely for purposes
of potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11)
of the Code and the lien created under Section 302(f) of ERISA and Section
412(n) of the Code, described in Section 414(m) or (o) of the Code of which the
Company is a member.
"Event of Default" shall mean any of the events, circumstances or
conditions described in Article IX hereof, provided that any applicable
requirement for the giving of notice, the passage of time or both associated
with such event, circumstance or condition has been satisfied.
"Excess Cash Flow" shall mean, with respect to the Company and
its Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP) for any fiscal period, the excess (if any) of: (a) the
Cash Flow for such period minus the amount of net increase in Working Capital
from the prior period (or, as applicable, plus the amount of net decrease in
Working Capital from the prior period); over (b) the sum of (i) Debt Service for
such period, plus (ii) the aggregate amount of all Capital Expenditures made
during such period (excluding for the purposes of such computation any such
Capital Expenditures, to the extent financed with the proceeds of Indebtedness,
and any Capital Lease Obligations, to the extent incurred pursuant to Section
8.07(e) hereof during such period), plus (iii) the aggregate amount paid, or
required to be paid, in cash in respect of income taxes during such period, plus
(iv) the sum of $100,000.00. The parties hereto intend that the foregoing
produce the same result, for any fiscal period, as the following definition: the
excess, if any, of: (c) the sum (without duplication) of (i) Net Income of the
Company and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP for such period), (ii) the aggregate amount
of all non-cash charges (including depreciation and amortization) deducted in
arriving at such Net Income, (iii) decreases in Working Capital of the Company
and its Subsidiaries for such period, (iv) the aggregate net non-cash loss on
the Disposition of Property by the Company and its Subsidiaries during such
period (other than sales of inventory in the ordinary course of business), to
the extent deducted in arriving at such Net Income and (v) the net increase
during such period (if any) in deferred tax accounts of the Company and its
Subsidiaries; over (d) the sum (without duplication) of (i) the aggregate amount
of all non-cash credits included in arriving at such Net
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Income, (ii) the aggregate amount actually paid by the Company and its
Subsidiaries in cash during such period on account of Capital Expenditures
(excluding the principal amount of Indebtedness incurred in connection with such
expenditures and any such expenditures financed with the proceeds of Net Cash
Payments from any Disposition or from the net proceeds received from any
Casualty Event), (iii) the aggregate amount of all optional prepayments of the
Loan during such period, (iv) the aggregate amount of all regularly scheduled
principal payments of Indebtedness of the types described in clauses (a) through
(e) of the definition of "Indebtedness" in this Section 1.01 (including, without
limitation, the Loan) of the Company and its Subsidiaries made during such
period, (v) increases in Working Capital of the Company and its Subsidiaries for
such period, (vi) the aggregate net non-cash gain on the Disposition of Property
by the Company and its Subsidiaries during such period (other than sales of
inventory in the ordinary course of business), to the extent included in
arriving at such Net Income, and (vii) the net decrease during such period (if
any) in deferred tax accounts of the Company.
"Excluded Taxes" shall mean any present or future net income Tax,
Tax imposed on or measured by overall gross receipts and/or franchise Taxes
imposed in lieu of net income Taxes, in each case levied or assessed against the
Administrative Agent or any of the Lenders as a result of a present or former
connection between the Administrative Agent or such Lender and the jurisdiction
of the Governmental Authority imposing such tax or any political subdivision or
taxing authority thereof or therein (other than any such connection arising
solely from the Administrative Agent's or such Lender's having executed,
delivered, enforced, performed its obligations under or received a payment owed
or due under this Agreement or any of the other Loan Documents).
"FCC" shall mean the Federal Communications Commission or any
Governmental Authority substituted therefor.
"FCC License" shall mean any paging, personal communications
service, mobile telephone, specialized mobile radio, microwave or other license,
permit, consent, certificate of compliance, franchise, approval, waiver or
Authorization granted or issued by the FCC, including, without limitation, any
of the foregoing authorizing or permitting the acquisition, construction or
operation of a Paging System, mobile telephone system or other radio
communications system.
"Final Order" shall mean an action by any Governmental Authority
that has not been reversed, stayed, enjoined, set aside, annulled, or suspended,
and with respect to which no requests are pending for administrative or judicial
review, reconsideration, appeal or stay, and the time for filing any such
requests and the time for such Governmental Authority to set aside the action on
its own motion have expired.
"First Community Bank Loan Documents" shall mean, collectively,
(a) that certain Accounts Receivable Security Agreement (with Equipment and
Inventory Riders), dated May 17, 2002, given by the Company, as debtor, to First
Community Financial Corporation, an Arizona corporation, as secured party, (b)
that certain Term Promissory Note, dated May 17, 2002, in the original principal
amount of $250,000 given by the Company, as "maker", to First Community
Financial Corporation, an Arizona corporation, (c) that certain Multiple Advance
Promissory Note, dated May 17, 2002, in the original principal amount of
$2,000,000 given by the Company, as "maker", to First Community Financial
Corporation, an Arizona corporation, (d) all Uniform Commercial Code financing
statements required by, or to be filed with respect to the security interests
created pursuant to, the Accounts Receivable Security Agreement (with Equipment
and Inventory Riders), and (e) all other documents, agreements and other
instruments (including, without limitation, any and all guaranties, security
agreements, pledges, collateral assignments of ownership interests, consents,
subordination agreements, financial statements, certificates
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and other materials) at any time executed and/or delivered by or on behalf of
any of the Obligors in connection with or relating directly or indirectly to the
Accounts Receivable Security Agreement, Term Promissory Note, Multiple Advance
Promissory Note or any of the loans by First Community Financial Corporation
evidenced thereby or described therein (collectively, the "First Community Bank
Loans"), accurate, current and complete copies of each of which (including,
without limitation, of that certain Agreement, of even date herewith, by and
among TLL, the Company and First Community Financial Corporation which clarifies
various matters relating to the respective Indebtednesses owed to each of such
creditors by the Company) are attached hereto, collectively, as Exhibit "B" and
----------
thereby made a part hereof, in each case as the same shall be modified and
supplemented and in effect from time to time.
"GAAP" shall mean generally accepted accounting principles
applied on a basis consistent with those that, in accordance with the last
sentence of Section 1.02(a) hereof, are to be used in making the calculations
for purposes of determining compliance with this Agreement.
"GM Interests" shall mean, on any date, the Junior Subordinated
Notes, the Series A Preferred Stock, the Series B Preferred Stock, the Warrants
and the "Underlying Stock" (as such term is defined in the Amended and Restated
Subordinated Note, Preferred Stock and Warrant Purchase Agreement referred to in
the definition of "Capitalization Documents" in Section 1.01 hereof) owned or
voting control over which is held by GM Holdings, LLC, a Tennessee limited
liability company, on such date.
"Governing Documents" shall mean, for any Person, collectively,
the charter, articles or certificate of incorporation, by-laws and any
shareholders agreement of a corporation, the certificate of formation or
articles of organization and operating agreement of any limited liability
company, the certificate of partnership and partnership agreement of any
partnership, or the comparable formation or constitutive documents of any other
entity.
"Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled (through
stock or capital ownership or otherwise) by any of the foregoing.
"Guarantee" shall mean a guarantee, an endorsement, a contingent
agreement to purchase or to furnish funds for the payment or maintenance of, or
otherwise to be or become contingently liable under or with respect to,
Indebtedness, other obligations, net worth, working capital or earnings of any
other Person, or a guarantee of the payment of dividends or other distributions
upon the stock or equity interests of any other Person, or an agreement to
purchase, sell or lease (as lessee or lessor) Property, products, materials,
supplies or services primarily for the purpose of enabling a debtor to make
payment of such debtor's obligations or an agreement to assure a creditor
against loss, and including, without limitation, causing a bank or other
financial institution to issue a letter of credit or other similar instrument
for the benefit of another Person, but excluding endorsements for collection or
deposit in the ordinary course of business. The terms "Guarantee" and
"Guaranteed" used as a verb shall have a correlative meaning.
"Guarantee and Security Agreement" shall mean a Guarantee and
Security Agreement substantially in the form of Exhibit B to the Existing Credit
---------
Agreement between the Company, the Guarantors from time to time party thereto
and the predecessor-in-interest to the Administrative Agent, as the same shall
be modified and supplemented and in effect from time to time.
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"Guarantors" shall mean, collectively: (a) each Subsidiary of the
Company that has executed a Guarantee and Security Agreement; and (b) effective
upon the execution and delivery of any Subsidiary Guarantee Agreement, each
additional Subsidiary of the Company so executing and delivering a Subsidiary
Guarantee Agreement.
"Hazardous Material" shall mean, collectively: (a) any pollutants,
petroleum or petroleum-based products, underground storage tanks, flammable
materials, explosives, hazardous substances, toxic wastes, radioactive
materials, radon, lead, asbestos, urea formaldehyde foam insulation, and
transformers or other equipment that contain polychlorinated biphenyls
("PCB's"); (b) any chemicals or other materials or substances that are now or
hereafter become defined as or included in the definition of "hazardous
substances", "hazardous wastes", "hazardous materials", "extremely hazardous
wastes", "restricted hazardous wastes", "toxic substances", "toxic pollutants",
"contaminants", "pollutants" or words of similar import under any Environmental
Law; and (c) any other chemical or other material or substance, exposure to
which is now or hereafter prohibited, limited or regulated under any
Environmental Law.
"Incapacity" shall mean any of: (a) the death of an individual; (b)
the entry of an order or judgment by a court of competent jurisdiction
adjudicating an individual to be incompetent to manage his person or his estate;
(c) the commission of an Act of Insolvency by or the existence of an Act of
Insolvency with respect to any Person; or (d) the dissolution (without
reconstitution in accordance with applicable Law), termination or liquidation of
any Person not an individual.
"Indebtedness" shall mean, for any Person: (a) all obligations
created, issued or incurred by such Person for borrowed money (whether by loan,
the issuance and sale of debt securities or the sale of Property to another
Person subject to an understanding or agreement, contingent or otherwise, to
repurchase such Property from such Person); (b) all obligations of such Person
to pay the deferred purchase or acquisition price of Property or services, other
than trade accounts payable (other than for borrowed money) arising, and accrued
expenses incurred, in the ordinary course of business so long as such trade
accounts payable are payable within thirty (30) days of the date the respective
goods are delivered or the respective services are rendered; (c) all obligations
of such Person evidenced by notes, bonds, debentures or other similar
instruments; (d) all indebtedness created or arising under any conditional sale
or other title retention agreement with respect to Property acquired by such
Person (even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
Property; (e) all Capital Lease Obligations of such Person; (f) all obligations
of such Person, contingent or otherwise, as an account party in respect of
bankers' acceptances, letters of credit or similar instruments issued or
accepted by banks and other financial institutions; (g) all obligations of such
Person, contingent or otherwise, to purchase, redeem, retire or otherwise
acquire for value any Capital Stock of such Person; (h) all obligations of
another Person of the type referred to in the preceding clauses (a) through (g)
of this definition guaranteed by such Person; and (i) all obligations of the
type referred to in the preceding clauses (a) through (h) of this definition
secured by a Lien on the Property of such Person, whether or not the respective
indebtedness so secured has been assumed by such Person or such Person otherwise
has become liable for the payment thereof.
"Insurance Requirements" shall mean all material terms of any
insurance policy required pursuant to this Agreement or any Security Document
and all material regulations and then current standards applicable to or
affecting any Property of the Company or any of its Subsidiaries constituting
part of the Collateral or any part thereof or any use or condition thereof,
which may, at any time, be recommended by the Board of Fire Underwriters, if
any, having jurisdiction over any such Property, or any other body exercising
similar functions.
-11-
"Interest Expense" shall mean, for any period, the sum, for the
Company and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of all interest in respect of Indebtedness
(including, without limitation, the interest component of any payments in
respect of Capital Lease Obligations but excluding any capitalized financing
fees paid during such period that are to be charged to future periods) accrued
or capitalized during such period (whether or not actually paid during such
period). Notwithstanding the foregoing, (i) if during any period for which
-----------------------------
Interest Expense is being determined the Company shall have consummated any
Acquisition or Disposition, then, for all purposes of this Agreement (other than
for purposes of the definition of Excess Cash Flow), Interest Expense shall be
determined on a pro forma basis as if such Acquisition or Disposition (and any
Indebtedness incurred by the Company or any of its Subsidiaries in connection
with such Acquisition or repaid as a result of such Disposition) had been made
or consummated (and such Indebtedness incurred or repaid) on the first day of
such period and (ii) if, as at any date (a "calculation date"), fewer than four
complete consecutive fiscal quarters have elapsed subsequent to the Closing
Date, Interest Expense shall be calculated (after giving effect to the
adjustment contemplated in the foregoing clause (i)) only for the portion of
such period commencing on the Closing Date and ending on the calculation date
and shall then be annualized by multiplying the amount of such Interest Expense
by a fraction, the numerator of which is 365 and the denominator of which is the
number of days during the period commencing on the day immediately following the
Closing Date through and including the calculation date.
"Investment" shall mean, for any Person: (a) the acquisition (whether
for cash, Property, services, securities or otherwise) of Capital Stock, bonds,
notes, debentures, partnership or other ownership interests or other securities
of any other Person or any agreement to make any such acquisition (including,
without limitation, any "short sale" or any sale of any securities at a time
when such securities are not owned by the Person entering into such sale); (b)
the making of any deposit with, or advance, loan or other extension of credit
to, any other Person (including the purchase of Property from another Person
subject to an understanding or agreement, contingent or otherwise, to resell
such Property to such Person), but excluding any such advance, loan or extension
of credit having a term not exceeding thirty (30) days arising in connection
with the sale of inventory or supplies or services rendered by such Person in
the ordinary course of business; or (c) the entering into of any Guarantee of,
or other contingent obligation with respect to, Indebtedness or other liability
of any other Person and (without duplication) any amount committed to be
advanced, lent or extended to such Person.
"Junior Subordinated Notes" shall mean the 14% Junior Subordinated
Notes issued pursuant to the Amended and Restated Subordinated Note, Preferred
Stock and Warrant Purchase Agreement referred to in the definition of
"Capitalization Documents" in this Section 1.01, as amended, accurate, current
and complete copies of each of which are attached hereto as Exhibit "N" and
-----------
thereby made a part hereof.
"Law" shall mean any and all present and future legislative, judicial
and administrative statutes, codes, acts, laws, ordinances, orders, judgments,
decrees, injunctions, decisions, rules, resolutions, restrictions, regulations
and requirements of Governmental Authorities.
"Lenders" shall mean: (a) on the Closing Date, Pilgrim; and (b)
thereafter, all Persons from time to time holding interests in the Loan after
giving effect to any assignments thereof permitted by Sections 11.06(b),
11.06(c) or 11.06(d) hereof.
"License Management Agreement" shall mean, collectively: (a) the
Amended and Restated Operating Agreement, effective as of May 17, 2002, by and
between the Company, as the
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"Operator", and Teletouch Licenses, Inc., as the "License Subsidiary", an
accurate, current and complete copy of which is attached hereto as Exhibit "D"
-----------
and thereby made a part hereof; and/or (b) any other similar agreement in
substantially the form of such Operating Agreement between the Company or a
Subsidiary of the Company operating such Paging Business and a License
Subsidiary, in the case of each of the foregoing clauses (a) and (b), as the
same shall, subject to the provisions of Section 8.18 hereof, be modified and
supplemented and in effect from time to time.
"License Subsidiary" shall have the meaning assigned to such term in
Section 8.14(b) hereof.
"Lien" shall mean any mortgage, pledge, hypothecation, collateral
assignment, encumbrance, lien (statutory or other), security interest, charge,
deposit arrangement, title retention arrangement, conditional sales agreement or
other security agreement of any kind or nature whatsoever in respect of or
affecting Property. For purposes of this Agreement and the other Loan Documents,
a Person shall be deemed to own subject to a Lien any Property that it has
acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
(other than an operating lease) relating to such Property.
"Loan" shall mean the loan described in Section 2.01 hereof.
"Loan Documents" shall mean, collectively, this Agreement, the Loan
Modification Agreement, the Amended and Restated Note, the New Pilgrim Deed of
Trust and the other Security Documents.
"Loan Modification Agreement" shall mean that certain Loan
Modification Agreement, of even date herewith, by and among the parties hereto.
"Management Stockholders" shall mean, collectively, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, J. ▇▇▇▇▇▇ ▇▇▇▇▇▇, any future Chief Executive Officer of the Company,
any future Chief Financial Officer of the Company, and any other officer of the
Company who at such time also holds ownership interests in one or more of
Progressive Concepts Communications, Inc., Rainbow Resources, Inc. and/or any
other member of the TLL Group.
"Margin Stock" shall mean "margin stock" within the meaning of
Regulations U and X.
"Material Adverse Effect" shall mean a material adverse effect on or
change in: (a) the Property, assets, business, operations, condition (financial
or otherwise), management, prospects or liabilities of the Company and its
Subsidiaries, taken as a whole; or (b) that calls into question in any material
and adverse respect (i) the projections previously supplied to the
Administrative Agent and the Lenders, or (ii) any of the material assumptions on
which the aforesaid projections were based; or (c) the ability of the Company or
any of its Subsidiaries to pay or perform its obligations under any of the Basic
Documents (including, without limitation, the Loan Documents) to which it is a
party as and when required; or (d) the binding nature, legality, validity,
enforceability or priority of any of the Loan Documents (including, without
limitation, any of the Liens purported to be created by the Security Documents);
or (e) any of the Lenders' benefits, powers, privileges, rights and/or remedies,
whether under the Loan Documents (or any of them) or at Law or in equity, or
their ability to exercise or enforce any of the same; or (f) any of the Lenders'
rights, title and interests in and to the Property of the Company and its
Subsidiaries.
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"Material Contracts" shall have the meaning assigned to such term in
Section 7.28 below.
"Multiemployer Plan" shall mean a multiemployer plan defined as such
in Section 3(37) or 4001(a)(3) of ERISA to which contributions have been made by
the Company or any ERISA Affiliate and that is covered by Title IV of ERISA.
"Net Available Proceeds" shall mean:
(a) in the case of any Disposition, the amount of Net Cash
Payments received in connection with such Disposition;
(b) in the case of any Casualty Event, the aggregate amount of
insurance proceeds, condemnation awards and other compensation received in cash
by the Company and its Subsidiaries in respect of such Casualty Event, net of
(i) reasonable and customary fees and expenses actually incurred and paid by the
Company and its Subsidiaries in connection therewith, (ii) contractually
required repayments of Indebtedness, to the extent secured by a Lien on such
Property and actually paid as a consequence thereof, and (iii) any federal,
state and local income and/or transfer taxes actually paid or reasonably
estimated to be payable by the Company or any of its Subsidiaries in respect of
such Casualty Event (after taking into account any available tax credits or
deductions and any tax sharing arrangements), but only, in the case of taxes
estimated to be payable, to the extent that (x) within sixty (60) days following
the date of such Casualty Event the Company delivers a certificate of a senior
financial officer of the Company setting forth a calculation of the amount of
such estimated taxes, and (y) the Company holds an amount of Net Cash Payments
equal to such estimated taxes in a segregated deposit account until such payment
of taxes is in fact made, it being understood that to the extent the amount so
deposited is not applied to such payment of taxes within fifteen (15) months of
such deposit, the remaining balance shall be treated as "Net Available Proceeds"
for purposes of this Agreement and shall be applied in accordance with the
provisions of Section 3.05(d) hereof; and
(c) in the case of any Equity Issuance or Debt Issuance, the
aggregate amount of all cash received by the Company and its Subsidiaries in
respect of such Equity Issuance or Debt Issuance, net of underwriting discounts
and reasonable and customary commissions and expenses actually incurred and paid
by the Company and its Subsidiaries in connection therewith.
"Net Cash Payments" shall mean, with respect to any Disposition, the
aggregate amount of all cash payments received by the Company and its
Subsidiaries directly or indirectly in connection with such Disposition, whether
at the time of such Disposition or after such Disposition under deferred payment
arrangements or Investments entered into or received in connection with such
Disposition (including, without limitation, Disposition Investments); provided,
--------
however, that:
-------
(a) Net Cash Payments shall be net of (i) escrow, title, filing
and recording charges (including, without limitation, filing and recording
taxes) and other reasonable and customary commissions, fees and expenses
actually incurred and paid by the Company and its Subsidiaries in connection
with such Disposition and (ii) any federal, state and local income and/or
transfer taxes actually paid or reasonably estimated to be payable by the
Company and its Subsidiaries as a result of such Disposition (after taking into
account any available tax credits or deductions and any tax sharing
arrangements), but only, in the case of taxes estimated to be payable, to the
extent that (x) on the date of such Disposition the Company delivers a
certificate of a senior financial officer of the Company setting
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forth a calculation of the amount of such estimated taxes, and (y) the Company
holds an amount of such Net Cash Payments equal to such estimated taxes in a
segregated deposit account until such payment of taxes is in fact made, it being
understood that to the extent the amount so deposited is not applied to such
payment of taxes within fifteen (15) months of such deposit, the remaining
balance shall be treated as "Net Available Proceeds" for purposes of this
Agreement and shall be applied in accordance with the provisions of Section
3.05(d) hereof; and
(b) Net Cash Payments also shall be net of any repayments by the
Company or any of its Subsidiaries of Indebtedness to the extent that (i) such
Indebtedness is secured by a Lien on the Property that is the subject of such
Disposition and the transferee of (or holder of a Lien on) such Property
requires that such Indebtedness be repaid as a condition to the purchase of such
Property or (ii) such Indebtedness requires that it be repaid as a condition to
such Disposition.
"Net Income" shall mean, for any period, the consolidated net income
(or loss) of the Company and its Subsidiaries for such period, determined on a
consolidated basis without duplication in accordance with GAAP; provided,
--------
however, that there shall be excluded: (a) the income (or loss) of any Person
-------
accrued prior to the date it becomes a Subsidiary of the Company or any of the
Company's Subsidiaries or is merged into or consolidated with the Company or any
of the Company's Subsidiaries; (b) the income (or loss) of any Person (other
than a Subsidiary of the Company) in which the Company or any of its
Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by the Company or any of its Subsidiaries in the
form of dividends or similar distributions; and (c) the undistributed earnings
of any of the Subsidiaries of the Company, to the extent that the declaration or
payment of dividends or similar distributions by such Subsidiary is not at the
time permitted by the terms of any security issued by such Subsidiary or any
agreement, instrument or other arrangement (other than any of the Loan
Documents) to which such Subsidiary is a party or by which it or any of its
Property might be bound or subject or by any Law applicable to such Subsidiary
or to which such Subsidiary or any of its Property might be bound or subject.
"Network Agreement" shall mean any agreement pursuant to which the
Company or any of its Subsidiaries contracts with the owner of a Paging System
(other than the Company or any of its Subsidiaries) so that either: (a) Paging
Subscriber Units may receive pages while in the service area of a Paging System
operated by such owner; or (b) customers of such owner may receive pages while
in the service area of a Paging System operated by the Company or any of its
Subsidiaries, or both.
"Non-Excluded Taxes" shall mean any and all Taxes, other than Excluded
Taxes, arising from any payment made hereunder or under any of the other Loan
Documents or from the execution, delivery or enforcement of, or otherwise with
respect to, this Agreement or any of the other Loan Documents (including,
without limitation, any and all present or future recording, stamp, documentary,
excise and property taxes).
"Obligors" shall mean, collectively and jointly and severally, the
Company and the Guarantors.
"Paging Business" shall mean the business consisting of: (a) owning,
operating or managing one or more Paging Systems; and (b) to the extent
ancillary thereto and not constituting a material part of the operations as a
whole, other communications businesses related thereto which utilize the
training or resources appurtenant to the operation of a Paging System,
including, without limitation, telephone answering services, mobile telephone
services or sales or servicing of radio equipment or mechanical parts.
-15-
"Paging License" shall mean an FCC License authorizing the
construction and/or operation of a Paging System pursuant to Part 22 or Part 90.
"Paging Subscriber Units" shall mean, as at any date, pagers owned or
leased by customers subscribing to, and paying for (other than purely nominal
charges), paging or messaging services provided by the Company or any of its
Subsidiaries pursuant to Part 22 or Part 90, excluding any such customer that
has not been a customer for at least thirty (30) days.
"Paging System" shall mean a paging or messaging system licensed under
Part 22 or Part 90, including the facilities from time to time licensed by the
FCC pursuant to Part 22 or Part 90 as shall be necessary to provide
communications services offered by the Company and its Subsidiaries.
"Part 22" shall mean 47 CFR Part 22 of the Rules and Regulations of
the FCC or such other parts or subparts that may be substituted for or combined
with said Part 22.
"Part 90" shall mean 47 CFR Part 90 of the Rules and Regulations of
the FCC or such other parts or subparts that may be substituted for or combined
with said Part 90.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA or any entity succeeding to any or
all of its functions under ERISA.
"Permitted Investments" shall mean: (a) marketable direct obligations
of the United States of America or of any agency thereof, or marketable
obligations unconditionally guaranteed as to principal and interest by the
United States of America or any agency thereof and backed by the full faith and
credit of the United States of America, in either case maturing not more than
ninety (90) days from the date of acquisition thereof; (b) certificates of
deposit issued by any Lender or any bank or trust company organized under the
laws of the United States of America or any state thereof and having combined
capital and surplus of at least $500,000,000, maturing not more than ninety (90)
days from the date of acquisition thereof; (c) commercial paper of an issuer
rated "A-1" or better by Standard & Poor's Ratings Services, a Division of The
▇▇▇▇▇▇-▇▇▇▇ Companies ("S&P"), Inc., or "P-1" or better by ▇▇▇▇▇'▇ Investors
Services, Inc. ("Moody's"), respectively, or carrying an equivalent rating by a
nationally recognized rating agency if both of the two named rating agencies
cease publishing ratings of commercial paper issuers generally, and maturing not
more than ninety (90) days from the date of acquisition thereof; (d) repurchase
obligations of any Lender or of any commercial bank or trust company satisfying
the requirements of clause (b) of this definition, and having a term of not more
than thirty (30) days; (e) securities with maturities of not more than ninety
(90) days from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States of America or by any political
subdivision or taxing authority of such state, commonwealth or territory, the
securities of which state, commonwealth, territory, political subdivision or
taxing authority are rated at least "A" by S&P or "A" by Moody's; (f) securities
with maturities of ninety (90) days or less from the date of acquisition backed
by standby irrevocable letters of credit issued by any Lender or any commercial
bank or trust company satisfying the requirements of clause (b) of this
definition; and (g) shares of money-market mutual funds, rated AAA+ or better by
S&P or MR1 or better by Moody's, having aggregate assets of at least
$1,000,000,000 and which invest exclusively in securities satisfying the
requirements of clauses (a) through (f) of this definition; in each case so long
as the same (x) provide for the payment of principal and interest (and not
principal alone or interest alone) and (y) are not subject to any contingency
regarding the payment of principal or interest.
"Person" shall mean any individual, partnership, corporation, limited
liability company,
-16-
joint stock company, voluntary association, joint venture, trust, unincorporated
organization, government (or any agency, instrumentality or political
subdivision thereof) or other entity of whatever nature.
"Plan" shall mean any employee benefit or other plan established or
maintained by the Company or any ERISA Affiliate and that is covered by Title IV
of ERISA, other than a Multiemployer Plan.
"Post-Default Rate" shall mean the lesser of: (a) eighteen percent per
annum (18%); or (b) the highest rate then permitted by applicable Law for
comparable loans.
"Preferred Stock" shall mean, collectively, the Series A Preferred
Stock and the Series B Preferred Stock.
"Property" shall mean any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible. Without intending to limit the foregoing, the term "Property" shall
specifically include FCC Licenses and other Authorizations granted to the
Company or any of its Subsidiaries, as well as agreements between the Company or
any of its Subsidiaries and Subscribers.
"Purchase Price" shall mean, with respect to any Acquisition, an
amount equal to the sum (without duplication) of: (a) the aggregate
consideration, whether cash, Property or securities (including, without
limitation, any Indebtedness incurred pursuant to Section 8.07(e) hereof), paid
or delivered by the Company and its Subsidiaries in connection with such
Acquisition; plus (b) the aggregate amount of liabilities of the acquired
business (net of current assets of the acquired business) that would be
reflected on a balance sheet (if such were to be prepared) of the Company and
its Subsidiaries after giving effect to such Acquisition.
"Registered Holder" shall have the meaning assigned to such term in
Section 5.02(c)(ii) hereof.
"Registered Loan" shall have the meaning assigned to such term in
Section 2.02(c) hereof.
"Registered Note" shall have the meaning assigned to such term in
Section 2.02(c) hereof.
"Regulations A, D, G, T, U and X" shall mean, respectively,
Regulations A, D, G, T, U and X of the Board of Governors of the Federal Reserve
System (or any successor), as the same may be modified and supplemented and in
effect from time to time.
"Regulatory Change" shall mean, with respect to any Person: (a) the
adoption, or the making of any change in, after the date hereof of any federal,
state or foreign Law or regulation (including, without limitation, those
affecting Part 22 or Part 90); or (b) the adoption of, or the making of any
change in, after the date hereof of any interpretation, directive or request
under any federal, state or foreign Law or regulation (whether or not having the
force of Law and whether or not failure to comply therewith would be unlawful)
by any court or governmental or monetary authority charged with the
interpretation or administration thereof; in each case which applies to any
Person or to any class of Persons of which such Person is a member.
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"Release" shall mean any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, dumping, placement, storage,
leaching, seepage or migration into the indoor or outdoor environment,
including, without limitation, the movement of Hazardous Materials through
ambient air, soil, surface water, ground water, wetlands, land or subsurface
strata.
"Security Documents" shall mean, collectively, the Guarantee and
Security Agreement, the New Pilgrim Deed of Trust, the Supplemental Collateral
Documents and all Uniform Commercial Code financing statements required by, or
to be filed with respect to the security interests in the Collateral created
pursuant to, the Guarantee and Security Agreement, the New Pilgrim Deed of Trust
and/or the Supplemental Collateral Documents.
"Series A Preferred Stock" shall mean the Company's Series A 14%
Cumulative Convertible Preferred Stock, par value $.001 per share.
"Series B Preferred Stock" shall mean the Company's Series B
Convertible Preferred Stock, par value $.001 per share.
"Solvent" shall mean, when used with respect to any Person as of any
date, the satisfaction of all of the following conditions as of such date: (a)
the amount of the "present fair saleable value" of the assets of such Person, as
of such date, exceeds the amount of all "liabilities of such Person, contingent
or otherwise", as of the same date, as such quoted terms are determined in
accordance with applicable federal and state laws governing determinations of
the insolvency of debtors; (b) the "present fair saleable value" of the assets
of such Person, as of such date, is greater than the amount that would be
required to pay the liability of such Person on its debts as such debts become
absolute and matured; (c) such Person does not have, as of such date, an
unreasonably small amount of capital with which to conduct its business; (d) as
of such date, such Person is able to pay its debts as they mature; and (e) such
Person is not insolvent within the meaning of any applicable Bankruptcy Law. For
purposes of this definition, (i) "debt" means liability on a "claim", and (ii)
"claim" means (x) any right to payment, whether or not such a right is reduced
to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured, or (y) any right
to an equitable remedy for breach of performance if such breach gives rise to a
right to payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured
or unsecured.
"Subscriber" shall mean, as at any date, any Person then subscribing
to, receiving from and/or paying or obligated to pay for any products or
services theretofore or thereafter to be provided by the Company or any of its
Subsidiaries, including, without limitation, any paging or messaging services
provided by the Company or any of its Subsidiaries pursuant to Part 22 or Part
90.
"Subsidiary" shall mean, with respect to any Person, any corporation,
partnership or other entity of which at least a majority of the securities or
other ownership interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions of such corporation, partnership or other entity (irrespective of
whether or not at the time securities or other ownership interests of any other
class or classes of such corporation, partnership or other entity shall have or
might have voting power by reason of the happening of any contingency) is at the
time directly or indirectly owned or controlled by such Person or one or more
Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person.
"Subsidiary Guarantee Agreement" shall mean a Subsidiary Guarantee
Agreement
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substantially in the form of Exhibit C attached to the Existing Credit
---------
Agreement, as the same shall be modified and supplemented and in effect from
time to time.
"Supplemental Collateral Documents" shall mean, collectively, all
documents, agreements and other instruments (other than the Guarantee and
Security Agreement) at any time executed and delivered by any Obligor for the
purpose of creating a Lien on such Property of such Obligor as is intended to be
collateral security for the obligations of such Obligor hereunder or under the
Guarantee and Security Agreement or any of the other Loan Documents to which
such Obligor is or hereafter becomes a party, including, without limitation, the
documents, instruments and agreements executed and delivered pursuant to Section
6.01(b) or Section 8.19 hereof, in each case as the same shall be modified and
supplemented and in effect from time to time.
"Taxes" shall mean any present or future tax, assessment, levy,
impost, duty, withholding, deduction, fee or other charge or levy imposed,
levied, collected, withheld or assessed by or on behalf of any Governmental
Authority.
"TLL Group" shall mean, collectively, TLL Partners, L.L.C., a Delaware
limited liability company, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, J. ▇▇▇▇▇▇ ▇▇▇▇▇▇, Progressive
Concepts Communications, Inc., Rainbow Resources, Inc., the constituent entities
of each of the foregoing Persons which is not an individual, and the respective
Affiliates of each of the foregoing.
"TLL Interests" shall mean, on any date, the TLL Note, the Junior
Subordinated Notes, the Series A Preferred Stock, the Series B Preferred Stock,
the Warrants and the "Underlying Stock" (as such term is defined in the Amended
and Restated Subordinated Note, Preferred Stock and Warrant Purchase Agreement
referred to in the definition of "Capitalization Documents" in Section 1.01
hereof) owned or voting control over which is held TLL Partners, L.L.C., a
Delaware limited liability company, or any other member of the TLL Group, on
such date.
"TLL Note" shall mean that certain Subordinated Promissory Note, dated
May 17, 2002, in the original principal amount of $2,200,000.00 to be issued by
the Company to TLL Partners, L.L.C. pursuant to the Restructuring Agreement
referred to in the definition of "Capitalization Documents" in this Section
1.01, an accurate, current and complete copies of which is attached hereto as
Exhibit "C" and thereby made a part hereof.
-----------
"Total Debt" shall mean, as at any date, the sum, for the Company and
its Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the aggregate amount of all Indebtedness (including
all Capital Lease Obligations) as at such date.
"U.S. Person" shall mean a citizen or resident of the United States of
America, a corporation, partnership or other entity created or organized in or
under any laws of the United States of America or any state thereof, or any
estate or trust that is subject to federal income taxation regardless of the
source of its income.
"Wholly-Owned Subsidiary" shall mean, with respect to any Person, any
corporation, partnership or other entity of which all of the equity securities
or other ownership interests (other than, in the case of a corporation,
directors' qualifying shares) are directly or indirectly owned or controlled by
such Person or one or more other Wholly-Owned Subsidiaries of such Person or by
such Person and one or more other Wholly-Owned Subsidiaries of such Person.
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"Working Capital" shall mean, as at any date, the excess of (a) all
amounts (other than cash and Cash Equivalents) which would, in conformity with
GAAP, be set forth opposite the caption "total current assets" (or any like
caption) on a consolidated balance sheet of the Company and its Subsidiaries at
such date, over (b) all amounts that would, in conformity with GAAP, be set
forth opposite the caption "total current liabilities" (or any like caption) on
a consolidated balance sheet of the Company and its Subsidiaries at such date
(but excluding the current portion of any Indebtedness of the Company and its
Subsidiaries of the types described in clauses (a) through (e) of the definition
of "Indebtedness" appearing in this Section 1.01), in each case determined for
the Company and its Subsidiaries on a consolidated basis without duplication in
accordance with GAAP.
1.02 Accounting Terms and Determinations.
-----------------------------------
(a) Except as otherwise expressly provided in this Agreement, 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 (unless otherwise disclosed to the Lenders in
writing at the time of delivery thereof in the manner described in Section
8.01(b) and Section 8.01(c) below) be prepared, in accordance with generally
accepted accounting principles applied on a basis consistent with those used in
the preparation of the latest financial statements furnished to the Lenders
hereunder (which, prior to the delivery of the first financial statements under
Section 8.01 hereof, shall mean the audited financial statements as at May 31,
2001 referred to in Section 7.01 hereof). All calculations made for the purposes
of determining compliance with this Agreement shall (except as otherwise
expressly provided herein) be made by application of generally accepted
accounting principles applied on a basis consistent with those used in the
preparation of the latest annual or quarterly financial statements furnished to
the Lenders pursuant to Section 8.01 hereof (or, prior to the delivery of the
first financial statements under Section 8.01 hereof, used in the preparation of
the audited financial statements as at May 31, 2001 referred to in Section 7.01
hereof) unless (i) the Company shall have objected to determining such
compliance on such basis at the time of delivery of such financial statements or
(ii) the Lenders shall so object in writing within thirty (30) days after
delivery of such financial statements, in either of which events such
calculations shall be made on a basis consistent with those used in the
preparation of the latest financial statements as to which such objection shall
not have been made (which, if objection is made in respect of the first
financial statements delivered under Section 8.01 hereof, shall mean the audited
financial statements as at May 31, 2001 referred to in Section 7.01 hereof).
(b) Unless otherwise specified therein or herein, accounting terms
used in the other Loan Documents or in any certificate or document delivered
pursuant hereto or thereto shall have the same meanings as are set forth in
Section 1.01 above. When used herein or in any of the other Loan Documents, or
in any certificate or other document made or delivered pursuant hereto or
thereto, accounting terms not defined in Section 1.01 or only partly defined in
Section 1.01 shall, to the extent not defined, have the respective meanings
given to them by GAAP.
ARTICLE II LOAN AND AMENDED AND RESTATED NOTE
2.01 Loan. The Company, the Administrative Agent and each of the Lenders
----
acknowledge that: (a) pursuant to the Existing Credit Agreement, Pilgrim
previously advanced funds to it in the aggregate principal amount of Ten Million
and 00/100ths Dollars (the "Facility B Term Loan") for the purposes of financing
the acquisition of various assets and businesses integrally related to the
Company's primary line of business involving paging systems, refinancing certain
then-existing Indebtedness of the Company and its Subsidiaries and providing
funds for the working capital needs and capital expenditures of the Company and
its Subsidiaries; (b) such Facility B Term Loan is evidenced by that certain
Promissory Note in such stated principal amount dated July 24, 1996 (the
"Facility B Term Loan Note"),
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an accurate and complete copy of which is attached hereto as Exhibit "A-2" and
------------
thereby made a part hereof; (c) the Company is justly indebted to Pilgrim
thereunder, as of March 28, 2002, in the amount of $ 10,417,542.43, which amount
includes unpaid principal and accrued and unpaid interest but does not include
any and all other unpaid fees, sums and charges which the Company is obligated
to pay; and (d) provided that the Closing referred to in Article VI below
occurs, as of the Closing (i) the total Indebtedness of the Company in respect
of the Facility B Term Loan shall be deemed to have been reduced to
$2,750,000.00 (such amount hereinafter being referred to as the "Loan"), (ii)
the stated maturity date shall be deemed to have been extended to May 31, 2005,
(iii) the applicable rate of interest shall be deemed to have been reduced to
nine percent (9.00%) per annum, and (iv) the Facility B Term Loan Note shall be
amended and restated in its entirety and, as so amended and restated, replaced
by the Amended and Restated Note.
2.02 Amended and Restated Note.
-------------------------
(a) The Loan shall be evidenced by a single amended and
restated promissory note of the Company in the form of Exhibit "A-1" attached
------------
hereto and thereby made a part hereof (the "Amended and Restated Note"), dated
the Closing Date, and payable to the Lenders in the stated principal amount of
Two Million Seven Hundred Fifty Thousand and 00/100ths Dollars ($2,750,000.00).
At the Closing, the Company shall execute and deliver the Amended and Restated
Note to the Administrative Agent.
(b) In the event that any Lender desires to participate or
assign, whether in whole or in part and whether absolutely or as security, all
or any portion of its rights or interests under the Loan, the Company agrees to
substitute, exchange or subdivide into promissory notes of lesser denominations
the Amended and Restated Note and to execute and deliver the same against return
of the Amended and Restated Note. Notwithstanding the foregoing, any Lender that
is not a U.S. Person and is not "exempt" within the meaning of Sections 871(h)
or 881(c) of the Code may request the Company to record, and the Company
thereupon shall record, on the Register referred to in Section 11.06(g) hereof
and on the subaccount thereof maintained for such Lender any portion of the Loan
held by such non-U.S. Person Lender under this Agreement. Interests in the Loan
recorded on the Register ("Registered Loans") may not be evidenced by promissory
notes other than Registered Notes as defined below and, upon the registration of
any interest in the Loan, any promissory note (other than a Registered Note)
evidencing the same shall be null and void and shall be returned to the Company.
The Company agrees, at the request of any Lender that is the holder of a
Registered Loan, to execute and deliver to such Lender a promissory note in
registered form to evidence such Registered Loan and registered as provided in
Section 11.06(g) hereof (herein, a "Registered Note"), dated the Closing Date,
payable to such Lender and otherwise duly completed. An interest in the Loan
once recorded on the Register may not be removed from the Register so long as it
remains outstanding and a Registered Note may not be exchanged for a promissory
note that is not a Registered Note.
(c) The date, original principal amount and rate of interest
of the Amended and Restated Note, the date and amount of each payment made on
account thereof, and each Lender's share thereof, shall be maintained by the
Administrative Agent. In the event that separate notes are issued pursuant to
Section 2.02(b) above, each Lender also shall maintain in accordance with its
usual practice an account or accounts evidencing indebtedness of the Company to
such Lender from time to time outstanding resulting from the Loan, including the
amounts of interest and principal payable and paid to such Lender from time to
time under this Agreement. Prior to any transfer of its participation or other
interests in the Amended and Restated Note and Loan, the schedule attached to
its Amended and Restated Note shall be endorsed by such Lender or any
continuation thereof; provided, however, that the failure of any Lender to make
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any such recordation or endorsement shall not affect the obligations of the
Company to make a payment when due of any amount owing hereunder or under such
Amended and Restated Note in respect of the Loan.
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(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to this Section 2.02 shall, to the extent permitted
by applicable Law, be prima facie evidence of the existence and amounts of the
obligations of the Company therein recorded; provided, however, that the failure
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of the Company to maintain the Register or of any Lender or the Administrative
Agent to maintain any such account, or any error in any thereof, shall not in
any manner affect the obligation of the Company to repay (with applicable
interest) the Loan in accordance with the terms of this Agreement.
ARTICLE III PAYMENTS
3.01 Regular Payments of Principal and Interest. The Company
------------------------------------------
hereby promises to pay to the Administrative Agent for the account of the
Lenders the Indebtedness relating to the Loan as follows: commencing on the
first (1st) day of June, 2002, and continuing on the same day of each and every
month thereafter until the Indebtedness relating to the Loan has been paid in
full, the Company shall make equal monthly payments of principal and interest,
each in the amount of EIGHTY-SEVEN THOUSAND FOUR HUNDRED FORTY NINE and
26/100ths DOLLARS ($87,449.26); provided, however, that if not sooner paid, all
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outstanding principal and interest, and all other fees, sums and charges
required to be paid hereunder or under any of the Loan Documents (including,
without limitation, under the New Pilgrim Deed of Trust) but remaining unpaid,
shall be due and payable on the first to occur (the "Maturity Date") of (i) May
31, 2005, or (ii) at the option of the Lenders, the occurrence of an Event of
Default.
3.02 Interest. From and after the Closing Date and until the
--------
Indebtedness relating to the Loan has been repaid in full, interest shall accrue
on the amount of the Indebtedness relating to the Loan then outstanding at an
annual rate equal to (a) prior to maturity and for so long as no uncured Event
of Default exists, NINE PERCENT (9.00%) per annum (the "Regular Rate"), and (b)
upon the occurrence and during the continuance of an Event of Default, or at any
time after maturity or acceleration, at the lesser (said lesser rate being
hereinafter referred to as the "Default Rate") of EIGHTEEN PERCENT (18.00%) per
annum or the highest rate then permitted by applicable Law. As used with respect
to the Amended and Restated Note and the Loan, the term "Indebtedness relating
to the Loan" (or words of similar import) means and includes the stated
principal sum of the Amended and Restated Note, capitalized interest which has
been added to principal, late charges, accrued and unpaid interest not yet
capitalized and all other amounts (including, without limitation, advances and
reimbursable or indemnified costs and expenses under the New Pilgrim Deed of
Trust or any of the other Loan Documents) provided for in the Amended and
Restated Note or in any of the other Loan Documents, together with interest on
all of the foregoing. The amount of Indebtedness relating to the Loan existing
at any time shall be determined exclusively by the Administrative Agent and,
absent manifest error, such determination shall be binding upon both the Company
and the Lenders.
3.03 Late Charges. If any amount required to be paid by the
------------
Company under any of the Loan Documents is not paid on or before the fifth (5th)
calendar day after the date when the same shall first become due, then the
Company immediately shall become liable for, and shall pay to the Administrative
Agent for the ratable account of the Lenders promptly following written demand,
a late charge equal to, for each thirty (30) day period or portion thereof that
any part of said required payment remains unpaid, five percent (5%) of the
unpaid amount, as liquidated and agreed damages for the additional expenses
which the Lenders will incur in administering their interests in the Loan, for
loss of use of the money due and for the Lenders' consequent inabilities to meet
their other commitments. The Company acknowledges the extreme difficulty and
impracticality of presently determining the Lenders' (or any Lender's) actual
damages resulting from a future late payment and, accordingly, agree that this
late charge is a reasonable estimate thereof and not a penalty.
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3.04 Optional Prepayments. Subject to Section 4.03 hereof, the
--------------------
Company shall have the right to prepay the Indebtedness relating to the Loan, in
whole or in part, at any time or from time to time, provided, however, that: (a)
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the Company shall give the Administrative Agent prior written notice of each
such prepayment as provided in Section 4.04 hereof (and, upon the date specified
in any such notice of prepayment, the amount to be prepaid shall become due and
payable hereunder); (b) all prepayments of principal designated as such shall be
applied against the principal component of the scheduled monthly installments of
principal and interest in inverse order of maturity; (c) all prepayments must be
accompanied by an interest payment equal in amount to all accrued and unpaid
interest on the amount being prepaid through the date of prepayment; and (d) all
prepayments must be accompanied by an interest payment equal in amount to all
accrued and unpaid interest on the remaining balance of the Indebtedness
relating to the Loan through the date of prepayment. Notwithstanding the
foregoing, and without limiting the rights and remedies of the Lenders under
Article IX hereof, in the event that any Event of Default shall have occurred
and be continuing, the Administrative Agent may (and at the request of the
Lenders shall) suspend the right of the Company to make any partial optional
prepayments under this Section 3.04.
3.05 Mandatory Prepayments.
---------------------
(a) Excess Cash Flow. No later than ninety (90) calendar days
----------------
after the end of each of the Company's fiscal years (commencing with the fiscal
year ending on May 31, 2003), the Company shall make a payment against the Loan
in an amount equal to the excess of (i) fifty percent (50%) of Excess Cash Flow
for such fiscal year over (ii) the aggregate amount of whatever voluntary
prepayments may have been made during such fiscal year pursuant to Section 3.04
above. Each such mandatory prepayment made pursuant to the provisions of this
Section 3.05(a) shall be applied against the regularly scheduled payment
installments in inverse order of maturity.
(b) Casualty Events. No later than ninety (90) calendar days
---------------
following the Company's receipt of any insurance proceeds, condemnation awards
or other compensation in respect of any Casualty Event affecting any Property of
the Company or any of its Subsidiaries (or upon such earlier date as the Company
or such Subsidiary, as the case may be, shall have determined not to repair or
replace the Property affected by any such Casualty Event), the Company shall
make a prepayment against the Loan in an amount equal to one hundred percent
(100%) of the Net Available Proceeds of such Casualty Event, such prepayment to
be applied against the regularly scheduled payment installments in inverse order
of maturity.
(c) Debt and Equity Issuances. No later than the date on
-------------------------
which the Net Available Proceeds of any Debt or Equity Issuance (herein, the
"Current Issuance"), when cumulated with the Net Available Proceeds from all
prior Debt or Equity Issuances as to which a prepayment has not yet been made
under this Section 3.05(c), shall equal or exceed $50,000.00, the Company shall
make a prepayment against the Loan in an amount equal to one hundred percent
(100%) of the Net Available Proceeds of the Current Issuance and from all such
prior Debt and Equity Issuances, such prepayment and reduction to be applied
against the regularly scheduled payment installments in inverse order of
maturity; provided, however, that notwithstanding the foregoing or anything else
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contained herein to the contrary, the Company shall make a prepayment against
the Loan in an amount equal to one hundred percent (100%) of the Net Available
Proceeds from any refinancing, recasting, extension or replacement of either or
both of the First Community Bank Loans (i.e., in excess of the aggregate current
maximum principal amount of $2,250,000.00), whether or not the cumulative
proceeds at such time from all prior Debt and Equity Issuances shall equal or
exceed $50,000.00.
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(d) Sale of Assets. Without limiting the obligation of the
--------------
Company to obtain the consent of the Lenders pursuant to Section 11.04 hereof to
any Disposition not otherwise permitted hereunder, the Company agrees that, on
or prior to the occurrence of any Disposition (herein, the "Current
Disposition"), it shall deliver to the Administrative Agent a statement
certified by a senior financial officer of the Company, in form and detail
satisfactory to the Administrative Agent, of the estimated amount of the Net
Available Proceeds of the Current Disposition and the portion thereof that will
on the date of the Current Disposition be received in cash. To the extent that
the Net Available Proceeds of the Current Disposition, and of all prior
Dispositions as to which a prepayment has not yet been made under this Section
3.05(d), shall equal or exceed $50,000.00, the Company shall make prepayments
against the Loan as follows:
(i) upon the date of the Current Disposition, a payment in
an amount equal to the sum of one hundred percent (100%) of the Net Available
Proceeds of the Current Disposition received in cash on the date of the Current
Disposition, together with one hundred percent (100%) of the Net Available
Proceeds from all prior Dispositions; and
(ii) thereafter, quarterly, on the earlier of (A) the
dates of and together with delivery by the Company to the Administrative Agent
pursuant to Section 8.01 hereof of the financial statements for each quarterly
fiscal period or (B) sixty (60) days after the end of such quarterly fiscal
period, to the extent the Company or any of its Subsidiaries shall receive Net
Available Proceeds during such quarterly fiscal period in cash under deferred
payment arrangements or Disposition Investments entered into or received in
connection with any Disposition, an amount equal to one hundred percent (100%)
of the aggregate amount of such Net Available Proceeds; provided, however, that
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if prior to the date upon which the Company would otherwise be required to make
a prepayment under this clause (ii) with respect to any quarterly fiscal period
the aggregate amount of such Net Available Proceeds received in cash shall be an
amount that will require a prepayment of $50,000.00 or more under this clause
(ii) with respect to such quarterly fiscal period, then the Company shall within
two (2) Business Days make a prepayment under this clause (ii) in an amount
equal to such required prepayment;
provided, however, that notwithstanding the foregoing or anything else contained
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herein to the contrary, the Company shall make a prepayment against the Loan in
an amount equal to one hundred percent (100%) of the Net Available Proceeds from
any Disposition involving Subscriber contracts, whether or not the cumulative
proceeds at such time from all prior Dispositions shall equal or exceed
$50,000.00. Each such mandatory prepayment made pursuant to the provisions of
this Section 3.05(d) shall be applied against the regularly scheduled payment
installments in inverse order of maturity.
3.06 Ratable Payments. Each payment with respect to the Loan
----------------
(whether a regularly scheduled monthly payment of principal and interest, an
optional or mandatory prepayment of principal, a payment of fees, charges or
other amounts due and owing hereunder or under any of the other Loan Documents,
or otherwise) shall be allocated among the Lenders pro rata based upon the
remaining outstanding principal amounts of their respective interests in the
Loan. No amounts paid or prepaid may be reborrowed.
ARTICLE IV MANNER OF PAYMENTS; COMPUTATIONS; ETC.
4.01 Manner of Payments.
------------------
(a) Except to the extent otherwise provided herein, all
payments of principal, interest or other amounts to be made by the Company under
this Agreement, the Amended and Restated Note or
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under any of the other Loan Documents shall be made in Dollars, either by bank
wire transfer of immediately available funds or by official bank check drawn
upon a financial institution acceptable to the Administrative Agent in its sole
and absolute discretion, without notice or demand and without abatement,
deduction, set-off or counterclaim, to the Administrative Agent at its
Applicable Lending Office or at such other address previously designated in
writing to the Company by the Administrative Agent, not later than 1:00 p.m.
Mountain Standard Time on the date on which such payment shall become due (each
such payment made after such time on such due date shall be treated as having
been made on the next succeeding Business Day). No amounts shall be considered
as having been paid until good funds therefor actually have been collected by
the Administrative Agent.
(b) Any of the Lenders for whose account any such payment is
being made may (but shall not be obligated to) debit the amount of any such
payment that is not made by such time to any account of the Company with such
Lender (with notice to the Company and the Administrative Agent), provided,
--------
however, that such Lender's failure to give notice of such account debiting
-------
shall not affect the validity thereof.
(c) The Company shall, at the time of making each payment
required by this Agreement, the Amended and Restated Note or any of the other
Loan Documents, specify to the Administrative Agent (which shall so notify the
intended recipient(s) thereof) the amounts payable by the Company hereunder or
under the Amended and Restated Note or any of the other Loan Documents to which
such payment is to be applied (and in the event that the Company fails to so
specify, or if an Event of Default has occurred and is continuing, the
Administrative Agent may distribute such payment to the Lenders for application
against the Indebtedness relating to the Loan in such manner as it or the
Lenders may determine to be appropriate).
(d) Each payment received by the Administrative Agent under
this Agreement, the Amended and Restated Note or any of the other Loan Documents
for the account of any Lender shall be paid by the Administrative Agent promptly
following its receipt thereof to such Lender, in immediately available funds,
for the account of such Lender's Applicable Lending Office for the Loan or other
obligation in respect of which such payment is made.
(e) If the due date of any payment under this Agreement, the
Amended and Restated Note or any of the other Loan Documents would otherwise
fall on a day that is not a Business Day, such date shall be extended to the
next succeeding Business Day, and interest shall be payable for any amount so
extended for the period of such extension.
4.02 Computations. Interest on the Indebtedness relating to the
------------
Loan shall be computed on the basis of a year of three hundred sixty (360) days
consisting of twelve (12) thirty (30) day months for the actual number of days
elapsed (including the first day but excluding the last day).
4.03 Minimum Amounts. There shall be no minimum amount requirement
---------------
applicable to any prepayment, whether mandatory or optional.
4.04 Certain Notices. Notices by the Company to the Administrative
---------------
Agent of optional prepayments being made pursuant to Section 3.04 above shall be
irrevocable and shall be effective only if received by the Administrative Agent
not later than 10:00 a.m. Mountain Standard Time on the second (2nd) Business
Day prior to the date of the optional prepayment. Each such notice of optional
prepayment shall specify the amount (subject to Section 4.03 hereof) to be
prepaid and the date of the optional prepayment (which shall be a Business Day).
The Administrative Agent shall promptly notify the Lenders
-25-
of the contents of each such notice.
4.05 Non-Receipt of Funds by the Administrative Agent. Unless the
------------------------------------------------
Administrative Agent shall have been notified in writing by the Company prior to
the date on which the Company is required hereunder to make any payment or
prepayment relating to the Loan to the Administrative Agent for the account of
one or more of the Lenders (such payment being herein called the "Required
Payment"), which notice shall be effective upon receipt, that the Company does
not intend to make the Required Payment, the Administrative Agent may assume
that the Required Payment is being made and may, in reliance upon such
assumption (but shall not be required to), make available to the Lenders their
respective pro rata shares of a corresponding amount on such date. If such
Required Payment is not made to the Administrative Agent as and when due, the
recipient(s) of any amount made available by the Administrative Agent shall, on
demand, repay to the Administrative Agent the amount so made available, together
with interest thereon, commencing on the date (the "Advance Date") such amount
first was so made available by the Administrative Agent until the date the
Administrative Agent recovers such amount, at a rate per annum equal to the
Regular Rate for each day that any portion of such amount remains unrepaid. If
such recipient(s) shall fail to promptly return such payment, the Administrative
Agent shall be entitled to recover such amount, on demand, from the Company,
together with interest as aforesaid; provided, however, that if neither the
-------- -------
recipient(s) nor the Company shall return the Required Payment to the
Administrative Agent within three (3) Business Days of the Advance Date, then,
retroactively to the Advance Date, the Company and the recipient(s) shall each
be obligated to pay interest in respect of the Required Payment at the
Post-Default Rate; it being understood that the return by the recipient(s) of
the Required Payment to the Administrative Agent shall not limit such obligation
of the Company to pay interest at the Post-Default Rate in respect of the
Required Payment.
4.06 Lender's Rights of Set-Off.
--------------------------
(a) The Company agrees that, in addition to (and without
limitation of) any other rights and remedies otherwise available to the Lenders
at Law or in equity (including, without limitation, any right of set-off,
banker's lien or counterclaim which a Lender otherwise may have), each Lender
shall have the right (without prior notice to the Company, any such notice being
expressly waived by the Company to the maximum extent permitted by applicable
Law), upon any amount becoming payable hereunder not being paid when first due
(whether at the stated maturity date, by acceleration or otherwise), to, at its
option, set off and apply against such amount any and all deposits (general or
special, time or demand, provisional or final), or other claims, credits or
indebtedness (whether direct or indirect, absolute or contingent, matured or
unmatured), in Dollars or any other currency, held or owing by such Lender at
any of its offices to or for the credit or the account of the Company. Each
Lender agrees to notify promptly the Company and the Administrative Agent after
any such setoff and application made by such Lender; provided, however, that the
failure to give such notice shall not affect the validity of any such setoff and
application.
(b) If any Lender (a "Benefited Lender") shall at any time
receive any payment of principal, interest or other amount owing to it under
this Agreement or any of the other Loan Documents, or receive any Collateral in
payment thereof (whether voluntarily or involuntarily, by set-off or otherwise),
in a greater percentage or proportion than that to which it is entitled (each
Lender being entitled to receive a share of any such payment or Collateral pro
rata in accordance with the unpaid balance of any such principal, interest or
other amount owing to all of the Lenders), such Benefited Lender shall purchase
for cash from the other Lenders a participating (or, if and to the extent
specified by the other Lenders, a direct) interest in such portion of each such
other Lender's share of such principal, interest or other amount relating to the
Loan, or shall provide such other Lenders with the benefits of any such
Collateral, as shall
-26-
be necessary to cause such Benefited Lender to share the excess payment or
benefits of such Collateral ratably with each of the Lenders; provided, however,
-------- -------
that if all or any portion of such excess payment or benefits is thereafter
recovered from such Benefited Lender, such purchase shall be rescinded, and the
purchase price and benefits returned, to the extent of such recovery, but
without interest.
(c) The Company agrees that any Lender so purchasing such a
participation (or direct interest) may exercise all rights of set-off, banker's
lien, counterclaim or similar rights with respect to such participation as fully
as if such Lender were a direct holder of the Loan or other amounts (as the case
may be) owing to such Lender in the amount of such participation.
(d) Nothing contained herein shall require any Lender to
exercise any such right or shall affect the right of any Lender to exercise, and
retain the benefits of exercising, any such right with respect to any other
indebtedness or obligation of the Company. If, under any applicable bankruptcy,
insolvency or other similar law, any Lender receives a secured claim in lieu of
a set-off to which this Section 4.06 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 other Lenders entitled under this Section 4.06
to share in the benefits of any recovery on such secured claim.
ARTICLE V TAX REGULATORY CHANGES;
TAXES ON NON-U.S. LENDERS
5.01 Reimbursement for Additional Costs Resulting from Tax Regulatory
----------------------------------------------------------------
Changes. The Company shall pay directly to each Lender from time to time such
-------
additional amounts as such Lender may determine to be necessary from time to
time to compensate such Lender on an after-tax basis for any increase in costs
or reduction in amounts receivable that such Lender determines are attributable
to its having made, or continuing to maintain, the Loan hereunder (such
increases in costs and reductions in amounts receivable being herein called
"Additional Costs"), resulting from any Regulatory Change that subjects any
Lender (or its Applicable Lending Office) to any tax, duty or other charge of
any kind whatsoever with respect to the Loan or any of the Loan Documents, or
changes the basis of taxation of payments to such Lender in respect thereof,
excluding (a) Non-Excluded Taxes and (b) changes in the rate of Excluded Taxes
imposed upon such Lender or the Applicable Lending Office by the jurisdiction in
which such Lender has its principal office or such Applicable Lending Office.
5.02 Taxes of Non-U.S. Persons.
-------------------------
(a) All payments by the Company under this Agreement or any of
the other Loan Document shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future Taxes (other than
Excluded Taxes). Notwithstanding the foregoing, if any of the Taxes referred to
in the preceding sentence (hereinafter, "Non-Excluded Taxes") are required to be
withheld from any amounts payable to the Administrative Agent or any of the
Lenders hereunder, the amounts so payable to the Administrative Agent or such
Lender shall be increased to the extent necessary to yield to the Administrative
Agent or such Lender (after payment of all Non-Excluded Taxes) interest or any
such other amounts that would have been received hereunder had such withholding
not been required; provided, however, that neither the Company nor any Obligor
-------- -------
shall be required to increase any such amounts payable to the Administrative
Agent or any Lender with respect to any Non-Excluded Taxes that are (i)
attributable to the Administrative Agent's or such Lender's failure to comply
with the requirements of Section 5.02(c) below, or (ii) United States
withholding taxes imposed on amounts payable to the Administrative Agent or such
Lender at the time the Administrative Agent or such Lender becomes a party to
this Agreement, except, in the case of the Taxes referred to in clause (ii), to
the extent that the Administrative Agent's or
-27-
such Lender's assignor (if any) was entitled, at the time of assignment, to
receive additional amounts from the Company or any Obligor with respect to such
Non-Excluded Taxes pursuant to this Section 5.02(a). The Company or the
applicable Obligor shall make any required withholding and pay the full amount
withheld to the relevant tax authority or other Governmental Authority in
accordance with applicable requirements of Law.
(b) The Company or the applicable Obligor also pay any and all present
or future stamp, documentary, excise or property Taxes arising from any payment
made hereunder or from the execution, delivery or enforcement of, or otherwise
with respect to, this Agreement or any of the other Loan Documents
(collectively, "Other Taxes") to the applicable Governmental Authority in
accordance with applicable requirements of Law.
(c) The Company further agrees to pay to each Lender that is not a
U.S. Person such additional amounts as are necessary in order that the net
payment of any amount due to such non-U.S. Person hereunder after deduction for
or withholding in respect of any U.S. Taxes imposed with respect to such payment
(or, in lieu thereof, payment of such U.S. Taxes by such non-U.S. Person) will
not be less than the amount stated herein to be then due and payable; provided,
--------
however, that the foregoing obligation to pay such additional amounts shall not
-------
apply:
(i) to any payment to any Lender hereunder (other than in
respect of any Registered Loan) unless such Lender is, on the date hereof (or on
the date it becomes a Lender hereunder as provided in Sections 11.06(b),
11.06(c) or 11.06(d) hereof) and on the date of any change in the Applicable
Lending Office of such Lender, either entitled to submit a Form 1001 (relating
to such Lender and entitling it to a complete exemption from withholding on all
interest to be received by it hereunder in respect of the Loan) or Form 4224
(relating to all interest to be received by such Lender hereunder in respect of
the Loan);
(ii) to any payment to any Lender hereunder in respect of a
Registered Loan (a "Registered Holder"), unless such Registered Holder (or, if
such Registered Holder is not the beneficial owner of such Registered Loan, the
beneficial owner thereof) is, on the date hereof (or on the date such Registered
Holder becomes a Lender as provided in Sections 11.06(b), 11.06(c) or 11.06(d)
hereof) and on the date of any change in the Applicable Lending Office of such
Lender, entitled to submit a Form W-8 BEN, together with an annual certificate
stating that (x) such Registered Holder (or beneficial owner, as the case may
be) is claiming benefits under an applicable treaty or is entitled to complete
exemption from, or a reduced rate of, U. S. federal withholding tax under
Sections 871(h) or 881(c) of the Code with respect to payments of "portfolio
interest", and (y) such Registered Holder (or beneficial owner, as the case may
be) shall promptly notify the Company if at any time such Registered Holder (or
beneficial owner, as the case may be) determines that it is no longer in a
position to provide such certificate to the Company (or any other form of
certification adopted by the relevant taxing authorities of the United States of
America for such purposes); or
(iii) to any U.S. Taxes imposed solely by reason of the failure by
such non-U.S. Person (or, if such non-U.S. Person is not the beneficial owner of
the Loan, such beneficial owner) to comply with applicable certification,
information, documentation or other reporting requirements concerning the
nationality, residence, identity or connections with the United States of
America of such non-U.S. Person (or beneficial owner, as the case may be) if
such compliance is required by statute or regulation of the United States of
America as a precondition to relief or exemption from such U.S. Taxes.
For the purposes of this Section 5.02(a), (A) "Form 1001" shall mean Form 1001
of the Department of
-28-
the Treasury of the United States of America, (B) "Form 4224" shall mean Form
4224 of the Department of the Treasury of the United States of America, and (C)
"Form W-8 BEN" shall mean Form W-8 BEN or Form W-8 ECI of the Department of the
Treasury of the United States of America. Each of the Forms referred to in the
foregoing clauses (A), (B) and (C) shall include such successor and related
forms as may from time to time be adopted by the relevant taxing authorities of
the United States of America to document a claim to which such Form relates.
(d) Within thirty (30) days after paying any amount to the
Administrative Agent or any Lender from which it is required by Law to make any
deduction or withholding, and within thirty (30) days after it is required by
Law to remit such deduction or withholding to any relevant taxing or other
authority, the Company shall deliver to the Administrative Agent for delivery to
such non-U.S. Person a certified copy of an original official receipt showing
payment thereof.
(e) Notwithstanding any other provision of this Section 5.02, any
Lender that is a Non-U.S. Person shall not be required to deliver any form
pursuant to this Section 5.02 that such Non-U.S. Person is not legally able to
deliver.
(f) The Company shall indemnify the Administrative Agent and each of
the Lenders for the full amount of Non-Excluded Taxes or Other Taxes arising in
connection with payments made under this Agreement (including, without
limitation, any Non-Excluded Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section 5.02) paid by the Administrative Agent or
such Lender or any of their respective Affiliates and any liability (including
penalties, additions to tax, interest and expenses) other than under those
circumstances as to which no additional payment would have been payable under
Section 5.02(a) above arising therefrom or with respect thereto. Payment under
this indemnification shall be made within fifteen (15) Business Days from the
date the Administrative Agent or any Lender (or any of their respective
Affiliates) makes written demand and provides documentation therefor. If any
Lender or the Administrative Agent shall become aware that it is entitled (as
determined in the sole but reasonable discretion of such Lender or the
Administrative Agent) to receive a refund in respect of any Taxes or Other Taxes
as to which it has been indemnified by the Company pursuant to this Section
5.02, it shall (i) promptly notify the Company of the availability of such
refund and (ii) within thirty (30) Business Days after receipt of a request by
the Company, apply for such refund at the Company's expense unless to do so will
unduly prejudice or cause undue hardship to such Lender or the Administrative
Agent (as determined in the sole but reasonable discretion of such Lender or the
Administrative Agent). If any Lender or the Administrative Agent receives a
refund in respect of any Taxes or Other Taxes as to which it has been
indemnified by the Company pursuant to this Section, it shall promptly notify
the Company of such refund and shall, within thirty (30) Business Days after
receipt of a request by the Company (or promptly upon receipt, if the Company
has requested application for such refund pursuant hereto), repay such refund to
the Company (to the extent attributable to amounts that have been paid by the
Company under this Section 5.02), net of all reasonable out-of-pocket expenses
of such Lender or the Administrative Agent; provided, however, that the Company,
-------- -------
upon the request of such Lender or the Administrative Agent, shall promptly
return such refund (plus penalties, interest or other charges) to such Lender or
the Administrative Agent in the event such Lender or the Administrative Agent is
required to repay such refund. Nothing contained in this Section 5.02(f) shall
require any Lender or the Administrative Agent to make available any of its tax
returns (or any other information relating to its Taxes that it deems to be
confidential). Each Lender and the Administrative Agent, as the case may be,
shall have full control over computations (which shall be carried out in a
reasonable manner) relating to the amount of any refund of Taxes or Other Taxes
and any payment to the Company relating to such refund as described in this
Section 5.02(f).
-29-
5.03 Replacement of Lenders. If any Lender requests compensation
----------------------
pursuant to Sections 5.01 or 5.02 hereof (any such Lender requesting such
compensation being herein called an "Affected Lender"), the Company, upon three
(3) Business Days' notice, may require that such Affected Lender transfer all of
its right, title and interest under this Agreement and the Amended and Restated
Note to any bank or other financial institution (a "Proposed Lender") identified
by the Company that is satisfactory to the Administrative Agent (a) if such
Proposed Lender agrees to assume all of the obligations of such Affected Lender
hereunder, and to purchase all of such Affected Lender's interests in the Loan
for consideration equal to the aggregate outstanding principal amount of such
Affected Lender's interests in the Loan, together with interest thereon to the
date of such purchase, and satisfactory arrangements are made for payment to
such Affected Lender of all other amounts payable hereunder to such Affected
Lender on or prior to the date of such transfer (including any fees accrued
hereunder) and (b) if such Affected Lender has requested compensation pursuant
to Sections 5.01 or 5.02 hereof, such Proposed Lender's aggregate requested
compensation, if any, pursuant to said Sections 5.01 or 5.02 with respect to
such Affected Lender's interests in the Loan is lower than that of the Affected
Lender. Subject to the provisions of Sections 11.06(b), 11.06(c) and 11.06(d)
hereof, such Proposed Lender shall be a "Lender" for all purposes hereunder.
5.04 Survival. Without prejudice to the survival of any other agreement
--------
of the Company hereunder, the agreements of the Company contained in Sections
5.01, 5.02, 5.03 and 11.03 hereof (without duplication of any payments made to
such Affected Lender by the Company or the Proposed Lender) shall survive for
the benefit of the Administrative Agent and all Lenders (including, without
limitation, any and all Affected Lenders and Proposed Lenders) the termination
of this Agreement, as well as the release of all Security Documents and the
payment of the Loan and all other amounts payable hereunder or under any of the
other Loan Documents.
ARTICLE VI CONDITIONS PRECEDENT
6.01 Delivery of Documents and Other Written Materials. The reduction
-------------------------------------------------
of the Indebtedness outstanding under the Facility B Term Loan and the amendment
and restatement of the Facility B Term Loan into the Loan is subject to the
conditions precedent that the Administrative Agent and each of the Lenders shall
have received and found to be satisfactory in both form and substance (in their
respective sole and absolute discretions) each of the following on or before May
17, 2002:
(a) Amended and Restated Note. The Amended and Restated Note, duly
-------------------------
completed and executed (except that, in the case of any Lender which is a
Registered Holder, the Amended and Restated Note shall be required only to the
extent that such Registered Holder shall have requested the execution and
delivery of an Amended and Restated Note pursuant to Section 2.02(c) hereof).
(b) Additional Security Documents. The New Pilgrim Deed of Trust,
-----------------------------
and such updates and/or amendments to the Guarantee and Security Agreement and
existing Supplemental Collateral Documents and such additional Supplemental
Collateral Documents as the Administrative Agent shall have requested, in each
case duly executed and delivered by the respective Obligors which are and/or are
intended to be made a party thereto, together with the certificates identified
under the name of such Obligor in Annex 1 to the Guarantee and Security
Agreement, in each case accompanied by undated stock powers of Teletouch
Licenses, Inc. executed in blank. In addition, each Obligor shall have taken
such other action (including, without limitation, delivering to the
Administrative Agent, for filing, appropriately completed and duly executed
copies of Uniform Commercial Code financing statements) as the Administrative
Agent shall have requested in order to perfect or, as applicable, continue the
security interests created pursuant to such Security Documents.
-30-
(c) Corporate Documents. Certified (by the secretary, or equivalent
-------------------
officer, of the Company) copies of the charter and by-laws (or equivalent
Governing Documents) of each Obligor and of all corporate (or equivalent
organizational) authority for each Obligor (including, without limitation, board
of director resolutions and evidence of the incumbency, including specimen
signatures, of officers) with respect to the execution, delivery and performance
of such of the Basic Documents as to which each Obligor is intended to be a
party and each other document to be delivered by such Obligor from time to time
in connection herewith and the Loan hereunder (and the Administrative Agent and
each Lender may conclusively rely on such certificate), together with:
(i) a copy of the Governing Documents of the Company and each
of its Subsidiaries and each amendment thereto, certified as of the Closing Date
as being an accurate, current and complete copy thereof by the Secretary of
State or other applicable Governmental Authority of the jurisdiction in which
each such Person is organized;
(ii) an original certificate of the Secretary of State or
other applicable Governmental Authority of the jurisdiction in which the Company
and each of the Subsidiaries is organized, dated as of the Closing Date, listing
the charter of such Person and each amendment thereto on file in such office and
certifying that (A) such amendments are the only amendments to such Person's
charter on file in such office, (B) such Person has paid all franchise taxes to
the date of such certificate and (C) such Person is duly organized, validly
existing and in good standing under the Laws of such jurisdiction; and
(iii) an original certificate of the Secretary of State or
other applicable Governmental Authority of each jurisdiction in which the
Company and each of its Subsidiaries is required to be qualified as a foreign
corporation or entity, dated as of the Closing Date, certifying that such Person
is duly qualified and in good standing as a foreign corporation or entity in
each such jurisdiction and has filed all annual reports required to be filed to
the date of such certificate.
(d) Officer's Certificate. A certificate from the President of the
---------------------
Company or, with the prior written consent of the Administrative Agent and each
of the Lenders, another senior officer of the Company, dated the Closing Date,
as to the matters set forth in clauses (i) and (ii) of Section 6.02(b) below and
substantially in the form of Exhibit "E-1" attached hereto and thereby made a
part hereof.
(e) Opinion of Corporate and Securities Counsel to the Company. An
----------------------------------------------------------
Opinion, dated the Closing Date, from Messrs. ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ &
▇▇▇▇▇, counsel to the Company, substantially in the form of Exhibit "F" attached
hereto and thereby made a part hereof, covering such matters as the
Administrative Agent or any Lender (or any counsel for the Administrative Agent
or any Lender) reasonably may request (and the Company hereby instructs such
counsel to deliver such opinions to each of the Lenders and the Administrative
Agent and their respective counsel).
(f) Opinion of FCC Counsel to the Company. An opinion, dated the
-------------------------------------
Closing Date, from Messrs. Blooston, Mordkofsky, Dickens, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇,
special FCC counsel to the Company, substantially in the form of Exhibit "G"
attached hereto and thereby made a part hereof, covering such matters as the
Administrative Agent or any Lender (or any counsel for the Administrative Agent
or any Lender) reasonably may request (and the Company hereby instructs such
counsel to deliver such opinions to each of the Lenders and the Administrative
Agent and their respective counsel).
(g) Repayment of Designated Indebtedness. Evidence that the
------------------------------------
principal of and
-31-
interest on, and all other amounts owing in respect of, the Indebtedness
(including, without limitation, any contingent or other amounts payable in
respect of letters of credit) indicated on Part A of Schedule 7.12 attached
-------------
hereto and thereby made a part hereof that is to be repaid on the Closing Date
shall have been (or shall be simultaneously) paid in full, that any commitments
to extend credit under the agreements or instruments relating to such
Indebtedness shall have been (or shall be simultaneously) canceled or terminated
and that all Guarantees in respect of, and all Liens securing, any such
Indebtedness shall have been released (or arrangements for such release
satisfactory to the Administrative Agent shall have been made).
(h) Financial Statements. To the extent not previously delivered,
--------------------
certified copies of the financial statements referred to in Section 7.01 below,
which financial statements shall not reflect, in the sole determination of the
Administrative Agent and the Lenders, any material adverse changes in the
financial condition or prospects of the Company or any of its Subsidiaries.
(i) EBITDA. A certificate of the Chief Financial Officer of the
------
Company setting forth calculations, in form and detail satisfactory to the
Administrative Agent, demonstrating that EBITDA for the three (3) fiscal
quarters ending February 28, 2002 equalled or exceeded $ 6,243,745.00.
(j) Capital Expenditures. A certificate of the Chief Financial
--------------------
Officer of the Company setting forth calculations, in form and detail
satisfactory to the Administrative Agent, demonstrating that Capital
Expenditures for the three (3) fiscal quarters ending February 28, 2002 did not
equal or exceed the sum of $ 3,375,000.00.
(k) First Community Bank Loan Documents. Certified copies of fully
-----------------------------------
completed and duly executed and delivered original counterparts of each of the
First Community Bank Loan Documents (including, without limitation, the
Agreement by and among First Community Financial Corporation, TLL and the
Company clarifying the equal, but separate collateral bases, relationship
between the Company's Indebtednesses owed to each of First Community Financial
Corporation and the Lenders and the subordinated nature to each of such
Indebtednesses of the Company's Indebtedness to TLL), each identical in form and
substance to the respective drafts thereof previously supplied to special
Arizona counsel to the Administrative Agent for its review and approval by the
Company's regular counsel, Messrs. Bracewell & ▇▇▇▇▇▇▇▇▇, L.L.P. of Houston,
Texas.
(l) TLL Note and Subordination Agreement. Certified copies of fully
------------------------------------
completed and duly executed and delivered original counterparts of each of the
TLL Note and the TLL Subordination Agreement, of even date therewith, by and
among the Company, TLL and the Administrative Agent clearly and fully
subordinating the Company's Indebtedness to TLL to the Company's Indebtedness to
the Lenders), identical in form and substance to those attached hereto,
collectively, as Exhibit "C" and thereby made a part hereof.
-----------
(m) License Management Agreement. Certified copies of fully
----------------------------
completed and duly executed and delivered original counterparts of the Amended
and Restated Operating Agreement, dated as of May 17, 2002, by and between the
Company, as "Operator", and the License Subsidiary, as "Subsidiary", extending
the coverage of the existing Operating Agreement to all FCC Licenses acquired
subsequent to the date of its execution, identical in form and substance to that
attached hereto as Exhibit "D" and thereby made a part hereof.
-----------
(n) FCC Licenses. Evidence that all of the FCC Licenses referred to
------------
in Schedule 7.18 attached hereto shall have been validly issued in the name of,
-------------
or shall have been validly assigned to, a
-32-
License Subsidiary, and all consents to such assignments shall have been
approved by Final rders, and that all such FCC Licenses are in full force and
effect without conditions, other than such conditions as are generally
applicable to such Authorizations.
(o) Authorizations. All governmental and third party Authorizations
--------------
necessary or, in the sole and absolute discretion of the Administrative Agent,
advisable in connection with the consummation of the transactions contemplated
hereby shall have been obtained and be in full force and effect, and all
applicable waiting periods shall have expired without any action being taken or
threatened by any competent authority which would restrain, prevent or otherwise
impose adverse conditions on the consummation of all or any portion thereof.
(p) Basic Documents. Accurate, current and complete certified
---------------
copies of (i) the Capitalization Documents, (ii) the Material Contracts, and
(iii) such other debt and equity instruments, agreements evidencing Indebtedness
or Liens and/or other Basic Documents to which the Company or any of the
Subsidiaries or the Obligors is a party or by which the Company or any of the
Subsidiaries or Obligors, or any of their respective Properties, may be bound or
subject.
(q) Lien Searches. Results of recent lien, tax lien, judgment and
-------------
litigation searches in (i) each of the jurisdictions or offices in which Uniform
Commercial Code financing statements or other filings or recordations should be
made to evidence, continue or perfect (with the priority required under the Loan
Documents) security interests in the Collateral, and (ii) in each other
jurisdiction or office in which an existing filing may exist with respect to any
Property of the Company or any of its Subsidiaries, each of which searches shall
reveal no Liens other than Liens permitted by the provisions of Section 8.06
below.
(r) Pledged Stock; Stock Powers. The certificates representing the
---------------------------
shares of Capital Stock to be pledged pursuant to the Guarantee and Security
Agreement, together with an undated stock power for each such certificate
executed in blank by a duly authorized officer of the pledgor thereof.
(s) Filings, Registrations and Recordings. Each document
-------------------------------------
(including, without limitation, any UCC financing statement) required by the
Security Documents or under applicable Law or otherwise reasonably requested by
the Administrative Agent to be executed by the appropriate Obligor and filed,
registered or recorded in order to create in favor of the Administrative Agent,
for the benefit of the Lenders, a perfected Lien on, and security interest in,
the collateral described therein, prior and superior in right to any other
Person (other than Permitted Liens), shall have been delivered to the
Administrative Agent in proper form for filing, registration or recordation,
together with sufficient cash funds to file, register or record the same.
(t) Surveys. Together with the title insurance company issuing the
-------
policy referred to in Section 6.01(u) below (the "Title Insurance Company"),
satisfactory current "as built" surveys of the real properties intended to serve
as collateral for the Loan.
(u) Title Insurance. With respect to each of the real properties
---------------
serving as a portion of the Collateral for the Loan, a satisfactory lender's
extended coverage title insurance policy (or policies) or a marked-up
unconditional binder (or binders) for such insurance. Each such policy shall (i)
be in an amount satisfactory to the Administrative Agent; (ii) be issued at
ordinary rates; (iii) insure that the Security Document insured thereby creates
a valid perfected first Lien on, and security interest in, such real property
free and clear of all defects and encumbrances, except for Permitted Liens
disclosed therein; (iv) name the Administrative Agent for the benefit of the
Lenders as the insured thereunder; (v) be in the form of ALTA Loan Policy - 1970
Form B (Amended 10/17/70 and 10/17/84) (or equivalent); (vi) contain such
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endorsements and affirmative coverage as the Administrative Agent may request in
form and substance reasonably acceptable to the Administrative Agent; and (vii)
be issued by title companies satisfactory to the Administrative Agent (including
any such title companies acting as co-insurers or reinsurers, at the option of
the Administrative Agent). The Administrative Agent further shall have received
evidence satisfactory to it that all premiums in respect of each such policy,
all charges for mortgage recording tax, and all related fees and expenses, if
any, have been paid. The Administrative Agent shall have received accurate,
complete and legible copies of all recorded documents referred to, or listed as
exceptions to title in, the title policy or policies referred to in this Section
6.01(u) and accurate, current, complete and legible copies of all other material
documents affecting the real properties.
(v) Flood Insurance. DELETED PRIOR TO EXECUTION.
---------------
(w) Insurance. Certificates of insurance demonstrating that the
---------
Company and its Subsidiaries are in compliance with the insurance requirements
of the Loan Documents (including, without limitation, the provisions of Section
8.04 below).
(x) Lease Conditions. Satisfactory evidence that short form
----------------
leases or lease memoranda have been duly recorded in the local real estate
records, with respect to each Property constituting a leasehold interest,
together with copies, certified to be accurate, current and complete, of valid,
binding and enforceable lease amendments in form and content reasonably
acceptable to the Administrative Agent, conferring upon the Administrative Agent
rights of notice and opportunity to cure with respect to defaults and such other
leasehold lender protections as the Administrative Agent reasonably may require.
(y) Solvency Certificates. Solvency Certificates executed by the
---------------------
Chief Financial Officer of the Company, and the President(s) of each its
Subsidiaries and each other Obligor, in each case attesting to the Solvency of
each Subsidiary and Obligor (other than the Company) both immediately prior to,
and immediately following the consummation of, each of the transactions
contemplated hereby and to the Solvency of the Company immediately following the
consummation of each of the transactions contemplated hereby.
(z) Loan Modification Agreement Conditions Precedent. Full and
------------------------------------------------
satisfactory performance (in the sole and absolute determination of the
Administrative Agent and each of the Lenders) of all of the conditions precedent
set forth in that certain Loan Modification Agreement, of even date herewith, by
and among the parties hereto (to which a photocopy of this Agreement is affixed
as an exhibit thereto).
(aa) Other Documents. Such other documents as either the
---------------
Administrative Agent or any Lender or special Arizona counsel to the
Administrative Agent reasonably may request (including, without limitation,
forgiveness of the indebtedness evidenced by and cancellation and return to the
Company, without any payment therefor, of all of the Junior Subordinated Notes
(each marked "paid in full"), accompanied by certified copies of fully completed
and duly executed and delivered original counterparts of each of the CIVC
Subordination Agreement and the GM Holdings, LLC Subordination Agreement, each
of even date herewith, by and among, respectively, the Company, the Lenders,
CIVC, and each of the other parties (except for GM Holdings, LLC) to the Amended
and Restated Subordinated Note, Preferred Stock and Warrant Purchase Agreement
(in the case of the CIVC Subordination Agreement), and the Company, the Lenders
and GM Holdings, LLC (in the case of the GM Holdings Subordination Agreement),
each identical in form and substance to those attached hereto, collectively, as
Exhibit "P" and thereby made a part hereof.
-----------
-34-
6.02 Additional Conditions Precedent to Amendment and Restatement of
---------------------------------------------------------------
Facility B Term Loan. The reduction of the Indebtedness outstanding under the
--------------------
Facility B Term Loan and the amendment and restatement of the Facility B Term
Loan into the Loan also is subject to satisfaction (in the sole and absolute
determinations of the Administrative Agent and the Lenders) of the following
additional conditions precedent on or prior to the Closing Date (i.e., the date
first set forth in Section 6.01 above):
(a) the payment by the Company of all fees and expenses incurred
by the Administrative Agent or the Lenders in connection with the negotiation,
preparation, execution, delivery and filing or recording of this Agreement, the
Loan Modification Agreement, the Amended and Restated Note, the New Pilgrim Deed
of Trust, the Supplementary Collateral Documents and the other Loan Documents,
including, without limitation, the expenses and reasonable attorneys' fees of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.L.L.C., special Arizona counsel to
the Administrative Agent, and of Messrs. Dow, ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ of
Washington, D.C., special FCC counsel to the Administrative Agent.
(b) receipt of satisfactory, in the sole and absolute
determination of the Administrative Agent and the Lenders, evidence
demonstrating that both immediately prior to such reduction, amendment and
restatement and after giving effect thereto:
(i) except as otherwise set forth in Section 2.12 of the
Loan Modification Agreement of even date herewith by and among the parties
hereto, no Default shall have occurred and be continuing; and
(ii) the representations and warranties made by the Company
in Article VII below, and by each Obligor in each of the other Loan Documents,
shall be accurate, current and complete on and as of such date with the same
force and effect as if made on and as of such date (or, if any such
representation or warranty is expressly stated to have been made as of a
specific date, as of such specific date).
ARTICLE VII REPRESENTATIONS AND WARRANTIES
In order to induce the Administrative Agent and each of the Lenders
to enter into this Agreement and the other Loan Documents and to make the Loan,
the Company represents and warrants to and with the Administrative Agent and
each of the Lenders as follows:
7.01 Financial Condition. The Company has heretofore furnished to the
-------------------
Administrative Agent and each of the Lenders the following financial statements:
(a) the audited consolidated balance sheets of the Company and
its Subsidiaries as at May 31, 1999, May 31, 2000 and May 31, 2001 and the
related audited consolidated statements of income, stockholders' equity and cash
flows of the Company and its Subsidiaries for the fiscal years ended on said
dates, with the opinion on each of Ernst & Young LLP;
(b) an unaudited consolidated balance sheet of the Company and
its Subsidiaries as at February 28, 2002 and the related unaudited consolidated
statements of income, stockholders' equity and cash flows of the Company and its
Subsidiaries for the nine (9) month period ended on said date;
(c) an unaudited consolidated balance sheet of the Company and
its Subsidiaries as at March 31, 2002 and the related unaudited consolidated
statements of income, stockholders' equity and
-35-
cash flows of the Company and its Subsidiaries for the ten (10) month period
ended on said date;
(d) an unaudited pro forma consolidated balance sheet of the
Company and its Subsidiaries as at May 10, 2002, prepared as if the transactions
contemplated hereby had closed as of March 31, 2002; and
(e) an unaudited pro forma consolidated sources and uses of cash
for the Company and its Subsidiaries, relating to the sources and uses of cash
received or disbursed by the Company in connection with all of the transactions
contemplated hereby and any other transactions anticipated to close in
connection therewith (including, without limitation, (i) the making of the First
Community Bank Loans and the issuance of the Term Promissory Note and Multiple
Advance Promissory Note by the Company,
-36-
(ii) the cancellation of all of the Junior Subordinated Notes (including,
without limitation, those held by the CIVC Group, the TLL Group and GM Holdings,
LLC), and (iii) the making of the subordinated loan to the Company by TLL
Partners, L.L.C. and the issuance of the subordinated TLL Note in connection
therewith), prepared as if all of such transactions had closed as of May 10,
2002.
All such financial statements are accurate, current and complete, present fairly
in all material respects the actual consolidated financial condition of the
Company and its Subsidiaries as at said dates and the actual consolidated
results of their operations for the applicable periods ended on said respective
dates, and were prepared in accordance with generally accepted accounting
principles and practices applied on a consistent basis (except as disclosed
therein or in Schedule 7.01 attached hereto and thereby made a part hereof, and
-------------
except that any unaudited financial statements do not include footnote
disclosures and are subject to normal year-end audit adjustments). Neither the
Company nor any of its Subsidiaries has any material contingent liabilities,
liabilities for taxes, guarantied obligations, unusual forward or long-term
commitments or unrealized or anticipated losses from any unfavorable
commitments, except as referred to or reflected or provided for in said
financial statements. Since the date of the most recent financial statements
referred to above, there has been no material adverse change in the consolidated
financial condition, operations, business or prospects of the Company and its
Subsidiaries, taken as a whole, from that set forth in said most recent
financial statements; neither has there occurred any other event, circumstance
or condition which (whether individually or in the aggregate) has had or could
reasonably be expected to have a Material Adverse Effect.
7.02 Corporate Existence; Compliance with Law. The Company and each
----------------------------------------
of its Subsidiaries: (a) is a corporation, duly organized, validly existing and
in good standing under the Laws of the jurisdiction of its organization; (b) has
all requisite corporate or other power and authority and the legal right, and
has received all governmental approvals, consents, licenses and other
Authorizations necessary, to own and/or lease its Properties and to carry on its
business as now being or as proposed to be conducted; (c) is duly qualified as a
foreign corporation and is in good standing under the Laws of all jurisdictions
in which the ownership of its Properties or the conduct of its business requires
such qualification; and (d) is in compliance with all applicable Laws, except to
the extent that any failure to comply therewith could not (either individually
or in the aggregate) reasonably be expected to have a Material Adverse Effect.
7.03 Authorization; Validity. The Company and each of its
-----------------------
Subsidiaries has all necessary corporate power, authority and legal right to
execute, deliver and perform its obligations under each of the Basic Documents
(including, without limitation, the Loan Documents) to which it is a party; the
execution, delivery and performance by the Company and each of its Subsidiaries
of each of the Basic Documents (including, without limitation, the Loan
Documents) to which it is a party have been duly authorized by all necessary
corporate action on its part (including, without limitation, any required
shareholder approvals); and each of the Loan Modification Agreement and this
Agreement has been duly and validly executed and delivered by the Company and
constitutes, and each of the Amended and Restated Note, the New Pilgrim Deed of
Trust and the other Basic Documents (including, without limitation, the other
Loan Documents) to be executed as part of the Closing to which the Company or
any of its Subsidiaries will be a party when executed and delivered will
constitute, its legal, valid and binding obligation, enforceable against the
Company and its Subsidiaries (to the extent party thereto) in accordance with
its terms, except as such enforceability may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium or similar Laws of general applicability
affecting the enforcement of
-37-
creditors' rights and (b) the application of general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at Law).
7.04 Approvals. No approvals, consents or other Authorizations of,
---------
and no filings or registrations with, any Governmental Authority (including,
without limitation, the FCC), or any securities exchange, are necessary for the
execution, delivery or performance by the Company or any of its Subsidiaries of
this Agreement or any of the other Basic Documents (including, without
limitation, the Loan Documents) to which it is a party or for the binding
nature, enforceability, legality, priority or validity hereof or thereof, except
for those consents, filings, notices and other Authorizations described in
Schedule 7.04 attached hereto and thereby made a part hereof, which consents,
-------------
filings, notices and other Authorizations already have been obtained or made and
are in full force and effect, and the filings referred to in Section 7.33 below;
provided, however, that the approval of the FCC may be required prior to the
-------- -------
exercise by the Lenders or the Administrative Agent of certain remedies provided
for in the Security Documents, and for the transfer or assignment of FCC
Licenses to License Subsidiaries as contemplated by Section 8.14(b) hereof. As
of the Closing Date, all Authorizations of any Governmental Authority
(including, without limitation, the FCC) required in connection with the
operation of the business of the Company and its Subsidiaries shall have been
duly granted pursuant to Final Orders and shall be in full force and effect
without conditions, other than such conditions as are generally applicable to
such Authorizations.
7.05 No Legal Bar. Neither the execution and delivery of this
------------
Agreement, the Loan Modification Agreement, the Amended and Restated Note or any
of the other Loan Documents or Basic Documents, nor the consummation of the
transactions herein and therein contemplated nor performance or compliance with
the terms and provisions hereof and thereof, will:
(a) contravene, violate, conflict with, result in the
termination or acceleration of, cause to occur any breach of or constitute a
default under, or require any approval or consent under (i) the Governing
Documents of the Company or any of its Subsidiaries, or (ii) any applicable Law
or regulation, or any order, writ, injunction or decree, of any arbitral
tribunal, court or other Governmental Authority (including, without limitation,
the FCC) to which the Company or any of its Subsidiaries or any of their
respective Properties may be bound or subject, or (iii) any material bond,
indenture or other agreement, instrument or arrangement to which the Company or
any of its Subsidiaries is a party or by which any of them or any of their
respective Properties may be bound or subject; or
(b) except for the Liens created pursuant to the Security
Documents, result in the creation or imposition of any Lien upon any of the
revenues or Properties of the Company or any of its Subsidiaries;
provided, however, that the approval of the FCC may be required prior to (X) the
-------- -------
exercise by the Lenders or the Administrative Agent of certain remedies provided
for in the Security Documents (to the extent the exercise of such remedies would
result in a transfer or assignment of FCC Licenses requiring prior approval by
the FCC under the Communication Act of 1934), and (Y) the transfer or assignment
of FCC Licenses to License Subsidiaries as contemplated by Section 8.14(b)
hereof.
7.06 No Existing Defaults. Except as otherwise set forth in the Loan
--------------------
Modification Agreement of even date herewith by and among the parties hereto,
neither the Company nor any of its Subsidiaries is (or with the passage of time,
the giving of notice or both would be) in breach or default under or in
violation of (a) any bond, indenture or other agreement, instrument or
arrangement, or (b) any Law or order, writ, rule or regulation of any arbitral
tribunal, court or other Governmental Authority, in each case
-38-
to which any of them is a party or by which any of them or any of their
respective Properties, or any of the Collateral, may be bound or subject, except
for breaches, defaults or violations which could not (either individually or in
the aggregate) reasonably be expected to have a Material Adverse Effect.
7.07 Absence of Investigations, Claims and Litigation. Except as set
------------------------------------------------
forth on Schedule 7.07 attached hereto and thereby made a part hereof, neither
-------------
the Company nor any of its Subsidiaries is a party to, has received written
notice or, to the best of the Company's knowledge, information and belief (after
due inquiry), otherwise is aware of any investigations, claims, actions, suits
or other proceedings, whether pending, threatened or, to the best of the
Company's knowledge, information and belief (after due inquiry), contemplated by
or against the Company or any of its Subsidiaries or against any of their
respective revenues or Properties, or of any facts, circumstances or conditions
which might constitute the basis for any such investigation, claim, action, suit
or other proceeding, which if adversely determined:
(a) might prohibit, delay or interfere with the consummation of
or result in the invalidation, rescission or modification of any of the
transactions contemplated hereby; or
(b) might result in any materially adverse change in the
Company's, or any of its Subsidiaries', business, operations, Properties,
prospects or condition (financial or otherwise); or
(c) might materially and adversely affect (i) the rights, title
and interests of any one or more of the Company or any of its Subsidiaries in
and to all or any material portion of their Properties or the Collateral, (ii)
any one or more of the Obligors' abilities to perform their obligations
hereunder or under any of the other Loan Documents to which it may be a party,
(iii) any one or more of the Lenders' or the Administrative Agent's abilities to
exercise its rights, powers or remedies hereunder or under any of the other Loan
Documents, (iv) the value or condition of all or any portion of the Collateral,
(v) the legality, validity, binding nature of, enforceability or priority of
this Agreement or any of the other Loan Documents, or (vi) any of the Lenders'
or the Administrative Agent's rights, title or interests in and to the
Collateral; or
(d) could (either individually or in the aggregate) reasonably
be expected to have a Material Adverse Effect.
7.08 Federal Regulations. Neither the Company nor any of its
-------------------
Subsidiaries is engaged in the business of extending credit for the purpose,
whether immediate, incidental or ultimate, of buying or carrying "margin stock";
and no part of the proceeds of the Facility B Term Loan has been and no part of
the proceeds of the Loan will be used to buy or carry any "margin stock" (within
the meaning of Regulation U), or for the purpose of purchasing, carrying or
trading in any securities under such circumstances as to involve the Company or
any of its Subsidiaries in a violation of Regulation X or to involve any broker
or dealer in a violation of Regulation T. None of the transactions contemplated
by this Agreement (including, without limitation, the direct and indirect use of
proceeds of the Loan) will violate or result in a violation of Regulation T,
Regulation U or Regulation X. If requested by any Lender or the Administrative
Agent, the Company will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
G-3 or FR Form U-1 referred to in Regulation U.
7.09 Investment Company Act; Public Utility Holding Company Act.
----------------------------------------------------------
Neither the Company nor any of its Subsidiaries is an "investment company", or a
company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended. Neither the Company nor any of its
Subsidiaries is subject to any regulation or other legal requirement (other than
Regulation X) which limits or conditions its ability to incur Indebtedness.
Neither the Company nor any of
-39-
its Subsidiaries is a "holding company", or an "affiliate" of a "holding
company" or a "subsidiary company" of a "holding company", within the meaning of
the Public Utility Holding Company Act of 1935, as amended.
7.10 Taxes. The Company and its Subsidiaries are members of an
-----
affiliated group of corporations filing consolidated returns for federal income
tax purposes, of which the Company is the "common parent" (within the meaning of
Section 1504 of the Code) of such group. The Company and each of its
Subsidiaries have filed or caused to be filed all federal, state and other tax
returns that are required to be filed by them and have paid all taxes shown to
be due and payable on such returns or on any assessment made against the Company
or any of its Subsidiaries (or any of their respective revenues or Properties)
and all other taxes, fees or other charges imposed on any of them or any of
their respective revenues or Properties by any Governmental Authority (other
than any taxes, the amount or validity of which currently are being contested in
good faith by appropriate proceedings being diligently conducted and with
respect to which adequate reserves in conformity with GAAP have been provided
for on the books of the Company or the applicable Subsidiary, as the case may
be). The contents of all such tax returns are accurate and complete in all
material respects; no tax Lien has been filed and, to the best knowledge of the
Company, no claim is being asserted with respect to any such tax, fee or other
charge, other than with respect to taxes that are not yet due or payable. The
charges, accruals and reserves on the books of the Company and its Subsidiaries
in respect of taxes and other governmental charges are, in the reasonable
opinions of the Company and its auditors, adequate. Except as set forth on
Schedule 7.10 attached hereto and thereby made a part hereof, the Company has
-------------
not given or been requested to give a waiver of the statute of limitations
relating to the payment of any federal, state, local or foreign taxes or other
impositions.
7.11 ERISA. Each Plan and, to the knowledge of the Company, each
-----
Multiemployer Plan is in compliance in all material respects with, and has been
administered in all material respects in compliance with, the applicable
provisions of ERISA, the Code and any other federal or state law, and no event
or condition has occurred and is continuing as to which the Company or any of
its Subsidiaries would be under an obligation to furnish a report to the Lenders
under Section 8.01(h) hereof. Neither a "reportable event" nor an "accumulated
funding deficiency" (within the meaning of the Code or ERISA) has occurred with
respect to any Plan during the past five (5) years, and each Plan has complied
in all material respects with all applicable provisions of ERISA and the Code.
No Plan has been terminated, and no Lien in favor of the PBGC or a Plan has
arisen, during such five (5) year period. The present value of all accrued
benefits under each Plan (based on those assumptions used to fund such Plans)
did not, as of the last annual valuation date, exceed the value of the assets of
such Plan allocable to such accrued benefits by a material amount. Neither the
Company nor any ERISA Affiliate has had a complete or partial withdrawal from
any Multiemployer Plan that has resulted or could reasonably be expected to
result in a material liability under ERISA, and neither the Company nor any
ERISA Affiliate would become subject to any material liability under ERISA if
the Company or any ERISA Affiliate were to withdraw completely from all
Multiemployer Plans. No Multiemployer Plan is insolvent, and no proceeding under
any Bankruptcy Law by or against an Multiemployer Plan is pending or, to the
best of the Company's knowledge, information and belief (after due inquiry),
pending.
7.12 Material Agreements and Liens.
-----------------------------
(a) Part A of Schedule 7.12 attached hereto and thereby made a
-------------
part hereof is an accurate, current and complete list of each credit agreement,
loan agreement, indenture, purchase agreement, guarantee, letter of credit or
other arrangement providing for or otherwise relating to any Indebtedness or any
extension of credit (or commitment for any extension of credit) to, or guarantee
by, the
Company or any of its Subsidiaries outstanding on the date hereof, the aggregate
principal or face amount of which equals or exceeds (or may equal or exceed)
$25,000.00, and the aggregate amount (including, without limitation, principal,
interest, fees and charges) outstanding or that may become outstanding under
each of such arrangements is accurately, currently and completely described in
Part A of said Schedule 7.12.
-------------
(b) Part B of Schedule 7.12 attached hereto and thereby made
-------------
a part hereof is an accurate, current and complete list of each Lien securing
Indebtedness of any Person outstanding on the date hereof, the aggregate
principal or face amount of which equals or exceeds (or may equal or exceed)
$25,000.00 and covering any of the Properties of the Company or any of its
Subsidiaries, and the aggregate Indebtedness secured (or that may be secured) by
each such Lien and the Property covered by each such Lien is accurately,
currently and completely described in Part B of said Schedule 7.12.
-------------
7.13 Environmental Matters.
---------------------
(a) Each of the Company and its Subsidiaries has obtained all
environmental, health and safety permits, licenses and other Authorizations
required under all Environmental Laws to carry on its business as now conducted,
except to the extent failure to have any such permit, license or Authorization
could not (either individually or in the aggregate) reasonably be expected to
have a Material Adverse Effect. Each of such permits, licenses and
Authorizations is in full force and effect and each of the Company and its
Subsidiaries is in compliance with the terms and conditions thereof, except to
the extent failure to maintain the same in full force and effect, or failure to
comply with the terms thereof, could not (either individually or in the
aggregate) reasonably be expected to have a Material Adverse Effect. Each of the
Company and its Subsidiaries also is in compliance with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in any applicable Environmental Law or in any
regulation, code, plan, order, decree, judgment, injunction, notice or demand
letter issued, entered, promulgated or approved thereunder, except to the extent
failure to comply therewith could not (either individually or in the aggregate)
reasonably be expected to have a Material Adverse Effect.
(b) No notice, notification, demand, request for information,
citation, summons or order has been issued, no complaint has been filed, no
penalty has been assessed and no investigation or review is pending or
threatened by any Governmental Authority or other Person with respect to any
alleged failure by the Company or any of its Subsidiaries to have any
environmental, health or safety permit, license or other Authorization required
under any Environmental Law in connection with the conduct of the business of
the Company or any of its Subsidiaries or with respect to any generation,
treatment, storage, recycling, transportation, discharge or disposal, or any
Release, of any Hazardous Materials generated by the Company or any of its
Subsidiaries, except such as could not (either individually or in the aggregate)
reasonably be expected to have a Material Adverse Effect.
(c) No Hazardous Materials are present or being generated,
manufactured, stored or treated at, on, under or in, or are being discharged or
leaked from, or disposed of, dumped or Released onto or beneath, any real
property now or formerly owned, leased or operated by the Company or any of its
Subsidiaries, or at, on, under, in or from any other location (including,
without limitation, any location to which Hazardous Materials have been sent for
re-use or recycling or for treatment, storage or disposal by the Company or any
of its Subsidiaries), in either case which could reasonably be expected to (i)
give rise to liability of the Company or any of its Subsidiaries under any
applicable Environmental Law or otherwise result in material costs to the
Company or any of its Subsidiaries, or (ii) interfere in any material respect
with the Company's or any of its Subsidiaries' continued operations, or (iii)
impair the fair saleable value of
-41-
any real property owned or leased by the Company or any of its Subsidiaries.
(d) There is no judicial, administrative or arbitral proceeding
(including any notice of violation or alleged violation) under or relating to
any Environmental Law to which the Company or any of its Subsidiaries is, or to
the knowledge of the Company will be, named as a party that is pending or, to
the knowledge of the Company, threatened.
(e) Neither the Company nor any of its Subsidiaries has received
any written request for information, or been notified that it is a potentially
responsible party under or relating to the federal Comprehensive Environmental
Response, Compensation, and Liability Act or any similar Environmental Law, or
with respect to any Hazardous Materials.
(f) Neither the Company nor any of its Subsidiaries has entered
into or agreed to any consent decree, order, or settlement or other agreement,
or is subject to any judgment, decree, order or other agreement, in any
judicial, administrative, arbitral or other forum for dispute resolution,
relating to compliance with or liability under any Environmental Law.
(g) To the best knowledge of the Company, neither the Company nor
any of its Subsidiaries has assumed or retained, by contract or operation of Law
(other than those routinely imposed under leases), any liabilities of any kind,
fixed or contingent, known or unknown, under any Environmental Law or with
respect to any Hazardous Materials.
(h) All environmental investigations, studies, audits, tests,
reviews or other analyses conducted by or that are in the possession of the
Company or any of its Subsidiaries in relation to facts, circumstances or
conditions at or affecting any site or facility now or previously owned,
operated or leased by the Company or any of its Subsidiaries and that could
(either individually or in the aggregate) reasonably be expected to result in a
Material Adverse Effect have been made available to the Lenders.
(i) Neither the Company nor any of its Subsidiaries has, and to
the best of the Company's knowledge, information and belief (after due inquiry),
no other Person heretofore has caused, suffered or permitted, any Hazardous
Materials to be dumped, placed, stored, held, located, used, manufactured,
generated, leaked, discharged, released, seeped, emitted or disposed of into,
from, on, under, above, around, in or at any real property in which the Company
or any of its Subsidiaries now has or ever had a real property interest.
7.14 Capitalization. The authorized Capital Stock of the Company
--------------
consists solely of: (a) 25,000,000 shares of common stock, par value $.001 per
share (4,793,420 of which have been issued and are outstanding as at April 30,
2002) and (b) 5,000,000 shares of preferred stock, par value $.001 per share, of
which the Company has designated 15,000 shares as Series A Preferred Stock
(15,000 of which have been issued and are outstanding as at April 30, 2002) and
617,189 shares as Series B Preferred Stock (86,025 of which have been issued and
are outstanding as at April 30, 2002), and the balance of which shares is
undesignated. Each of such outstanding shares of common and preferred stock has
been duly authorized and validly issued, is fully paid and non-assessable and is
owned of record and beneficially by the shareholders and in the amounts set
forth on Schedule 7.14 attached hereto and thereby made a part hereof. Except as
-------------
set forth in Part A of Schedule 7.14, there are no outstanding Equity Rights
-------------
with respect to the Company. Except as set forth in Part B of Schedule 7.14,
-------------
there are no outstanding obligations of the Company or any of its Subsidiaries
to repurchase, redeem, or otherwise acquire any shares of Capital Stock of the
Company or of any of its Subsidiaries; nor are there any outstanding obligations
of the Company or any of its Subsidiaries to make payments to any Person, such
as "phantom stock" payments,
-42-
where the amount thereof is calculated with reference to the fair market value
or equity value of the Company or any of its Subsidiaries. None of the Capital
Stock of the Company or of any of its Subsidiaries is subject to any Liens,
except for the Liens intended to be created by the Security Documents. Schedule
--------
7.14 also accurately and completely identifies, as at April 30, 2002, (a) the
----
names and number (both absolute and as a percentage) of shares of preferred
stock, common stock, options, warrants, direct holdings, indirect holdings,
beneficial ownership and votes held by each shareholder of the Company which,
together with the Affiliates of such shareholder (to the extent such Affiliates
are known, or with the exercise of reasonable due diligence should be known, to
the Company), as of such date owns more than one percent (1%) of the outstanding
Capital Stock of the Company; and (b) the names and mailing addresses of all of
the current members of the Board of Directors of the Company, as well as the
information contained in clause (a) hereof with respect to such Board members.
7.15 Subsidiaries.
------------
(a) Part A of Schedule 7.15 attached hereto and thereby made
-------------
a part hereof is an accurate, current and complete list of all of the
Subsidiaries of the Company, together with, for each such Subsidiary, (i) the
name and jurisdiction of organization of such Subsidiary, (ii) each Person
holding ownership interests in such Subsidiary and (iii) the nature of the
ownership interests held by each such Person and the number of ownership
interests and the percentage of ownership of such Subsidiary represented by such
ownership interests. Except as disclosed in Part A of Schedule 7.15, (x) each of
-------------
the Company and its Subsidiaries owns, free and clear of Liens (other than Liens
permitted under Section 8.06(a) hereof), and has the unencumbered right to vote,
all outstanding ownership interests in each Person shown to be held by it in
Part A of Schedule 7.15, (y) all of the issued and outstanding Capital Stock of
-------------
each such Person organized as a corporation has been duly authorized and validly
issued, is fully paid and non-assessable and is owned of record and beneficially
by the shareholders and in the amounts set forth on Part A of Schedule 7.15, and
-------------
(z) there are no outstanding Equity Rights with respect to such Person.
(b) Part B of Schedule 7.15 attached hereto and thereby made
-------------
a part hereof is an accurate, current and complete list of all Investments
(other than Investments permitted under clauses (b) and (c) of Section 8.08
hereof) held by the Company or any of its Subsidiaries in any Person on the date
hereof and, for each such Investment, (x) the identity of the Person or Persons
holding such Investment and (y) the nature and amount of such Investment. Except
as disclosed in Part B of Schedule 7.15, each of the Company and its
-------------
Subsidiaries owns, free and clear of all Liens (other than Liens created
pursuant to the Security Documents), all such Investments.
(c) None of the Subsidiaries of the Company is, on the date
hereof, subject to any indenture, agreement, instrument or other arrangement of
the type described in Section 8.17(d) hereof.
7.16 Ownership of Properties. The Company and its Subsidiaries
-----------------------
either own or have the unchallenged right to use all assets, rights and
properties necessary for the operation or conduct of their respective
businesses; and the Company and each of its Subsidiaries is the sole owner of,
legally and beneficially, and has good, marketable and insurable fee simple
title to (or, as applicable, a leasehold estate in), all of its Properties
subject only to, and holds each of the same free and clear of any and all
encumbrances, liens, claims, charges, liabilities, obligations, restrictions and
adverse rights and interests of any kind, nature or description whatsoever other
than, the Liens permitted by Section 8.06 hereof and those other matters listed
on Schedule 7.16 attached hereto and thereby made a part hereof (collectively,
-------------
the "Permitted Exceptions"); provided, however, that the provisions of this
-------- -------
Section 7.16 shall not be construed as being applicable to any of the FCC
Licenses, as to which the provisions of Section 7.18 shall be applicable.
Neither the Company nor any of its Subsidiaries is aware (after due inquiry) of
any matter
-43-
affecting or likely to affect title thereto or the use thereof, except as set
forth on Schedule 7.16.
-------------
7.17 True and Complete Disclosure. None of the exhibits, schedules,
----------------------------
balance sheets, income or cash flow statements, reports, budgets, plans or other
financial, operating or other information heretofore furnished or hereafter to
be furnished by or on behalf of the Company or any of its Subsidiaries in
connection with the negotiation, preparation, delivery or administration of this
Agreement or any of the other Loan Documents or included herein or therein or
delivered pursuant hereto or thereto, when taken as a whole, did or will contain
any untrue statement of material fact or omit to state any material fact
necessary to make the statements contained herein or therein not misleading.
Such materials were and will continue to be prepared and submitted in good faith
and without any intent to mislead or defraud the Administrative Agent or any of
the Lenders. All written information (other than projections) heretofore
furnished or hereafter to be furnished by or on behalf of the Company and its
Subsidiaries in connection with this Agreement and the other Loan Documents and
the transactions contemplated hereby and thereby was and shall continue to be
accurate, current and complete in every material respect on the date as of which
such information was or will be stated or certified for the periods reflected
therein, presented and will continue to present fairly the subjects intended to
be covered thereby and has been and shall continue to be prepared in accordance
with generally accepted accounting principles, consistently applied. All
projections heretofore furnished or hereafter to be furnished by or on behalf of
the Company and its Subsidiaries in connection with this Agreement and the other
Loan Documents and the transactions contemplated hereby and thereby have been
and will continue to be, except as noted therein, based on estimates and
assumptions believed in good faith by the Company's management to be reasonable
and achievable. There is no fact known to the Company that could (either
individually or in the aggregate) reasonably be expected to have a Material
Adverse Effect that has not been disclosed herein or in any of the other Loan
Documents or in a written disclosure letter attached as an exhibit or schedule
hereto or to any of the other Loan Documents. There have not been any and there
will continue to be no obligations, liabilities, indebtedness (including,
without limitation, contingent liabilities), facts or circumstances which are or
might be material to the Collateral, or to the Properties, financial condition
or affairs of the Company or any of its Subsidiaries or any Obligor which have
not and will continue to have not been accurately and completely reflected in
such delivered materials; and no materially adverse change with respect to any
of the information set forth therein has or will have occurred since the
respective dates of their last delivery without first having been conspicuously
disclosed in writing to and receipt thereof acknowledged in writing by the
Administrative Agent.
7.18 Paging License and Other FCC Related Matters.
--------------------------------------------
(a) License Information. Part A of Schedule 7.18 attached
------------------- -------------
hereto and thereby made a part hereof is an accurate, current and complete list
of all Paging Licenses and other FCC Licenses held by the Company or any of its
Subsidiaries and, for each such Paging License and each such other FCC License,
the call sign, the name of the licensee, the transmitter location, the type of
service (e.g., paging, etc.), the frequency or frequencies authorized and the
expiration dates. No later than five (5) Business Days prior to the date when
any Acquisition or Disposition permitted under Section 8.05 below is
consummated, the Company shall deliver to the Administrative Agent and each of
the Lenders an updated Schedule 7.18, so that the same will accurately,
-------------
currently and completely list all Paging Licenses and other FCC Licenses that
will be granted or assigned to or by the Company or any Subsidiary on or before
the date of such Acquisition or Disposition and, for each such Paging License
and each such other FCC License, the call sign, the name of the licensee, the
transmitter location, the type of service (e.g. paging, etc.), the frequency or
frequencies authorized and the expiration dates.
(b) Shared Frequency Agreements, Etc. Except for the
---------------------------------
agreements specifically so
-44-
identified in Part B of Schedule 7.18, neither the Company nor any of its
-------------
Subsidiaries is, on the date hereof, a party to (i) any agreement for the shared
use of frequencies, (ii) any management, loading or similar agreements with
respect to the FCC Licenses held by the Company or any of its Subsidiaries
(other than the License Management Agreement), or (iii) any agreement pursuant
to which the Company or any of its Subsidiaries has agreed to share with others
any portion of the revenues derived from any such FCC Licenses, or pursuant to
which such FCC Licenses shall be subject to any right on the part of any other
Person to require the Company or any of its Subsidiaries to sell any such FCC
Licenses which if terminated, amended or modified, could (either individually or
in the aggregate) reasonably be expected to have a Material Adverse Effect.
(c) Network Agreements. The terms of all Network Agreements
------------------
to which the Company or any of its Subsidiaries is a party, and the operation of
each Paging System pursuant thereto, comply with the Communications Act of 1934,
as amended, and all rules, regulations and policies of the FCC and of any other
Governmental Authority, except for any such non-compliance that could not
(either individually or in the aggregate) reasonably be expected to result in a
Material Adverse Effect. Each Network Agreement (to the extent the same is in
writing) has been duly executed and delivered by the Company or its applicable
Subsidiary, is in full force and effect and none of the parties thereto is in
default of any of the provisions thereof.
(d) Condition of Systems. All of the assets, properties,
--------------------
equipment and systems owned, leased or managed by the Company or any of its
Subsidiaries are, and all assets, properties, equipment and systems to be
acquired or added in connection with any contemplated system expansion or
construction will be, in good repair, working order and operating condition and
are and will be in compliance with all terms and conditions of the FCC Licenses
and all standards or rules imposed by any Governmental Authority (including,
without limitation, the FCC) or as imposed under any agreements with telephone
companies and customers, except for any such non-compliance that could not
(either individually or in the aggregate) reasonably be expected to result in a
Material Adverse Effect.
(e) Fees. Each of the Company and each of its Subsidiaries
----
(as to all Paging Systems owned, leased or managed by any of such entities) has
paid all license or other fees and charges which have become due pursuant to any
Authorization in respect of its business and has made appropriate provision as
is required by GAAP for any such fees and charges which have accrued.
(f) License Compliance. Except as specifically identified in
------------------
Part C of Schedule 7.18, each of the Company and its Subsidiaries (as to all
-------------
Paging Systems owned, leased or managed by any of such entities) has secured all
Authorizations from the FCC and any other Governmental Authority exercising
jurisdiction over the Paging Business of the Company and its Subsidiaries (or
the construction of delivery systems therefor) required for the conduct of the
business and operations of the Paging Business as currently conducted.
(g) Licenses Valid. Each of the FCC Licenses listed on
--------------
Schedule 7.18 is valid and in full force and effect without conditions, except
-------------
for such conditions as are generally applicable to holders of FCC Licenses and
such Authorizations.
(h) No Revocation Proceedings or Events. To the best
-----------------------------------
knowledge of the Company and its Subsidiaries, no event has occurred and is
continuing which could (i) result in the imposition of any forfeiture,
revocation, termination, suspension or adverse modification of any FCC License
specified in Schedule 7.18 or (ii) materially and adversely affect any rights of
-------------
the Company or any of its Subsidiaries thereunder. Neither is there currently
pending any forfeiture, revocation, termination, suspension or
-45-
adverse modification proceeding affecting any of the FCC Licenses specified in
Schedule 7.18 and, to the best knowledge of the Company and its Subsidiaries, no
-------------
such proceeding is contemplated or has been threatened.
(i) Licenses Renewable. The Company has no reason to believe and
------------------
has no knowledge that any of the FCC Licenses specified in Schedule 7.18 will
-------------
not be renewed in the ordinary course.
(j) Paging System Construction. DELETED PRIOR TO EXECUTION.
--------------------------
(k) Compliance with Ownership and Operation Requirements. The
----------------------------------------------------
current ownership and operation by each of the Company and its Subsidiaries of
its Paging Business complies with the Communications Act of 1934, as amended,
and all rules, regulations and policies of the FCC and of any other Governmental
Authority, except for such non-compliance that could not (either individually or
in the aggregate) result in a Material Adverse Effect.
(l) Reclassification. DELETED PRIOR TO EXECUTION.
----------------
(m) No Claims or Infringements. No material claim has been
--------------------------
asserted or is pending by any Person challenging or questioning the use by the
Company and its Subsidiaries of any of the Paging Licenses or other FCC Licenses
or the validity or effectiveness of any thereof; nor does the Company know of
any valid basis for any such claim. The use of the Paging License and other FCC
Licenses by the Company and its Subsidiaries does not infringe on the rights of
any other Person in any material respect.
7.19 Certain Documents and Agreements. The Company has heretofore
--------------------------------
delivered to the Administrative Agent and each of the Lenders accurate, current
and complete copies (including of all modifications, supplements, exhibits,
schedules and ancillary agreements thereto or to be delivered in connection
therewith or pursuant thereto) of each of the Basic Documents (including,
without limitation, of any proposed amendments to any existing Basic Documents,
or any new Basic Documents, to be executed and delivered by any of the Obligors
as part of the Closing).
7.20 Real Property. Attached hereto as Schedule 7.20 and thereby made a
------------- -------------
part hereof is an accurate, current and complete list of all of the real
property used or occupied by the Company or any of its Subsidiaries, indicating,
with respect to each parcel of real property, whether (i) the respective
Property is owned or leased (and if leased, the term of such lease and the
nature and extent of the operations of the Company or any of its Subsidiaries
conducted or to be conducted on such real property), (ii) the identity of the
owner and lessee, (iii) the sums payable or receivable by the Company or any of
its Subsidiaries in respect thereof, and (iv) where such real property is
located. There are no encroachments onto any real property owned by the Company,
and none of the real property owned by the Company encroaches upon any easement
areas, adjoining property or public or private streets, roads or highways. All
of the Properties owned by the Company or any of its Subsidiaries constituting
real property abut on and have both legal and physical direct vehicular and
pedestrian access to a public road, street or highway. Except as set forth on
Schedule 7.20, none of such real properties is located within a 100 year or any
-------------
other flood plain district, or has suffered any material damage by fire or other
casualty which has not been completely restored and repaired or replaced by
items of similar quality. All buildings, improvements and other structures are
located entirely within the boundary lines of the real property upon which they
are situated and have been constructed in accordance with all relevant zoning,
building, setback and other Laws and governmental requirements, the terms and
conditions contained in all private agreements affecting such real property, and
the plans, specifications and working drawings relating thereto. The current use
of such real
-46-
property by the Company and its Subsidiaries complies with (i) all applicable
legal requirements (and neither the Company nor the relevant Subsidiary is a
non-conforming user of such real property), and (ii) all requirements of the
board of fire underwriters, in each case except where noncompliance could not
reasonably be expected to have a Material Adverse Effect. All permits, licenses,
variances, certificates (including, without limitation, certificates of
occupancy) and other Authorizations required for the current manner of
occupancy, use and operation of such real properties and for the lawful conduct
of all businesses presently being conducted thereat or therefrom have been
obtained and are in full force and effect. All of the improvements are furnished
with, and each of the spaces contained therein is connected to, heating,
ventilating, air-conditioning, mechanical, electrical and plumbing systems and
other appliances, facilities and equipment, suitable for the purposes for which
they currently are being used. All of such systems, facilities and equipment now
are and shall continue to be maintained in good repair, working order and
operating condition. The current use of such real properties is consistent with
the certificate of occupancy and any other declarations, restrictions,
covenants, conditions or easements affecting the same. All improvements now are
and hereafter shall continue to be kept free of structural defects and termite
and other pest infestations. No construction or other work or any supplies or
materials, in either case for which a Lien at any time hereafter could be filed
and gain priority over the Lien of any of the Loan Documents, either are
required to be undertaken or already have been performed on or delivered to all
or any part of such real properties (or any other real property where all or any
portion of the Collateral may be used, kept or stored) but remain unpaid. Water,
sewer, gas, electric, telephone, drainage and other utilities and services
required by Law for the present use and operation of such real property are
available at such real property and have been connected to the improvements
situated thereon pursuant to valid Authorizations, are in good repair, operating
condition and working order and are adequate to service such real properties in
a manner consistent with the present use being made thereof. All roads and
sidewalks necessary for the full utilization of such real properties for their
current purposes have been completed and dedicated to public use and accepted by
all Governmental Authorities or are the subject of access easements for the
benefit of such real property. All reciprocal easement agreements affecting any
real property are in full force and effect and neither the Company nor any of
its Subsidiaries is aware of any default thereunder. Each parcel of real
property, including each lease, has adequate available parking to meet legal and
operating requirements.
7.21 Leases. Attached hereto as Schedule 7.21 and thereby made a part
------ -------------
hereof is an accurate, complete and current list of all leases of space either
leased from third parties and used by, or rented to third parties for their use
by, the Company and its Subsidiaries (or any of them) (collectively, the
"Leases"), setting forth with respect to each Lease: (a) the location of the
space covered thereby; (b) the name and address of the tenant to which or the
name of the landlord from which such space is demised; (c) the amount of the
monthly rent (and other charges) payable by the tenant thereunder; and (d) the
expiration date of the term thereof. There are no other rights of use,
possession or occupancy with respect to any real property in which the Company
and its Subsidiaries (or any of them) have an insurable interest other than the
Leases. Except as otherwise specifically noted on Schedule 7.21: (i) all of the
-------------
Leases are in full force and effect; (ii) none of them has been assigned,
sublet, amended, modified, extended or cancelled; and (iii) none of the
landlord's or the tenant's respective rights, remedies, obligations or duties
under any of the Leases have been waived or released. No other party to any of
the Leases has asserted any claim for offset or rebate against or demanded any
concession or deduction from the Company or any of its Subsidiaries, and neither
the Company nor any of its Subsidiaries has any knowledge of any such claims or
demands. No other party to any of the Leases has sent written notice to the
Company or any of its Subsidiaries claiming that the Company or any of its
Subsidiaries is in breach or default, and neither the Company nor any of its
Subsidiaries has any knowledge of any breach or default. None of the Leases
contains any option or right to cancel or terminate such Lease prior to the end
of its term or affords the other party thereto the right to prohibit, limit or
restrict without such other party's consent any pledge, granting of a security
-47-
interest in or encumbering by the Company or any of its Subsidiaries in favor of
the Administrative Agent, for the benefit of the Lenders, of the Company's or
any of such Subsidiary's rights, title or interests in, to or under such Lease.
Accurate, current and complete copies of all Leases relating to or otherwise
affecting warehouse or office space (including, without limitation, the Tyler
Texas Real Property) previously have been delivered to each of the Lenders and
the Administrative Agent by the Company.
7.22 Condemnation; Real Property Assessments. Neither the Company nor
---------------------------------------
any of its Subsidiaries has received written notice or, to the best of the
Company's knowledge, information and belief (after due inquiry) otherwise is
aware of any proceeding to change any existing or impose any new valuation for
tax purposes or special or other assessment for public improvements or otherwise
upon, or for a taking by condemnation or otherwise of, all or any portion of
their respective Properties (including, without limitation, any of the
Collateral), whether pending, threatened or, to the best of the Company's
knowledge, information and belief (after due inquiry), contemplated. No portion
of their respective Properties (including, without limitation, any of the
Collateral) is included for assessment or valuation purposes with any other real
or personal property, whether owned by them or any other Person. All owned real
property is comprised of one or more parcels, each of which constitutes a
separate tax lot and none of which constitutes a portion of any other tax lot.
7.23 Property Taxes. Except as may be set forth on Schedule 7.23
-------------- -------------
attached hereto and thereby made a part hereof: (a) all prior and current
property taxes, assessments (both general and special) and other governmental,
improvement district and private charges affecting all or any portion of the
Properties of the Company or any of its Subsidiaries (including, without
limitation, any of the Collateral) have been paid in full; (b) there are no tax
abatements or exemptions affecting any of such Properties; and (c) there are no
existing, pending or, to the best of the Company's knowledge, information and
belief (after due inquiry), contemplated tax certiorari or other protest,
contest, reduction or refund proceedings in respect of such taxes, assessments
or charges.
7.24 No Adverse Interests. To the best of the Company's knowledge,
--------------------
information and belief (after due inquiry), no other Person has, is claiming or
asserting or heretofore has claimed or asserted any possessory, use or other
rights or interests with respect to all or any portion of the Company's or any
of its Subsidiaries' respective Properties (including, without limitation, the
Collateral). Except for the Tyler, Texas Real Property, none of such Properties
is subject to any outstanding purchase, option, right of first refusal or other
agreement affecting the transferability thereof.
7.25 No Other Contracts. Except for the Lien of the Security
------------------
Documents and except as set forth on Schedule 7.25 attached hereto and thereby
-------------
made a part hereof, neither the Company nor any of its Subsidiaries previously
has assigned, sold, encumbered, leased, put, optioned or otherwise pledged,
transferred or disposed of, or entered into any agreement affecting title to or
the enjoyment, use, occupancy, possession or operation of, all or any portion of
the Collateral or of their respective rights, title or interests therein, or
entered into any arrangement to do any of the foregoing. Neither is the Company
or any of its Subsidiaries, nor any portion of the Collateral, subject to any
other arrangement which could prevent, delay or impede the Company or any of its
Subsidiaries from entering into this Agreement or any of the other Loan
Documents to which it is a party or from complying with, observing or paying and
performing all of their respective obligations hereunder or thereunder.
7.26 Use of Proceeds. DELETED PRIOR TO EXECUTION.
---------------
7.27 Authorizations. Other than exceptions to any of the following
--------------
that could not (whether individually or in the aggregate) reasonably be expected
to have a Material Adverse Effect: (a) the
-48-
Company and each of its Subsidiaries have obtained and hold all Authorizations
required in respect of all real properties and other Property otherwise operated
by or on behalf or for the benefit of such Persons and for the operation of
their respective businesses as presently conducted and as proposed to be
conducted; (b) each of the Authorizations is in full force and effect and not
the subject of any pending, threatened or, to the best of the Company's
knowledge, information and belief (after due inquiry), contemplated action or
proceeding to amend, suspend or revoke the same; (c) no event has occurred which
allows or results in, or after notice or lapse of time would allow or result in,
revocation or termination by the issuer thereof or in any other impairment of
the rights of the holder of any such Authorization; (d) none of the
Authorizations is subject to any restriction, limitation or condition (including
approval or consent by a third party), whether at Law or by agreement, which
would prohibit, limit, restrict or render ineffective the pledging, granting of
a security interest in or encumbering by the Company or any of its Subsidiaries
in favor of the Administrative Agent, for the benefit of the Lenders, of any of
such Person's rights, title or interests in, to or under any of such
Authorizations; and (e) the Company and each of its Subsidiaries reasonably
believes that each of its Authorizations will be timely renewed without material
expense and that any additional Authorizations that may be required of such
Person will be timely obtained without material expense. Accurate, current and
complete copies of all of such Authorizations previously have been delivered to
each of the Lenders and the Administrative Agent by the Company.
7.28 Material Contracts. Attached hereto as Schedule 7.28 and thereby
------------------ -------------
made a part hereof is an accurate, complete and current list of all material
contracts to which the Company or any of its Subsidiaries or all or any portion
of their respective Properties (including, without limitation, the Collateral)
is a party or may be bound or subject (collectively, the "Material Contracts"),
other than the Leases identified on Schedule 7.21 and the Liens identified on
-------------
Part B of Schedule 7.12, setting forth with respect to each Material Contract:
-------------
(a) the names and addresses of the parties thereto; (b) a summary of the subject
matter thereof and why such subject matter is material; (c) the charges payable
thereunder (and, if applicable, the amount of any deposits made by the Company
or any of its Subsidiaries, or the other party pursuant to the terms thereof);
and (d) the expiration date thereof. There are no other material agreements
pertaining to the use, operation, maintenance, management or repair of all or
any portion of the Properties of the Company or any of its Subsidiaries, or to
the financial condition or business affairs of the Company or any of its
Subsidiaries, except for the Material Contracts. All of the Material Contracts
are in full force and effect; none of them has been assigned, modified, amended,
extended or cancelled; and none of the rights, remedies, duties or obligations
of any party thereto have been waived or released. No other party to any of the
Material Contracts has asserted any claim for offset or rebate against or
demanded any concession or deduction from the Company or any of its
Subsidiaries, and neither the Company nor any of its Subsidiaries has any
knowledge of any such claims or demands. No other party to any of the Material
Contracts has sent written notice to the Company or any of its Subsidiaries
claiming that the Company or any of its Subsidiaries is in breach or default,
and neither the Company nor any of its Subsidiaries has any knowledge of any
such breach or default. None of the Material Contracts contains any option or
right to cancel or terminate such Material Contract prior to the end of its term
or affords the other party thereto the right to prohibit, limit or restrict
without such other party's consent any pledge, granting of a security interest
in or encumbering by the Company or any of its Subsidiaries in favor of the
Administrative Agent, for the benefit of the Lenders, of any of the Company's or
its Subsidiaries' respective rights, title or interests in, to or under such
Material Contract. Accurate, current and complete copies of all of such Material
Contracts previously have been delivered to each of the Lenders and the
Administrative Agent by the Company.
7.29 Insurance Policies. Attached hereto as Schedule 7.29 and thereby
------------------ -------------
made a part hereof is an accurate, complete and current list of all insurance
policies maintained by the Company or any of its Subsidiaries ("Existing
Insurance Policies"), setting forth with respect to each Existing Insurance
Policy:
-49-
(a) the name and address of the insurer; (b) the amount and type of coverage
afforded thereby; (c) the premiums payable thereunder; and (d) the expiration
date thereof. Neither the Company nor any of its Subsidiaries is the beneficiary
of, pays or is obligated to pay any charges or premiums with respect to, or has
an insurable interest under, any other insurance policy. All of the Existing
Insurance Policies are in full force and effect, name the Administrative Agent
as an additional insured (with respect to liability policies) or as the sole
loss payee (with respect to casualty policies) thereunder and contain typical
institutional lender protective endorsements and notice provisions. None of such
policies has been assigned, amended, modified, extended or cancelled; and none
of the rights or remedies of the Company or any of its Subsidiaries or the
duties or obligations of any insurance carrier under any of such policies have
been released or waived. All premiums in respect of such Existing Insurance
Policies have been fully paid through and beyond the Closing Date. Neither the
Company nor any of its Subsidiaries has received any notice of substantial rate
increase, change in coverage, non-renewal or cancellation with respect to any
Existing Insurance Policy, and neither the Company nor any of its Subsidiaries
has any knowledge of any such substantial rate increase, change in coverage,
non-renewal or cancellation. Neither the Company nor any of its Subsidiaries has
any reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers at a cost that could not reasonably be expected to have a
Material Adverse Effect. Neither the Company nor any of its Subsidiaries has
received notice from any insurance carrier asserting that any repairs or
alterations are required to be made to all or any portion of their respective
Properties, and neither the Company nor any of its Subsidiaries has any
knowledge or any such repairs or alterations. Accurate, current and complete
copies of all of such Existing Insurance Policies previously have been delivered
to each of the Lenders and the Administrative Agent by the Company.
7.30 Labor Matters. No strikes, work stoppages, work slowdowns or other
-------------
labor disputes currently affect the Company's or any of its Subsidiaries'
respective business operations; and neither the Company nor any of its
Subsidiaries has received any written notice or otherwise is aware (after due
inquiry) of any threatened strikes, work stoppages, work slowdowns or other
labor disputes. Hours worked by and payment made to employees of the Company and
its Subsidiaries have not been in violation of the Fair Labor Standards Act or
any other applicable legal requirement dealing with such matters that could
(individually or in the aggregate) reasonably be expected to have a Material
Adverse Effect. All payments due from the Company or any of its Subsidiaries on
account of employee health and welfare insurance that could (individually or in
the aggregate) reasonably be expected to have a Material Adverse Effect if not
paid have been paid or accrued as a liability on the books of the Company or the
relevant Subsidiary. Neither ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or any of his family members is an
employee of or consultant to, nor receives any form of wages, salaries or other
benefits, compensation or perquisites from the Company or any of its
Subsidiaries. There are no arrearages in excess of one week in the payment of
any compensation or other benefits owed to any individual employed by the
Company or any of its Subsidiaries (individually, an "Employee").
7.31 Solvency. The Company and each of its Subsidiaries, after giving
--------
effect to the consummation of the transaction contemplated hereby and the
incurral of all Indebtedness and other obligations being incurred in connection
therewith, will and will continue to be Solvent.
7.32 Relationship of Indebtedness. None of the amounts currently owed,
----------------------------
or which at any time in the future while the Indebtedness relating to the Loan
remains unpaid possibly could be owed, by the Company or any of its Subsidiaries
under the Capitalization Documents (or any of them) constitutes or possibly
could constitute Indebtedness. The Indebtedness relating to the TLL Note and the
Indebtedness relating to the Junior Subordinated Notes are both junior in all
respects to the Indebtedness relating to the Loan and the Indebtedness relating
to either or both of the First Community Bank Loans; the Indebtedness
-50-
relating to the Loan is senior in all respects to the Indebtedness relating to
either or both of the First Community Bank Loans with respect to the Collateral;
and the Indebtedness relating to each of the First Community Bank Loans is
senior in all respects to the Indebtedness relating to the Loan with respect to
all Properties of the Company and its Subsidiaries other than the Collateral.
7.33 Security Documents. The New Pilgrim Deed of Trust and Guarantee
------------------
and Security Agreement are effective to create in favor of the Administrative
Agent, for the benefit of the Lenders, legal, valid, binding and enforceable
security interests in the items of the Collateral described therein and proceeds
and products thereof. In the case of any pledged stock, when any stock
certificates representing such pledged stock are delivered to the Administrative
Agent, and in the case of the other Collateral described in the Guarantee and
Security Agreement, when mortgages and financing statements in appropriate form
are duly filed in the offices specified on Schedule 7.33a attached hereto and
--------------
thereby made a part hereof (which financing statements may be filed by the
Administrative Agent at any time), the New Pilgrim Deed of Trust and Guarantee
and Security Agreement shall constitute fully perfected Liens on, and security
interests in, all right, title and interest of the Company and its Subsidiaries
in the items of the collateral for the Loan set forth in the filings and the
proceeds and products thereof, as security for the Obligations (as defined in
the Guarantee and Security Agreement), in each case prior and superior in right
to the interests, rights or claims of any other Person (except for the Liens
permitted by Section 8.06 below). Schedule 7.33b attached hereto and thereby
--------------
made a part hereof lists each UCC financing statement that (i) names any Obligor
as debtor and (ii) will remain on file after the Closing Date. Schedule 7.33c
--------------
attached hereto and thereby made a part hereof lists each UCC financing
statement that (i) names any Obligor as debtor and (ii) will be terminated of
record within thirty (30) days after the Closing Date. The Company will update
Schedules 7.33b and 7.33c within thirty (30) days after the Closing Date to
--------------- -----
reflect the results of additional lien searches presently being conducted by the
Company; provided, however, that such updated schedules are reasonably
-------- -------
satisfactory to the Administrative Agent.
7.34 Duty to Promptly Advise and Cure. If any of the warranties or
--------------------------------
representations of the Company or any of its Subsidiaries contained herein is
breached or turns out to have been materially untrue when made, the Company
immediately shall inform the Administrative Agent and each of the Lenders
thereof and forthwith take all actions necessary to cure such breach and/or
misrepresentation. The continued accuracy, completeness and currency of such
representations and warranties, together with the full performance of the
Company's other agreements, covenants and obligations hereunder, are expressly
made a condition precedent to the Administrative Agent's and the Lenders'
respective obligations to close.
ARTICLE VIII COVENANTS OF THE COMPANY
The Company covenants and agrees with the Lenders and the
Administrative Agent that, so long as the Loan is outstanding and until payment
in full of all amounts owed to the Administrative Agent or any of the Lenders:
8.01 Required Deliveries. The Company shall deliver to the
-------------------
Administrative Agent and each of the Lenders:
(a) Monthly Unaudited Consolidated Statements of Income and
-------------------------------------------------------
Balance Sheets. As soon as available but in any event within forty (40) days
--------------
after the end of each month of each fiscal year of the Company, unaudited
consolidated statements of income, stockholders' equity and cash flow of the
Company and its Subsidiaries for such period and for the period from the
beginning of the applicable fiscal year to the end of such monthly period, and
the related unaudited consolidated balance sheet of the Company and its
Subsidiaries as at the end of such period, setting forth in each case in
comparative form
-51-
the corresponding consolidated figures for the corresponding periods in the
preceding fiscal year (except that, in the case of balance sheets, such
comparison shall be to the last day of the prior fiscal year), accompanied by a
----------- --
certificate of the Chief Financial Officer of the Company, in the form of
Exhibit "E-2" attached hereto and thereby made a part hereof, stating that said
-------------
consolidated financial statements present fairly in all material respects the
consolidated financial condition and results of operations of the Company and
its Subsidiaries, in each case in accordance with generally accepted accounting
principles, consistently applied, as at the end of and for such period (subject
to normal year-end audit adjustments and the absence of footnote disclosures);
(b) Quarterly Unaudited Consolidated Statements of Income and Balance
-----------------------------------------------------------------
Sheets. As soon as available but in any event within forty-five (45) days after
------
the end of each quarterly fiscal period of each fiscal year of the Company
(ninety (90) days if such quarterly fiscal period is the last quarterly fiscal
period of a fiscal year), unaudited consolidated statements of income,
stockholders' equity and cash flow of the Company and its Subsidiaries for such
period and for the period from the beginning of the applicable fiscal year to
the end of such quarterly period, and the related unaudited consolidated balance
sheet of the Company and its Subsidiaries as at the end of such period, setting
forth in each case in comparative form the corresponding consolidated figures
for the corresponding periods in the preceding fiscal year (except that, in the
case of balance sheets, such comparison shall be to the last day of the prior
fiscal year), accompanied by (i) a certificate of the Chief Financial Officer of
----------- --
the Company, in the form of Exhibit "E-3" attached hereto and thereby made a
-------------
part hereof, (A) stating that said consolidated financial statements present
fairly in all material respects the consolidated financial condition and results
of operations of the Company and its Subsidiaries, in each case in accordance
with generally accepted accounting principles, consistently applied, as at the
end of and for such period (except that such unaudited financial statements do
not include footnote disclosures and are subject to normal year-end audit
adjustments), (B) containing a description in reasonable detail of any material
variation between the application of accounting principles employed in the
preparation of such statement and the application of accounting principles
employed in the preparation of the next preceding annual or quarterly financial
statements as to which no objection has been made in accordance with the last
sentence of Section 1.02(a) above and (C) providing reasonable estimates of the
difference between such statements arising as a consequence thereof, and (ii) a
narrative discussion and analysis of the financial condition and results of
operation of the Company and its Subsidiaries for such fiscal quarter and for
the period from the beginning of the then fiscal year to the end of such fiscal
quarter, as compared to the previously delivered budget and projections referred
to in Section 8.01(e) below covering such periods and to the comparable periods
for the previous fiscal year;
(c) Annual Audited Consolidated Statements of Income and Balance
------------------------------------------------------------
Sheets. As soon as available but in any event within ninety (90) days after the
------
end of each fiscal year of the Company, consolidated statements of income,
stockholders' equity and cash flow of the Company and its Subsidiaries for such
fiscal year and the related consolidated balance sheets of the Company and its
Subsidiaries as at the end of such fiscal year, setting forth in each case in
comparative form the corresponding consolidated figures for the preceding fiscal
year, and accompanied by (i) an opinion, without material exception or
----------- --
qualification, thereon of independent certified public accountants of recognized
national standing stating that said consolidated financial statements present
fairly in all material respects the consolidated financial condition and results
of operations of the Company and its Subsidiaries as at the end of and for such
fiscal year in accordance with generally accepted accounting principles, (ii) a
statement of such accountants to the effect that in making the examination
necessary for their opinion nothing came to their attention that caused them to
believe that the Company was not in compliance with Sections 8.07(e), 8.10 or
8.11 hereof, insofar as such Sections relate to accounting matters, (iii) a
certificate of the Chief Financial Officer of the Company, in the form of
Exhibit "E-4" attached hereto and thereby made a part hereof, (A) stating that
-------------
-52-
said consolidated financial statements present fairly in all material respects
the consolidated financial condition and results of operations of the Company
and its Subsidiaries, in each case in accordance with generally accepted
accounting principles, consistently applied, as at the end of and for such
period, (B) containing a description in reasonable detail of any material
variation between the application of accounting principles employed in the
preparation of such statement and the application of accounting principles
employed in the preparation of the next preceding annual or quarterly financial
statements as to which no objection has been made in accordance with the last
sentence of Section 1.02(a) above and (C) providing reasonable estimates of the
difference between such statements arising as a consequence thereof, and (iv) a
narrative discussion and analysis of the financial condition and results of
operation of the Company and its Subsidiaries for such fiscal year, as compared
to the previously delivered budget and projections referred to in Section
8.01(e) below for such fiscal year and for the previous fiscal year;
(d) Auditors' Reports. Promptly upon receipt thereof, copies of all
-----------------
reports submitted to the Company by independent certified public accountants of
recognized national standing in connection with each annual, interim or special
audit of the books and records of the Company made by such accountants,
including, without limitation, any management letter commenting upon the
Company's internal controls submitted by such accountants to management in
connection with their annual audit;
(e) Annual Budgets and Financial Projections. As soon as available but
----------------------------------------
in any event on or before the April 30th immediately preceding each fiscal year
of the Company (commencing with the April 30th immediately preceding the fiscal
year commencing June 1, 2002), a consolidated budget for the Company and its
Subsidiaries in such detail as shall be reasonably requested by the
Administrative Agent for such fiscal year, setting forth projected income,
expense (including marketing expense), cash flow, Capital Expenditures and
changes in financial position for each quarter during such fiscal year and the
following fiscal year, together with an identification of the estimates,
information and assumptions upon which such projections were based and a
certificate from the Chief Financial Officer of the Company that such
assumptions and estimates are reasonable and that such officer has no reason to
believe that the projections are incorrect or misleading in any material
respect;
(f) Budget Comparison Reports. Together with delivery of each of the
-------------------------
financial statements referred to in Sections 8.01(a), 8.01(b) and 8.01(c) above,
a report in such detail as shall be reasonably requested by the Administrative
Agent setting forth a detailed comparison to the budget for such fiscal year of
the actual results of income, expense and capital expenditures items for the
applicable fiscal periods in such fiscal year;
(g) Securities Filings. Simultaneously with the filing thereof with
------------------
applicable Governmental Authorities, copies of all registration statements and
periodic, special or other reports which the Company is filing with the
Securities and Exchange Commission (or any governmental agency substituted
therefor), any state securities commission and/or any national securities
exchange and, so long as the Company or any of its Subsidiaries has outstanding
any "restricted securities" within the meaning of Rule 144(a)(3) of the Exchange
Act, copies of whatever information and materials it is required to provide to
holders and prospective purchasers thereof pursuant to Rule 144A(d)(4);
(h) ERISA Reporting. As soon as possible, but in any event within ten
---------------
(10) Business Days after the Company knows or has reason to know that any of the
events or conditions specified below with respect to any Plan or Multiemployer
Plan has occurred or exists, a statement signed by a senior financial officer of
the Company setting forth details respecting such event or condition and the
action, if any, that the Company or its ERISA Affiliate proposes to take with
respect thereto (together with a copy of any application, request, report or
notice given to or filed with or required to be given to or filed
-53-
with the PBGC by the Company or an ERISA Affiliate with respect to such event or
condition and, to the extent applicable, a copy of any report, notice, demand or
material received from the PBGC or any applicable regulatory authority with
respect to such event or condition):
(i) any "reportable event", as defined in Section 4043(b) of
ERISA and the regulations issued thereunder, with respect to a Plan which might
constitute grounds for a termination of such Plan under Title IV or ERISA or
other action by the PBGC with respect to the Plan, as to which the PBGC has not
by regulation waived the requirement of Section 4043(a) of ERISA that it be
notified within thirty (30) days of the occurrence of such event (provided that
a failure to meet the minimum funding standard of Section 412 of the Code or
Section 302 of ERISA, including, without limitation, the failure to make on or
before its due date a required installment under Section 412(m) of the Code or
Section 302(e) of ERISA, shall be a reportable event regardless of the issuance
of any waivers in accordance with Section 412(d) of the Code);
(ii) any request for a waiver under Section 412(d) of the Code
for any Plan;
(iii) the distribution under Section 4041 of ERISA of a notice
of intent to terminate any Plan or under Section 4063 of ERISA of a notice of
withdrawal from any Plan (or of a deemed withdrawal under Section 4062(e) of
ERISA), or of any action taken by the Company or an ERISA Affiliate to terminate
or withdraw from (or resulting in the deemed withdrawal from) any Plan;
(iv) the receipt of notice from the PBGC advising of its
intent to institute proceedings under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Plan, or the receipt by
the Company or any ERISA Affiliate of a notice from a Multiemployer Plan that
any such action is intended to be or already has been taken by the PBGC with
respect to such Multiemployer Plan;
(v) the complete or partial withdrawal from a Multiemployer
Plan by the Company or any ERISA Affiliate that results in liability under
Section 4201 or 4204 of ERISA (including the obligation to satisfy secondary
liability as a result of a purchaser default) or the receipt by the Company or
any ERISA Affiliate of notice from a Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA or that
it intends to terminate or has terminated under Section 4041A of ERISA;
(vi) the institution of a proceeding by a fiduciary of any
Multiemployer Plan against the Company or any ERISA Affiliate to enforce Section
515 of ERISA, which proceeding is not dismissed within thirty (30) days;
(vii) the adoption of an amendment to any Plan that, pursuant
to Section 401(a)(29) of the Code or Section 307 of ERISA, would result in the
loss of tax-exempt status of the trust of which such Plan is a part if the
Company or an ERISA Affiliate fails to timely provide security to the Plan in
accordance with the provisions of said Sections; or
(viii) the failure to make any payment or contribution to any
Plan or Multiemployer Plan, or the occurrence of any other event which has
resulted or could reasonably be expected to result in the imposition of a Lien
or the posting of a bond or other security under ERISA or the Code;
(i) Paging License Reports. As soon as available but in any event
----------------------
within forty-five
-54-
(45) days after the end of each quarterly fiscal period of each fiscal year of
the Company, a report identifying any Paging License that has been lost,
surrendered or canceled during such period, and within ten (10) Business Days of
the receipt by the Company or any of its Subsidiaries of notice from the FCC
that any Paging License has been lost or canceled or is subject to any action
that might reasonably be expected to cause such loss or cancellation, copies of
any such notice, accompanied by a report describing the measures undertaken by
the Company or any of its Subsidiaries to prevent such loss or cancellation (and
the anticipated impact, if any, that such loss or cancellation will have upon
the Paging Business of the Company and its Subsidiaries); provided, however,
-------- -------
that the ten (10) Business Day (as opposed to the forty-five (45) calendar day)
period referred to above shall not apply to (i) any Auction License, or (ii) any
other Paging License whose loss, surrender or cancellation, when aggregated with
all other Paging Licenses which, during the past twelve (12) months, have been
lost, surrendered or cancelled or subject to any action that reasonably might
have been expected to cause loss or cancellation, will affect less than five
percent (5%) of the Company's Paging Subscribers.
(j) Shareholder, First Community Financial Corporation, TLL Note
------------------------------------------------------------
Holder and/or Junior Subordinated Note Holder Deliveries. Simultaneously with
--------------------------------------------------------
their delivery to the shareholders of the Company or to First Community
Financial Corporation or to the holders of the TLL Note or the Junior
Subordinated Notes, copies of all financial statements, reports, proxy
statements, compliance certificates, notices and other materials being delivered
to such Persons;
(k) Name and Location Changes. Prompt written notice of any change (i)
-------------------------
in the corporate name of the Company or any of its Subsidiaries, (ii) in the
location of the Company's or any of its Subsidiaries' chief executive office,
principal place of business, any office in which it or any of its Subsidiaries
maintains books or records relating to any collateral for the Loan owned by it
or any of its Subsidiaries or any office or facility at which the collateral for
the Loan owned by it or any of its Subsidiaries is located (including the
establishment of any such new office or facility), (iii) resulting in any
tangible collateral for the Loan being located in any jurisdiction in which a
financing statement must be, but has not been, filed in order to perfect the
Administrative Agent's Liens, or (iv) in the Company's or any of its
Subsidiaries' federal Taxpayer Identification Number; and the Company agrees
that neither it nor any of its Subsidiaries will effect or permit any change
referred to in this Section 8.1(k) unless all filings have been made under the
Uniform Commercial Code or otherwise that are required in order for the
Administrative Agent to continue at all times following such change to have a
legal, valid and perfected first priority security interest in all of the
collateral for the Loan;
(l) Amendments. No later than ten (10) Business Days prior to the
----------
effectiveness thereof, accurate, current and complete copies of any proposed
amendments, supplements, waivers or other modifications with respect to any of
the First Community Bank Loan Documents, the Basic Documents, the Material
Contracts, the TLL Note, the Junior Subordinated Notes or the Capitalization
Documents;
(m) Notices of Actions, Claims and Proceedings. Promptly after the
------------------------------------------
Company knows or has reason to believe that there has been filed, or that there
may be filed, any claim, action or other proceeding affecting the Company or any
of its Subsidiaries by or before any arbitral tribunal, court or other
Governmental Authority (including, without limitation, any claim or proceeding
before the FCC and any Environmental Claim or notice from any Person of (i) the
occurrence of any release, spill or discharge of any Hazardous Material that is
reportable under any Environmental Law, (ii) the commencement of any clean-up or
remediation activities pursuant to or in accordance with any Environmental Law
of any Hazardous Material at, on, under or within any real property or any part
thereof or (iii) any other condition, circumstance, occurrence or event which
could reasonably be expected to result in a Material Adverse Effect), and
whenever a material development in respect of any such legal, arbitral or
-55-
other proceeding shall occur, a notice describing the same in reasonable detail
(and, if any notice has been received by the Company or any of its Subsidiaries
in respect thereof, an accurate, current and complete copy of such received
notice), along with (or as soon after the giving of such notice as is possible)
a description of the action that the Company theretofore has taken and
thereafter proposes to take with respect thereto;
(n) Notices of Liens. Promptly after the Company knows or has reason
----------------
to believe that there has been incurred, or that there may have been incurred,
any Lien against all or any portion of the Properties of the Company or any of
its Subsidiaries (including, without limitation, any Lien against any collateral
for the Loan), a notice describing the same in reasonable detail (and, if any
notice has been received in respect thereof, an accurate, current and complete
copy of such received notice), along with (or as soon after the giving of such
notice as is possible) a description of the action that the Company theretofore
has taken and thereafter proposes to take with respect thereto;
(o) Notices of Default. Promptly after the Company knows or has reason
------------------
to believe that any Default has occurred, a notice of such Default describing
the same in reasonable detail (and, if any notice has been received in respect
thereof, an accurate, current and complete copy of such received notice), along
with (or as soon after the giving of such notice as is possible) a description
of the action that the Company theretofore has taken and thereafter proposes to
take with respect thereto;
(p) Notices of Other Defaults. Promptly after the Company knows or has
-------------------------
reason to believe that there has occurred, or that an allegation has been made
that there has occurred, any breach, default or failure of payment or
performance on the part of the Company or any of its Subsidiaries or any of the
Obligors under any agreement, instrument or other instrument to which the
Company, any of its Subsidiaries or any of the Obligors is a party or by which
the Collateral for the Loan, the Company, any of its Subsidiaries, any of the
Obligors or any of their respective Properties might be bound or subject
(including, without limitation, under the First Community Bank Loan Documents,
the TLL Note, the Junior Subordinated Notes, the Material Contracts or any of
the other Basic Documents), a notice describing the same in reasonable detail
(and, if any notice has been received in respect thereof, an accurate, current
and complete copy of such received notice), along with (or as soon after the
giving of such note as is possible), a description of the action that the
Company thereafter has taken and thereafter proposes to take with respect
thereto;
(q) Notices of Material Adverse Changes and Material Adverse Effects.
----------------------------------------------------------------
Promptly after the Company knows or has reason to know of the occurrence of any
matter which might result in a material adverse change in the financial
condition or business affairs of the Company or any of its Subsidiaries, or of
the occurrence of any other matter, thing, condition, circumstance or event
which otherwise could (whether individually or in the aggregate) reasonably be
expected to result in a Material Adverse Effect (including, without limitation,
any Casualty Event), a notice describing the same in reasonable detail (and, if
any notice has been received in respect thereof, an accurate, current and
complete copy of such received notice), along with (or as soon after the giving
of such notice as possible) a description of the action that the Company
theretofore has taken and thereafter proposes to take with respect thereto;
(r) Subscriber Reports. Together with delivery of each of the
------------------
financial statements referred to in Sections 8.01(a), 8.01(b) and 8.01(c) above,
a report in such detail as shall be reasonably requested by the Administrative
Agent setting forth a detailed comparison to the budget for such fiscal year of
(i) for each category of Subscriber reflected in the budget, the number of
Subscribers at the beginning of such Period, (ii) for each category of
Subscriber reflected in the budget, the number of Subscribers at the
-56-
end of such Period, (iii) for each category of Subscriber reflected in the
budget, the number of Subscribers added during such period, (iv) for each
category of Subscriber reflected in the budget, the number of Subscribers lost
during such period, and (v) for each category of Subscriber reflected in the
budget, the average monthly per Subscriber gross revenue, operating cost, net
income and EBITDA figures; and
(s) Other Deliveries. From time to time such other information
----------------
regarding the financial condition, operations, business or prospects of the
Company or any of its Subsidiaries (including, without limitation, any Plan or
Multiemployer Plan and any reports or other information required to be filed
under ERISA) as any Lender or the Administrative Agent may reasonably request.
Concurrently with delivery of each of the financial statements required pursuant
to the provisions of Sections 8.01(a), 8.01(b) and 8.01(c) above, the Company
shall furnish to the Administrative Agent and each of the Lenders a Compliance
Certificate as at the end of the respective monthly, quarterly or annual fiscal
period covered by such statements, together with a certificate signed by both
-------- ----
the Chief Executive Officer and the Chief Financial Officer of the Company (A)
attesting that the Company and each of its Subsidiaries has performed all of its
covenants and other agreements and satisfied every condition contained in this
Agreement or any of the other Loan Documents to which it is a party to be
observed, paid, performed, complied with or satisfied by it during such period
and that no Default (or event which with the giving of notice, the passage of
time or both would constitute a Default) has occurred and is continuing (or, if
any Default has occurred and is continuing, describing the same in reasonable
detail and describing the action that the Company theretofore has taken and
thereafter proposes to take with respect thereto), (B) setting forth in
reasonable detail the computations necessary to determine whether the Company is
in compliance with Sections 8.07(e), 8.10 and 8.11, and (C) listing all
jurisdictions where the Company or any of its Subsidiaries keeps its Property
and any changes to such Property from the date of the most recent list delivered
pursuant to this clause (C) (or, in the case of the first list so delivered,
since the date of this Agreement).
8.02 Notices of Paging Business and FCC License Matters. The Company
--------------------------------------------------
shall promptly give to the Administrative Agent and each of the Lenders notice
of:
(a) FCC License Proceedings. The receipt of any notice from any
-----------------------
Governmental Authority (including, without limitation, the FCC) of the
imposition of any forfeiture hearing or proceeding relating thereto against the
Company or any of its Subsidiaries or the designation of a hearing or the
initiation of any proceeding which could result in the expiration without
renewal, termination, revocation, suspension, modification or impairment of any
FCC License or other Authorization now or hereafter held by the Company or any
of its Subsidiaries, to the extent that such forfeiture, expiration,
termination, revocation, suspension, modification or impairment could (either
individually or in the aggregate) reasonably be expected to have a Material
Adverse Effect; and
(b) New or Amended Paging Business Legislation or Regulations. The
---------------------------------------------------------
enactment or promulgation after the date hereof of any federal, state or local
statute, regulation or ordinance or judicial or administrative decision or order
(or, to the extent the Company or any of its Subsidiaries has knowledge thereof,
any such proposed statute, regulation, ordinance, decision or order, whether by
the introduction of legislation or the commencement of rulemaking or similar
proceedings or otherwise) affecting or relating to the operation of the Paging
Business, or any of the Paging Licenses or Paging Systems, owned or operated by
the Company or any of its Subsidiaries (including, without limitation, any
statutes, regulations, decisions or orders affecting the paging or personal
communication service industries generally and not directed against the Company
or any of its Subsidiaries specifically) which has been issued or adopted (or
which has been proposed) and which could (either individually or in the
aggregate)
-57-
reasonably be expected to have a Material Adverse Effect.
8.03 Preserve Existence. The Company shall, and shall cause each of
------------------
its Subsidiaries to:
(a) Preserve Legal Existence and Franchises. Preserve, renew and
---------------------------------------
maintain in full force and effect its legal existence and all material rights,
privileges, licenses and franchises relating thereto and/or necessary for the
lawful conduct of its business operations;
(b) Comply with Applicable Law; Maintain Authorizations and FCC
-----------------------------------------------------------
Licenses. Keep and maintain in full force and effect all FCC Licenses and other
--------
Authorizations, and otherwise comply in all material respects with the
requirements of all applicable Laws, rules, regulations and orders of
Governmental Authorities, unless failure to do so could not (either individually
or in the aggregate) reasonably be expected to have a Material Adverse Effect;
(c) File Required Tax Returns; Pay Taxes and Governmental Charges.
-------------------------------------------------------------
Timely file accurate and complete tax returns required by all Governmental
Authorities and pay and discharge all taxes, assessments and governmental
charges or levies imposed upon it or any of its income, profits or Properties,
in each case prior to the date on which penalties attach thereto, except for any
such tax, assessment, charge or levy the payment of which is being contested in
good faith by proper proceedings and against which adequate reserves or security
deposits are being maintained;
(d) Maintenance. Maintain all of its Properties in good repair,
-----------
working order and operating condition, ordinary wear and tear excepted;
(e) Keep Records. Keep and maintain at the Company's principal
------------
office: (i) in accordance with generally accepted accounting principles,
consistently applied, proper and complete books, records and accounts, in which
accurate and complete entries shall be currently made reflecting its financial
and business activities, dealings and transactions and all items of income and
expense in connection therewith; and (b) originals of all budgets, plans,
specifications, working drawings, construction contracts, change orders and
Basic Documents, as well as copies of all other material agreements and
instruments which affect its Properties or operations;
(f) Permit Inspections and Copying. Upon reasonable prior notice
------------------------------
(which may be telephonic), permit representatives of any Lender or of the
Administrative Agent, during normal business hours and at the Company's expense,
to examine, copy and make extracts from the Company's books and records or those
of any of its Subsidiaries, to inspect any of its or any of its Subsidiaries'
Properties, and to discuss its and its Subsidiaries' business and affairs with
its and its Subsidiaries' officers, all to the extent reasonably requested by
such Lender or the Administrative Agent (as the case may be);
(g) Attend Meetings. Upon reasonable prior notice and at the
---------------
Company's expense, send a knowledgeable representative to meet with
representatives of the Administrative Agent and the Lenders at the
Administrative Agent's offices in Phoenix, Arizona for the purposes of
reviewing, elaborating upon, discussing and updating the Administrative Agent
and the Lenders with respect to the current status and/or future prospects
relating to its business affairs, financial and/or operating condition and/or
the Loan;
(h) Pay and Perform Obligations. Except as otherwise prohibited or
---------------------------
restricted by any of the other provisions of this Article VIII, pay and perform,
and cause each of its Subsidiaries to pay and perform, in all material respects,
all of its obligations under each Basic Document and Material
-58-
Contract to which it is a party or by which it or any material portion of its
Properties may be bound or subject; and
(i) ERISA Documents. Cause to be delivered to the
---------------
Administrative Agent, promptly upon the Administrative Agent's request, any or
all of the following: (A) a copy of each Plan (or, where any such Plan is not in
writing, a complete description thereof) and, if applicable, related trust
agreements or other funding instruments and all amendments thereto, and all
written interpretations thereof and written descriptions thereof that have been
distributed to employees or former employees of the Company or any of its
subsidiaries; (B) the most recent determination letter issued by the Internal
Revenue Service with respect to each Plan; (C) for the three (3) most recent
plan years preceding the Administrative Agent's request, annual reports on Form
5500 Series required to be filed with any governmental agency for each Plan; (D)
a listing of all Multiemployer Plans, with the aggregate amount of the most
recent annual contributions required to be made by the Company or any ERISA
Affiliate to each such Plan and copies of the collective bargaining agreements
requiring such contributions; (E) any information that has been provided to the
Company or any ERISA Affiliate regarding withdrawal liability under any
Multiemployer Plan; (F) the aggregate amount of payments made under any employee
welfare benefit plan (as defined in Section 3(1) of ERISA) to any retired
employees of the Company or any of its Subsidiaries (or any dependents thereof)
during the most recently completed fiscal year; and (G) documents reflecting any
agreements between the PBGC and the Company or any ERISA Affiliate with respect
to any Plan.
8.04 Insurance. The Company shall, and shall cause each of its
---------
Subsidiaries to, keep insured by financially sound and reputable insurance
companies all Property of a character usually insured by corporations engaged in
the same or similar business similarly situated, against loss, damage and
liability of the kinds and in the amounts customarily insured against by such
corporations, and carry such other insurance as is usually carried by such
corporations. Without limiting the generality of the foregoing, the Company
shall, at its own expense, procure, maintain in full force and effect and pay
when due all premiums on, or cause to be procured, maintained in full force and
effect and all premiums thereon to be paid when due, the following insurance
policies in addition to such others as the Lenders, in the exercise of their
reasonable business judgment, may require because of a change in circumstance or
changed economic or liability conditions (the "Insurance Policies"):
(a) Comprehensive "all risk" property insurance on all
improvements, fixtures and tangible personal property located on any real
property owned by the Company or any of its Subsidiaries and on all of its and
its Subsidiaries' fixtures and personalty as may be located on any other
Person's real property, affording coverage against loss or damage by or due to
fire, smoke, collapse, lightning, windstorm, machinery breakdown or failure,
vandalism, malicious mischief and such other perils as now are or hereafter may
be embraced by the so-called "special extended coverage" form of endorsement,
(i) in an amount not less than such property's full replacement value
(exclusive, in the case of improvements, of the costs of foundations, footings
and underpinnings), plus the cost of excavation, demolition and debris removal,
(ii) containing "change in building codes", "water damage", "electrical short
circuit", "sprinkler leakage", "waiver of subrogation", and "waiver of
co-insurance penalty" endorsements, and (iii) providing for no deductible in
excess of $10,000.00 per loss (the amount of such deductible to be adjusted from
time to time as the Administrative Agent reasonably may request as changes in
economic conditions might require);
(b) Comprehensive commercial liability insurance (i) written on
the so-called "occurrence" form, (ii) in an amount reasonable and customary in
the Company's industry and acceptable to the Administrative Agent (part of which
may be afforded through an "umbrella" or "excess coverage" policy), and (iii)
covering at least the following hazards: (A) premises and operation, (B)
independent
-59-
contractors, (C) broad form property damage, (D) blanket contractual liability
for all written and oral contracts (specifically including the Company's
indemnity obligations hereunder), (E) completed operations, and (F) owned,
non-owned and hired vehicles (such coverage requirements to be adjusted from
time to time as the Administrative Agent reasonably may request as changes in
economic or liability conditions might require);
(c) During any period of time when construction is being conducted,
(i) owner's contingent or protective liability insurance covering claims, if
any, not covered by or under its comprehensive commercial liability policy, and
(ii) builder's risk completed value insurance for (A) 100% of the contract
price, (B) on a non-reporting form and deleting all co-insurance penalties, (C)
covering all risks insured against under its comprehensive "all risk" property
policy, with the addition of damage due to faulty materials, workmanship and
errors in design, and (D) including permission to occupy the improvements (such
coverage requirements to be adjusted from time to time as the Administrative
Agent reasonably may request as changes in economic or liability conditions
might require); and
(d) Workers' compensation and employer's liability insurance covering
all Persons employed by the Company or any of its Subsidiaries, to the extent
required by applicable Law.
The Company shall provide or cause to be provided any other insurance reasonably
requested by the Administrative Agent in such amounts and covering such risks as
may be reasonably required. All policies of insurance required to be maintained
shall be issued by companies satisfactory to the Administrative Agent and shall
have coverages and endorsements and be written for such amounts as the
Administrative Agent reasonably may require. All such policies must name the
Administrative Agent on behalf of the Lenders as mortgagee (in the case of
property insurance) or additional insured (in the case of liability insurance)
or certificate holder (in the case of workers' compensation insurance), as
applicable.
Neither the Company nor any of its Subsidiaries may obtain or maintain
separate insurance concurrent in form or contributing in the event of loss with
that required by this Section 8.04 unless the Administrative Agent, on behalf of
the Lenders, is named insured under such insurance, with loss payable as
provided in this Section 8.04. The Company shall promptly notify the
Administrative Agent whenever any such separate insurance is obtained and shall
deliver to the Administrative Agent the certificates evidencing the same.
All Insurance Policies provided for in this Section 8.04 shall contain
clauses or endorsements to the effect that: (i) no act or omission of the
Company or any of its Subsidiaries or of anyone acting for or on any of their
respective behalves, or of any other occupant or user of all or any portion of
the real property upon which the collateral for the Loan may be located, shall
in any way affect the amount recoverable, validity or enforceability of such
insurance insofar as the Administrative Agent and the Lenders are concerned;
(ii) such policies shall not be non-renewed, canceled or reduced in coverage
without at least thirty (30) days' prior written notice to the Administrative
Agent; (iii) neither the Administrative Agent nor any of the Lenders shall be
liable for any premiums thereon or subject to any assessments thereunder; (iv)
the insurer waives all claims and rights of subrogation and set-off against the
Administrative Agent and the Lenders; and (v) except in the case of third-party
liability insurance, the proceeds of any loss affecting real or personal
property or interests therein shall be applied in accordance with the terms of
the applicable Security Document.
Each Insurance Policy to be obtained and maintained by the Company and
its Subsidiaries shall be issued by financially sound and reputable insurance
carriers authorized to write insurance in the jurisdictions where the Company
and its Subsidiaries are doing business, which have an
-60-
A.M. Best rating of "A" or better and being in a financial size category of
"XII" or larger (or equivalent, as determined by mutual agreement, if A.M. Best
ceases to publish such ratings or substantially changes its rating system) and
which are reasonably acceptable to the Administrative Agent.
The Company will advise the Administrative Agent promptly of
any policy non-renewal, cancellation or material amendment or reduction in
coverage, and shall deliver to the Administrative Agent certificates of
insurance reasonably satisfactory to the Administrative Agent evidencing the
existence of all insurance required to be maintained under this Agreement and
setting forth the respective coverages, limits of liability, carriers, policy
numbers and periods of coverage.
8.05 Restrictions Regarding Fundamental Changes. Without, in each
------------------------------------------
instance, the prior written consent of the Administrative Agent and each of the
Lenders, which consent may be given or withheld in their respective sole and
absolute discretions and, if given, under such conditions as each of the Lenders
and the Administrative Agent, in their respective sole and absolute discretions,
may believe to be appropriate under the circumstances then-existing, the Company
shall not, and shall not permit any of its Subsidiaries to, whether directly or
indirectly:
(a) Restrictions on Mergers and Dissolutions. Merge,
-----------------------------------------
consolidate or amalgamate with or into any other Person, or liquidate, wind-up
or dissolve (or suffer any such merger, consolidation, amalgamation,
liquidation, winding-up or dissolution); provided, however, that any Subsidiary
-------- -------
of the Company (other than a License Subsidiary) may be merged or consolidated
with or into (i) the Company, if the Company shall be the continuing or
surviving corporation, or (ii) any other Subsidiary of the Company (other than a
License Subsidiary), if such other Subsidiary of the Company shall be a
Wholly-Owned Subsidiary and the continuing or surviving corporation;
(b) Restrictions on Acquisitions. Acquire any business or
----------------------------
Property from, or Capital Stock of, or be a party to any acquisition of, any
other Person, except for (i) purchases of inventory and other Property by the
------ ---
Company to be sold or used in the ordinary course of business, (ii) Investments
permitted under Section 8.08(b) hereof, (iii) Investments permitted under
Section 8.08(c) hereof (excluding the acquisition of an entity, other than a
newly-formed Subsidiary, that becomes a Subsidiary after such acquisition) and
(iv) Capital Expenditures permitted under Section 8.11 hereof;
(c) Restrictions on Dispositions. Convey, exchange, sell,
----------------------------
lease, transfer or otherwise dispose of, or allow to be conveyed, exchanged,
sold, leased, transferred, withdrawn or otherwise disposed of, whether in one
transaction or a series of transactions, any part of its business or any of its
Properties (including, without limitation, agreements with Subscribers), whether
now owned or hereafter acquired (including, without limitation, receivables and
leasehold interests), except for (i) obsolete or worn-out Property, tools or
------ ---
equipment no longer used or useful in its business which are sold by the Company
in the ordinary course of business and the proceeds of which are promptly used
by the Company to acquire replacement Property, tools or equipment, (ii)
Subscribers lost or inventory sold or disposed of in the ordinary course of
business, (iii) the sale, lease, transfer or other disposition by a Subsidiary
(other than a License Subsidiary) to the Company or a Wholly-Owned Subsidiary of
the Company of all of such Subsidiary's Properties (as part of a transaction
similar in nature to one permitted by Section 8.05(a) above), (iv) the transfer
by the Company to License Subsidiaries of FCC Licenses as contemplated by
Section 8.14(b) hereof, or (v) the disposition of Property by the Company due to
a Casualty Event;
(d) Changes in Control. Admit or suffer the admission of any
------------------
additional, or allow the substitution for any existing, or permit the
resignation, removal or withdrawal of any existing members, partners or
shareholders, or allow to occur any change in its control, or allow to occur any
change in
-61-
control in any of its controlling ownership interests, or suffer any controlling
ownership interests in any of its members, partners or shareholders to be
transferred; provided, however, the foregoing shall not be deemed to prohibit
-------- -------
(i) any transactions occurring on a national securities exchange, stock
automated quotation system, stock manual quotation system, electronic
communication network or private transactions (other than transactions, whether
public or private and wherever occurring, involving any of the Management
Stockholders or any member of the TLL Group or any of their respective
Affiliates), or (ii) any transactions in which any of the Management
Stockholders or any member of the TLL Group or any of their respective
Affiliates is a party, whether or not occurring on a national securities
exchange, so long as the same, when aggregated with all prior transactions
involving one or more of such Persons, does not cumulatively involve more than
1,000,000 shares of Capital Stock, or other Equity Interests, of the Company; or
remove or fail to nominate for re-election any directors, or fail to maintain in
the employ of the Company any officer, or otherwise engage in any transaction if
as a result the Company shall be deemed to have undergone a change of control
for FCC purposes; or otherwise allow to occur any change in control of the
Company for FCC purposes; or
(e) Issuance or Disposition of Capital Stock. Issue, acquire,
----------------------------------------
purchase, convert, exchange, sell, assign, pledge or otherwise dispose of any
shares of its Capital Stock (or of any other ownership interests), or of any
Equity Rights to purchase its Capital Stock, or of any other securities
exchangeable for or convertible into its Capital Stock, except for: (i) the
------ ---
transactions permitted by Section 8.05(a) above; (ii) the pledge of the
Company's Subsidiaries' Capital Stock to the Administrative Agent and the
Lenders pursuant to the Security Documents; (iii) the issuance of Capital Stock
of the Company for cash to Persons who are not members of the TLL Group or
Management Stockholders and all of the proceeds of which (in excess of the first
$50,000, determined cumulatively) are delivered to the Lenders; (iv) the
exchange of all Preferred Stock of the Company currently held by GM Holdings,
LLC into Series C Preferred Stock upon and subject to the terms and conditions
of the Restructuring Agreement; and (v) the exercise of options and warrants of
the Company and/or the conversion or exchange of existing Preferred Stock of the
Company held by current members of the CIVC Group (other than GM Holdings, LLC
or TLL Partners, L.L.C.), into Capital Stock of the Company, subject to delivery
of any cash amounts payable in connection with any such exercise or conversion
in accordance with the provisions of clause (iii) above.
8.06 Restriction on Liens. Without, in each instance, the prior
--------------------
written consent of the Administrative Agent and each of the Lenders, which
consent may be given or withheld in their respective sole and absolute
discretions and, if given, under such conditions as each of the Lenders and the
Administrative Agent, in their respective sole and absolute discretions, may
believe to be appropriate under the circumstances then-existing, the Company
shall not, and shall not permit any of its Subsidiaries to, whether directly or
indirectly, create, incur, assume or suffer to exist any Lien (including,
without limitation, attachments, judgments or executions) upon all or any
portion of the Collateral or upon all or any portion of its or its Subsidiaries'
respective other Properties, whether now owned or hereafter acquired, except
------
for:
---
(a) Liens created by or pursuant to the Security Documents;
(b) Liens in existence on the date hereof and listed in Part B
of Schedule 7.12 hereto securing Indebtedness permitted by Section 8.07(b);
-------------
provided, however, that (i) no such Lien may be extended after the Closing Date
-------- -------
to cover any additional Property and (ii) the Indebtedness secured thereby also
may not be increased after the Closing Date;
(c) Liens imposed by any Governmental Authority for taxes,
assessments or charges
-62-
not yet due or that are being contested in good faith and by appropriate
proceedings; provided, however, that adequate reserves or security deposits with
-------- -------
respect thereto are maintained on the books of the Company or the affected
Subsidiary, as the case may be, in accordance with GAAP;
(d) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business that
are not yet due or that are being contested in good faith and by appropriate
proceedings; provided, however, that (i) adequate reserves or security deposits
-------- -------
with respect thereto are maintained on the books of the Company or the affected
Subsidiary, as the case may be, in accordance with GAAP, and (ii) such Liens are
at all times subordinate to the Liens created by or pursuant to the Security
Documents;
(e) Liens created after the date hereof to secure Indebtedness
permitted by Section 8.07(e) below, and Liens upon real and/or tangible personal
Property permitted to be acquired under Section 8.05(b) above and acquired after
the date hereof (by purchase, construction or otherwise, and including Liens
arising pursuant to capital leases) by the Company or any of its Subsidiaries,
each of which Liens either (i) existed on such Property before the time of its
acquisition and was not created in anticipation thereof or (ii) was created
solely for the purpose of securing Indebtedness representing, or incurred to
finance, refinance or refund, the cost (including the cost of construction) of
such Property; provided, however, that (A) no such Lien shall extend to or cover
-------- -------
any Property of the Company or such Subsidiary other than the Property so
acquired and improvements thereon and (B) the principal amount of Indebtedness
secured by any such Lien shall at no time exceed the lesser of $50,000.00 or the
fair market value (as determined in good faith by a senior financial officer of
the Company) of such Property at the time it was acquired (by purchase,
construction or otherwise);
(f) deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(g) deposits by or on behalf of the Company or any of its
Subsidiaries to secure the performance of bids, trade contracts (other than for
borrowed money), leases, service contracts and other contractual obligations of
a like nature incurred in the ordinary course of business; and
(h) recorded easements, rights-of-way and covenants,
conditions and restrictions incurred in the ordinary course of business that do
not provide for the creation or imposition of monetary Liens and which in any
case do not materially detract from the value of the Property subject thereto or
materially interfere with the ordinary conduct of the business of the Company or
any of its Subsidiaries.
8.07 Restriction on Indebtedness. Without, in each instance, the
---------------------------
prior written consent of the Administrative Agent and each of the Lenders, which
consent may be given or withheld in their respective sole and absolute
discretions and, if given, under such conditions as each of the Lenders and the
Administrative Agent, in their respective sole and absolute discretions, may
believe to be appropriate under the circumstances then-existing, the Company
shall not, and shall not permit any of its Subsidiaries to, whether directly or
indirectly, create, incur, assume or suffer to exist any Indebtedness
(including, without limitation, making any Investments in or loans or advances
to, or guaranteeing any obligations on behalf of, any Obligor, any Affiliate of
or any Person related to any Obligor, or any of its members, partners,
shareholders, directors, executive officers or employees or any member, partner,
shareholder, director, executive officer or employee of any Obligor or of any
Affiliate of or any Person related to any Obligor, except for:
------ ---
(a) Indebtedness to the Lenders hereunder and under the other
Loan Documents;
-63-
(b) except as otherwise provided in this Agreement,
Indebtedness outstanding on the date hereof and listed in Part A of Schedule
--------
7.12 hereto and any refinancings, recastings, renewals or extensions thereof (so
----
long as such refinancings, recastings, renewals or extensions do not involve any
increase in the principal amount thereof or rate of interest applicable thereto
or frequency or amount of repayment installments, shortening of the maturity
dates applicable thereto or change in the security therefor or guarantors
thereof);
(c) Indebtedness evidenced by the TLL Note and Indebtedness
evidenced by the Term Promissory Note and/or the Multiple Advance Promissory
Note to First Community Financial Corporation and any refinancings, recastings,
renewals or extensions thereof (so long as such refinancings, recastings,
renewals or extensions do not involve any increase in the principal amount
thereof or rate of interest applicable thereto or frequency or amount of
repayment installments, shortening of the maturity dates applicable thereto or
change in the security therefor or guarantors thereof);
(d) Indebtedness of one or more of the Company and its
Subsidiaries to one or more of the Company and its Subsidiaries arising in the
ordinary course of business in connection with intercompany cash management
operations of the Company and its Subsidiaries (so long as such intercompany
debt shall be unsecured and fully subordinated to the Indebtedness relating to
the Loan); and
(e) additional Indebtedness of the Company and its
Subsidiaries (including, without limitation, Capital Lease Obligations and other
Indebtedness secured by Liens permitted under Section 8.06(e) hereof) up to but
not exceeding $50,000.00 at any one time outstanding.
8.08 Restrictions on Investments. Without, in each instance, the
---------------------------
prior written consent of the Administrative Agent and each of the Lenders, which
consent may be given or withheld in their respective sole and absolute
discretions and, if given, under such conditions as each of the Lenders and the
Administrative Agent, in their respective sole and absolute discretions, may
believe to be appropriate under the circumstances then-existing, the Company
shall not, and shall not permit any of its Subsidiaries to, whether directly or
indirectly, make or permit to remain outstanding any Investments (including,
without limitation, becoming a general or limited partner in a partnership, or a
joint venturer in a joint venture, or a member in a limited liability company or
a shareholder in a corporation), except for:
------ ---
(a) Investments outstanding on the date hereof and identified
in Part B of Schedule 7.15 hereto;
-------------
(b) Permitted Investments;
(c) Capital Expenditures permitted by Section 8.11 below;
(d) Disposition Investments received in connection with any
Disposition permitted under Section 8.05(c) hereof or any Disposition to which
the Lenders shall have consented in accordance with Section 11.04 hereof; and
(e) Investments consisting of Acquisitions permitted under
Section 8.05(b) hereof.
8.09 Restrictions on Payments. Without, in each instance, the prior
------------------------
written consent of the Administrative Agent and each of the Lenders, which
consent may be given or withheld in their respective sole and absolute
discretions and, if given, under such conditions as each of the Lenders and the
-64-
Administrative Agent, in their respective sole and absolute discretions, may
believe to be appropriate under the circumstances then-existing, the Company
shall not, and shall not permit any of its Subsidiaries to, whether directly or
indirectly, declare or make any Dividend Payments, distributions, returns of
capital or other payments to any Obligor, any Affiliate of or any Person related
to any Obligor, any of its members, partners, shareholders, directors or
executive officers or any member, partner, shareholder, director or executive
officer of any Obligor or of any Affiliate of or any Person related to any
Obligor; provided, however, that the Company may make dividend payments with
-------- -------
respect to its outstanding Preferred Stock (of any Series) solely through the
issuance of additional shares of Preferred Stock of such Series in a face amount
equal to the amount of dividends payable in respect of such outstanding shares
of Preferred Stock. Nothing herein shall be deemed to prohibit the payment of
dividends (including cash dividends) by any Subsidiary of the Company to the
Company.
8.10 Minimum EBITDA Requirement. Without, in each instance, the
--------------------------
prior written consent of the Administrative Agent and each of the Lenders, which
consent may be given or withheld in their respective sole and absolute
discretions and, if given, under such conditions as each of the Lenders and the
Administrative Agent, in their respective sole and absolute discretions, may
believe to be appropriate under the circumstances then-existing, the Company
shall not, whether directly or indirectly, permit the quarterly consolidated
EBITDA of the Company and its Subsidiaries to be less than:
$ 7,792,815.00 for the twelve (12) fiscal month period ending
May 31, 2002;
$ 7,226,162.00 for the twelve (12) fiscal month period ending
August 31, 2002;
$ 6,888,729.00 for the twelve (12) fiscal month period ending
November 30, 2002;
$ 6,786,983.00 for the twelve (12) fiscal month period ending
February 28, 2003;
$ 6,814,149.00 for the twelve (12) fiscal month period ending
May 31, 2003;
$ 6,771,533.00 for the twelve (12) fiscal month period ending
August 31, 2003;
$ 6,689,623.00 for the twelve (12) fiscal month period ending
November 30, 2003;
$ 6,667,454.00 for the twelve (12) fiscal month period ending
February 29, 2004;
$ 6,735,473.00 for the twelve (12) fiscal month period ending
May 31, 2004;
$ 6,735,473.00 for the twelve (12) fiscal month period ending
August 31, 2004;
$ 6,735,473.00 for the twelve (12) fiscal month period ending
November 30, 2004;
$ 6,735,473.00 for the twelve (12) fiscal month period ending
February 28, 2005; or
$ 6,735,473.00 for the twelve (12) fiscal month period ending
May 31, 2005.
8.11 Restrictions on Capital Expenditures. Without, in each
------------------------------------
instance, the prior written consent of the Administrative Agent and each of the
Lenders, which consent may be given or withheld in their respective sole and
absolute discretions and, if given, under such conditions as each of the Lenders
and the Administrative Agent, in their respective sole and absolute discretions,
may believe to be appropriate under the circumstances then-existing, the Company
shall not, whether directly or indirectly, permit the aggregate amount of
Capital Expenditures by the Company and its Subsidiaries to equal or exceed the
sum of $ 4,500,000.00 for any fiscal year ending on or after May 31, 2002. If
the aggregate amount of Capital Expenditures for any fiscal year ending on or
after May 31, 2002 shall be less than the amount permitted above for such
period, then, the shortfall may not be added to the amount of Capital
Expenditures permitted for any succeeding period until the Loan has been paid in
full.
8.12 Interest Rate Protection Agreements. DELETED PRIOR TO EXECUTION
-----------------------------------
8.13 Restrictions on Payments on Term Promissory Note, Multiple
----------------------------------------------------------
Advance Promissory Note, Junior Subordinated Notes and TLL Note. Without, in
---------------------------------------------------------------
each instance, the prior written consent of the Administrative Agent and each of
the Lenders, which consent may be given or withheld in their respective sole and
absolute discretions and, if given, under such conditions as each of the Lenders
and the Administrative Agent, in their respective sole and absolute discretions,
may believe to be appropriate under
-65-
the circumstances then-existing, the Company shall not and shall not permit any
of its Subsidiaries to, whether directly or indirectly, purchase, repurchase,
defease, redeem, retire or otherwise acquire for value, or set apart any money
for a sinking, defeasance or other analogous fund for the purchase, repurchase,
defeasance, redemption, retirement or other acquisition of, or make any
voluntary or involuntary payment or prepayment of the principal of or interest
on, or any other amount owing in respect of, any of the Junior Subordinated
Notes, the TLL Note, the Term Promissory Note or the Multiple Advance Promissory
Note (except, in the case of the Term Promissory Note and the Multiple Advance
Promissory Note in favor of First Community Financial Corporation, for the
regularly-scheduled monthly payments of interest, and regularly-scheduled weekly
payments of principal, set forth therein).
8.14 Restrictions on Lines of Business.
---------------------------------
(a) Business Activities. Neither the Company nor any of its
-------------------
Subsidiaries shall engage, whether directly or indirectly, in any line or lines
of business activity other than the Paging Business and related lines of
business (such as cellular telephones, internet access, telemetry and other
telecommunication services).
(b) License Subsidiaries. The Company shall cause all FCC
--------------------
Licenses (including any thereof acquired in the future) at all times to be held
in the name of one or more Subsidiaries satisfying the conditions of this
paragraph (b) (each, a "License Subsidiary"), and shall execute and deliver, and
cause each such License Subsidiary to execute and deliver, a License Management
Agreement pursuant to which the Company or one of its Subsidiaries (other than
another License Subsidiary) shall agree to manage, on behalf of such License
Subsidiary, the FCC Licenses held by such License Subsidiary. The Company shall
not permit a License Subsidiary to become directly or indirectly obligated in
respect of any Indebtedness (other than Indebtedness hereunder or under the
Security Documents) or to engage in any line or lines of business activity or to
hold any Property other than FCC Licenses, as expressly contemplated by the
respective License Management Agreement to which such License Subsidiary is a
party.
8.15 Restrictions on Transactions with Affiliates and Related
--------------------------------------------------------
Persons. Without, in each instance, the prior written consent of the
-------
Administrative Agent and each of the Lenders, which consent may be given or
withheld in their respective sole and absolute discretions and, if given, under
such conditions as each of the Lenders and the Administrative Agent, in their
respective sole and absolute discretions, may believe to be appropriate under
the circumstances then-existing, the Company shall not and shall not permit any
of its Subsidiaries to, whether directly or indirectly: (a) make any Investment
in an Affiliate or related Person or permit or suffer an Affiliate or related
Person to make an Investment in it; (b) assign, sell, lease or otherwise
transfer or dispose of any Property to, or purchase or acquire any Property
from, an Affiliate or a related Person; (c) merge or dissolve into or
consolidate with an Affiliate or related Person; (d) enter into any other
transaction directly or indirectly with or for the benefit of an Affiliate or a
related Person (including, without limitation, loaning or advancing funds or
otherwise extending credit to, entering into Guarantees on behalf or for the
benefit of, assuming obligations of or entering into consultant, management,
advisory or other arrangements with an Affiliate or related Person); or (e)
except as set forth on Schedule 8.15 attached hereto and thereby made a part
-------------
hereof, making any payments (whether of cash, Property or otherwise) to an
Affiliate or related Person. For the purposes of this Section 8.15 only,
"related Person" also includes GM Holdings, LLC.
8.16 Use of Proceeds. The Company shall, and shall cause all of its
---------------
Subsidiaries to, use the proceeds of the Loan in compliance with all applicable
legal and regulatory requirements (provided, however, that neither the
-------- -------
Administrative Agent nor any Lender shall have any responsibility for monitoring
the use of any of such proceeds).
-66-
8.17 Certain Obligations Respecting Subsidiaries.
-------------------------------------------
(a) Subsidiary Guarantors. In the event that the Company or
---------------------
any of its Subsidiaries shall form or acquire any new Subsidiary after the
Closing Date, the Company shall cause such new Subsidiary:
(i) to execute and deliver to the Administrative Agent
all such agreements, documents, guaranties and certificates (including, without
limitation, a Subsidiary Guarantee Agreement) as the Administrative Agent or the
Lenders may deem necessary or reasonably advisable and do such other acts and
things as the Administrative Agent or the Lenders may deem necessary or
reasonably advisable in order to have such Subsidiary become a Guarantor of the
Loan (and thereby become a party to the Guarantee and Security Agreement, as a
"Guarantor" and "Securing Party" thereunder, and to pledge and grant a security
interest in the "Collateral" as defined thereunder to the Administrative Agent
for the benefit of the Lenders);
(ii) to execute and deliver to the Administrative Agent
(A) such amendments to the Security Documents as the Administrative Agent deems
necessary or reasonably advisable in order to grant to the Administrative Agent,
for the benefit of the Lenders, a perfected first priority security interest in
one hundred percent (100%) of the Capital Stock and debt securities of such new
Subsidiary, (B) the certificates representing such Capital Stock and debt
securities, (C) undated stock powers, endorsed in blank, with respect to such
Capital Stock certificates, and (D) undated allonges, endorsed in blank, with
respect to such debt securities;
(iii) to take such further action (including, without
limitation, executing and delivering such Uniform Commercial Code financing
statements) as the Administrative Agent deems necessary or reasonably advisable
to create and perfect valid and enforceable first priority Liens, consistent
with the provisions of the Security Documents, on all of the Properties of such
new Subsidiary as collateral security for the obligations of such new Subsidiary
under the Guarantee and Security Agreement, and to execute and deliver such
Supplemental Collateral Documents as the Administrative Agent deems necessary or
reasonably advisable; and
(iv) to deliver such proof of corporate action,
incumbency of officers, opinions of counsel and other documents as is consistent
with those delivered by the Company pursuant to Sections 6.01 and 6.02 hereof on
the Closing Date or as the Administrative Agent deems necessary or reasonably
advisable.
(b) Ownership of Subsidiaries. The Company shall, and shall
-------------------------
cause each of its Subsidiaries to, take such action from time to time as shall
be necessary to ensure that each of its Subsidiaries is a Wholly-Owned
Subsidiary. In the event that any additional shares of stock shall be issued by
any Subsidiary, the Company agrees forthwith to deliver (or cause to be
delivered) to the Administrative Agent pursuant to the Guarantee and Security
Agreement the certificates evidencing such shares of stock, accompanied by
undated stock powers executed in blank and to take such other action as the
Administrative Agent shall request to perfect the security interest created
therein pursuant to the Guarantee and Security Agreement.
(c) FCC Matters. If after the date hereof there shall be a
-----------
change in Law, or the rules or regulations of the FCC, the effect of which is to
permit the granting of a security interest in the FCC Licenses held by the
Company and its Subsidiaries, the Company shall, and shall cause each of its
Subsidiaries to, execute and deliver all such instruments and documents, and to
take such other actions, as shall be necessary, or that the Administrative Agent
may reasonably request, in order to create and perfect
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a first priority security interest in such FCC Licenses in favor of the Lenders.
(d) Additional Restrictions on Subsidiaries. Without, in each
---------------------------------------
instance, the prior written consent of the Administrative Agent and each of the
Lenders, which consent may be given or withheld in their respective sole and
absolute discretions and, if given, under such conditions as each of the Lenders
and the Administrative Agent, in their respective sole and absolute discretions,
may believe to be appropriate under the circumstances then-existing, the Company
shall not permit any of its Subsidiaries to, whether directly or indirectly,
enter into, after the date hereof, any indenture, agreement, instrument or other
arrangement that, directly or indirectly, prohibits or restrains, or has the
effect of prohibiting or restraining, or imposes materially adverse conditions
upon, (i) the incurral or payment of Indebtedness, (ii) the granting of Liens,
(iii) the declaration or payment of dividends, (iv) the making of loans,
advances or Investments, or (v) the sale, assignment, transfer or other
disposition of Property, other than any such prohibition or restraint (A)
----- ----
contained in the Loan Documents (or any of them), or (B) with respect only to
the FCC Licenses, contained in the License Management Agreement, or (C) with
respect only to particular items of Property (and no other items of Property),
contained in security documents creating the Liens covering such Property
permitted by Section 8.06(e) hereof.
8.18 Modifications of Certain Documents. Without, in each instance,
----------------------------------
the prior written consent of the Administrative Agent and each of the Lenders,
which consent may be given or withheld in their respective sole and absolute
discretions and, if given, under such conditions as each of the Lenders and the
Administrative Agent, in their respective sole and absolute discretions, may
believe to be appropriate under the circumstances then-existing, the Company
shall not, whether directly or indirectly, enter into, suffer to exist or allow
to become effective, and shall not permit any of its Subsidiaries to, whether
directly or indirectly, enter into, suffer to exist or allow to become
effective, any amendment, modification, supplement or waiver of any of the
provisions of: (a) its Governing Documents or the Governing Documents of any of
its Subsidiaries or any of the Obligors; (b) any of the Capitalization
Documents; (c) any of the Material Contracts (other than any sales agency
contracts entered into in the ordinary course of business); (d) any of the First
Community Bank Loan Documents; (e) any of the TLL Loan Documents (including,
without limitation, the TLL Note); (f) any of the Junior Subordinated Notes; (g)
any Acquisition Agreement; (h) the License Management Agreement; or (i) any of
the other Basic Documents.
8.19 Supplemental Collateral Documents. The Company shall, from time
---------------------------------
to time upon the request of the Administrative Agent or the Lenders, execute and
deliver (and cause each other Obligor to execute and deliver) such documents,
agreements and other instruments as shall be necessary, desirable or appropriate
to create Liens on Collateral of the Company or such other Obligor as collateral
security for the obligations of the Company or such other Obligor hereunder or
under the Guarantee and Security Agreement (including, without limitation, the
Property referred to in Section 8.20 below).
8.20 Collateral Accessions, Replacements and/or Substitutions. All
--------------------------------------------------------
accessions, additions, betterments, substitutions and/or replacements of all or
any portion of the Collateral shall immediately be and become, without the
necessity of any further act by the Administrative Agent, any of the Lenders or
the Company or any of its Subsidiaries, subject to the Lien and security
interest of the Security Documents as fully and completely, and with the same
effect, as though originally owned by the Company or its applicable Subsidiary
party thereto and specifically described in the granting clauses thereof.
Notwithstanding the foregoing, the Company agrees, without in any way intending
to derogate the foregoing, that it shall, and shall cause the applicable
Subsidiary to, promptly following request therefor by the Administrative Agent,
execute, acknowledge and deliver to the Administrative Agent any instrument
(including, without limitation, amendments to the Guarantee and Security
Agreement and/or New Pilgrim
-68-
Deed of Trust and supplemental UCC financing statements and/or amendments to
existing UCC financing statements) the Administrative Agent may require to
confirm that each such accession, addition, betterment, substitution and/or
replacement is and/or continues to be subject to the provisions of the Security
Documents, and that the Lien of such Security Documents constitutes a perfected
first priority Lien upon and security interest in all of such accessions,
additions, betterments, substitutions and/or replacements. Without limiting the
generality of the foregoing:
(a) With respect to any Collateral acquired or moved after the
Closing Date by the Company or any of it Subsidiaries (other than any Property
described in paragraphs (b) or (c) of this Section 8.20) as to which the
Administrative Agent, for the benefit of the Lenders, does not but pursuant to
the provisions hereof is intended to have a perfected security interest,
promptly (and, in any event, within thirty (30) days following the date of such
acquisition or move) (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Security Agreement or such other documents as
the Administrative Agent deems necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a security interest in
such Collateral and (ii) take all actions necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a perfected first priority
security interest in such Collateral, including, without limitation, the filing
of UCC financing statements in such jurisdictions as may be required by Law or
as may be requested by the Administrative Agent or the Lenders.
(b) With respect to any ▇▇▇▇▇ County, Texas real property
interest acquired after the Closing Date by the Company or any of it
Subsidiaries as to which the Administrative Agent, for the benefit of the
Lenders, does not but pursuant to the provisions hereof is intended to have a
perfected Lien and security interest, promptly (and, in any event, within thirty
(30) days following the date of any such acquisition, (i) execute and deliver a
first priority deed of trust or mortgage in favor of the Administrative Agent,
for the benefit of the Lenders, covering such real property, (ii) if requested
by the Administrative Agent, provide the Administrative Agent and the Lenders
with (x) extended coverage title insurance covering such real property complying
with the provisions of Section 6.01(u) above, in an amount at least equal to the
purchase price of such real property (or such other amount as shall be
reasonably specified by the Administrative Agent) as well as a current ALTA
survey thereof complying with the provisions of Section 6.01(t) above, together
with a surveyor's certificate, (y) any consents or estoppels reasonably deemed
necessary or advisable by the Administrative Agent in connection with such deed
of trust or mortgage, each of the foregoing in form and substance reasonably
satisfactory to the Administrative Agent and (z) Phase I environmental reports
(and where appropriate based upon such Phase I environmental reports and at the
request of the Administrative Agent, Phase II environmental reports) with
respect to such real property, all in form and substance reasonably satisfactory
to the Administrative Agent; and (iii) if requested by the Administrative Agent,
deliver to the Administrative Agent legal opinions relating to the matters
described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent.
(c) With respect to any new Subsidiary created or acquired
after the Closing Date by the Company or any of its Subsidiaries as to which the
Administrative Agent, for the benefit of the Lenders, does not but pursuant to
the provisions hereof is intended to have a perfected security interest,
promptly (and, in any event, within thirty (30) days following such creation or
the date of such acquisition) (i) execute and deliver to the Administrative
Agent such amendments to the Guarantee and Security Agreement and the Pledge
Agreement as the Administrative Agent deems necessary or advisable to grant to
the Administrative Agent, for the benefit of the Lenders, a perfected first
priority security interest in the Capital Stock of such new Subsidiary that is
owned by the Company or any of its Subsidiaries, (ii) deliver to the
Administrative Agent the certificates representing such Capital Stock, together
with undated stock powers, in blank, executed and delivered by a duly authorized
officer of the Company or such existing
-69-
Subsidiary, as the case may be, (iii) cause such new Subsidiary (A) to become a
party to the Guarantee and Security Agreement and Pledge Agreement and (B) to
take such actions necessary or advisable to grant to the Administrative Agent
for the benefit of the Lenders a perfected first priority security interest in
the Collateral described in the Guarantee and Security Agreement and the Pledge
Agreement with respect to such new Subsidiary, including, without limitation,
the filing of UCC financing statements in such jurisdictions as may be required
by the Guarantee and Security Agreement or the Pledge Agreement or by law or as
may be requested by the Administrative Agent, and (iv) if requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
8.21 Restriction on Changes in Fiscal Periods. Without, in each
----------------------------------------
instance, the prior written consent of the Administrative Agent and each of the
Lenders, which consent may be given or withheld in their respective sole and
absolute discretions and, if given, under such conditions as each of the Lenders
and the Administrative Agent, in their respective sole and absolute discretions,
may believe to be appropriate under the circumstances then-existing, the Company
shall not and shall not permit any of its Subsidiaries to, whether directly or
indirectly, change the fiscal year or method of determining fiscal quarters for
itself or any of its Subsidiaries. In particular, the Company will not change
the last day of its fiscal year from the last day of May of each year, or the
last days of the first three fiscal quarters in each of its fiscal years from
August 31, November 30 and February 28 (or February 29, as applicable) of each
year, respectively.
8.22 Hazardous Materials.
-------------------
(a) The Company covenants that it will not, and shall cause
each of its Subsidiaries not to, cause, suffer or permit any Hazardous Materials
to be generated, manufactured, stored or treated at, on, under or in, or to be
emitted, discharged or leaked from, or disposed of, dumped or Released onto or
beneath, any real property owned, leased or operated by the Company or any of
its Subsidiaries, or at, on, under, in or from any other location (including,
without limitation, any location to which Hazardous Materials have been sent for
re-use or recycling or for treatment, storage or disposal by the Company or any
of its Subsidiaries) in which the Company or any of its Subsidiaries have an
interest, in either case which could reasonably be expected to (i) give rise to
liability of the Company or any of its Subsidiaries under any applicable
Environmental Law or otherwise result in material costs to the Company or any of
its Subsidiaries, or (ii) interfere in any material respect with the Company's
or any of its Subsidiaries' continued operations, or (iii) impair the fair
saleable value of any real property owned or leased by the Company or any of its
Subsidiaries.
(b) Notices. The Company further agrees to (i) give notice to
-------
the Administrative Agent and the Lenders immediately upon it or any of its
Subsidiaries acquiring knowledge of the use, presence or storage or alleged use,
presence or storage of any Hazardous Materials at, under, above, around, in or
on any of such real property or of any Release, with a full description thereof
and copies of all materials relating to the manner in which it acquired such
knowledge, (ii) promptly comply with all Environmental Laws requiring the
removal, remediation, treatment or disposal of such Hazardous Materials or
Release and provide the Administrative Agent and the Lenders with satisfactory
evidence of such compliance, and (iii) deliver to the Administrative Agent, for
the benefit of the Lenders, a bond, letter of credit or similar financial
assurance evidencing to the Administrative Agent's and the Lenders' satisfaction
that sufficient funds are available to pay the cost of removing, remediating,
treating and disposing of such Hazardous Materials or Release and discharging
any assessments which may be established on the real property as a result
thereof.
-70-
(c) Site Assessments. If the Administrative Agent or the Lenders ever
----------------
shall have reason to believe that there has been a Release or that there are
Hazardous Materials at, above, beneath or around, or otherwise affecting, any of
such real property, the Administrative Agent shall advise the Company in writing
of such belief (and the basis therefor), whereupon the Company shall or, if it
fails to do so within fifteen (15) days after the Company's receipt of such
written advice, the Administrative Agent or the Lenders may contract for the
services of one or more Persons (the "Site Reviewers") to perform environmental
inspections, samplings, testings and/or site assessments ("Site Assessments")
at, above, beneath, around or on such real property for the purpose of
determining whether there exists any condition which could result in any
liability, costs or expense to the owner, occupier or operator of such real
property under any Environmental Law. The Site Assessments may be performed at
any time or times upon reasonable notice to the Company, and the Site Reviewers
are hereby authorized to enter upon such real property for the purpose of
conducting such testing as they believe necessary or appropriate. The Company
agrees to supply to the Site Reviewers such historical and operational
information regarding such real property as may be reasonably requested by the
Site Reviewers to facilitate the Site Assessments and will make available for
meetings with the Site Reviewers appropriate personnel having knowledge of such
matters. On request, the Administrative Agent or the Lenders (or, as the case
may be, the Company) shall make the results of such Site Assessments fully
available to the Company (or, as the case may be, the Administrative Agent and
the Lenders). Prior to an Event of Default, the Company may at its election
participate under reasonable procedures in the direction of such Site
Assessments and the description of tasks of the Site Reviewers. The cost of
performing such Site Assessments shall be paid by the Company upon demand of the
Administrative Agent or the Lenders and constitute part of the Indebtedness
relating to the Loan secured by the Security Documents.
(d) Right to Remove Hazardous Materials. The Administrative Agent and
-----------------------------------
the Lenders shall have the right, but not the obligation, without in any way
limiting their other rights and remedies hereunder or under any of the other
Loan Documents, to enter onto such real property or to take such other actions
as it deems necessary or advisable to investigate, clean up, remove, resolve or
minimize the impact of, or otherwise deal with, any Hazardous Materials or
Release. All costs and expenses paid or incurred by the Administrative Agent or
the Lenders in the exercise of any such rights shall constitute part of the
Indebtedness relating to the Loan secured by the Security Documents and shall be
payable by the Company upon demand of the Administrative Agent or the Lenders.
(e) Indemnification. Irrespective of whether or not any Site
---------------
Assessments are conducted and notwithstanding anything contained herein or in
any of the other Loan Documents to the contrary, the Company, for itself and
each of its Subsidiaries (and each of their respective members, partners,
shareholders, directors, officers, agents and employees), hereby (i) releases
and discharges the Administrative Agent and each of the Lenders, the trustee
under any Security Document, all purchasers of such real property, the various
representatives (whether legal or otherwise) and agents of the Administrative
Agent, the Lenders, the trustee and such purchasers, each of their respective
partners, members, shareholders, directors, officers and employees of the
foregoing and all of their respective heirs, devisees, executors,
administrators, personal representatives, successors and assigns (collectively,
the "Environmental Indemnitees") from, (ii) indemnifies and holds each of them
harmless for, from and against, and (iii) agrees to defend and reimburse each of
them for, any and all claims, demands, proceedings, actions, suits, judgments,
settlements, liabilities (including strict liability), losses, damages
(including both foreseeable and unforeseeable consequential and "exemplary" or
"punitive" damages), expenses (including, without limitation, consultants' fees,
investigation and laboratory fees, reasonable attorneys' fees and costs of
clean-up, closure, detoxification and other required or necessary remedial
measures), fines, penalties, costs of settlements and/or judgments and claims of
any and every kind whatsoever which may now or in the future (whether before or
after the release of any Security Document)
-71-
be paid, incurred or suffered by or asserted against any of such Environmental
Indemnitees for, with respect to or as a direct or indirect result of the use,
manufacture, generation, storage or presence at, in, on, around, above or under
(regardless of the source of emanation or generation thereof), or the escape,
seepage, leakage, spillage, discharge, emission or release under, onto or from,
any of such real property of any Hazardous Materials or any Release or arising
out of or resulting from the applicability of any Environmental Law (including,
without limitation, CERCLA, any so-called federal, state or local "Superfund" or
"Superlien" Laws and/or the application of any concepts or constructs of
contribution, indemnity, subrogation or responsibility set forth therein),
regardless of whether or not caused by or within the control of the Company, any
of its Subsidiaries, or any such Environmental Indemnitees.
8.23 Additional Restrictions. Without, in each instance, the prior written
-----------------------
consent of the Administrative Agent and each of the Lenders, which consent may
be given or withheld in their respective sole and absolute discretions and, if
given, under such conditions as each of the Lenders and the Administrative
Agent, in their respective sole and absolute discretions, may believe to be
appropriate under the circumstances then-existing, the Company shall not and
shall not permit any of its Subsidiaries to, whether directly or indirectly:
(a) Leases. Become liable in any way (whether directly or by
------
assignment or as a guarantor or other surety) for the obligations of the lessee
under any operating Lease, except for those Leases appearing on Schedule 7.21
-------------
attached hereto and except for new leases of retail space (or additions to or
replacements for existing retail space) entered into by the Company in the
ordinary course of business from bona-fide third parties and the monthly amount
of rent (and all other charges) payable thereunder does not exceed $9,000.00;
(b) Sale or Discount of Receivables. Sell, with or without recourse,
-------------------------------
at a discount, or otherwise sell for less than the face value thereof, notes or
accounts receivables, other than in connection with trade discounts in the
ordinary course of business; provided, however, that the Company may pledge its
-------- -------
accounts receivable (and proceeds thereof) as security for either or both of the
First Community Bank Loans;
(c) Guaranties or Contingent Obligations. Create, become liable for or
------------------------------------
otherwise enter into any guaranty or contingent liability arrangement, except
(i) endorsements for collection or deposit in the ordinary course of business,
(ii) those guaranties or contingent liabilities listed as such in Part A of
Schedule 7.12 and renewals, extensions, modifications and replacements thereof
-------------
entered into after the Closing Date that do not increase the amount thereof or
provide for materially less favorable terms to the Company or any of its
Subsidiaries, and (iii) guaranties and contingent liabilities arising in
connection with Dispositions permitted by Section 8.05(d) above (in no event to
exceed the amount of consideration received by in connection with such
Disposition);
(d) Amendments to Loan Documents. Enter into, suffer to exist or
----------------------------
become or remain subject to any agreement or instrument that would prohibit or
restrict (including by way of a covenant, representation or warranty or event of
default), or require the consent of any third Person to, any amendment to, or
waiver or consent to departure from the terms of, any of the Loan Documents;
(e) Designation of Senior Indebtedness. Designate or permit the
----------------------------------
designation of any Indebtedness as "Designated Senior Indebtedness" or having a
lien or repayment priority senior to that of the Indebtedness relating to the
Loan;
(f) Tax Sharing Arrangements. Enter into or permit to exist any tax
------------------------
sharing
-72-
agreement or similar arrangement;
(g) Take or Pay Contracts. Enter into or be a party to any arrangement
---------------------
for the purchase of materials, supplies, other property or services if such
arrangement by its express terms requires that payment be made regardless of
whether such materials, supplies, other property or services are delivered or
furnished to it;
(h) State of Formation. Change its state of organization, formation or
------------------
incorporation;
(i) Management Incentive Plan; Bonus. Adopt any new or modify any
--------------------------------
existing management incentive plan or agreements or arrangements of like effect
or intent; or pay or declare payable any bonus or other type of incentive
compensation to either J. ▇▇▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ which, when
aggregated with other bonus or incentive compensation amounts previously paid or
declared payable during such fiscal year to J. ▇▇▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, would exceed the sum of $100,000.00;
(j) Interference with Administrative Agent Acquiring Knowledge.
----------------------------------------------------------
Interfere with, or make more inconvenient, difficult or expensive, the
Administrative Agent obtaining knowledge of matters relating to the Company or
any of its Subsidiaries; or
(k) Adverse Activities. Enter into, or permit any of its Affiliates or
------------------
related Persons or any of its or any of its Affiliates' or related Persons'
respective members, partners, directors, executive officers or shareholders to
enter into, any agreement, or do or refrain from doing, or permit any of its
Affiliates or related Persons or any of its or any of its Affiliates' or related
Persons' respective members, partners, directors, executive officers or
shareholders to do or refrain from doing, any act, in each case which might
delay, limit, restrict, impede or otherwise adversely affect the ability of the
Company to comply with its obligations under this Agreement and the other Loan
Documents.
8.24 Subrogation. To the extent that any proceeds of the Indebtedness
-----------
relating to the Loan heretofore have been or hereafter are used to pay or
discharge any other Lien, charge or encumbrance affecting all or any portion of
the Collateral, the Administrative Agent, for the benefit of the Lenders, shall
be subrogated to all rights, interests and Liens owned or held by the owner or
holder thereof, irrespective of whether such Liens, charges and encumbrances
heretofore have been or hereafter are released of record.
8.25 No Merger or Extinguishment. If the Administrative Agent, for the
---------------------------
benefit of the Lenders, or any of the Lenders shall at any time hereafter
acquire title to all or any portion of the Collateral, then, until the
Indebtedness relating to the Loan shall have been paid in full: (a) the
interests of the Lenders under the Security Documents and the Lien of the
Security Documents shall not be extinguished or merge or become merged in or
with the estate or interests of the Lenders as holders and owners of title to
all or any portion of the Collateral, regardless of how such title was acquired
(including, but not limited to, by foreclosure or trustee's sale of a Lien prior
or subordinate to the Lien of the Security Documents); (b) if the Lenders also
are the owners at that time of a leasehold estate in all or any portion of the
Collateral, the leasehold estate of the Lenders therein shall not be
extinguished or merged or become merged in or with the estate or interests of
the Lenders as holders and owners of fee title to the Collateral (or any portion
thereof); and (c) until payment in full of the Indebtedness relating to the
Loan, the various estates of the Lenders in the Collateral, the Lien of the
Security Documents and the interests of the Lenders thereunder shall continue in
full force and effect to the same extent as if the Lenders had not acquired
title to the Collateral, and the Indebtedness relating to the Loan shall not be
deemed extinguished, satisfied or
-73-
discharged.
8.26 Estoppel Certificates. The Company agrees that at any time and from
---------------------
time to time after the Closing it shall, at its own expense, no later than ten
(10) days following delivery thereof by the Administrative Agent or any of the
Lenders, execute, acknowledge and return to the Administrative Agent (or, as
applicable, the Lender furnishing the same), or to any Person designated by the
Administrative Agent (or, as applicable, the Lender furnishing the same), the
form of estoppel certificate so furnished.
8.27 Future Advances; Additional Indebtedness. The Company agrees that the
----------------------------------------
Security Documents also shall secure all funds at any time hereafter advanced or
re-advanced by the Administrative Agent or the Lenders to or for the benefit of
the Company or any of its Subsidiaries, whether such future advance occurs
pursuant to any provision of any of the Loan Documents or otherwise, as well as
all other debts and liabilities of every kind or nature whatsoever now owed or
which hereafter may become owed by the Company or any Obligor or any future
owner of the Collateral (or any portion thereof) to the Lenders.
8.28 Protection of Lender's Security; Rights of Entry, Inspection and Cure.
---------------------------------------------------------------------
Upon any failure by the Company to make any payment or perform any other
obligation required hereunder or under any of the other Loan Documents, the
Administrative Agent or the Lenders, without intending to limit any other
provision of this Agreement or any of the other Loan Documents and without
notice to or demand upon the Company or any of its Subsidiaries or any other
Obligor and without waiving or releasing the Company or any Obligor from any of
its obligations hereunder or under any of the other Loan Documents, may, but
need not, make any such payment and/or comply with, keep, observe or perform any
such obligation on behalf of the Company. The Administrative Agent or the
Lenders also may make such appearances, advance and/or disburse such sums and
take such other actions the Administrative Agent or the Lenders deem necessary
or appropriate to protect the Collateral or any portion thereof or title thereto
or all or any portion of the Lenders' respective interests therein or the Lien
of any of the Security Documents. The making of any such payment by the
Administrative Agent or the Lenders or the performance of any such obligation on
behalf of the Company shall constitute conclusive evidence of the necessity
therefor and the reasonableness thereof. For such purpose, each of the Lenders
and the Administrative Agent shall have the right to enter upon any real
property constituting part of the Collateral, as well as upon any other real
property where items of the Collateral may be kept, without thereby becoming
liable to the Company or any of its Subsidiaries or any Obligor or any other
Person in possession thereof holding by, through or under the Company or any of
its Subsidiaries or any Obligor. All fees, charges, costs and expenses incurred,
and all amounts and sums disbursed, by the Administrative Agent or the Lenders
in exercising its rights under this Section 8.28 or in exercising any similar
rights granted to the Administrative Agent or the Lenders under any other
provision hereof or any of the other Loan Documents (including, but not limited
to, all amounts, fees, charges, expenses and disbursements incurred or disbursed
in obtaining a judgment or decree of surrender and delivery of possession) shall
become due and payable immediately after written demand therefor, shall bear
interest at the "Post-Default" or "Default" rate set forth in the Loan Documents
from the date so incurred or expended until the date reimbursed in full, shall
be added to the Indebtedness relating to the Loan and constitute a Lien on the
Collateral prior to any right, title or interest therein or claim thereon
attaching or accruing subsequent to the Lien of the Security Documents and shall
be secured by the Security Documents. The Company, for itself and each of it
Subsidiaries and Obligors, hereby irrevocably constitutes and appoints the
Administrative Agent and each of the Lenders, and each of their respective
agents, representatives, employees and designees, such Person's
attorney-in-fact, coupled with an interest, for the purpose of performing all
acts on such Person's behalf necessary to effectuate the intent of this Section
8.28, and authorizes and empowers the Administrative Agent and each of the
Lenders, and each of their respective agents, representatives, employees and
designees, to enter upon at any time and from time to time (as often as the
Administrative Agent or the Lenders deem appropriate) any real property
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constituting part of the Collateral, as well as upon any other real property
where items of the Collateral may be kept, for the purposes of inspection and of
complying with, observing and performing any rights of cure granted to the
Administrative Agent or the Lenders herein or in any of the other Security
Documents; provided, however, that neither the Administrative Agent nor any of
-------- -------
the Lenders shall have any obligation to the Company, any of its Subsidiaries,
any of the Obligors or any third-party to undertake or to disclose the results
of any such inspection, or liability to the Company, any of its Subsidiaries,
any of the Obligors or any third-party for failing to inspect or for the manner
in which it conducts any such inspection. The aforesaid power of attorney shall
survive the death or disability of the principal, and the Company, for itself
and each of its Subsidiaries and Obligors, hereby ratifies any and all acts
which the Administrative Agent or the Lenders (or any of their respective
agents, representatives, employees or designees) shall lawfully do or cause to
be done by virtue thereof. Nothing contained in this or any other provision of
any of the Loan Documents, however, shall be construed as (a) requiring the
Administrative Agent or the Lenders to advance or expend monies, incur any cost
or expense or do any act for any purpose mentioned in such provisions or for any
other purpose whatsoever; or (b) authorizing the operation of any radio facility
without due authority from the FCC.
8.29 Permitted Actions by Lender. Neither the Administrative Agent nor any
---------------------------
of the Lenders shall be required to commence proceedings against the Company or
any of its Subsidiaries or any Obligor, or to refuse to extend time for payment
or otherwise to modify the terms of payment of the Loan by reason of any demand
made by the Company or any of its Subsidiaries or any Obligor. Without affecting
the liability of any Person for payment of all or any portion of the
Indebtedness relating to the Loan, the Administrative Agent's or the Lenders'
rights or abilities to exercise any right, remedy, benefit, privilege or power
herein or in any of the other Loan Documents provided or by Law or equity
conferred, or the Lien of the Security Documents on the remainder of the
Collateral for the full amount of any such Indebtedness relating to the Loan
remaining unpaid, the Administrative Agent or the Lenders may from time to time
and without notice: (a) release, add or substitute any Person liable for payment
of all or any portion of the Indebtedness relating to the Loan; (b) grant any
forbearance, indulgence, extension of time or otherwise alter the terms of
payment of any of the Indebtedness relating to the Loan; (c) accept additional
real or personal property of any kind as security therefor; and/or (d) alter,
substitute or release any property securing the Indebtedness relating to the
Loan.
8.30 Waivers By The Company. The Company, for itself and each of its
----------------------
Subsidiaries and the Obligors, as well as for all endorsers, guarantors and
other Persons now or hereafter becoming liable for all or any portion of the
Indebtedness relating to the Loan, all Persons who at any time hereafter may
become holders of any junior Liens upon all or any portion of the Collateral and
all Persons claiming by, through or under any of the foregoing, hereby: (a)
agrees to any and all extensions of time for payment and other modifications,
indulgences or waivers of any of the terms of any of the Loan Documents, and to
any and all realizations, compromises, releases, exchanges or substitutions of
any security (or portions thereof) given to secure the repayment of the
Indebtedness relating to the Loan, in each case at any time or from time to
time, without notice; (b) covenants that no such extension, modification,
waiver, realization, compromise, exchange, release or substitution, and no other
indulgence given by the Administrative Agent or the Lenders, shall impair,
release, discharge or otherwise modify or affect in any respect the liability of
the Company or any of the Obligors or preclude the Administrative Agent or the
Lenders from realizing upon any security (or portion thereof) or from obtaining
any other relief provided for under the Loan Documents or otherwise available to
them at Law or in equity; (c) agrees to offsets of any sums or property owed to
it by the Administrative Agent or the Lenders at any time; (d) waives all
counterclaims and setoffs to which it otherwise may be entitled; (e) waives, to
the fullest extent permitted by Law, any and all applicable homestead,
exemption, stay, redemption, marshalling of assets, order of sale, moratorium,
valuation and appraisal Laws now or hereafter in force or effect; (f) waives
diligence, presentment and
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demand for payment, protest and notice of protest, demand and dishonor, notice
of dishonor, notice of non-payment, notice of acceleration and/or of maturity
and all other notices which it lawfully may waive; (g) waives, to the fullest
extent permitted by Law, the right to demand a trial by jury and/or to assert
the statute of limitations as a defense in any action brought by the
Administrative Agent or any of the Lenders and agree that all issues in any such
proceeding shall, at the option of the Administrative Agent or the applicable
Lender, be decided and determined by the judge of the court in which such
proceeding is pending; (h) waives the benefits of the provisions of A.R.S.
▇▇.▇▇. 12-1641 and 12-1642 and of any comparable or similar provisions contained
in the rules or statutes of any other jurisdiction that may be found to be
applicable (including, without limitation, the jurisdiction in which any of the
Collateral constituting real property may be located), as the same now exist or
hereafter may be amended; and (i) waives any defense arising by reason of any
disability or other defense of any other Person or by reason of the cessation
from any cause whatsoever of the liability of any other Person.
8.31 Further Assurances. The Company shall, at its own expense at any time
------------------
and from time to time, execute, acknowledge, deliver and file or record, or
cause to be executed, acknowledged, delivered and filed or recorded, such
additional instruments, certificates or documents, and take or cause to be taken
all such other and further actions, as the Administrative Agent reasonably may
request for the purposes of implementing or effectuating the provisions of this
Agreement and the other Loan Documents, or for more fully perfecting or renewing
the rights of the Administrative Agent and the Lenders with respect to the
Collateral (or with respect to any additions thereto or replacements or proceeds
or products thereof or with respect to any other property or assets hereafter
acquired by the Company or any of its Subsidiaries which may be deemed to be
part of the Collateral) pursuant hereto or thereto. Upon the exercise by the
Administrative Agent or any Lender of any power, right, privilege or remedy
pursuant to this Agreement or any of the other Loan Documents which requires any
consent, approval, recording, qualification or authorization of any Governmental
Authority, the Company will execute and deliver, or will cause the execution and
delivery of, all applications, certifications, instruments and other documents
and papers that the Administrative Agent or such Lender may be required to
obtain from the Company or any of its Subsidiaries for such governmental
consent, approval, recording, qualification or authorization.
ARTICLE IX EVENTS OF DEFAULT
If one or more of the following events (herein called "Events of Default") shall
occur and be continuing:
9.01 The Company shall: (a) default in the payment of any principal or
interest on the Loan when due (whether on a regularly-scheduled installment
payment date, at stated maturity or otherwise); or (b) default in the payment of
any fee, charge or other amount payable by it hereunder or under any of the
other Loan Documents when due, if such default in the payment of fees, charges
or other amounts shall have continued unremedied for two (2) or more Business
Days; or
9.02 The Company, any of its Subsidiaries or any Obligor shall default in
the payment when due of any principal, interest, fee, charge or other amount on
any of its other Indebtedness (including, without limitation, any Indebtedness
owed to First Community Financial Corporation); or the occurrence of any other
event specified in any note, agreement, indenture or other document evidencing
or relating to any such other Indebtedness, the effect of which is to constitute
or to cause to occur (whether with or without the giving of notice or the lapse
of time or both) a breach or default under any such note, agreement, indenture
or other document evidencing or relating to any such other Indebtedness; or the
First Community Bank Loan Documents shall cease to be in full force and effect
(whether because the Indebtedness evidenced thereby has been paid in full, or
otherwise); or
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9.03 Because of any act or omission of the Company or any of its
Subsidiaries, any controversy or dispute shall arise between or among the
Lenders, on the one hand, and one or more of First Community Financial
Corporation, any of the holders of the TLL Note and/or any of the holders of the
Junior Subordinated Notes, on the other, relating to their respective rights to
be paid or to their respective security interests in and to the various
Properties of the Company and/or any of its Subsidiaries; or
9.04 Any representation, warranty or certification made or deemed to have
been made herein or in any other Loan Document (or in any modification or
supplement hereto or thereto) by the Company or any Obligor, or any certificate
furnished to any Lender or the Administrative Agent pursuant to the provisions
hereof or thereof, shall prove to have been false or misleading as of the time
made or furnished in any material respect; or
9.05 The Company shall abandon all or any material portion of the
Collateral, or shall commit or suffer waste to be committed with respect
thereto, or shall cease to conduct business operations in the normal course, or
shall default in the performance of any of its obligations under Article VIII of
this Agreement; or any Obligor shall default in the performance of any of its
obligations under Section 6.02 of the Guarantee and Security Agreement; or
9.06 The Company or any Obligor shall default in the performance of any of
its other Obligations under this Agreement, the Guarantee and Security Agreement
or any of the Loan Documents to which it is a party (i.e., other than those
obligations specifically referred to in other provisions of this Article IX) and
such default shall continue unremedied for a period of thirty (30) days after
notice thereof to the Company by the Administrative Agent or any Lender; or
9.07 The Company or any of its Subsidiaries shall admit in writing its
inability to, or be generally unable to, pay its debts as such debts become due;
or
9.08 The Company or any of its Subsidiaries shall: (a) apply for or consent
to the appointment of, or the taking of possession by, a receiver, custodian,
trustee, examiner or liquidator of itself or of all or a substantial part of its
Property; (b) make a general assignment for the benefit of its creditors; (c)
commence a voluntary case under any Bankruptcy Law; (d) file a petition seeking
to take advantage of any other law relating to bankruptcy, insolvency,
reorganization, liquidation, dissolution, arrangement or winding-up, or
composition or readjustment of debts; (e) fail to controvert in a timely and
appropriate manner, or acquiesce in writing to, any petition filed against it in
an involuntary case under any Bankruptcy Law; or (f) take any corporate action
for the purpose of effecting any of the foregoing; or
9.09 A proceeding or case shall be commenced, without the application or
consent of the Company or any of its Subsidiaries, in any court of competent
jurisdiction, seeking: (a) its reorganization, liquidation, dissolution,
arrangement or winding-up, or the composition or readjustment of its debts; (b)
the appointment of a receiver, custodian, trustee, examiner, liquidator or the
like for the Company or such Subsidiary or for all or any substantial part of
its Property; or (c) similar relief in respect of the Company or such Subsidiary
under any law relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts, and such proceeding or case shall continue
undismissed, or an order, judgment or decree approving or ordering any of the
foregoing shall be entered and continue unstayed and in effect, for a period of
sixty (60) or more days; or (d) an order for relief against the Company or such
Subsidiary shall be entered in an involuntary case under any Bankruptcy Law; or
9.10 A final judgment or judgments for the payment of money of $50,000.00
or more in the
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aggregate shall be rendered by one or more courts, administrative tribunals or
other bodies having jurisdiction against the Company or any of its Subsidiaries
and the same shall not be discharged (or irrevocable provision for its discharge
by any insurance carrier admitting liability therefor in writing shall not have
been made), or a stay of execution thereof shall not be procured, within thirty
(30) days from the date of entry thereof and the Company or the relevant
Subsidiary shall not, within said period of thirty (30) days, or such longer
period during which execution of the same shall have been stayed, appeal
therefrom and cause the execution thereof to be stayed during such appeal; or
9.11 An event or condition specified in Section 8.01(h) hereof shall occur
or exist with respect to any Plan or Multiemployer Plan and, as a result of such
event or condition, together with all other such events or conditions, the
Company or any ERISA Affiliate shall incur or in the opinion of the Lenders
shall be reasonably likely to incur a liability to a Plan, a Multiemployer Plan
or the PBGC (or any combination of the foregoing) that, in the determination of
the Lenders, could (either individually or in the aggregate) reasonably be
expected to have a Material Adverse Effect; or
9.12 A reasonable basis shall exist for the assertion against the Company
or any of its Subsidiaries or any Affiliate of the Company or any of its
Subsidiaries, or against any predecessor-in-interest of the Company or any of
its Subsidiaries or any Affiliates of the Company or any of its Subsidiaries, of
(or there shall have been asserted against the Company or any of its
Subsidiaries) an Environmental Claim that, in the judgment of the Lenders, is
reasonably likely to be determined adversely to the Company or any of its
Subsidiaries (or any of their respective Affiliates), and the amount thereof
could (either individually or in the aggregate) reasonably be expected to have a
Material Adverse Effect (insofar as such amount is payable by the Company or any
of its Subsidiaries); or
9.13 Any one or more of the following events shall occur and be continuing:
(a) either J. ▇▇▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ shall cease for any
reason to be actively involved in the daily operation and strategic direction of
the business of the Company and its Subsidiaries (unless a permanent replacement
with knowledge and experience in the Paging Business reasonably acceptable to
the Lenders shall have been appointed prior thereto); or
(b) the cumulative sale or disposition, from and after the date
hereof, of more than 1,000,000 shares of Capital Stock of the Company by any or
all of the Management Stockholders and members of the TLL Group (fully adjusted
for stock splits, stock dividends, reverse stock splits and other similar
adjustments); or
(c) any Person or group (within the meaning of Rule 13d-5 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and Section
13(d) and 14(d) of the Exchange Act), other than the Management Stockholders and
the CIVC Group (or, to the extent the interests of the CIVC Group are acquired
by the TLL Group, the Management Stockholders and the TLL Group), becomes,
directly or indirectly, in a single transaction or in a related series of
transactions by way of merger, consolidation or other business combination or
otherwise, the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act) of more than ten percent (10%) of the Capital Stock of the Company on a
fully-diluted basis (in other words, giving effect to the potential exercise of
any warrants, options and conversion and other rights); or the occurrence of any
event such that the Company shall be deemed to have undergone a change of
control for FCC purposes; or
(d) during any period of 12 consecutive calendar months, a majority of
the Board of Directors of the Company shall no longer be composed of individuals
(i) who were members of said Board
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on the first day of such period, (ii) whose election or nomination to said Board
was approved by individuals referred to in the preceding clause (i) constituting
at the time of such election or nomination at least a majority of said Board, or
(iii) whose election or nomination to said Board was approved by individuals
referred to in the preceding clauses (i) and (ii) constituting at the time of
such election or nomination at least a majority of said Board; or
(e) without, in each instance, the prior written consent of the
Administrative Agent and each of the Lenders, which consent may be given or
withheld in their respective sole and absolute discretions and, if given, under
such conditions as each of the Lenders and the Administrative Agent, in their
respective sole and absolute discretions, may believe to be appropriate under
the circumstances then-existing, there shall be any change in the names or
holdings of any of the shareholders of the Company listed on Schedule 7.14
-------------
attached hereto; or
9.14 The Liens created by the Security Documents shall at any time not
constitute a valid and perfected first priority Lien on the Collateral intended
to be covered thereby (to the extent perfection by filing, registration,
recordation or possession is required herein or therein) in favor of the
Administrative Agent, as agent for the Lenders, free and clear of all other
Liens (other than Liens permitted under Section 8.06 hereof or under the
respective Security Documents), or, except for expiration in accordance with its
terms, any of the Security Documents shall for whatever reason be terminated or
cease to be in full force and effect, or the binding nature, enforceability,
legality, priority or validity thereof or of any of the Loan Documents shall be
challenged or contested by the Company or any other Person; or
9.15 Except as a result of payment in full of the Indebtedness relating to
the Loan in accordance with the terms of this Agreement and the Amended and
Restated Note, the Guaranty and Security Agreement or any of the other Loan
Documents shall for whatever reason be terminated or cease to be in full force
and effect, or the binding nature, enforceability, legality, priority or
validity of any thereof shall be challenged or contested by the Company or any
other Person; or
9.16 The Indebtedness under any of the TLL Note or any of the Junior
Subordinated Notes shall cease to be fully and validly subordinated to the
Indebtedness relating to the Loan; or
9.17 The Indebtedness relating to the Loan shall become subordinated to the
Indebtedness relating to either or both of the First Community Bank Loans; or
9.18 The Company or any of its Subsidiaries shall suffer the cancellation,
non-renewal or adverse modification of any one or more of the Paging Licenses or
radio channels authorized under the Paging Licenses that, in the aggregate, in
the judgment of the Lenders, could (either individually or in the aggregate)
reasonably be expected to result in a Material Adverse Effect and which
cancellation, non-renewal or adverse modification is not appropriately remedied,
to the reasonable satisfaction of the Lenders, within thirty (30) days
thereafter; or
9.19 Any breach, default or non-compliance, or event, circumstance or
condition which with the giving of notice, the passage of time or both would
constitute a breach, default or non-compliance, on the part of the Company or
any of its Subsidiaries shall occur under any of the Basic Documents; or
9.20 Except for the First Community Bank Loans, the stated maturity date of
any other Indebtedness of the Company (other than trade payables and equipment
leases incurred in the ordinary course of business) shall not be at least one
(1) year later than the stated maturity date of the Loan; or except for the
First Community Bank Loans, but subject nevertheless to the provisions of
Sections 9.02 and
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9.03 above, the accelerated maturity date of any other Indebtedness of the
Company (other than trade payables or equipment leases incurred in the ordinary
course of business) shall not be at least thirty (30) days later than the
accelerated maturity date of the Loan, in each case pursuant to instruments in
form and substance satisfactory to the Administrative Agent and the Lenders in
their respective sole and absolute discretions; or
9.21 Any Governmental Authority or other Person shall take any action, or
any other event occurs (including, without limitation, the Incapacity of the
Company or any of its Subsidiaries or any of the Obligors), in each case which
the Administrative Agent or the Lenders reasonably believes will adversely
affect the Company's or any Obligor's ability to pay the Indebtedness relating
to the Loan; or
9.22 There shall occur any material adverse change in the financial
condition or business affairs of the Company or any of its Subsidiaries or any
of the Obligors; or the Administrative Agent or the Lenders reasonably
determines, in good faith, that its security or the likelihood of the Loan being
repaid has been, is being or is about to be materially impaired;
THEN:
(A) in the case of any Event of Default other than one referred to in
Sections 9.08 or 9.09 above with respect to the Company, the Administrative
Agent may, by notice to the Company, declare the principal amount then
outstanding of, and the accrued interest on, the Loan and all other amounts
payable by the Company hereunder or under any of the Loan Documents to be
forthwith due and payable, whereupon such amounts shall be immediately due and
payable without presentment, demand, protest or other formalities of any kind,
all of which are hereby expressly waived by the Company; and
(B) in the case of the occurrence of an Event of Default referred to in
Sections 9.08 or 9.09 above, the principal amount then outstanding of, and the
accrued interest on, the Loan and all other amounts payable by the Company
hereunder or under any of the Loan Documents automatically shall become
immediately due and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by the
Company.
ARTICLE X THE ADMINISTRATIVE AGENT
10.01 Appointment, Powers and Immunities. Each of the Lenders hereby
----------------------------------
irrevocably appoints and designates the Administrative Agent to act as its agent
hereunder and under the other Loan Documents, and irrevocably authorizes such
Administrative Agent, in such capacity, to take such action on its behalf under
the provisions of this Agreement and the other Loan Documents and to exercise
such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
The Administrative Agent (which term as used in this sentence and in Section
10.05 and the first sentence of Section 10.06 hereof shall include reference to
its Affiliates and its own and its Affiliates' shareholders, officers,
directors, members, partners, employees, agents, attorneys, other advisors and
attorneys-in-fact):
(a) shall have no duties or responsibilities, except those expressly
set forth in this Agreement or in any of the other Loan Documents, and shall not
by reason of this Agreement or any of the other Loan Documents be a trustee for
or have any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or
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any of the other Loan Documents or otherwise exist against the Administrative
Agent;
(b) shall not be responsible in any manner to the Lenders for any
recitals, statements, representations or warranties made by the Company or any
of its Subsidiaries or any officer thereof contained in this Agreement or in any
of the other Loan Documents, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Administrative Agent
or any of the Lenders under or in connection with, this Agreement or any of the
other Loan Documents, or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any of the other Loan
Documents or any other document referred to or provided for herein or therein or
for any failure by the Company or any other Person to perform any of its
obligations hereunder or thereunder;
(c) shall not, except to the extent expressly instructed by the
Lenders with respect to collateral security under the Security Documents, be
required to initiate or conduct any litigation or collection proceedings
hereunder or under any of the other Loan Documents;
(d) shall not be under any obligation to any Lender to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any of the other Loan
Documents, or to inspect the properties, books or records of the Company or any
of it Subsidiaries; and
(e) shall not be responsible for any action taken or omitted to be
taken by it hereunder or under any of the other Loan Documents or under any
other document or instrument referred to or provided for herein or therein or in
connection herewith or therewith, except to the extent that any of the foregoing
are found by a final and non-appealable decision of a court of competent
jurisdiction to have resulted solely and proximately from its own gross
negligence or willful misconduct in breach of a duty owed to the party asserting
liability.
The Administrative Agent may employ agents and attorneys-in-fact for the
purposes of executing any of its duties hereunder or under any of the other Loan
Documents, and shall be entitled to advice of counsel concerning all matters
pertaining to such duties; provided, however, that the Administrative Agent
-------- -------
shall not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith. The Administrative Agent may
deem and treat the payee (or Registered Holder, as the case may be) of an
Amended and Restated Note as the holder thereof for all purposes hereof unless
and until an Assignment and Acceptance in the form of Exhibit J to the Existing
---------
Credit Agreement shall have been delivered to the Administrative Agent.
10.02 Reliance by Administrative Agent. The Administrative Agent shall be
--------------------------------
entitled to rely, and shall be fully protected in relying, upon any instrument,
writing, resolution, notice, consent, certificate, affidavit, letter, 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 or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel (including, without limitation, counsel to the
Company or any of its Subsidiaries), independent accountants and other experts
selected by the Administrative Agent. The Administrative Agent may deem and
treat the payee of the Amended and Restated Note as the owner thereof for all
purposes unless a written notice of assignment, negotiation or transfer thereof
shall have been filed with the Administrative Agent. The Administrative Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any of the other Loan Documents unless it first shall have received
such advice or concurrence of the Lenders to authorize or require such action as
it deems appropriate or it first shall have received from the Lenders an
indemnification to its satisfaction against any and all liability and expense
that may be incurred by it by
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reason of taking or continuing to take any such action. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from acting,
hereunder or under any of the other Loan Documents in accordance with
instructions given by or a request of the Lenders to take such action or to
refrain from taking any action, and such instructions or requests of such
Lenders and any action taken or failure to act pursuant thereto shall be binding
upon all of the Lenders and all future holders of the Loan.
10.03 Defaults. The Administrative Agent shall not be deemed to have
--------
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender or
the Company referring to this Agreement, 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 notice thereof to the Lenders. The Administrative Agent shall (subject to
Section 10.07 hereof) take such action with respect to such Default or Event of
Default as shall be reasonably directed by the Lenders; provided, however, that
-------- -------
unless and until the Administrative Agent shall have received such directions,
the Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders (except
to the extent that this Agreement expressly requires that such action be taken,
or not be taken, only with the prior consent or authorization of the Lenders).
10.04 Rights as a Lender. With respect to the portion of the Loan made or
------------------
renewed by it (if any), the Administrative Agent (and any successor
Administrative Agent) shall have the same rights and powers hereunder and the
other Loan Documents as any other Lender and may exercise the same as though it
were not the Administrative Agent, and the term "Lender" or "Lenders" shall,
unless the context otherwise indicates, include the Administrative Agent in its
capacity as a Lender. Without limiting the generality of the foregoing, Pilgrim
(and any successor acting as Administrative Agent) and its Affiliates may
(without having to account therefor to any Lender) accept deposits from, lend
money to, make investments in and generally engage in any kind of banking, trust
or other business with the Company or any of its Subsidiaries (or any of their
Affiliates) as though it were not acting as the Administrative Agent, and
Pilgrim (and any such successor) and its Affiliates may accept fees and other
consideration from the Company and/or any of its Subsidiaries (or any of its
Affiliates) for services in connection with this Agreement or otherwise without
having to account for the same to the other Lenders.
10.05 Indemnification. The Lenders agree to indemnify the Administrative
---------------
Agent in its capacity as such (to the extent not reimbursed by the Company under
Section 11.03 hereof and without limiting the obligations of the Company under
said Section 11.03 to do so), ratably in accordance with the respective
principal amount of the Loan held by the Lenders, for, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever that
may at any time (including, without limitation, at any time following the
payment of the Loan) be imposed on, incurred by or asserted against the
Administrative Agent (including by any Lender) in any way relating to or arising
out of or by reason of this Agreement, any of the other Loan Documents, any
other documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken or omitted to be
taken by the Administrative Agent under or in connection with any of the
foregoing; provided, however, that no Lender shall be liable for any portion of
-------- -------
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements that are found by a final and
non-appealable decision of a court of competent jurisdiction to have resulted
solely and proximately from the Administrative Agent's gross negligence or
willful misconduct in breach of a duty owned to such Lender. The agreements in
this Section 10.5 shall survive the payment of the Loan and all other amounts
payable hereunder or under any of the other Loan Documents.
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10.06 Non-Reliance on Administrative Agent and Other Lenders. Each Lender
------------------------------------------------------
expressly acknowledges and agrees that neither the Administrative Agent or any
of its Affiliates, nor any of their respective partners, members, shareholders,
officers, directors, employees, agents, attorneys, other advisors or
attorneys-in-fact, have made any representations or warranties to it and that no
act by the Administrative Agent hereafter taken, including any review of the
affairs of the Company or any of its Subsidiaries, or any Affiliate of the
Company or any of its Subsidiaries, shall be deemed to constitute any
representation or warranty by the Administrative Agent to any Lender. Each
Lender specifically represents and warrants to the Administrative Agent that it
has, independently and without reliance on the Administrative Agent 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,
operations, property, financial and other condition, prospects and
creditworthiness of the Company and its Subsidiaries (and their respective
Affiliates) and made its own decision to make the Loan and enter into this
Agreement. Each Lender also represents and warrants that it will, independently
and without reliance upon the Administrative Agent 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 Agreement or under any of the other Loan
Documents, and to undertake such investigations as it deems necessary to inform
itself as to the business, operations, property, financial and other condition,
prospects and creditworthiness of the Company and its Subsidiaries (and their
respective Affiliates). The Administrative Agent shall not be required to keep
itself informed as to the performance or observance by the Company or any of its
Subsidiaries of this Agreement or any of the other Loan Documents or any other
document referred to or provided for herein or therein or to inspect the
Properties or books of the Company or any of its Subsidiaries. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Administrative Agent hereunder, the Administrative Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, operations, property, condition
(financial or otherwise), prospects, or creditworthiness of the Company or any
of its Subsidiaries (or any of their Affiliates) that may come into the
possession of the Administrative Agent or any of its Affiliates or any of their
respective partners, members, shareholders, officers, directors, employees,
agents, attorneys, other advisors or attorneys-in-fact.
10.07 Failure to Act. Except for action expressly required of the
--------------
Administrative Agent hereunder and under the other Loan Documents, the
Administrative Agent shall in all cases be fully justified in failing or
refusing to act hereunder and thereunder unless it shall receive further
assurances to its satisfaction from the Lenders of their indemnification
obligations under Section 10.05 hereof against any and all liability and expense
that may be incurred by it by reason of taking or continuing to take any such
action.
10.08 Successor Administrative Agent. The Administrative Agent may resign
------------------------------
at any time by giving ten (10) days' advance written notice to the Lenders and
the Company. Upon any such resignation, the Lenders shall appoint a successor
Administrative Agent (but only with the consent of the Company, which consent
shall not be unreasonably withheld or delayed, if such successor Administrative
Agent is not a Lender), whereupon such successor agent shall succeed to the
rights, powers and duties hereunder and under the other Loan Documents of the
Administrative Agent, and the term "Administrative Agent" shall mean such
successor agent effective upon such appointment and approval, and the former
Administrative Agent's rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the Lenders or any of the other parties to
this Agreement. If no successor agent shall have accepted such appointment
within thirty (30) days following the retiring Administrative Agent's giving of
notice of resignation, then the retiring Administrative Agent's resignation
nevertheless shall be effective, and the Lenders shall assume and
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perform all of the duties of the Administrative Agent hereunder and under the
other Loan Documents until such time, if any, as the Lenders appoint a successor
agent as provided for above. After any retiring Administrative Agent's
resignation, the provisions of this Article X shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was the Administrative
Agent under this Agreement and the other Loan Documents.
10.09 Consents under Other Loan Documents. Except as otherwise provided in
-----------------------------------
Section 11.04 hereof with respect to this Agreement, the Administrative Agent
may, with the prior consent of the Lenders (but not otherwise), consent to any
modification, supplement or waiver under any of the Loan Documents, provided,
--------
however, that without the prior consent of each Lender, the Administrative Agent
-------
shall not (except as provided herein or in the Security Documents): (a) release
any Collateral or otherwise terminate any Lien under any Security Document
providing for collateral security; (b) agree to additional obligations being
secured by such collateral security (unless the Lien for such additional
obligations shall be junior to the Lien in favor of the other obligations
secured by such Security Document, in which event the Administrative Agent may
consent to such junior Lien provided that it obtains the consent of the Lenders
thereto); (c) alter the relative priorities of the obligations entitled to the
benefits of the Liens created under the Security Documents; or (d) release any
Guarantor under any Security Document from its guarantee obligations thereunder.
Notwithstanding the foregoing, the Administrative Agent is hereby irrevocably
-----------------------------
authorized by each of the Lenders to release any Lien covering Property of the
Company or any of its Subsidiaries (and to release any such Guarantor) that is
the subject of either a disposition of Property permitted under this Agreement
or to which the Lenders previously have consented in writing pursuant to Section
11.04 below.
10.10 Withholding Tax. To the extent required by any applicable law, the
---------------
Administrative Agent may withhold from any interest payment to any Lender an
amount equivalent to any applicable withholding tax. If the forms or other
documentation required by Section 5.02(c) are not delivered to the
Administrative Agent, then the Administrative Agent may withhold from any
interest payment to any Lender not providing such forms or other documentation
an amount equivalent to the applicable withholding tax. If the Internal Revenue
Service or any authority of the United States or other jurisdiction asserts a
claim that the Administrative Agent did not properly withhold tax from amounts
paid to or for the account of any Lender (because the appropriate form was not
delivered, was not properly executed, or because such Lender failed to notify
the Administrative Agent of a change in circumstances which rendered the
exemption from, or reduction of, withholding tax ineffective, or for any other
reason), such Lender shall indemnify the Administrative Agent fully for all
amounts paid, directly or indirectly, by the Administrative Agent as tax or
otherwise, including penalties and interest, together with all expenses
incurred, including legal expenses, allocated staff costs and any out of pocket
expenses. If any Lender sells, assigns, grants a participation in, or otherwise
transfers its rights under this Agreement, the purchaser, assignee, participant
or transferee, as applicable, shall comply and be bound by the terms of Section
5.02(c) and this Section 10.10.
ARTICLE XI MISCELLANEOUS
11.01 Waiver Requirements; Availability of Remedies. No failure on the part
---------------------------------------------
of the Administrative Agent or any Lender to exercise, no delay in exercising
and no course of dealing with respect to, any remedy, right, power or privilege
under this Agreement or any of the other Loan Documents or at Law or in equity
shall operate as a waiver thereof; nor shall any single or partial exercise of
any remedy, right, power or privilege under this Agreement or any of the other
Loan Documents or at Law or in equity preclude any other or further exercise
thereof or the exercise of any other remedy, right, power or
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privilege. The remedies, rights, powers and privileges provided for herein are
cumulative and not exclusive of any remedies, rights, powers or privileges
otherwise available at Law or in equity, and each may be pursued singularly,
consecutively or concurrently with any other(s) and as often as may be deemed
expedient. No remedial action taken by the Administrative Agent or any of the
Lenders (including, without limitation, the accrual or collection of late
charges and/or the accrual or collection of interest at the "default rate")
shall constitute a cure or waiver of or an election of remedies with respect to
any failure of performance, observance or compliance by the Company or any
Obligor, or waive or modify any notice thereof, or prejudice any other rights,
powers, privileges or remedies otherwise available to the Administrative Agent
or the Lenders. No provision of this Agreement, breach thereof, or right to
exercise any right, privilege, power or remedy due to any breach shall be deemed
to have been waived unless contained in a written instrument signed by the party
sought to be charged thereby. Any waiver given as provided in the preceding
sentence shall apply only to the particular instance and at the particular time,
and no such waiver shall be considered a continuing one or construed as applying
to any other provision hereof or breach thereof, or breach of the same provision
occurring at any earlier or subsequent point in time, or other available
privilege, power, right or remedy. The Company irrevocably waives, to the
fullest extent permitted by applicable law, any claim that any action or
proceeding commenced by the Administrative Agent or any Lender relating in any
way to this Agreement or any of the other Loan Documents should be dismissed or
stayed by reason, or pending the resolution, of any action or proceeding
commenced by the Company relating in any way to this Agreement or any of the
other Loan Documents, whether or not commenced earlier. To the fullest extent
permitted by applicable law, the Company shall take all measures necessary for
any such action or proceeding commenced by the Administrative Agent or any
Lender to proceed to judgment prior to the entry of judgment in any such action
or proceeding commenced by the Company.
11.02 Notices. All notices, demands, consents, requests or other
-------
communications ("Notices") pertaining in any manner to this Agreement shall be
in writing, signed by the party giving the same (or its legal counsel), and sent
either by confirmed facsimile transmission, recognized independent courier
service or certified mail, return receipt requested, in each case with delivery
or postage charges prepaid, to the party intended to be the recipient thereof at
the "Address for Notices" specified below its name on the signature pages hereof
(or at such other address as previously may have been furnished in writing by
Notice given by the intended recipient to the sender in the manner as Notices
provided for in this Section 11.02). If given as provided above, Notices
conclusively shall be deemed to have been received: (a) when actually received,
if sent by confirmed facsimile transmission; (b) on the next Business Day
following the date of its deposit with a reputable independent local messenger
or overnight courier service (such as Federal Express) for "next Business Day"
delivery; or (c) four (4) Business Days after deposit with an official
depository of the U. S. mail. Refusal to accept delivery or to sign a receipt
therefor, or inability to deliver because of a changed address of which prior
Notice has not been given as provided above, shall constitute actual receipt.
11.03 Expenses and Indemnification.
----------------------------
(a) The Company, for itself and each of the other Obligors, agrees to
pay or reimburse each of the Lenders and the Administrative Agent, promptly
following written demand, for:
(i) any and all amounts at any time paid or incurred by the
Administrative Agent (including, without limitation, the costs of accountants,
appraisers, engineers, environmental consultants, receivers, surveyors and other
professionals and the expenses and reasonable fees of attorneys, including,
without limitation, the expenses and reasonable attorneys' fees of ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, P.L.L.C., special Arizona counsel to the
Administrative Agent, and Messrs. Dow,
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▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ of Washington, D.C., special FCC counsel to the
Administrative Agent) in connection with, relating to or arising out of (A) the
negotiation, preparation, execution, delivery and/or filing or recording of this
Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith and the making of the Loan hereunder, and/or
(B) the negotiation, preparation, execution, delivery or filing or recording of
any modification, supplement or waiver of any of the terms of this Agreement or
any of the other Loan Documents (whether or not consummated);
(ii) any and all amounts at any time paid or incurred by the
Administrative Agent and/or any of the Lenders (including, without limitation,
the costs of accountants, appraisers, engineers, environmental consultants,
receivers, surveyors and other professionals and the expenses and reasonable
fees of attorneys) in connection with, relating to or arising out of (A) any
Default and any enforcement or collection proceedings resulting therefrom,
including, without limitation, all manner of participation in or other
involvement with (x) bankruptcy, insolvency, receivership, foreclosure, winding
up or liquidation proceedings, (y) judicial or regulatory proceedings or (z)
workout, restructuring or other negotiations or proceedings (whether or not the
workout, restructuring or transaction contemplated thereby is consummated), (B)
any failure by the Company or any of the Obligors or any of their respective
Affiliates or related Persons to comply with, observe and/or perform any of
their obligations hereunder or under any of the other Loan Documents strictly in
accordance with the provisions hereof or thereof, (C) any and all efforts by the
Administrative Agent and/or any of the Lenders to monitor such compliance,
observance or performance and/or to undertake such compliance, observance or
performance itself (whether directly or through an agent) following any failure
of the Company or any of the Obligors or any of their respective Affiliates or
related Persons to do so, (D) any threatened, pending or contemplated action,
arrangement, dispute or proceeding in which the Administrative Agent and/or any
of the Lenders is or might be made a party or witness and which affects or might
affect this Agreement, one or more of the other Loan Documents, all or any
portion of the collateral for the Loan or title thereto or any of the
Administrative Agent's and/or any of the Lenders' respective liens thereon or
security interests therein, (E) any exercise or attempted exercise of any of the
Administrative Agent's and/or any of the Lenders' respective permitted rights,
powers, remedies, benefits or privileges under this Agreement or any of the
other Loan Documents, or at Law or in equity, (F) any and all actions taken by
or on behalf of the Administrative Agent and/or any of the Lenders relating to
the protection or preservation of all or any portion of the collateral for the
Loan (including, without limitation, performing any one or more of the Company's
or the Obligors' (or any of their respective Affiliates' or related Persons')
duties, responsibilities or obligations hereunder or under any of the other Loan
Documents), and/or (G) the enforcement of this Section 11.03; and
(iii) all transfer, stamp, documentary, excise or other similar
taxes, assessments or charges levied by any governmental or revenue authority in
respect of this Agreement or any of the other Loan Documents or any other
document referred to herein or therein and all costs, expenses, taxes,
assessments and other charges incurred in connection with any filing,
registration, recording or perfection of any security interest contemplated by
any Security Document or any other document referred to therein or any
amendment, supplement or modification thereof or waiver or consent thereto.
(b) The Company, for itself and each of the other Obligors, hereby
agrees to indemnify, hold harmless and defend the Administrative Agent and each
of the Lenders, their respective Affiliates and related Persons, the
representatives (whether legal or otherwise) and agents of the Administrative
Agent, each of the Lenders and their respective Affiliates and related Persons,
the members, partners, shareholders, directors, officers and employees of each
of the foregoing, and their respective heirs, devisees, executors,
administrators, personal representatives, successors and assigns (collectively,
the
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"Indemnitees") for, from and against, to reimburse each of the Indemnitees for,
to waive, renounce, release and discharge the Indemnitees from and not to assert
or raise or allow any of its Subsidiaries or any of the other Obligors to assert
or raise against the Indemnitees, any and all claims, demands, actions, causes
of action, suits, judgments, liabilities, obligations, damages, losses, fines,
penalties, charges, fees and expense (including, without limitation, reasonable
attorneys' fees and disbursements) of any kind or nature whatsoever, whether
founded in tort, contract or otherwise, which may be imposed upon or incurred by
or asserted against any of the Indemnitees or against all or any portion of the
Collateral (including, without limitation, any and all losses, liabilities,
claims, damages or expenses incurred by the Administrative Agent to any Lender,
whether or not the Administrative Agent or such Lender is a party thereto)
arising out of, by reason of, in connection with or directly or indirectly
relating to:
(i) any investigation, litigation or other proceedings (whether
actual or threatened) in any way relating to the Loan or to any use (whether
actual or proposed) by the Company or any of its Subsidiaries of the proceeds
thereof; or
(ii) the execution, delivery, performance, enforcement or
administration of the Loan Documents or any of them; provided, however, that in
-------- -------
connection with the "administration" of the Loan Documents (as opposed to their
execution, delivery, performance or enforcement), the Company's and each of the
other Obligor's reimbursement obligations under this clause (ii) shall be
limited to $25,000.00 per year; or
(iii) any Claim arising under any Environmental Law as a result
of the past, present or future operations of the Company or any of its
Subsidiaries (or any predecessor-in-interest to the Company or any of its
Subsidiaries), or the past, present or future condition of any site or facility
owned, operated or leased at any time by the Company or any of its Subsidiaries
(or any such predecessor-in-interest), or any Release or threatened Release of
any Hazardous Materials at or from any such site or facility, excluding any such
Release or threatened Release that shall occur during any period when the
Administrative Agent or any Lender shall be in possession of any such site or
facility following the exercise by the Administrative Agent or such Lender of
any of its rights and remedies hereunder or under any of the Security Documents,
but including any such Release or threatened Release occurring during such
period that is a continuation of conditions previously in existence, or of
practices employed by the Company and its Subsidiaries, at such site or
facility; or
(iv) any breach of the Company's or any of its Subsidiaries'
representations or warranties contained in this Agreement or in any of the other
Loan Documents or any failure by the Company or any of its Subsidiaries to fully
and punctually comply with, keep, observe and perform all of their respective
obligations hereunder or under any of the other Loan Documents, or under any
junior or senior liens or encumbrances now or hereafter affecting all or any
portion of their Properties (including, without limitation, all or any portion
of the Collateral for the Loan); or
(v) any accident, injury, death or damage to any Person or
property occurring in, on or about any real property where any of the Properties
of the Company or any of its Subsidiaries are kept, stored or used, or arising
out of or relating to the use, possession, maintenance, management, condition,
operation, value or security of all or any portion of such Properties; or
(vi) anything done in, on or around any real property owned or
used by the Company or any of its Subsidiaries, or arising out of or relating to
the use, possession, maintenance, management, condition, operation, value or
security of such real property or of any appurtenance thereto; or
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(vii) any negligent or otherwise tortious, fraudulent or
criminal act or omission on the part of the Company, any of its Subsidiaries or
any Obligor, any of their respective Affiliates or related Persons, any
contractor, tenant, guest, licensee, invitee, permittee, representative (whether
legal or otherwise) or agent of the Company, any of its Subsidiaries or any
Obligor or any of their respective Affiliates or related Persons, or any
officer, director, shareholder, partner, member, trust beneficiary or employee
of any of the foregoing; or
(viii) any violation of Law or agreement (including, without
limitation, contracts, leases, easements, declarations, covenants, conditions
and restrictions) now or hereafter affecting all or any portion of the
Properties of the Company or any of its Subsidiaries (including, without
limitation, the collateral for the Loan) or any real property on which any
Property of the Company or any of its Subsidiaries may be kept, used or stored
to which any of the indemnifying Persons or any of their respective Affiliates
or related Persons is a party or may be bound or subject, whether existing on,
after or before the Closing Date;
provided, however, that the Company shall have no obligation hereunder to any
-------- -------
Indemnitee to the extent that the indemnified liabilities are found by a final
and non-appealable decision of a court of competent jurisdiction to have
resulted solely and proximately from the gross negligence or willful misconduct
of such Indemnitee in breach of a duty owned to the Company (expressly
excluding, however, anything deemed to constitute gross negligence or willful
misconduct solely because it constitutes at Law a non-delegable duty and which,
under the provisions hereof, the indemnifying party has agreed to assume or
undertake).
(c) The provisions of this Section 11.03, and all other
indemnifications of the Company, any of its Subsidiaries or any of the Obligors
(or any of them) contained in this Agreement or any of the other Loan Documents,
shall not in any way be affected by the absence in any case of any covering
insurance or by the failure or refusal of any insurance company to perform any
obligation on its part.
11.04 Amendments. Except as otherwise expressly provided in this Agreement,
----------
any provision of this Agreement may be modified, supplemented or waived only by
an instrument in writing signed by the Company and those Lenders then holding
more than fifty percent (50%) of the unpaid balance of the Loan (collectively,
the "Majority Lenders"), or by the Company and the Administrative Agent acting
with the consent of the Majority Lenders; provided, however, that: (a) no
-------- -------
modification, supplement or waiver shall, unless by an instrument signed by all
of the Lenders or by the Administrative Agent acting with the consent of all of
the Lenders: (i) forgive all or any portion of the stated principal amount of
the Loan or extend the stated maturity date; (ii) extend the scheduled date for
the payment of any installment of principal or interest; (iii) reduce the amount
of any regularly scheduled installment payment or mandatory prepayment; (iv)
reduce the interest rate or the amount of any fees or late charges; (v) alter
the manner in which payments or prepayments of principal, interest or other
amounts are applied as between the Lenders; (vi) consent to any waiver or
amendment of any of the provisions of Article VIII hereof; (vii) alter the terms
of this Section 11.04; (viii) modify the definition of the term "Majority
Lenders" or modify in any other manner the number or percentage of the Lenders
required to make any determinations or waive any rights hereunder or to modify
any provision hereof; (ix) waive any of the conditions precedent set forth in
Sections 6.01 or 6.02 hereof; (x) consent to the assignment or delegation by the
Company of all or any portion of its rights or obligations hereunder or under
any of the other Loan Documents; (xi) release all or substantially all of the
Collateral; or (xii) release all or substantially all of the Guarantors from
their guarantee obligations under the Guarantee and Security Agreement; and (b)
any modification or supplement of Article X hereof, or of any of the rights or
duties of the Administrative Agent hereunder,
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shall require the consent of the Administrative Agent.
11.05 Successors and Assigns. Subject to the provisions of Section 11.06
----------------------
below, this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns, but shall
not be enforceable by or construed as conferring any right or benefit upon any
other Person.
11.06 Assignments and Participations.
------------------------------
(a) The Company may not assign or delegate all or any portion of its
rights or obligations hereunder or under any of the other Loan Documents
(including, without limitation, the Amended and Restated Note) without the prior
written consent of all of the Lenders and the Administrative Agent, which
consent may be given or withheld in each Lender's and the Administrative Agent's
respective sole and absolute discretions (and, if given, under such terms and
conditions as the Administrative Agent and the various Lenders, in their
respective sole and absolute discretions, may believe to be appropriate under
the circumstances then existing).
(b) Subject to the provisions of Sections 11.06(c) and (d), each
Lender may, without the consent of any Person being required but upon prior
notice to the Company and the Agent, assign, convey and transfer all (but not
just a portion) of its interests in the Loan and the Amended and Restated Note
to any other Person. In connection with any such assignment, and as a condition
precedent for its effectiveness, the assignor and the assignee shall execute and
deliver to the Administrative Agent an Assignment and Acceptance in the form of
Exhibit J to the Existing Credit Agreement and pay to the Administrative Agent a
---------
processing fee of $3,500.00 (except that (i) no such processing fee shall be
payable in the case of an assignee which is already a Lender or an Affiliate of
or Person related to an existing Lender, and (ii) in the case of assignments on
the same day by a Lender to more than one Person managed or advised by the same
investment advisor (which Persons are not then Lenders hereunder), only a single
$3,500.00 fee shall be payable for all such assignments by such Lender to such
Persons on such day). Upon receipt of an Assignment and Acceptance duly executed
and delivered by the assignor and the assignee, together with payment of its
processing fee, the Administrative Agent shall promptly accept such Assignment
and Acceptance and on the effective date determined pursuant thereto give notice
of such acceptance to the Company, whereupon the assignee shall have, to the
extent of such assignment, the obligations, rights and benefits of a Lender
hereunder holding the portion of the Loan assigned to it and specified in such
Assignment and Acceptance (in addition to whatever interests in the Loan, if
any, theretofore held by such assignee) and the assigning Lender shall, to the
extent of such assignment, be released from the portion of its interests so
assigned. If so requested, the Company shall, on or prior to such effective
date, at its own expense execute and deliver to the Administrative Agent (in
exchange for the interests in the note of the assigning Lender) a new note or
notes, as the case may be, payable to the assignee or its registered assigns in
the amount of the Loan assumed or acquired by it pursuant to such Assignment and
Acceptance and, if the assignor has retained an interest in the Loan, a new note
or notes payable to the assignor or its assigns in an amount equal to the amount
of the Loan being retained by it hereunder. Such new note or notes shall be
dated the Closing Date and shall otherwise be in the form of the note or notes
replaced thereby.
(c) Any Lender may, without the consent of any Person being required
and without having to give notice to the Company or the Administrative Agent,
sell or agree to sell to one or more other Persons (each a "Participant") a
participation in all or any part of any Loan held by it. In the event of any
such sale by a Lender of a participating interest to a Participant, such
Lender's obligations under this Agreement to the other parties to this Agreement
shall remain unchanged, such Lender shall remain solely
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responsible for the performance thereof, such Lender shall remain the holder of
any such Loan for all purposes under this Agreement and the other Loan
Documents, and the Company and the Administrative Agent shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. In no event shall
any Participant under any such participation have any right to approve any
amendment or waiver of any provision of any Loan Document, or any consent to any
departure by the Company therefrom, except to the extent that such amendment,
waiver or consent would reduce the principal of, or interest on, the Loan or any
fees payable hereunder, or postpone the date of the final maturity of the Loan,
in each case to the extent subject to such participation. Notwithstanding the
-------------------
foregoing, the Company agrees that if amounts outstanding under this Agreement
---------
and the Loan are due or unpaid, or shall have been declared or shall have become
due and payable upon the occurrence of an Event of Default, each Participant
shall, to the maximum extent permitted by applicable Law, be deemed to have the
right of setoff in respect of its participating interest in amounts owing under
this Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Agreement, provided, however,
-------- -------
that, in purchasing such participating interest, such Participant shall be
deemed to have agreed to share with the other Lenders the proceeds thereof as
provided in Section 4.06(b) above as fully as if it were a Lender hereunder. The
Company also agrees that each Participant shall be entitled to the benefits of
Article V above with respect to its participation in the Loan as if it were a
Lender; provided, however, that, in the case of Section 5.02, such Participant
-------- -------
shall have complied with the requirements of said Section and provided, further,
-------- -------
that no Participant shall be entitled to receive any greater amount pursuant to
any such Section than the transferor Lender would have been entitled to receive
in respect of the amount of the participation transferred by such transferor
Lender to such Participant had no such transfer occurred.
(d) The parties specifically acknowledge and agree that the provisions
of Sections 11.06(b) and 11.06(c) pertain only to absolute assignments and that
such provisions do not prohibit or apply to collateral assignments or
assignments creating security interests, including, without limitation, any
pledge or assignment by a Lender of any Loan or Amended and Restated Note to any
Federal Reserve Bank in accordance with applicable Law. In the case of any
Lender that is a fund that invests in bank loans, such Lender may, without the
consent of the Company or the Administrative Agent, collaterally assign or
pledge all or any portion of its rights under this Agreement, including the Loan
and the Amended and Restated Note or any other instrument evidencing its rights
as a Lender under this Agreement, to any holder of, trustee for, or any other
representative of holders of, obligations owed or securities issued by such
fund, as security for such obligations or securities; provided, however, that
-------- -------
any foreclosure or similar action by such trustee or representative shall be
subject to the provisions of this Section 11.06 concerning assignment.
(e) A Lender may furnish any information concerning the Company 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 11.12(b) hereof.
(f) Anything in this Section 11.06 to the contrary notwithstanding, no
Lender may assign or participate any interest in any Loan held by it hereunder
to the Company or any of its Affiliates or Subsidiaries without the prior
consent of each Lender.
(g) The Administrative Agent shall, on behalf of the Company, maintain
at its address referred to in Section 11.02 above a copy of each Assignment and
Acceptance delivered to it, together with a register (the "Register") for the
recordation of the names and addresses of the Lenders and the principal amount
of the Loan owing to each Lender from time to time. The entries in the Register
shall be conclusive, in the absence of manifest error, and the Company, the
Administrative Agent and the
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Lenders shall treat each Person whose name is recorded in the Register as the
owner of the Loan and any Amended and Restated Note evidencing such Loan
recorded therein for all purposes of this Agreement. Any assignment of any Loan,
whether or not evidenced by an Amended and Restated Note, shall be effective
only upon appropriate entries with respect thereto being made in the Register
(and each Amended and Restated Note shall expressly so provide). Any assignment
or transfer of all or part of a Loan evidenced by an Amended and Restated Note
shall be registered on the Register only upon surrender for registration of
assignment or transfer of the Amended and Restated Note evidencing such Loan,
accompanied by a duly executed Assignment and Acceptance; thereupon, one or more
new Amended and Restated Notes in the same aggregate principal amount shall be
issued to the designated Assignee, and the old Amended and Restated Note shall
be returned by the Administrative Agent to the Company marked "canceled". The
Register shall be available for inspection by the Company or any of the Lenders
(with respect to any entry relating to such Lender's Loan) at any reasonable
time and from time to time upon reasonable prior notice.
11.07 Survival. Each of the agreements, covenants, representations,
--------
warranties, indemnities and other obligations of the Company contained herein or
in any of the other Loan Documents or in any document, statement or certificate
delivered pursuant hereto or in connection herewith (including, without
limitation, those set forth in Sections 5.01, 5.02, 5.03 and 11.03 hereof), as
well as the obligations of the Lenders set forth in Sections 10.05 and 11.12
hereof, shall survive the execution and delivery of this Agreement and the
making of the Loan, any repayment of the Loan, the release of the Security
Documents, any post-execution termination or rescission of this Agreement and,
in the case of any Lender that may assign any interest in the Loan hereunder,
the making of such assignment (notwithstanding that such assigning Lender may
cease to be a "Lender" hereunder), in each case for the longest period of time
permitted by applicable Law. In addition, no Lender shall be deemed to have
waived, by reason of having participated in the making of the Loan, any Default
that may have arisen by reason of any representation or warranty proving to have
been false or misleading when made, notwithstanding that such Lender or the
Administrative Agent may have had notice or knowledge or reason to believe that
such (or any other) representation or warranty of the Company was false or
misleading at the time the Loan was made.
11.08 Headings. The Table of Contents and Article and Section
--------
headings appearing herein are included solely for convenience of reference and
shall not be used to ascertain, interpret or construe the meaning, intent or
scope of any provision of this Agreement.
11.09 Counterparts. This Agreement may be executed in any number of
------------
identical counterparts (each of which may contain fewer than all required
signatures) with the same effect as if all parties had signed the same document.
Delivery of an executed signature page by facsimile transmittal shall be as
effective as delivery of a manually executed counterpart. Thereafter, signature
and acknowledgment pages may be detached from one counterpart and added to
another counterpart, so that any set of identical counterparts containing
original or faxed signatures for each of the parties, or any counterpart
containing original or faxed signatures for all of the parties, shall constitute
an original Agreement for all purposes.
11.10 Governing Law; Submission to Jurisdiction. Except with respect
-----------------------------------------
to matters relating to the perfection and enforceability of the remedial
provisions contained in any real property security instruments, the Loan
Documents (including, without limitation, this Agreement and the Amended and
Restated Note) shall be governed by, and construed and enforced in accordance
with, the laws of the State of Arizona applicable to agreements made and to be
performed entirely therein. The Company further hereby irrevocably and
unconditionally:
(a) submits for itself and its Properties in any legal action
or proceeding relating to
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this Agreement and the other Loan Documents to which it is a party, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the Superior Court of the State of Arizona
sitting in Maricopa County, the United States District Court for the District of
Arizona (Phoenix Division), and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Company at its address set forth in Section 11.02 above or at such other address
of which the Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing contained herein shall affect the right
to effect service of process in any other manner permitted by Law or shall limit
the right to ▇▇▇ in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by Law, any
right it may have to claim or recover in any legal action or proceeding any
special, exemplary, punitive or consequential damages.
11.11 Waiver of Jury Trial. THE COMPANY, THE ADMINISTRATIVE AGENT AND
--------------------
EACH OF THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF
THE OTHER LOAN DOCUMENTS (INCLUDING, WITHOUT LIMITATION, THE AMENDED AND
RESTATED NOTE) OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY AND FOR ANY
COUNTERCLAIM THEREIN.
11.12 Treatment of Certain Information; Confidentiality.
-------------------------------------------------
(a) The Company acknowledges that from time to time financial
advisory, investment banking and other services may be offered or provided to
the Company or one or more of its Subsidiaries (in connection with this
Agreement or otherwise) by any Lender or by one or more subsidiaries or
affiliates of such Lender, and the Company hereby authorizes each Lender to
share any information delivered to such Lender by the Company and its
Subsidiaries pursuant to this Agreement, or in connection with the decision of
such Lender to enter into this Agreement, to any such subsidiary or affiliate,
it being understood that any such subsidiary or affiliate receiving such
information shall be bound by the provisions of paragraph (b) below as if it
were a Lender hereunder. Such authorization shall survive the repayment of the
Loan.
(b) Each Lender and the Administrative Agent agrees (on behalf
of itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable precautions to keep confidential, in
accordance with their customary procedures for handling confidential information
of the same nature and in accordance with safe and sound banking practices, any
non-public information supplied to it by the Company pursuant to this Agreement
that is identified by the Company as being confidential at the time the same is
delivered to the Lenders or the Administrative Agent, provided, however, that
-------- -------
nothing herein contained shall limit the disclosure of any such information (i)
after such information shall have become public (other than through a violation
of this Section 11.12), (ii) to the extent required by statute,
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rule, regulation or judicial process, (iii) to counsel for any of the Lenders or
the Administrative Agent, (iv) to bank examiners (or any other regulatory
authority having jurisdiction over any Lender or the Administrative Agent),
auditors or accountants, (v) to the Administrative Agent or any other Lender (or
to ING-Pilgrim Investments, L.L.C.), (vi) in connection with any litigation to
which any one or more of the Lenders or the Administrative Agent is a party, or
in connection with the enforcement of rights or remedies hereunder or under any
of the other Loan Documents, (vii) to a subsidiary or affiliate of such Lender
as provided in paragraph (a) above or (viii) to any assignee or participant (or
prospective assignee or participant) so long as such assignee or participant (or
prospective assignee or participant) first executes and delivers to the
respective Lender a Confidentiality Agreement substantially in the form of
Exhibit I to the Existing Credit Agreement (or executes and delivers to such
---------
Lender an acknowledgement to the effect that it is bound by the provisions of
this Section 11.12(b), which acknowledgement may be included as part of the
respective assignment or participation agreement pursuant to which such assignee
or participant acquires an interest in the Loan hereunder); provided further,
----------------
that, (x) unless specifically prohibited by applicable law or court order, each
----
Lender and the Administrative Agent agrees, prior to disclosure thereof, to
notify the Company of any request for the disclosure of non-public information
pursuant to a court order that specifically relates to a proceeding involving or
affecting the Obligors and (y) in no event shall any Lender or the
Administrative Agent be obligated or required to return any materials furnished
by the Company.
11.13 Interest Rates.
--------------
(a) It is the intention of the parties hereto that the Loan
made hereunder shall conform strictly to applicable usury laws. Accordingly,
none of the terms and provisions contained in this Agreement or any of the other
Loan Documents shall ever be construed to create a contract to pay interest to
the Lenders for the use, forbearance or detention of money at a rate in excess
of the highest lawful rate applicable (the "Maximum Lawful Rate"); for purposes
of this Section 11.13, "interest" shall include the aggregate of all charges or
other consideration which constitute interest under applicable laws (whether or
not denominated as interest) and are contracted for, taken, reserved, charged or
received under any of this Agreement or the other Loan Documents or otherwise in
connection with the transactions contemplated by this Agreement and the other
Loan Documents. If as a result of prepayment, acceleration of maturity or
otherwise the effective rate of interest which would otherwise be payable to any
Lender under this Agreement or any other Loan Document would exceed the Maximum
Lawful Rate for the period during which the principal amount of the Loan was
outstanding, or if any Lender shall receive moneys or other consideration that
are deemed to constitute interest that would increase the effective rate of
interest payable by the Company to such Lender under this Agreement or any other
Loan Document to a rate in excess of the Maximum Lawful Rate for the period
during which the principal amount of any Loan was outstanding, then (i) the
amount of interest that would otherwise be payable by the Company to such Lender
under this Agreement and the other Loan Documents shall be reduced to the
Maximum Lawful Rate, and (ii) any interest paid by the Company to such Lender in
excess of the Maximum Lawful Rate shall be credited by such Lender as an
optional prepayment of the Loan (to be applied to the principal of the Loan in
the order specified in Section 3.04 hereof and, thereafter, shall be returned to
the Company. All calculations of the rate or amount of interest contracted for,
taken, reserved, charged or received by any Lender under this Agreement or any
of the other Loan Documents that are made for the purpose of determining whether
such rate or amount exceeds the Maximum Lawful Rate shall be made, to the extent
permitted by applicable law, by amortizing, prorating, allocating and spreading
during the full stated term the Loan owed.
(b) If at any time and from time to time (i) the amount of
interest payable to any Lender on any date would otherwise exceed the Maximum
Lawful Rate, the amount of interest payable to such Lender shall be limited to
the Maximum Lawful Rate pursuant to paragraph (a) above and (ii) in
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respect of any subsequent interest computation period, the amount of interest
otherwise payable to such Lender would be less than the amount of interest
payable to such Lender computed at the Maximum Lawful Rate, then the amount of
interest payable in respect of such subsequent computation period shall be
computed at the Maximum Lawful Rate until the earlier to occur of (x) the date
upon which the total amount of interest payable to such Lender shall equal the
total amount of interest that would have been payable to such Lender if the
total amount of interest had been computed without giving effect to paragraph
(a) above, or (y) payment in full of the Loan.
(c) Without limiting the application of Section 11.10 hereof,
insofar as the provisions of Article 5069-1.04, Title 79 of the Revised Civil
Statutes of Texas, 1925, as amended, may be deemed applicable to the
determination of the Maximum Lawful Rate with respect to the Loan, the indicated
rate ceiling computed from time to time pursuant to Section (a) of such Article
shall apply to such Loan; provided, however, that to the extent permitted by
-------- -------
such Article, any Lender may from time to time by notice to the Company revise
the election of such interest rate ceiling as such ceiling affects the then
current or future balance of the Loan and other obligations held by such Lender.
(d) Without limiting the application of Section 11.10 hereof,
pursuant to Article 5069-15.10(b), Title 79, Revised Civil Statutes of Texas,
1925, as amended, the provisions of Chapter 15, Title 79, of the Revised Civil
Statutes of Texas, 1925, as amended, shall not apply to this Agreement, any of
the other Loan Documents or any of the transactions contemplated hereby.
(e) Notwithstanding anything contained herein to the contrary,
the Company and each of the other Obligors agrees to an effective rate of
interest which is the rate previously stated in this Agreement plus any
additional sums or charges provided for herein or in any of the other Loan
Documents or incident to the transaction of which the Amended and Restated Note
forms a part which are or may be deemed to be interest under applicable Arizona
law, and acknowledges that such rate of interest does not exceed the maximum
lawful rate for loans of this type. Should, however, any interest or other sum
or charge paid or payable hereunder result, or be adjudicated to result, in the
computation or earning of interest in excess of the allowable maximum legal
rate, then the same shall be deemed the result of a mistake and the Company
shall not be obligated to pay such excess and each of the Lenders and the
Administrative Agent hereby waives its right to demand or collect the same; but
if any excessive amount has been paid, then the same automatically shall be
applied in reduction of the unpaid principal balance of the Loan and not to the
payment of interest or any other sum or charge payable hereunder or under any of
the other Loan Documents, and, to the extent that the principal sum has been
paid in full by reason of such application or otherwise, any balance remaining
from such excess shall be remitted to the Company.
11.14 Lender Decision-Making. Whenever this Agreement provides that
----------------------
any action shall be undertaken, or any decision made, or any consent given, by
the Lenders, such action, decision or consent shall, except if otherwise
provided in any particular provision, be undertaken, made or given by the
Majority Lenders.
11.15 Authority. Each individual executing this Agreement on behalf
---------
of a party warrants and represents, both for itself and the party on whose
behalf it is signing this Agreement, that: (a) he or she has been duly
authorized to execute this Agreement on such party's behalf; (b) the party for
whom he or she is signing has been duly authorized to enter into, execute and
fully perform at the times required and in the manner specified its various
obligations under, this Agreement; (c) neither it nor the party on whose behalf
it is signing this Agreement suffers from any mental, physical, legal or other
impediment to capacity; and (d) upon execution, this Agreement shall and shall
continue to constitute such party's legal, valid and binding obligations and be
enforceable in accordance with its terms.
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11.16 Reasonably Equivalent Consideration; Reasonable Expectations.
------------------------------------------------------------
Each party acknowledges that: (a) it has been, or has had the opportunity to be,
represented by an attorney in connection with the negotiation, preparation and
execution of this Agreement; (b) it is receiving adequate and substantially
equivalent consideration for the consideration which it is giving hereunder; (c)
performance of its obligations hereunder will not cause it to be rendered
insolvent or to be in violation of any applicable legal requirement or in
default under any applicable contractual arrangement; (d) it has entered into
this Agreement in good faith and on an arms-length and informed basis,
knowingly, willingly and voluntarily, not pursuant to coercion, duress or
threats of any kind, and without any design or intent to hinder, delay or
defraud any creditor (whether past, present or future); and (e) this Agreement
reflects its own "reasonable expectations".
11.17 Entire Agreement. This Agreement, together with the other Loan
------------------------------------------------------------
Documents, constitutes the complete and entire agreement between the parties
pertaining to the subject matter hereof, and supersedes all of their prior
and/or contemporaneous arrangements and understandings (whether oral or written,
express or implied) concerning the same.
11.18 Time of the Essence. Except as may be specifically provided to
-------------------
the contrary in this Agreement, all time periods provided for herein or in any
of the other Loan Documents or the Other Agreements shall refer to calendar days
and shall expire at 4:30 p.m., Mountain Standard Time, on the last of such days;
provided, however, that if the time for the performance of any obligation under
-------- -------
this Agreement expires on a day other than a Business Day, the time for
performance shall be extended to the next succeeding day which is a Business
Day. Subject to the foregoing, time is of the essence with respect to each of
the Loan Documents and their respective provisions.
11.19 Additional Acts and Documents. The Company agrees that,
-----------------------------
promptly following receipt of written request from the Administrative Agent or
the Lenders, it shall promptly correct any defect, error or omission which may
be discovered in the contents of any of the Loan Documents (including, without
limitation, in this Agreement or in any of the Exhibits) or in the execution,
acknowledgment or recordation thereof, and additionally covenants to execute,
acknowledge and deliver such further instruments and take such further actions
as may be reasonably requested by the Administrative Agent or the Lenders to
effectuate more fully the intent and purpose of this Agreement or better
evidence, protect or secure the Administrative Agent's or the Lenders'
respective rights, titles and interests in and to the collateral for the Loan.
11.20 Severability. If any provision of this Agreement or any of the
------------
other Loan Documents shall be held by a court of competent jurisdiction to be
illegal, invalid or unenforceable, whether in whole or in part, in such
jurisdiction, the remaining provisions nevertheless shall continue in full force
and effect, and the illegal, invalid or unenforceable provision shall be
replaced by a provision which the court determines to be substantially
equivalent to that stricken in order to give effect to the overall underlying
intent of the parties; provided, however, that such holding shall not invalidate
-------- -------
or render unenforceable such provision in any other jurisdiction.
11.21 Interpretation. This Agreement, as well as each of the other
--------------
Loan Documents, shall be construed as a whole, in accordance with its fair
meaning and without application of any rule or presumption requiring
construction against the party with primary drafting responsibility therefor.
All words used herein shall be construed to be of such number and gender as the
circumstances require. Unless otherwise specified herein or therein, terms
defined in this Agreement shall have the definitions set forth herein when used
in any of the other Loan Documents or any certificate or other document made or
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delivered pursuant hereto or thereto. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and references to Sections, Schedules and Exhibits are to this
Agreement unless otherwise specified. The expressions "payment in full", "paid
in full" and any other similar terms or phrases when used herein with respect to
the obligations of the Company or any of its Subsidiaries or any other Obligor
shall mean the unconditional, final and irrevocable payment in full, in
immediately available funds, of all of such obligations. The words "including"
and words of similar import when used in this Agreement shall not be limiting
and shall mean "including, without limitation". If any party consists of more
than one Person, then the obligations of their constituent entities hereunder
shall be joint and several.
11.22 Attorneys' Fees. If the Administrative Agent or any of the
---------------
Lenders retains an attorney to obtain an interpretation of any provision of this
Agreement, to enforce any of its terms, or to collect damages or seek other
remedies (including, without limitation, declaratory and/or injunctive) for its
breach or anticipated breach, or if the Administrative Agent or any of the
Lenders is required to participate in any bankruptcy, reorganization or other
debtor relief proceeding involving the Company or any of its Subsidiaries or any
Obligor or any of their respective Affiliates or related Persons, or in the
event of any enforcement action or other litigation arising out of or relating
to this Agreement or any of the other Loan Documents, or should the
Administrative Agent's or any Lender's security be threatened, or should a
breach or default occur under this Agreement or any of the other Loan Documents,
or should the Administrative Agent or any of the Lenders appear or be named in
any action or proceeding purporting to affect all or any portion of the
collateral for the Loan or the rights, remedies or interests of the
Administrative Agent or any of the Lenders, then, in each such instance, the
Administrative Agent and each of the Lenders shall be entitled to recover from
the Company, in addition to any other remedy to which they or any them may be
entitled, all costs (including, but not limited to, reasonable attorneys' fees,
court costs, costs of investigation and other related expenses) incurred in
connection with such interpretation, collection, enforcement, foreclosure,
insolvency, bankruptcy, protection of security or other dispute resolution
proceedings (even if the dispute is settled prior to institution or completion
of the dispute resolution proceedings and whether incurred before or after suit
is commenced). Whenever dispute resolution proceedings are commenced, the award
of attorneys' fees shall be determined by the court, arbitrator or mediator (as
the case may be).
11.23 Exhibits and Schedules. All exhibits and schedules referenced
----------------------
in this Agreement and either attached hereto or to the Existing Credit Agreement
are by such reference and attachment incorporated herein.
11.24 Conflicts Among Loan Documents. The parties hereto expressly
------------------------------
stipulate and agree that this Agreement represents the final expression of their
intent and agreement with respect to all matters relating to the Loan, the
indebtedness, and the collateral for the Loan. Accordingly, in the event of any
conflict, inconsistency or ambiguity between any of the provisions contained
herein and any of the provisions contained in any of the other Loan Documents,
then the provisions of this Agreement shall at all times govern and control, and
the conflicting, inconsistent or otherwise ambiguous provisions of the other
Loan Documents shall be disregarded in their entirety and construed as being
null and void.
11.25 Relationship of Parties. Neither the Administrative Agent nor
-----------------------
any of the Lenders has any joint venture, partnership, trust, quasi-fiduciary or
fiduciary relationship with or duty to the Company or any of its Subsidiaries
arising out of or in connection with this Agreement or any of the other Loan
Documents, and the relationship between the Administrative Agent and the
Lenders, on the one hand, and the Company, on the other hand, in connection
herewith or therewith is strictly that of creditor and debtor.
11.26 No Brokers. Each of the parties warrants and represents to the
----------
others that it has not
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dealt with any Person which might be entitled to a mortgage or real estate
brokerage commission, finder's fee or other compensation on account of
introducing the parties, the execution or performance of this Agreement or the
consummation of any of the transactions contemplated hereby, and hereby
indemnifies and holds all of the other parties harmless for, from and against,
and agrees to defend and pay for, any and all damage, liability, loss and
expense (including, without limitation, reasonable attorneys' fees and
disbursements) which any of the other parties may incur arising out of (a) the
indemnifying party's breach of its representations and warranties contained in
this Section 11.26, and/or (b) any and all claims or demands made by any Person
with whom the indemnifying party has had contact on account of the execution or
performance of this Agreement or the consummation of any of the transactions
contemplated hereby or for introducing the parties.
[Signatures Appear on Following Pages]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the day and year first above written.
TELETOUCH COMMUNICATIONS, INC.,
a Delaware corporation
By: ______________________________
J. ▇▇▇▇▇▇ ▇▇▇▇▇▇, President
hereunto duly authorized
Address for Notices:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: J. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
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LENDERS
-------
Loan ING PRIME RATE TRUST,
----
$2,750,000 a Massachusetts business trust f/k/a
Pilgrim America Prime Rate Trust
By: ING Investments, LLC,
a Delaware limited liability company
its investment manager
By: _________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
hereunto duly authorized
Lending Office for all Loans:
ING Prime Rate Trust
c/o ING Investments, LLC
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Address for Notices:
ING Prime Rate Trust
c/o ING Investments, LLC
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
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ADMINISTRATIVE AGENT
--------------------
ING PRIME RATE TRUST, a
Massachusetts business trust f/k/a
Pilgrim America Prime Rate Trust
By: ING Investments, LLC,
a Delaware limited liability company
its investment manager
By: _________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
hereunto duly authorized
Address for Notices:
ING Prime Rate Trust
c/o ING Investments, LLC
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier No.: ▇▇▇-▇▇▇-▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
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CONSENT OF GUARANTOR
--------------------
The undersigned, each of which is a Guarantor under that certain
Guarantee and Security Agreement dated as of July 24, 1996, has affixed its
signature below for the purposes of: (a) acknowledging its receipt, review and
approval of a copy of the Second Amended and Restated Credit Agreement; (b)
consenting to the execution, delivery and performance thereof by the Company;
(c) confirming that the obligations of the Company under the Existing Credit
Agreement, as amended by the Second and Amended and Restated Credit Agreement,
are entitled to the benefits of the Guarantee and Security Agreement (and shall
constitute "Guaranteed Obligations" as defined in the Guarantee and Security
Agreement) under and for all purposes of the Guarantee and Security Agreement;
(d) agreeing that the references in the Guarantee and Security Agreement to "the
Credit Agreement" (including indirect references) hereafter shall be deemed to
be references to the Second and Amended Restated Credit Agreement; and (e)
evidencing its obligation to be bound by and to comply with the provisions
thereof applicable to it (as an Obligor) to the same extent as if it were a
party thereto.
In particular, each of the undersigned acknowledges that the
obligations of the Guarantors under the Loan Documents is joint and several and,
as such, each Guarantor shall be liable for the Obligations of the Company and
the other Guarantors under the Guaranty and Security Agreement and the other
Loan Documents. The liability of each Guarantor for the Obligations of the other
Guarantors under the Guaranty and Security Agreement and the other Loan
Documents is absolute, unconditional and irrevocable, irrespective of: (a) any
lack of validity, legality or enforceability of any of the Loan Documents; (b)
the failure of any Secured Party (i) to assert any claim or demand or to enforce
any right or remedy against such other Guarantor, the Company or any other
Person under the provisions of any other Loan Document or (ii) to exercise any
right or remedy against any guarantor of, or collateral securing, any of the
Obligations; (c) any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations, or any other extension or
renewal of any Obligation of the Company or any other Guarantor; (d) any
reduction, limitation, impairment or termination of any of the Obligations for
any reason other than the written agreement of the Secured Parties to terminate
the Obligations in full, including any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to, and each Guarantor hereby
waives any right to or claim of, any defense or setoff, counterclaim, recoupment
or termination whatsoever by reason of the invalidity, illegality,
nongenuineness, irregularity, compromise, unenforceability of, or any other
event or occurrence affecting, any Obligations of the Company, any other
Guarantor or otherwise; (e) any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any of the terms of any of
the Loan Documents; (f) any addition, exchange, release, surrender or
non-perfection of any collateral, or any amendment to or waiver or release or
addition of, or consent to departure from, any guaranty held by any Secured
Party securing any of the Obligations; or (g) any other circumstance which might
otherwise constitute a defense available to, or a legal or equitable discharge
of, the Company, any other Guarantor or any surety or any guarantor.
This Consent of Guarantors may be executed in any number of identical
counterparts (each of which may contain fewer than all required signatures) with
the same effect as if all parties had signed the same document. Thereafter,
signature and acknowledgment pages may be detached from one counterpart and
added to another counterpart, so that any set of identical counterparts
containing original signatures and acknowledgments for each of the Guarantors,
or any counterpart containing original signatures and acknowledgments for all of
the Guarantors, shall constitute an original Consent of Guarantors for all
purposes.
[Signatures Appear on Following Page]
-101-
TLI
TELETOUCH LICENSES, INC.,
a Delaware corporation
By: _________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, President
hereunto duly authorized
-102-
STATE OF ___________________)
) ss.
County of __________________)
On this ____day of May, 2002, before me, the undersigned notary
public, personally appeared J. ▇▇▇▇▇▇ ▇▇▇▇▇▇ who, after satisfactorily
identifying himself to me, executed the foregoing instrument in my presence as
the President and Chief Financial Officer of TELETOUCH COMMUNICATIONS, INC., a
Delaware corporation, and acknowledged that he was the President and Chief
Financial Officer of said corporation, that he was signing the foregoing
instrument in such capacity on behalf of such corporation for the purposes
therein contained, that he had been duly authorized by the corporation to do so,
and that the same constituted the free act and deed of such corporation.
IN WITNESS WHEREOF, I hereunder set my hand and official seal.
Notary Public
My Commission Expires:
STATE OF ___________________)
) ss.
County of __________________)
On this ____day of May, 2002, before me, the undersigned notary
public, personally appeared ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ who, after satisfactorily
identifying himself/herself to me, executed the foregoing instrument in my
presence as the President of TELETOUCH LICENSES, INC., a Delaware corporation,
and acknowledged that he/she was the President of said corporation, that he/she
was signing the foregoing instrument in such capacity on behalf of such
corporation for the purposes therein contained, that he/she had been duly
authorized by the corporation to do so, and that the same constituted the free
act and deed of such corporation.
IN WITNESS WHEREOF, I hereunder set my hand and official seal.
Notary Public
My Commission Expires:
STATE OF ___________________)
) ss.
County of __________________)
On this ____day of May, 2002, before me, the undersigned notary
public, personally appeared ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ who, after satisfactorily
identifying himself/herself to me, executed the foregoing instrument in my
presence as the Vice President of ING Investments, LLC, a Delaware limited
liability company and the investment manager for ING PRIME RATE TRUST, a
Massachusetts business trust f/k/a Pilgrim America Prime Rate Trust, and
acknowledged that he/she was the Vice President of said limited liability
company, that such limited liability company was the investment manager for such
business trust, that he/she was signing the foregoing instrument in such
capacity on behalf of such limited liability company, as the investment manager
for such business trust, for the purposes therein contained, that he/she had
been duly authorized by the limited liability company and the business trust to
do so, and that the same constituted the free act and deed of such limited
liability company and business trust.
IN WITNESS WHEREOF, I hereunder set my hand and official seal.
Notary Public
My Commission Expires:
LIST OF SCHEDULES
-----------------
SCHEDULE 7.01 - Certain Accounting Matters
SCHEDULE 7.04 - Certain Approvals
SCHEDULE 7.07 - Certain Litigation Matters
SCHEDULE 7.10 - Waivers of Tax Statutes of Limitations
SCHEDULE 7.12 - Material Agreements and Liens
SCHEDULE 7.14 - Capitalization
SCHEDULE 7.15 - Subsidiaries and Investments
SCHEDULE 7.16 - Real Estate Permitted Exceptions
SCHEDULE 7.18 - Paging and Other FCC Licenses
SCHEDULE 7.20 - Real Property
SCHEDULE 7.21 - Leases
SCHEDULE 7.23 - Property Taxes
SCHEDULE 7.25 - Assignees and Transferees
SCHEDULE 7.28 - Material Contracts
SCHEDULE 7.29 - Insurance Policies
SCHEDULE 7.33a - List of Filing and Recording Offices
SCHEDULE 7.33b - List of Financing Statements To Remain or To Be
Continued
SCHEDULE 7.33c - List of Financing Statements To Be Terminated
SCHEDULE 8.15 - Schedule of Permitted Payments
LIST OF EXHIBITS
----------------
EXHIBIT "A-1" - Form of Amended and Restated Note
EXHIBIT "A-2" - Form of Facility B Term Loan Note
EXHIBIT "B" - First Community Bank Loan Documents
-i-
EXHIBIT "C" - TLL Note and Subordination Agreement
EXHIBIT "D" - License Management Agreement and Amended and Restated
License Management Agreement
EXHIBIT "E-1" - Form of Compliance Certificate at Closing
EXHIBIT "E-2" - Form of Monthly Compliance Certificate
EXHIBIT "E-3" - Form of Quarterly Compliance Certificate
EXHIBIT "E-4" - Form of Annual Compliance Certificate
EXHIBIT "F" - Form of Opinion of Corporate and Securities Counsel to
the Company
EXHIBIT "G" - Form of Opinion of Special FCC Counsel to the Obligors
EXHIBIT "H" - Legal Description of Tyler Texas Real Property
EXHIBIT "I" - Amended and Restated Subordinated Note, Preferred Stock
and Warrant Purchase Agreement, dated as of August 3,
1995, as amended
EXHIBIT "J" - Executive Employment Agreements, Underwriting
Agreement, Warrant Agreement, Stockholders' Agreement
and Registration Agreement, dated as of August 3, 1995,
as amended
EXHIBIT "K" - Option and Securities Purchase Agreement dated as of
August 24, 2001
EXHIBIT "L" - Restructuring Agreement dated as of May 17, 2002
EXHIBIT "M" - Certificate of Designation of Rights and Preferences
EXHIBIT "N" - Junior Subordinated Notes
EXHIBIT "O" - Termination Agreement dated as of May 17, 2002
EXHIBIT "P" - TLL Subordination Agreement dated as of May 17, 2002
-ii-
Exhibits to Exhibit 10.1, Second Restated and Amended Credit Agreement, dated as
--------------------------------------------------------------------------------
of May 17, 2002
---------------
Exhibit A-1 to this document, Form of Amended and Restated Note, is filed as
-----------
exhibit 4.4 to the Current Report on Form 8-K to which this document is
appended.
Exhibit A-2 to this document, Form of Facility B Term Loan, is omitted.
-----------
Exhibit B to this document, First Community Bank Loan Documents, is filed as
---------
exhibits 4.1, 4.2, 10.5, 10.6 and 10.7 to the Current Report on Form 8-K to
which this document is appended.
Exhibit C to this document, TLL Note and Subordination Agreement, are filed as
---------
exhibits 4.3 and 10.10, respectively, to the Current Report on Form 8-K to which
this document is appended.
Exhibit D to this document, License Management Agreement and Amended and
---------
Restated License Management Agreement, are filed as exhibit 10.8 to the Current
Report on Form 8-K to which this document is appended.
Exhibits E-1, E-2, E-3 and E-4 to this document, Forms of Compliance
------------------------------
Certificates, are omitted.
Exhibit F to this document, Form of Opinion of Corporate and Securities Counsel
---------
to the Company, is omitted.
Exhibit G to this document, Form of Opinion of Special FCC Counsel to the
---------
Obligors, is omitted.
Exhibit H to this document, Legal Description of Tyler Texas Real Property, is
---------
included in exhibit 10.9 to the Current Report on Form 8-K to which this
document is appended.
Exhibit I to this document, Amended and Restated Subordinated Note, Preferred
---------
Stock and Warrant Purchase Agreement dated as of August 3, 1995, is filed as
exhibit 10.12(b) to the Company's Current Report on Form 8-K filed August 18,
1995.
Exhibit J to this document, Executive Employment Agreements, Underwriting
---------
Agreement, Warrant Agreement, Stockholders Agreement and Registration Agreement
dated as of August 3, 1995, are filed as exhibits 10.1(b), 10.2(b), 1.1, 10.15,
10.12 and 10.13 to the Company's Current Report on Form 8-K filed August 18,
1995.
Exhibit K to this document, Option and Securities Purchase Agreement dated as of
---------
August 24, 2001, is filed as exhibit 2.1 to the Current Report on Form 8-K to
which this document is appended.
Exhibit L to this document, Restructuring Agreement, is filed as exhibit 10.3 to
---------
the Current Report on Form 8-K to which this document is appended.
Exhibit M to this document, Certificate of Designation of Rights and
---------
Preferences, is filed as exhibit 3.3 to the Company's Current Report on Form 8-K
filed August 18, 1995.
Exhibit N to this document, Junior Subordinated Notes, is exhibit 4.6 to the
---------
Company's Current Report on Form 8-K filed August 18, 1995.
Exhibit O to this document, Termination Agreement dated as of May 17, 2002, is
---------
filed as exhibit 10.13 to the Current Report on Form 8-K to which this document
is appended.
Exhibit P to this document, TLL Subordination Agreement dated as of May 17,
---------
2002, is filed as exhibit 10.10 to the Current Report on Form 8-K to which this
document is appended.