Exhibit 10.2
LOAN AGREEMENT
by and among
CASTLE TOWER CORPORATION,
as the Borrower,
SOCIETY NATIONAL BANK,
as the Agent,
and
THE FINANCIAL INSTITUTIONS LISTED HEREIN
AS OF APRIL 26, 1995
TABLE OF CONTENTS
SECTION 1. DEFINITIONS.................................................. 1
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1.1 Definitions.................................................... 1
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1.2 Other Terms.................................................... 17
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1.3 Accounting Terms............................................... 18
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SECTION 2. THE LOANS.................................................... 18
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2.1 The Reducing Commitment and the Reducing Loans................. 18
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2.2 The Working Capital Commitment and the Working Capital Loans... 20
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2.3 The Term Loan.................................................. 21
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2.4 Making and Conversion/Continuation of the Loans................ 21
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2.5 The Notes...................................................... 23
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2.6 Fees........................................................... 24
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2.7 Prepayment..................................................... 24
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2.8 Reserves or Deposit Requirements, Etc.......................... 27
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2.9 Tax Law, Increased Costs, Etc.................................. 28
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2.10 Eurodollar Deposits Unavailable or Interest Rate
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Unascertainable................................................ 28
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2.11 Changes in Law Rendering LIBOR Loans Unlawful.................. 28
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2.12 Funding........................................................ 29
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2.13 Indemnity...................................................... 29
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2.14 Capital Adequacy............................................... 29
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2.15 Taxes.......................................................... 30
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SECTION 3. INTEREST; PAYMENTS........................................... 31
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3.1 Interest....................................................... 31
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3.2 Manner of Payments............................................. 32
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SECTION 4. CLOSING...................................................... 33
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SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE BORROWER............... 33
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5.1 Organization and Powers........................................ 33
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5.2 Authorization.................................................. 33
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5.3 Financial Statements........................................... 34
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5.4 Projections.................................................... 34
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5.5 Capitalization of the Borrower................................. 34
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5.6 Subsidiaries................................................... 35
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5.7 Title to Properties; Patents, Trademarks, Etc.................. 35
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5.8 Litigation; Proceedings........................................ 35
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5.9 Taxes.......................................................... 35
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5.10 Absence of Conflicts........................................... 36
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5.11 Indebtedness................................................... 36
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5.12 Compliance..................................................... 36
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5.13 Statements Not Misleading...................................... 37
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5.14 Consents or Approvals.......................................... 37
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5.15 Material Contracts and Commitments............................. 37
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5.16 Employee Benefit Plans......................................... 38
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5.17 Licenses....................................................... 38
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5.18 Material Restrictions.......................................... 39
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5.19 Investment Company Act......................................... 39
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5.20 Absence of Material Adverse Changes............................ 39
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5.21 Defaults....................................................... 39
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5.22 Real Property.................................................. 39
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5.23 Securities Laws................................................ 39
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5.24 Insurance...................................................... 40
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5.25 Labor Disputes................................................. 40
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5.26 Environmental Compliance....................................... 40
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5.27 Solvency....................................................... 43
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5.28 Purchase Agreement............................................. 43
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SECTION 6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE BANKS............. 43
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6.1 Compliance..................................................... 44
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6.2 Security Agreement............................................. 44
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6.3 Pledge Agreement............................................... 44
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6.4 Real Property Matters.......................................... 44
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6.5 Financing Statements........................................... 46
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6.6 Seller Subordination Agreement................................. 46
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6.7 Assignment of Seller Escrow Deposit............................ 46
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6.8 Consummation of Purchase Agreement............................. 46
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6.9 No Indebtedness................................................ 47
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6.10 Opinion of Borrower's and Stockholders' Counsel................ 47
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6.11 Insurance Certificates......................................... 47
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6.12 Financial Information.......................................... 48
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6.13 Engineer's Report.............................................. 48
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6.14 Borrowing Request, Statement of Application of Proceeds and
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Acquisition Advance Worksheet.................................. 48
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6.15 Rate Hedging Obligations....................................... 48
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6.16 Depository Accounts and Cash Management System................. 48
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6.17 Corporate Documents............................................ 48
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6.18 Consents and Releases of Liens................................. 49
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6.19 Fees and Expenses.............................................. 49
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6.20 Legal Approval................................................. 49
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6.21 Other Documents................................................ 49
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SECTION 7. AFFIRMATIVE COVENANTS OF THE BORROWER........................ 50
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7.1 Use of Proceeds................................................ 50
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7.2 Continued Existence; Compliance with Law....................... 50
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7.3 Insurance...................................................... 50
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7.4 Obligations and Taxes.......................................... 51
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7.5 Financial Statements and Reports............................... 52
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7.6 Notices........................................................ 54
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7.7 Maintenance of Property........................................ 55
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7.8 Information and Inspection..................................... 55
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7.9 Maintenance of Liens........................................... 55
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7.10 Title To Property.............................................. 56
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7.11 Environmental Compliance and Indemnity......................... 56
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7.12 Appraisals..................................................... 57
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7.13 Rate Hedging Obligations....................................... 57
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7.14 Depository Accounts and Cash Management System................. 57
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SECTION 8. NEGATIVE COVENANTS OF THE BORROWER........................... 57
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8.1 Indebtedness................................................... 58
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8.2 Liens.......................................................... 58
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8.3 Guaranties..................................................... 58
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8.4 Rental and Conditional Sale Obligations........................ 58
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8.5 Real Property Interests........................................ 59
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8.6 Capital Leases................................................. 59
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8.7 Capital Expenditures........................................... 59
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8.8 Notes, Accounts Receivable and Claims.......................... 59
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8.9 Capital Distributions.......................................... 59
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8.10 Disposal of Property; Mergers; Acquisitions; Reorganizations... 60
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8.11 Investments.................................................... 63
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8.12 Amendment of Governing Documents............................... 63
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8.13 Financial Covenants............................................ 63
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8.14 Management Agreements and Fees................................. 64
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8.15 Fiscal Year.................................................... 65
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8.16 ERISA.......................................................... 65
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8.17 Affiliates..................................................... 65
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8.18 Change of Name or Corporate Structure.......................... 65
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8.19 Amendments or Waivers.......................................... 65
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8.20 Issuance or Transfer of Capital Stock.......................... 65
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8.21 Change in Business............................................. 66
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8.22 Payments to Stockholders and Affiliates........................ 66
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8.23 Regulation U................................................... 66
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8.24 Subordinated Debt.............................................. 66
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8.25 Rights of First Refusal and Call Rights........................ 66
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SECTION 9. EVENTS OF DEFAULT............................................ 66
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9.1 Non-Payment.................................................... 66
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9.2 Failure of Performance in Respect of Other Obligations......... 67
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9.3 Breach of Warranty............................................. 67
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9.4 Cross-Defaults................................................. 67
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9.5 Assignment for Benefit of Creditors............................ 67
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9.6 Bankruptcy..................................................... 67
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9.7 Appointment of Receiver; Liquidation........................... 68
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9.8 Judgments...................................................... 68
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9.9 Impairment of Collateral; Invalidation of any Loan Document.... 68
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9.10 Termination of License or Agreements........................... 68
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9.11 Change of Control.............................................. 69
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9.12 Default under Collateral Document.............................. 69
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9.13 Condemnation................................................... 69
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9.14 Put, Call and Redemption Rights................................ 69
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9.15 Material Adverse Change........................................ 69
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SECTION 10. REMEDIES..................................................... 69
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10.1 Optional Defaults.............................................. 69
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10.2 Automatic Defaults............................................. 70
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10.3 Performance by the Banks....................................... 70
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10.4 Other Remedies................................................. 70
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10.5 Enforcement and Waiver by the Banks............................ 70
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SECTION 11. THE AGENT.................................................... 71
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11.1 Appointment.................................................... 71
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11.2 Powers......................................................... 71
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11.3 General Immunity............................................... 71
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11.4 Action on Instructions of the Banks............................ 72
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11.5 Employment of Agents and Counsel............................... 72
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11.6 Reliance on Documents; Counsel................................. 72
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11.7 Agent's Reimbursement and Indemnification...................... 72
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11.8 Rights as a Bank............................................... 73
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11.9 Bank Credit Decision........................................... 73
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11.10 Successor Agent............................................... 73
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11.11 Ratable Sharing............................................... 74
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11.12 Actions by the Agent and the Banks............................ 74
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SECTION 12. MISCELLANEOUS................................................ 74
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12.1 Construction................................................... 74
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12.2 Further Assurance.............................................. 75
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12.3 Expenses of the Agent and the Banks; Indemnification........... 75
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12.4 Notices........................................................ 76
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12.5 Waiver and Release by the Borrower............................. 77
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12.6 Right of Set Off............................................... 77
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12.7 Successors and Assigns; Participations......................... 77
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12.8 Applicable Law................................................. 79
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12.9 Binding Effect and Entire Agreement............................ 79
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12.10 Counterparts.................................................. 79
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12.11 Survival of Agreements........................................ 79
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12.12 Modification.................................................. 80
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12.13 Separability.................................................. 80
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12.14 Section Headings.............................................. 81
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12.15 Enforcement................................................... 81
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12.16 Termination................................................... 81
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12.17 Jury Trial Waiver............................................. 82
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12.18 Interest Limitation........................................... 82
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LOAN AGREEMENT
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THIS LOAN AGREEMENT is made and entered into as of April 26, 1995, by
and among CASTLE TOWER CORPORATION, a Delaware corporation (the "Borrower"), the
FINANCIAL INSTITUTIONS listed on the signature pages hereof, and SOCIETY
NATIONAL BANK, as agent (the "Agent").
R E C I T A L S:
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The Borrower has entered into an agreement to acquire 133 wireless
communication tower sites and related towers and equipment. The Borrower
desires to borrow up to $21,700,000 on a reducing revolving credit basis, up to
$1,000,000 on a revolving credit basis and $2,300,000 on a term loan basis from
the Banks, the proceeds of which will be used to finance such acquisition, for
short-term seasonal working capital purposes and for permitted acquisitions.
A G R E E M E N T S:
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Accordingly, the Borrower, the Banks and the Agent agree as follows:
SECTION 1. DEFINITIONS.
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1.1 Definitions. All terms typed with leading capitals are terms
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defined in this Agreement. For the purposes of this Agreement, the terms
defined in this Section 1 shall have the meanings set out below.
"Acquisition Advance Worksheet" means a worksheet in the form attached
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hereto as Schedule 1.1 to be properly completed and delivered to the Agent in
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advance of the consummation of each Qualified Acquisition.
"Affiliate" means, with respect to any Person, (a) any other Person
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which is directly or indirectly controlled by, under common control with or
controlling the first specified Person; (b) a Person owning beneficially or
controlling 5% or more of the equity interest in such other Person; (c) any
officer, director or partner of such other Person; or (d) any spouse or relative
(by blood, adoption or marriage) of any such individual Person.
The term "control" means possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person whether
through the ownership of voting securities or partnership interests, by contract
or otherwise.
"Annualized Operating Cash Flow" means, as of any date of
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determination, Operating Cash Flow for the fiscal quarter then ended or most
recently ended multiplied by four.
"Applicable Margin" means, as of any date of determination, the
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percentage determined from the following table based upon the ratio of Total
Debt outstanding on such date to Operating Cash Flow for the four quarter period
then most recently ended:
Total Debt to Applicable Margin Applicable Margin
Operating Cash for Base Rate for LIBOR Loans:
Flow for last four Loans: ---------------
quarters: -----
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Greater than or 2.00% 3.50%
equal to 5.0:1.0:
Greater than or 1.50% 3.00%
equal to 4.0:1.0
but less than
5.0:1.0:
Less than 4.0 to 1.00% 2.50%
1.0:
"Asset Sale" means the sale by the Borrower to any Person of any
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assets of the Borrower, other than (i) the sale of assets with an aggregate
value which does not exceed in any fiscal year an amount equal to $100,000 and
(ii) the sale in the ordinary course of business of assets held for resale in
the ordinary course of business or the trade in or replacement of assets in the
ordinary course of business or the disposition of any asset which, in the good
faith exercise of its business judgment, the Borrower determines is no longer
useful in the conduct of its business.
"Banking Day" means a day on which the main office of the Agent is
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open to the public for the transaction of business, and on which, with respect
to any LIBOR Loan, banks are open for business in London, England, and quoting
deposit rates for dollar deposits.
"Banks" means the financial institutions listed on the signature pages
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of this Agreement and their respective successors and assigns as permitted
hereunder.
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"Base Rate" means the rate of interest determined and publicly
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announced by the Agent from time to time as its prime rate at its main office in
Cleveland, Ohio. The prime rate functions as a reference rate index, and the
Agent may charge other borrowers more or less than the prime rate. The Base
Rate will automatically change as and when such prime rate changes.
"Base Rate Loans" means those Reducing Loans and Working Capital Loans
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described in Sections 2.1 and 2.2 hereof on which the Borrower shall pay
interest at a rate based on the Base Rate.
"Benefit Arrangement" means any pension, profit-sharing, thrift, or
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other retirement plan, medical, hospitalization, vision, dental, life,
disability or other insurance or benefit plan, deferred compensation, stock
ownership, stock purchase, stock option, performance share, bonus, fringe
benefit, savings or other incentive plan, severance plan or other similar plan,
agreement, arrangement or understanding, to which the Borrower or any member of
the Controlled Group is, or in the preceding six years was, required to
contribute on behalf of its employees or directors, whether or not such plan,
agreement, arrangement or understanding is subject to ERISA.
"Capital Distribution" means any payment or distribution made,
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liability incurred or other consideration given for the purchase, acquisition,
redemption or retirement of any capital stock, partnership interest or other
equity interest of a Person or as a dividend, return of capital or other payment
or distribution of any kind to a stockholder or partner of such Person (other
than any stock dividend or stock split or similar distribution payable only in
capital stock of such Person) in respect of such Person's capital stock or
partnership interests.
"Capital Expenditures" means any payments which are made by a Person
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for or in connection with the rental, lease, purchase, construction or use of
any real or personal property the value or cost of which, under GAAP, should be
capitalized and appear on such Person's balance sheet in the category of
property, plant or equipment, without regard to the manner in which such
payments or the instrument pursuant to which they are made are characterized by
such Person or any other Person; provided, however, that the capitalized portion
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of the purchase price payable pursuant to the Purchase Agreement or a Qualified
Acquisition shall not constitute a Capital Expenditure.
"Capitalized Lease Obligations" means, as to any Person, the
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obligations of such Person to pay rent or other amounts under leases of, or
other agreements conveying the right to use real or personal property, which
obligations are required
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to be classified and accounted for as capital leases on a balance sheet of such
Person, prepared in accordance with GAAP.
"Closing" and "Closing Date" have the meanings assigned to them in
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Section 4.
"Code" means the Internal Revenue Code of 1986, as amended, or any
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successor statute thereto.
"Collateral Documents" means all promissory notes, letters of credit,
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agreements, assignments, guaranties, mortgages, financing statements,
certificates and other instruments and documents which are required by this
Agreement or any other Collateral Document to be executed or delivered by or on
behalf of the Borrower, Holdco, the Sellers, the Stockholders or any other
Person.
"Commitments" means the Reducing Commitment and the Working Capital
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Commitment, and "Commitment" means either of such Commitments.
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"Controlled Group" means a controlled group of entities which are
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treated as a single employer under Sections 414(b), 414(c) or 414(m) of the Code
of which the Borrower is a part.
"Corporate Development Expense" means any expense of the Borrower
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incurred in connection with the pursuit of new acquisition business and related
activities, including, without limitation, travel and entertainment expense,
professional fees, due diligence costs and overhead allocable to such
activities.
"Debt Service" means, for any period, the sum of (a) all scheduled
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Reducing Commitment reductions under Section 2.1(b) during such period, (b) all
principal payments required to be made by the Borrower on the Term Loans
pursuant to Section 2.3(b) during such period, (c) all principal payments
required to be made by the Borrower on Total Debt, other than the Loans, but
including, without limitation, the PCI Debt, Seller Debt and Capitalized Lease
Obligations, during such period, and (d) all cash interest payments on, and fees
in respect of, Total Debt, and all fees in respect of the Letters of Credit,
required to be made by the Borrower during such period.
"Default Interest Rate" means, as of any date, a rate of interest
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equal to the rate of interest otherwise applicable to a Base Rate Loan pursuant
to Section 3.1(a) as of such date plus 2% per annum.
"Deferred Interest" has the meaning assigned to it in Section 3.1(d).
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"Discount Rate" means, with respect to a prepayment or conversion of a
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LIBOR Loan on a date other than the last day of its Interest Period, a rate
equal to the interest rate (as of the date of prepayment or conversion) on
United States Treasury obligations in a like amount as such Loan and with a
maturity approximately equal to the period between the prepayment or conversion
date and the last day of the Interest Period of such Loan, as determined by the
Agent.
"Division A Acquisition" means an acquisition by the Borrower of
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wireless communications towers based on land or the top of buildings, or of
management agreements pursuant to which the Borrower acquires the right to
manage the leasing or licensing of space for wireless communications on the tops
of buildings, or of all of the equity interests of an entity which owns or
leases such towers or manages such roof tops, where the total Purchase Price of
such acquisition is equal to or greater than the product of 7.5 times the most
recent twelve months operating cash flow, as reasonably determined by the Agent,
of the towers or the management agreements, as the case may be, being acquired
for the twelve month period most recently ended prior to the closing of such
acquisition. Any construction, purchase or other acquisition by the Borrower of
a Tower from the proceeds of a Capital Expenditure made by the Borrower pursuant
to the last sentence of Section 8.7 shall be deemed to be a Division A
Acquisition.
"Division B Acquisition" means the acquisition by the Borrower of
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substantially all of the assets of Spectrum Engineering, Inc. and any
acquisition by the Borrower of wireless communications towers based on land or
the top of buildings, or of management agreements pursuant to which the Borrower
acquires the right to manage the leasing or licensing of space for wireless
communications on the tops of buildings, or of all of the equity interests of an
entity which owns or leases such towers or manages such roof tops, where the
total Purchase Price of such acquisition is less than the product of 7.5 times
the most recent twelve months operating cash flow, as reasonably determined by
the Agent, of the towers or the management agreements, as the case may be, being
acquired for the twelve month period most recently ended prior to the closing of
such acquisition.
"Environmental Claim" means, with respect to any Person, any written
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or oral notice, claim, demand, request for information, citation, summons, order
or other communication (each, a "claim") by any other Person alleging or
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asserting the liability of the recipient of such claim for investigatory costs,
cleanup costs, governmental response costs, damages to natural resources or
other Property or health, personal injuries, fines or penalties arising out of,
based on or resulting from (a) the presence or Release of any Hazardous Material
at or from any
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location, whether or not owned by such Person, or (b) 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, remedial 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 the environment.
"Environmental Laws" means all provisions of law, statutes,
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ordinances, rules, regulations, permits, licenses, judgments, writs,
injunctions, decrees, orders, awards and standards promulgated by the government
of the United States of America or by any state or municipality thereof or by
any court, agency, instrumentality, regulatory authority or commission of any of
the foregoing regulating, relating to or imposing liability or a standard of
conduct concerning the environment or regulating the emission, release or
discharge of substances into the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended, and the regulations thereunder.
"Event of Default" means any of the events specified in Section 9.
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"Excess Cash Flow" means, as of any date of determination, Operating
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Cash Flow for the four quarter period then most recently ended less the sum
(without duplication) of (a) all Debt Service payments made in such period, (b)
income taxes paid in such period, (c) Capital Expenditures, excluding proceeds
of casualty insurance policies reasonably and promptly applied to replace
insured assets, paid in cash during such fiscal year to the extent permitted
pursuant to Section 8.7, (d) Capitalized Lease Obligation payments made during
such period to the extent permitted pursuant to Section 8.6, and (e) the excess,
if any, in the Borrower's Working Capital as of the end of such fiscal year over
its Working Capital as of the end of the prior fiscal year.
"Extraordinary Items" means, to the extent deducted in calculating Net
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Earnings, (a) gains or losses from sales, exchanges and other dispositions of
property not in the ordinary course of business and (b) gains or losses from
sales, exchanges and other dispositions of any Tower, Land Lease Agreement or
management agreement in respect of a Tower.
"FAA" means the Federal Aviation Administration or any governmental
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authority at any time substituted therefor.
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"Fixed Charge Coverage Ratio" means, as of any date of determination,
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the ratio of Annualized Operating Cash Flow as of such date to Historical Fixed
Charges as of such date.
"GAAP" means generally accepted accounting principles in effect from
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time to time in the United States, consistently applied.
"Guarantor" means one who pledges its credit or property in any
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manner, or otherwise becomes responsible for the payment or other performance of
the indebtedness, contract or other obligation of another Person and includes
(without limitation) any guarantor (whether of payment or of collection),
surety, co-maker, endorser or one who agrees conditionally or otherwise to make
any purchase, loan or investment in order thereby to enable another to prevent
or correct a default of any kind and one who has endorsed (otherwise than for
collection or deposit in the ordinary course of business), or has discounted
with recourse or agreed (contingently or otherwise) to purchase or repurchase or
otherwise acquire or become liable for, any Indebtedness or who has entered into
any agreement for the purchase or other acquisition of any product, materials or
supplies, or for the making of shipments, or for the payment for services, if in
any such case payment therefor is to be made regardless of the nondelivery of
the product, materials or supplies or the non-furnishing of the services.
"Guaranty" has the meaning assigned to it in Section 6.3.
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"Hazardous Material" means, collectively, (a) any petroleum or
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petroleum products, flammable materials, explosives, radioactive materials,
asbestos, urea formaldehyde foam insulation, and transformers or other equipment
that contain polychlorinated biphenyls ("PCBs"), (b) any chemicals or other
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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.
"Historical Fixed Charges" means, as of any date of determination, the
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sum (without duplication) of the aggregate amount of (a) all Debt Service
payments required to be made during the four quarter period then ended or most
recently ended, (b) Capital Expenditures made by the Borrower during such four
quarter period (other than Capital Expenditures made pursuant to
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the last sentence of Section 8.7), and (c) income taxes paid by the Borrower
during such four quarter period.
"Holdco" means Castle Tower Holding Corp., a Delaware corporation
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which owns all of the issued and outstanding capital stock of the Borrower.
"Holdco Pledge Agreement" has the meaning assigned to it in Section
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6.3.
"Indebtedness" of any Person means, without duplication, (a) all
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obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
assets purchased by such Person, (e) all obligations of such Person issued or
assumed as the deferred purchase price of property or services (excluding trade
accounts payable and accrued expenses arising in the ordinary course of business
and not more than ninety days past due), (f) all Indebtedness of others secured
by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the obligations secured thereby have
been assumed by such Person, (g) all obligations or liabilities in respect of
which such Person is a Guarantor, (h) all Capitalized Lease Obligations of such
Person, (i) all Rate Hedging Obligations, and (j) all obligations of such Person
as an account party to reimburse any bank or any other Person in respect of
letters of credit or bankers' acceptances. The Indebtedness of any Person shall
include any recourse Indebtedness of any partnership in which such Person is a
general partner.
"Interest Period" means, with respect to any LIBOR Loan, a period of
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one, two or three months, selected by the Borrower, commencing on the date such
Loan is made, continued or converted and ending on the last day of such period.
Whenever the last day of an Interest Period would otherwise occur on a day other
than a Banking Day, the last day of such Interest Period shall occur on the next
succeeding Banking Day; provided, however, that if such extension of time would
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cause the last day of such Interest Period to occur in the next calendar month,
the last day of such Interest Period shall occur on the next preceding Banking
Day. The Borrower shall not select any Interest Period which extends beyond any
date on which a payment is required to be made pursuant to Section 2.1(b) or
Section 2.2(d) unless the sum of the amount available to be drawn under the
Reducing Commitment plus the aggregate principal balance of all Base Rate Loans
and all LIBOR Loans with Interest Periods
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ending prior to such date is at least equal to the maximum amount that is
required to be paid on such date.
"Land Lease Agreement" means each lease for real property on which the
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Borrower owns, operates or maintains a Tower.
"Letters of Credit" has the meaning assigned to it in Section 2.1(d).
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"Leverage Ratio" means, as of any date of determination, the ratio of
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Total Debt as of such date to Annualized Operating Cash Flow as of such date;
provided, however, that (a) solely for purposes of calculating the Leverage
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Ratio in determining the Borrower's compliance with the financial covenant set
forth in Section 8.13(a), the PCI Debt shall not be included in Total Debt and
(b) for purposes of completing the Acquisition Advance Worksheet in connection
with any Qualified Acquisition the PCI Debt shall not be included in Total Debt.
"LIBOR" means the average (rounded upward to the nearest 1/16th of 1%)
-----
of the per annum rates at which deposits in immediately available funds in
United States dollars for the relevant Interest Period and in the amount of the
LIBOR Loan to be disbursed or to remain outstanding during such Interest Period,
as the case may be, are offered to the Agent by prime banks in any Eurodollar
market reasonably selected by the Agent, determined as of 11:00 a.m. London time
(or as soon thereafter as practicable), two Banking Days prior to the beginning
of the relevant Interest Period.
"LIBOR Loans" means those Reducing Loans and Working Capital Loans
-----------
described in Sections 2.1 and 2.2 hereof on which the Borrower shall pay
interest at a rate based on the applicable LIBOR Rate.
"LIBOR Prepayment Premium" means, with respect to the prepayment or
------------------------
conversion of any LIBOR Loan or any other receipt or recovery of any LIBOR Loan
prior to the end of the applicable Interest Period, whether by voluntary
prepayment, acceleration, conversion to a Base Rate Loan or otherwise, an amount
equal to the sum of (a) the product of (i) the excess, if any, of the rate of
interest then applicable to such Loan pursuant to Section 3.1 at the time of
such prepayment or conversion over LIBOR calculated as of such date, multiplied
by (ii) the principal amount so prepaid, converted or accelerated, as the case
may be, multiplied by (iii) a fraction, the numerator of which is the number of
days remaining in the related Interest Period and the denominator of which is
360 (taking into consideration the applicable compounding for the frequency of
installment payments of the Loans being prepaid), plus (b) out-of-pocket costs
and
-9-
expenses incurred by the Banks and the Agent with respect to such prepayment.
"LIBOR Rate" means a rate per annum equal to the quotient obtained
----------
(rounded upwards, if necessary, to the nearest 1/100th of 1%) by dividing (a)
the applicable LIBOR by (b) 1.00 minus the LIBOR Reserve Percentage.
"LIBOR Reserve Percentage" means for any day that percentage
------------------------
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum reserve requirement (including, without limitation, all
basic, supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements) for
a member bank of the Federal Reserve System in respect of Eurocurrency
Liabilities (as that term is defined in Regulation D of the Board of Governors
of the Federal Reserve System, as in effect from time to time). The LIBOR Rate
shall be adjusted automatically on and as of the effective date of any change in
the LIBOR Reserve Percentage.
"License" means any license, authorization, permit, consent,
-------
franchise, ordinance, registration, certificate, agreement or other right filed
with, granted by, or entered into by a federal, state or local governmental
authority which permits or authorizes the construction or maintenance of a Tower
or the use of a Tower for wireless communications.
"License Agreement" means the License Agreement dated as of January
-----------------
10, 1995, among the Sellers and the Borrower.
"Licensing Authority" means a governmental authority which has granted
-------------------
a License.
"Lien" as applied to the property of any Person means: (a) any
----
mortgage, lien, pledge, charge, lease constituting a Capitalized Lease
Obligation, conditional sale or other title retention agreement, or other
security interest or encumbrance of any kind in respect of any property of such
Person, or upon the income or profits therefrom; (b) any arrangement, express or
implied, under which any property of such Person is transferred, sequestered or
otherwise identified for the purpose of subjecting the same to the payment of
Indebtedness in priority to the payment of the general, unsecured creditors of
such person; (c) the filing of, or any agreement to give, any financing
statement under the Uniform Commercial Code or its equivalent of any
jurisdiction in respect of Indebtedness; and (d) in the case of securities or
other equity interests, any purchase option, call or similar right of a third
party with respect to such securities or other equity interests.
-10-
"Loans" means the Reducing Loans, all amounts drawn under any Letter
-----
of Credit (which amounts shall be deemed to be Reducing Loans) and not repaid,
the Working Capital Loans and the Term Loans.
"Majority Banks" means, at any time, the Agent and Banks holding at
--------------
least 66 2/3% of the then aggregate unpaid principal amount of the Notes and the
face amount of the outstanding Letters of Credit, or, if no principal amount of
the Notes or any Letter of Credit is then outstanding, the Agent and Banks
having at least 66 2/3% of the Commitments.
"Management Agreement" means the Management Agreement dated as of
--------------------
January 1, 1995, among Pittencrieff Communications, Inc. and the Borrower.
"Material Adverse Effect" means a material adverse effect upon or
-----------------------
change in (a) the properties, assets, business, operations, financial condition,
prospects, liabilities or capitalization of the Borrower or on the ability of
the Borrower to conduct its business or to own or maintain its Material Towers,
(b) the ability of the Borrower or any party to a Collateral Document (other
than the Agent and the Banks) to perform its obligations hereunder or under any
other Collateral Document to which it is a party, (c) the validity or
enforceability of this Agreement, any Note or any other Collateral Document, or
(d) the rights or remedies of the Agent or the Banks under this Agreement, the
Notes or any other Collateral Document or at law or in equity or the value of
any material collateral granted to the Agent, for the benefit of the Banks,
pursuant to any Collateral Document.
"Material Towers" means, as of any date of determination, any Tower or
---------------
any group or set of Towers wheresoever located to which more than 10% of the
Operating Cash Flow for any of the immediately prior four fiscal quarters is
attributable.
"Mortgages" has the meaning assigned to it in Section 6.4.
---------
"Net Earnings" means the net income (or deficit) of the Borrower for
------------
the period involved, after taxes, if any, and after all proper charges and
reserves (excluding, however, Extraordinary Items), all as determined in
accordance with GAAP.
"Notes" means the Reducing Notes, the Working Capital Notes, the Term
-----
Notes and any notes issued in connection with the issuance of a Letter of
Credit.
"Obligation" means any obligation of the Borrower (a) to pay to the
----------
Banks the principal of and interest on the Notes in
-11-
accordance with the terms thereof, including, without limitation, any interest
accruing after the date of any filing by the Borrower of any petition in
bankruptcy or the commencing of any bankruptcy, insolvency or similar
proceedings with respect to the Borrower, regardless of whether such interest is
allowable as a claim in any such proceeding; (b) in respect of the contingent
liability of the Borrower under all outstanding Letters of Credit, (c) in
respect of any Rate Hedging Obligations owing to any Bank or Affiliate of any
Bank; (d) to pay, satisfy or perform any other agreement, liability or
obligation of the Borrower or any other Person to the Agent or any Bank, arising
under this Agreement or any Collateral Document, whether now existing or
hereafter incurred by reason of future advances or otherwise, matured or
unmatured, direct or contingent, joint or several, including any extensions,
modifications or renewals thereof and substitutions therefor, and including
without limitation all fees, indemnification amounts, costs and expenses,
including interest thereon and reasonable attorneys' fees, incurred by the Agent
or any Bank for the protection and preservation or enforcement of its rights and
remedies arising hereunder or under the Collateral Documents; (e) to repay to
the Agent and the Banks all amounts advanced at any time by the Agent or the
Banks hereunder or under any Collateral Document, including, without limitation,
advances for principal or interest payments to prior secured parties,
mortgagees, or lienors or other Persons, or for taxes, levies, insurance, rent
or repairs to, or maintenance or storage of, any of the property of the
Borrower; (f) to perform any covenant or agreement made with the Agent or the
Banks pursuant to this Agreement or any Collateral Document; (g) to take any
other action in respect of any other liability of any nature of the Borrower to
the Agent or the Banks under this Agreement or any Collateral Document; or (h)
any renewal, continuation or extension of any of the foregoing.
"Operating Cash Flow" means, during any period, Net Earnings for such
-------------------
period (excluding, to the extent included in Net Earnings, any Extraordinary
Items and the effect of any exchange of space on a tower for non-cash
consideration, such as merchandise or services), minus the sum of any interest
-----
and other investment income during such period, plus the sum of, without
----
duplication, (a) depreciation on or obsolescence of fixed or capital assets and
amortization of intangibles and leasehold improvements for such period, plus (b)
----
any amounts paid by the Borrower in such period in respect of Rate Hedging
Obligations to the extent such amounts were deducted in calculating Net
Earnings, plus (c) cash interest accrued and paid during such period, plus (d)
---- ----
federal and state income taxes accrued and paid during such period (exclusive of
any such taxes resulting from any Extraordinary Items), plus (e) non-recurring
----
costs paid in such period in connection with the Purchase Agreement or Qualified
Acquisitions and approved by the Agent, to the extent that such costs were paid
from equity contributions or the
-12-
proceeds of any Loan. For purposes of calculating Operating Cash Flow for any
quarter included within the four quarter period ending March 31, 1996, an amount
equal to the lesser of $75,000 or Corporate Development Expense actually accrued
and paid during such quarter shall be added back to Net Earnings (to the extent
deducted in calculating Net Earnings); provided, however, that in no event shall
-------- -------
more that $250,000 of Corporate Development Expense be added back pursuant to
this sentence for the four quarter period ending March 31, 1996. In addition,
for purposes of calculating Operating Cash Flow for any period, the acquisition
pursuant to the Purchase Agreement, each other Qualified Acquisition and each
sale or other disposition by the Borrower of any Towers and related assets,
whether by sale of stock or assets, which occurs during such period, shall be
deemed to have occurred on the first day of such period. Accordingly, the
operating cash flow received by the seller of the Towers and related assets, or
of a management agreement in respect thereof, acquired pursuant to the Purchase
Agreement and each Qualified Acquisition shall be included for the entire period
and the Operating Cash Flow relating to any Towers and related assets, or of a
management agreement in respect thereof, sold or otherwise disposed of during
such period shall be excluded from the calculation of Operating Cash Flow for
the entire period.
"PBGC" means the Pension Benefit Guaranty Corporation or any
----
governmental authority at any time substituted therefor.
"PCI Debt" means the Indebtedness of the Borrower to the Sellers
--------
evidenced by (a) the unsecured Promissory Note dated January 10, 1995, in the
original principal amount of $1,050,957 and (b) the secured, non-recourse
Promissory Note dated April 27, 1995, in an original principal amount not to
exceed $1,000,000.
"Pension Plan" means an employee pension benefit plan as defined in
------------
Section 3(2) of ERISA which is subject to the provisions of Section 302 or Title
IV of ERISA or Section 412 of the Code.
"Permitted Lien" means any of the following Liens:
--------------
(a) Liens for taxes or assessments and similar charges, which are
either not delinquent or being contested diligently and in good faith by
appropriate proceedings, and as to which the Borrower has set aside adequate
reserves on its books and which do not entail any risk of loss, forfeiture,
foreclosure or sale of the property subject thereto;
(b) statutory Liens, such as mechanic's, materialman's,
warehouseman's, landlord's, artisan's, ▇▇▇▇▇▇▇'▇, contractor's, carrier's or
other like Liens, (i) incurred in good faith in the ordinary course of business,
(ii) which are either not delinquent or are being contested diligently and in
good
-13-
faith by appropriate proceedings, (iii) as to which the Borrower has set aside
adequate reserves upon its books or bonded satisfactorily to the Agent and (iv)
which do not entail any risk of loss, forfeiture, foreclosure or sale of the
property subject thereto;
(c) encumbrances consisting of zoning restrictions, easements,
licenses, reservations, provisions, covenants, conditions, waivers, restrictions
on the use of property or minor irregularities of title, provided that none of
--------
such encumbrances materially impairs the use or value of any property in the
operation of the Borrower's business;
(d) Liens securing conditional sale, rental or purchase money
obligations permitted under Section 8.4, but only in the property which is the
subject of such obligations;
(e) Liens arising under or pursuant to this Agreement or any
Collateral Document or otherwise securing any Obligation;
(f) Liens in respect of judgments or awards with respect to which the
Borrower is, in good faith, prosecuting an appeal or proceeding for review and
with respect to which a stay of execution upon such appeal or proceeding for
review has been secured, and as to which judgments or awards the Borrower has
established adequate reserves on its books or has bonded in a manner
satisfactory to the Agent;
(g) pledges or deposits made in the ordinary course of business to
secure payment of worker's compensation, or to participate in any fund in
connection with worker's compensation, unemployment insurance, old-age pensions
or other social security programs;
(h) Liens granted to secure the performance of letters of credit,
bids, tenders, contracts, leases, public or statutory obligations, surety,
customs, appeal and performance bonds and other similar obligations to the
extent permitted herein and not incurred in connection with the borrowing of
money, the obtaining of advances or the payment of the deferred purchase price
of any property; and
(i) any other Liens listed on Exhibit H hereto or to which the
---------
Majority Banks have consented in writing.
"Person" includes natural persons, governmental agencies and
------
authorities, corporations, business trusts, associations, companies, limited
liability companies, joint ventures and partnerships.
-14-
"Plan" means any employee benefit plan, as defined under Section 3(3)
----
of ERISA, established or maintained by the Borrower or any member of the
Controlled Group or any such Plan to which the Borrower or any member of the
Controlled Group is, or in the last six years was, required to contribute on
behalf of its employees.
"Pledge Agreements" means the Holdco Pledge Agreement and the
-----------------
Stockholder Pledge Agreement.
"Possible Default" means an event, condition, situation or thing which
----------------
constitutes, or which with the lapse of any applicable grace period or the
giving of notice or both would constitute, an Event of Default.
"Projected Debt Service" means, as of any date of determination, the
----------------------
sum of (a) all scheduled Reducing Commitment reductions under Section 2.1(b)
during the four quarter period following the end of the fiscal quarter then most
recently ended, (b) all principal payments required to be made by the Borrower
under Section 2.3(b) on the Term Loans during such subsequent four quarter
period, (c) all principal payments required to be made by the Borrower on Total
Debt, other than the Loans, but including, without limitation, the PCI Debt,
Seller Debt and Capitalized Lease Obligations, during such subsequent four
quarter period, and (d) all cash interest payments and payments of fees on Total
Debt required to be made by the Borrower during such subsequent four quarter
period. In calculating Projected Debt Service, (i) the interest rate applicable
during such subsequent four quarter period to any Indebtedness which does not
bear interest at a rate which is fixed (either by its terms or pursuant to an
agreement regarding Rate Hedging Obligations) for the entire subsequent period
shall be deemed to be the interest rate in effect as of the date of
determination, and (ii) it shall be assumed that the principal amount of
Reducing Loans and Working Capital Loans outstanding as of the date of
determination will be outstanding for the subsequent four quarter period subject
to any required commitment reductions.
"Purchase Agreement" means the Purchase and Sale Agreement, dated as
------------------
of December 23, 1994, as amended, by and among the Sellers and the Borrower.
"Purchase Price", in respect of any Qualified Acquisition (whether of
--------------
assets, stock or other equity interests), means the total consideration payable
in connection with such acquisition, whether payable in cash, by a note or other
property, by the assumption of indebtedness and including all forms of deferred
compensation, such as non-compete agreements, consulting agreements and the
like.
-15-
"Qualified Acquisition" has the meaning assigned to it in Section
---------------------
8.10(b).
"Quarterly Date" means the last day of each March, June, September and
--------------
December.
"Ratable Share" means, with respect to any Bank, its pro rata share of
-------------
the Commitments, the Letters of Credit or the Loans. Initially, the Ratable
Shares of the Banks shall be as listed on Schedule 1.2 attached hereto.
"Rate Hedging Obligations" means any and all obligations of the
------------------------
Borrower, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (a) any and all
agreements, devices or arrangements designed to protect the Borrower from the
fluctuations of interest rates, including, but not limited to, interest rate
exchange or swap agreements and interest rate cap or collar protection
agreements, and (b) any and all cancellations, buy backs, reversals,
terminations or assignments of any of the foregoing.
"Reducing Commitment" has the meaning assigned to it in Section
-------------------
2.1(a).
"Reducing Loans" has the meaning assigned to it in Section 2.1(a).
--------------
"Reducing Notes" has the meaning assigned to it in Section 2.5.
--------------
"Regulatory Change" means the adoption of or any change in federal,
-----------------
state or local treaties, laws, rules, regulations or policies or the adoption of
or change in any interpretations, guidelines, directives or requests of or under
any federal, state or local treaties, laws, rules, regulations or policies
(whether or not having the force of law) by any court, governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof.
"Release" shall mean any release, spill, emission, leaking, pumping,
-------
injection, deposit, disposal, discharge, dispersal, leaching 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.
"Reportable Event" means a reportable event as that term is defined in
----------------
Title IV of ERISA, excluding, however, such events as to which the PBGC by
regulation has waived the requirement of Section 4043(a) of ERISA that it be
notified
-16-
within thirty days of the occurrence of such event (provided that a failure to
--------
meet the minimum funding standard of Section 412 of the Code and of Section 302
of ERISA shall be a Reportable Event regardless of the issuance of any such
waivers in accordance with Section 412(d) of the Code).
"Securities Purchase Agreement" means the Securities Purchase and Loan
-----------------------------
Agreement dated as of January 11, 1995, as amended as of April 27, 1995, among
the Borrower and the purchasers named therein, as the same may be further
amended from time to time with the consent of the Banks.
"Security Agreement" has the meaning assigned to it in Section 6.2.
------------------
"Seller Debt" has the meaning assigned to it in Section 8.10(b).
-----------
"Sellers" means Pittencrieff Communications, Inc., a Texas
-------
corporation, and A&B Electronics, Inc., a New Mexico corporation, and "Seller"
------
means either of such Sellers.
"Sellers Subordination Agreement" has the meaning assigned to it in
-------------------------------
Section 6.6.
"Seller Escrow Deposit" means, as of any date, the amount held by
---------------------
River Oaks Trust Company (the "Escrow Agent") on such date pursuant to the
Escrow Agreement dated as of March 6, 1995, among the Sellers, the Borrower and
the Escrow Agent.
"Stockholders" means the stockholders of Holdco, and "Stockholder"
------------ -----------
means any of such Stockholders.
"Stockholders Agreement" means the Stockholders Agreement, dated as of
----------------------
April 27, 1995, by and among Holdco and the Stockholders which are a party
thereto, as the same may be amended from time to time to the extent permitted
pursuant hereto.
"Stockholder Debt" means the Indebtedness of the Borrower to
----------------
Centennial Fund IV, L.P. pursuant to the Securities Purchase Agreement.
"Stockholder Pledge Agreement" has the meaning assigned to it in
----------------------------
Section 6.3.
"Stockholder Subordination Agreement" has the meaning assigned to it
-----------------------------------
in Section 6.6.
"Subordinated Debt" means Indebtedness of the Borrower to a
-----------------
Stockholder or to the Sellers, including the Stockholder Debt and the PCI Debt,
which is subordinate to the Obligations of
-17-
the Borrower to the Banks pursuant to terms and conditions satisfactory to the
Agent.
"Subsidiary" means each existing or future partnership, corporation or
----------
limited liability company, the majority of the outstanding partnership
interests, capital stock or voting power of which is (or upon the exercise of
all outstanding warrants, options and other rights would be) owned, directly or
indirectly, at the time in question by the Borrower.
"Termination Date" means June 30, 2002.
----------------
"Term Loan Prepayment Premium" means, with respect to the voluntary
----------------------------
prepayment of the Term Loans prior to the second anniversary of the Closing
Date, an amount equal to the product of (a) an interest factor equal to the
excess of the rate of interest applicable to the Term Loans pursuant to Section
3.1 hereof on the date of such prepayment over the LIBOR Rate on the date of
such prepayment, multiplied by (b) the principal amount so prepaid, multiplied
by (c) a fraction, the numerator of which is the number of days in the period
from and including the date of such prepayment to but not including the second
anniversary of the Closing Date and the denominator of which is 360.
"Term Loans" has the meaning assigned to it in Section 2.3(a).
----------
"Term Notes" has the meaning assigned to it in Section 2.5.
----------
"Total Debt" means, without duplication, all Indebtedness of the
----------
Borrower for borrowed money, including the Loans, all Capitalized Lease
Obligations of the Borrower, all other Indebtedness of the Borrower represented
by notes or drafts representing extensions of credit for borrowed money, all
other Indebtedness of other Persons for which the Borrower is a Guarantor, all
obligations of the Borrower evidenced by bonds, debentures, notes or other
similar instruments (including all such obligations to which any property or
asset owned by the Borrower is subject, whether or not the obligation secured
thereby shall have been assumed) and all obligations of the Borrower as an
account party to reimburse any bank or any other Person in respect of letters of
credit (other than the Letters of Credit) or bankers' acceptances; provided,
--------
however, that the Stockholder Debt shall not constitute Total Debt so long as it
-------
is subject to the Stockholder Subordination Agreement.
"Towers" means the wireless communications towers owned or leased by
------
the Borrower or which are subject to a management agreement to which the
Borrower is a party and which the Borrower has obtained pursuant to a Qualified
Acquisition, and "Tower" means each of such Towers.
-----
-18-
"Working Capital" means, as of any date, the excess of the Borrower's
---------------
current assets, other than cash, over its current liabilities, other than the
current portion of long term debt, as of such date.
"Working Capital Commitment" has the meaning assigned to it in Section
--------------------------
2.2(a).
"Working Capital Loans" has the meaning assigned to it in Section
---------------------
2.2(a).
"Working Capital Notes" has the meaning assigned to it in Section 2.5.
---------------------
1.2 Other Terms. Except as otherwise specifically provided in this
-----------
Agreement, each term not otherwise expressly defined herein which is defined in
the Uniform Commercial Code, as amended (the "UCC"), as adopted in any
applicable jurisdiction, shall have the meaning assigned to it in the UCC in
effect in such jurisdiction. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. All
references herein to Sections, Exhibits or Schedules shall be deemed to be
references to Sections of, and Exhibits and Schedules to, this Agreement unless
the context shall otherwise require. Whenever any agreement, promissory note or
other instrument or document is defined in this Agreement, such definition shall
be deemed to mean and include, from and after the date of any amendment,
restatement or modification thereof, such agreement, promissory note or other
instrument or document as so amended, restated or modified. All terms defined
in this Agreement in the singular shall have comparable meanings when used in
the plural and vice versa. 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.
1.3 Accounting Terms. All accounting terms used in this Agreement
----------------
which are not expressly defined herein shall have the respective meanings given
to them in accordance with GAAP, all computations shall be made in accordance
with GAAP, and all balance sheets and other financial statements shall be
prepared in accordance with GAAP.
SECTION 2. THE LOANS.
---------
2.1 The Reducing Commitment and the Reducing Loans.
----------------------------------------------
(a) Subject to the terms and conditions hereof, during the period up
to but not including the Termination Date, the Banks shall make loans to the
Borrower in such amounts as the Borrower may from time to time request (the
"Reducing Loans") but
-19-
not exceeding in aggregate principal amount at any one time outstanding
$21,700,000 (as such amount may be reduced from time to time, the "Reducing
Commitment"). Each Reducing Loan requested by the Borrower shall be funded by
the Banks in accordance with their Ratable Shares of the requested Reducing
Loan. A Bank shall not be obligated hereunder to make any additional Reducing
Loan if immediately after making such Loan, the aggregate principal balance of
all Reducing Loans made by such Bank would exceed such Bank's Ratable Share of
the Reducing Commitment. The Reducing Loans may be comprised of Base Rate Loans
or LIBOR Loans, as provided in Section 2.4 hereof.
(b) On June 30, 1997, the Reducing Commitment shall automatically
reduce to the then outstanding amount of the Reducing Loans, and, on each date
set forth in the table below, the Reducing Commitment shall automatically
further reduce by an amount equal to that percentage set forth in such table for
such date of the Reducing Commitment in effect on July 1, 1997:
=======================================================================
Calendar March 31 June 30 September 30 December 31
Year
-----------------------------------------------------------------------
1997 N/A N/A 4.00% 4.00%
-----------------------------------------------------------------------
1998 4.00% 4.00% 4.00% 4.00%
-----------------------------------------------------------------------
1999 4.50% 4.50% 4.50% 4.50%
-----------------------------------------------------------------------
2000 4.75% 4.75% 4.75% 4.75%
-----------------------------------------------------------------------
2001 5.25% 5.25% 5.25% 5.25%
-----------------------------------------------------------------------
2002 5.75% 12.25% N/A N/A
=======================================================================
(c) Prior to the Termination Date, the Borrower may, at its option,
from time to time prepay all or any portion of the Reducing Loans, subject to
the provisions of Section 2.7, and the Borrower may reborrow from time to time
hereunder amounts so paid up to the amount of the Reducing Commitment in effect
at the time of reborrowing.
(d) (i) Subject to the terms and conditions hereof, the Borrower may
request the Banks to issue, and the Banks agree to issue, from time to time,
standby letters of credit (the "Letters of Credit" and each individually a
"Letter of Credit") in an aggregate stated amount for all Letters of Credit at
any one time not exceeding $5,000,000; provided, however, that each Letter of
-------- -------
Credit shall be in an amount of not less than $250,000; and provided, further,
-------- -------
that no Letter of Credit shall be issued if after giving effect to such
issuance, the sum of the outstanding principal balance of the Reducing Loans
(including amounts drawn on Letters of Credit and not
-20-
repaid), plus the aggregate face amount of outstanding Letters of Credit would
exceed the Reducing Commitment. The Letters of Credit shall only be issued to
secure not more than five notes evidencing Seller Debt. No Letter of Credit
shall be issued if the sum of the face amount of such Letter of Credit and the
face amount of all other outstanding Letters of Credit would exceed as of any
date during the term of such Letters of Credit the Reducing Commitment as in
effect as of such date. Each Letter of Credit shall be issued in the manner and
on the conditions set forth in this Section 2.1(d) and Section 6. No Letter of
Credit shall be issued after June 30, 1997, or expire later than December 31,
2001. The Banks shall not be obligated to extend or renew any Letter of Credit.
Any amount drawn upon a Letter of Credit shall be deemed to be a Reducing Loan
for all purposes of this Agreement. All Letters of Credit shall be issued by the
Banks in accordance with their Ratable Shares of the amount requested by the
Borrower.
(ii) Each request for a Letter of Credit shall be made to the
Agent and each Bank by an application on each Bank's standard form or in such
other manner as a Bank may approve and shall be made such reasonable time in
advance as the Agent may require. Each Letter of Credit shall be issued by the
Banks within three Banking Days after satisfaction of the conditions set forth
herein and shall be accompanied by a duly executed note (each, a "Letter of
Credit Note"), in each case on the issuing Bank's standard form or in such other
form as it may approve.
(iii) The Borrower shall: (A) indemnify and hold each Bank
harmless from any loss resulting from any claim, demand or liability which may
be asserted against such Bank in connection with actions taken under any Letter
of Credit, and (B) reimburse such Bank for any fees or other reasonable expenses
paid or incurred by such Bank in connection with any Letter of Credit, other
than any loss or expense resulting from such Bank's willful misconduct or gross
negligence. Any amounts paid by any Bank on any Letter of Credit shall be deemed
to be a Reducing Loan and shall bear interest from the date of payment by such
Bank as the rates provided in Section 3.1 until paid in full.
(iv) Upon the occurrence of any Event of Default, the Borrower
shall, upon demand, pay to each Bank the face amount of any outstanding Letter
of Credit Note issued to such Bank, which amount such Bank shall hold as
security for the obligations incurred under such Letter of Credit, this
Agreement or the Notes. The payment by the Borrower of such security shall not
terminate the obligations of the Borrower under this Section 2.1(d).
(v) If any Regulatory Change shall either (A) impose upon,
modify, require, make or deem applicable to any
-21-
Bank any reserve requirement, special deposit requirement, insurance assessment
or similar requirement against or affecting any Letter of Credit issued or to be
issued hereunder, or (B) subject any Bank to any tax, charge, fee, deduction or
withholding of any kind whatsoever, or (C) impose any condition upon or cause in
any manner the addition of any supplement to or increase of any kind to any
Bank's capital or cost base for issuing such Letter of Credit which results in
an increase in the capital requirement supporting such Letter of Credit, or (D)
impose upon, modify, require, make or deem applicable to any Bank any capital
requirement, increased capital requirement or similar requirement such as the
deeming of such Letters of Credit to be assets held by such Bank for capital
calculation or other purposes and the result of any events referred to in (A),
(B), (C) or (D) above shall be to increase the costs or decrease the benefit in
any way to a Bank of issuing, maintaining or participating in such Letters of
Credit, then and in such event the Borrower shall, on the third Banking Day
after the mailing of written notice of such increased costs and/or decreased
benefits to the Borrower by any Bank, pay to such Bank all such additional
amounts which in such Bank's sole good faith calculation as allocated to such
Letters of Credit, shall be sufficient to compensate it for all such increased
costs and/or decreased benefits. Such Bank's calculation shall be conclusive
absent manifest error.
(vi) The Letters of Credit shall be issued for an annual fee of
4.5% of the amount then drawable thereunder payable upon issuance and on each
anniversary of the issuance.
(e) At any time prior to the Termination Date, by written notice to
the Agent no later than 11:00 A.M. Cleveland, Ohio time five Banking Days prior
to such termination or reduction, the Borrower may permanently terminate, or
from time to time permanently reduce, the Reducing Commitment. Such notice
shall be in writing or by telephonic communication confirmed by telecopy or
other facsimile transmission on the same day as such telephone notice. Any such
partial reduction hereunder shall be in an amount which is not less than
$2,500,000 or an integral multiple of $1,000,000 in excess thereof. The Agent
shall notify the Banks of any such reduction or termination of the Reducing
Commitment.
(f) All Reducing Loans, together with all interest accrued thereon,
shall be paid in full no later than the Termination Date.
(g) All reductions of the Reducing Commitment pursuant to Section
2.1(e), 2.7(c) or any other provision of this Agreement shall be permanent
reductions, and the Reducing Commitment shall not be increased.
-22-
2.2 The Working Capital Commitment and the Working Capital Loans.
------------------------------------------------------------
(a) Subject to the terms and conditions hereof, during the
period up to but not including the Termination Date, the Banks shall make loans
to the Borrower in such amounts as the Borrower may from time to time request
(the "Working Capital Loans") but not exceeding in aggregate principal amount at
any one time outstanding $1,000,000 (as such amount may be reduced from time to
time, the "Working Capital Commitment"). Each Working Capital Loan requested by
the Borrower shall be funded by the Banks in accordance with their Ratable
Shares of the requested Working Capital Loan. A Bank shall not be obligated
hereunder to make any additional Working Capital Loan if immediately after
making such Loan, the aggregate principal balance of all Working Capital Loans
made by such Bank would exceed such Bank's Ratable Share of the Working Capital
Commitment. All Working Capital Loans may be comprised of Base Rate Loans or
LIBOR Loans, as provided in Section 2.4 hereof.
(b) Prior to the Termination Date, the Borrower may, at the
Borrower's option, from time to time prepay all or any portion of the Working
Capital Loans, subject to the provisions of Section 2.7, and the Borrower may
reborrow from time to time hereunder amounts so paid up to the amount of the
Working Capital Commitment in effect at the time of reborrowing.
(c) At any time prior to the Termination Date, by written notice
to the Agent no later than 11:00 A.M. Cleveland, Ohio time five Banking Days
prior to such termination or reduction, the Borrower may permanently terminate,
or from time to time permanently reduce, the Working Capital Commitment. Such
notice shall be in writing or by telephonic communication confirmed by telecopy
or other facsimile transmission on the same day as such telephone notice. Any
such partial reduction hereunder shall be in an amount which is not less than
$250,000 or an integral multiple of $250,000 in excess thereof. The Agent shall
notify the Banks of any such reduction or termination of the Working Capital
Commitment.
(d) All Working Capital Loans, together with all interest
accrued thereon, shall be paid in full no later than the Termination Date.
(e) All reductions of the Working Capital Commitment pursuant to
Sections 2.2(c) or 2.7(c) or any other provision hereof shall be permanent
reductions, and the Working Capital Commitment shall not be increased.
-23-
2.3 The Term Loan.
-------------
(a) Subject to the terms and conditions of this Agreement, on
the Closing Date the Banks, severally, but not jointly, shall lend to the
Borrower on a term loan basis an aggregate amount equal to $2,300,000 (the "Term
Loans"). The Term Loans shall be funded by the Banks in accordance with their
Ratable Shares. No portion of the Term Loans, upon the payment or prepayment
thereof, may be reborrowed.
(b) The aggregate principal of the Term Loans shall be repaid in
fourteen installments due in the amounts and on the dates set forth in the
following table, with the final installment of all then outstanding principal,
together with all accrued interest, due no later than the Termination Date:
=========================================================================
Calendar March 31 June 30 September December
Year 30 31
-------------------------------------------------------------------------
1999 $ 62,500 $ 62,500 $ 62,500 $ 62,500
-------------------------------------------------------------------------
2000 $187,500 $187,500 $187,500 $187,500
-------------------------------------------------------------------------
2001 $250,000 $250,000 $250,000 $250,000
-------------------------------------------------------------------------
2002 $150,000 all N/A N/A
remaining
principal
=========================================================================
2.4 Making and Conversion/Continuation of the Loans.
-----------------------------------------------
(a) Making of the Loans.
-------------------
(i) Each Reducing Loan and each Working Capital Loan shall
be made by the Banks in such amount as the Borrower shall request, provided that
--------
each borrowing shall be in an amount which is a minimum of (A), with respect to
any LIBOR Loan, $500,000, and integral multiples of $250,000 in excess thereof,
and (B) with respect to any Base Rate Loan, $250,000 and integral multiples of
$100,000 in excess thereof or such lesser amount as may be equal to the then
unused portion of the Reducing Commitment or the Working Capital Commitment, as
the case may be. The obligation of the Banks to make any Loan is conditioned
upon (x) the fact that no Possible Default or Event of Default shall then exist
or immediately after the Loan would exist; (y) the fact that all of the
Collateral Documents shall still be in full force and effect; and (z) the fact
that the representations and warranties contained herein and in the Collateral
Documents shall be true and correct in all material respects as if made on and
as of the date of such borrowing, except to the extent that any thereof
expressly relate to an earlier date.
-24-
(ii) Subject to the satisfaction of the conditions set
forth in Section 6, Loans shall be effected at the principal banking office of
the Agent in Cleveland, Ohio, and shall be made at such times as the Borrower
may request by notice to the Agent no later than 11:00 A.M. Cleveland, Ohio time
(A) three Banking Days prior to the date of a requested LIBOR Loan and (B) one
Banking Day prior to the date of a requested Base Rate Loan. Such notices shall
be in writing, or by telephonic communication confirmed by telecopy or other
facsimile transmission on the same day as the telephone request, and shall
specify the proposed date and the amount of the requested Loan, whether it is to
bear interest initially at an interest rate based on the Base Rate or the LIBOR
Rate, and the Interest Period thereof, if applicable.
(iii) Upon receipt of each borrowing notice for a Reducing
Loan or a Working Capital Loan, the Agent shall promptly notify each Bank of the
type, amount and date of the proposed borrowing or conversion. Not later than
11:00 A.M. Cleveland time, on the date of a proposed borrowing of a Reducing
Loan or Working Capital Loan, as the case may be, each Bank shall provide the
Agent at its address specified in Section 12.4 hereof with immediately available
funds covering such Bank's Ratable Share of the borrowing, and the Agent shall
pay over such immediately available funds to the Borrower.
(b) Conversion/Continuation of the Loans. At the Borrower's
------------------------------------
election pursuant to notice given to the Agent not later than 11:00 A.M.
Cleveland, Ohio time three Banking Days prior to such conversion or
continuation, any Base Rate Loan or LIBOR Loan may be converted to or continued
as, as the case may be, a LIBOR Loan as requested by the Borrower; provided,
--------
however, that each conversion shall be in an amount which is a minimum of
-------
$500,000, and integral multiples of $250,000 in excess thereof; and provided,
--------
further, that no Loan may be continued as or converted to a LIBOR Loan at any
-------
time that an Event of Default or Possible Default exists; and provided, still,
-------- -----
further, that no Term Loan may be converted to a Base Rate Loan or LIBOR Loan.
-------
If the Borrower has not timely delivered to the Agent such notice with respect
to any terminating Interest Period, the affected LIBOR Loan shall convert to a
Base Rate Loan at the end of such Interest Period.
(c) Number of Interest Rate Options. In no event shall the
-------------------------------
Borrower have more than three LIBOR Loans outstanding at any time.
(d) Incurrence Limitations.
----------------------
(i) The Borrower may not borrow any Working Capital Loan if
the proceeds of such Loan are to be used to prepay any part of the Term Loans.
The Borrower may not borrow
-25-
any Reducing Loan if the proceeds of such Loan are to be used to prepay any part
of the Term Loans unless (A) such Loan is made prior to the second anniversary
of the Closing Date and (B) the Leverage Ratio has not at any time prior to the
making of such Loan been in excess of 5.0 to 1.0. If the Borrower uses the
proceeds of any Reducing Loan to prepay any part of the Term Loans, then (A) the
Average Acquisition Leverage Multiple set forth in Step 3 of the Acquisition
Advance Worksheet shall be reduced to 5.0 to 1.0 at all times thereafter and (B)
the Acquisition Leverage Multiple set forth in Step 3 of the Acquisition Advance
Worksheet shall be reduced to 67%.
(ii) No more than [$_____________] may be borrowed on the
Closing Date for application to the portion of the purchase price then payable
under the Purchase Agreement.
(iii) No later than ten Banking Days prior to the closing
of any Qualified Acquisition, the Borrower shall deliver to the Agent a properly
completed Acquisition Advance Worksheet computing, in accordance with such
worksheet, the amount of the Reducing Loans available to be borrowed in
connection with such acquisition. The Borrower shall provide to the Agent any
information and documentation reasonably requested by the Agent to assist in its
review of such worksheet and its verification of the computations set forth
therein. Subject to the Agent's satisfaction with the computations set forth
therein, the Borrower may borrow an amount of Reducing Loans up to but not
exceeding the lesser of the maximum availability as established in such
worksheet and the undrawn amount of the Reducing Commitment. No proceeds of a
Reducing Loan made after June 30, 1997, shall be used to pay any portion of the
Purchase Price of a Qualified Acquisition.
2.5 The Notes. All Reducing Loans shall be evidenced by separate
---------
promissory notes payable to the Banks substantially in the form attached hereto
as Exhibit A to be duly executed and delivered by the Borrower at or prior to
---------
the Closing in the principal amount of the Reducing Commitment (the "Reducing
Notes"). All Working Capital Loans shall be evidenced by separate promissory
notes payable to the Banks substantially in the form attached hereto as Exhibit
-------
B to be duly executed and delivered by the Borrower at or prior to the Closing
-
in the principal amount of the Working Capital Commitment (the "Working Capital
Notes"). All Term Loans shall be evidenced by separate promissory notes payable
to the Banks substantially in the form attached hereto as Exhibit C to be duly
---------
executed and delivered by the Borrower at or prior to the Closing in the
aggregate principal amount of the Term Loans (the "Term Notes"). The Banks may,
and are hereby authorized by the Borrower to, set forth on the grids attached to
the Notes, or in other comparable records maintained by them, the amount of each
Loan, all payments and prepayments of principal and interest received, the
current
-26-
outstanding principal balance, and other appropriate information. The aggregate
unpaid amount of any Loan set forth in any records maintained by a Bank with
respect to a Note shall be presumptive evidence of the principal amount owing
and unpaid on such Note. Failure of a Bank to record the principal amount of any
Loan on the grid(s) attached to a Note shall not limit or otherwise affect the
obligation of the Borrower hereunder or under such Note to repay the principal
amount of such Loan and all interest accruing thereon.
2.6 Fees. The Borrower shall pay to the Agent, for the benefit of
----
the Banks, a commitment fee of 1/2% per annum (based on a year having 360 days
and actual days elapsed) on the aggregate average daily undisbursed amount of
each Commitment. Such commitment fee shall (a) commence to accrue as of the
earlier of the Closing Date and April 18, 1995, and continue for each day to and
including the Termination Date, (b) be in addition to any other fee required by
the terms and conditions of this Agreement or any other agreement among or
between the parties hereto, (c) be payable quarterly in arrears on each
Quarterly Date and (d) be shared by the Banks in accordance with their Ratable
Shares.
2.7 Prepayment.
----------
(a) Voluntary Prepayments.
---------------------
(i) By notice to the Agent (which shall be in writing or by
telephonic communication confirmed by telecopy or other facsimile transmission
on the same day as such telephone notice) no later than 11:00 A.M. Cleveland,
Ohio time on the Banking Day prior to such prepayment (with respect to any Base
Rate Loan) or on the third Banking Day prior to such prepayment (with respect to
any LIBOR Loan), the Borrower may, at its option, prepay the Reducing Loans or
the Working Capital Loans in whole at any time or in part from time to time
without penalty or premium (except as provided in Section 2.7(d)); provided,
--------
however, that each partial prepayment of the Reducing Loans shall be in the
-------
aggregate principal amount of not less than $250,000 or an integral multiple of
$250,000 in excess thereof and that each partial prepayment of the Working
Capital Loans shall be in the aggregate principal amount of not less than
$100,000 or an integral multiple of $100,000 in excess thereof.
(ii) By notice to the Agent (which shall be in writing or
by telephonic communication confirmed by telecopy or other facsimile
transmission on the same day as such telephone notice) no later than 11:00 A.M.
Cleveland, Ohio time on the third Banking Day prior to such prepayment, the
Borrower may, at its option, prepay the Term Loans in whole or in part;
provided, however, that each partial prepayment shall be in the aggregate
-------- -------
principal amount of not less than $250,000 or an integral
-27-
multiple of $100,000 in excess thereof; provided, further, that the Borrower
-------- -------
shall pay to the Agent, for the benefit of the Banks, the applicable Term Loan
Prepayment Premium upon any voluntary prepayment of the Term Loans prior to the
second anniversary of the Closing Date; provided, still, further, that, unless
-------- ----- -------
such prepayment is in connection with a prepayment of all Loans, together with
all accrued interest and all other amounts due hereunder or under the Collateral
Documents, all voluntary prepayments of any Term Loan may only be made on the
last day of April of any year and may not exceed an amount equal to 50% of the
prior year's Excess Cash Flow. All accrued interest (including Deferred
Interest) on the amount prepaid shall be paid with the prepayment. The amount of
any voluntary prepayment that may be made pursuant to the last proviso of the
first sentence of this Section 2.7(a)(ii) shall be determined from the annual
financial statements delivered by the Borrower pursuant to Section 7.5(a) in
respect of such fiscal year, and any such voluntary prepayment shall be
accompanied by a certificate executed by the chief financial officer of the
Borrower setting forth the calculations from which the amount of such prepayment
and satisfaction of the conditions set forth herein were determined.
(b) Mandatory Prepayments.
---------------------
(i) Reduction of Commitments. If at any time the sum of
------------------------
the outstanding principal amount of the Reducing Loans plus the face amount of
all outstanding Letters of Credit exceeds the Reducing Commitment, or if at any
time the outstanding principal amount of the Working Capital Loans exceeds the
Working Capital Commitment, the Borrower shall immediately prepay the Reducing
Loans or the Working Capital Loans, as the case may be, without penalty or
premium (except that any such prepayment of any LIBOR Loan shall be made
together with the applicable LIBOR Prepayment Premium), in an amount necessary
to cause the outstanding principal amount of the Reducing Loans not to exceed
the Reducing Commitment or to cause the outstanding principal amount of the
Working Capital Loans not to exceed the Working Capital Commitment, as the case
may be. All accrued interest on the amount prepaid shall be paid with the
prepayment.
(ii) Excess Cash Flow Recapture. Within ninety days of the
--------------------------
end of each fiscal year ending on or after December 31, 1996, the Borrower shall
make a mandatory prepayment of the Loans in an amount equal to 50% of the Excess
Cash Flow for such fiscal year. Mandatory prepayments made pursuant to this
Section 2.7(b)(ii) shall be determined from the annual financial statements
delivered by the Borrower pursuant to Section 7.5(a) in respect of such fiscal
year and shall be accompanied by a certificate executed by the chief financial
officer of the Borrower setting forth the calculations from which the amount of
such prepayment was determined.
-28-
(iii) Asset Sales. Immediately upon receipt by the
-----------
Borrower of cash proceeds of any Asset Sale, the Borrower shall immediately make
a mandatory prepayment of the Loans in an amount equal to such cash proceeds,
net of any costs directly incurred in connection with such Asset Sale and any
taxes reasonably estimated to be payable in connection with such Asset Sale as
certified by the Borrower's chief financial officer. Together with such
prepayment, the Borrower shall deliver to the Agent a certificate executed by
the chief financial officer of the Borrower setting forth the calculation of the
net cash proceeds of such Asset Sale.
(iv) Unapplied Insurance Proceeds. Within ninety days from
----------------------------
the date of receipt of any cash payments under any insurance policy maintained
by the Borrower which have not been reinvested in productive assets of a kind
then used or usable in the business of the Borrower or used to maintain the
business of the Borrower as a going concern, the Borrower shall make a mandatory
prepayment of the Loans in the amount of such unreinvested or unused proceeds,
net of any costs directly incurred in connection with receiving payment of such
proceeds and any taxes reasonably estimated to be payable in connection with
such receipt as certified by the Borrower's chief financial officer; provided,
--------
however, that upon and during the continuance of any Event of Default or
-------
Possible Default all such insurance proceeds received by the Borrower shall be
applied as a prepayment of the Loans.
(c) Application of Prepayments.
--------------------------
(i) Application to Accrued Interest. All prepayments made
-------------------------------
pursuant to this Section 2.7 shall be applied as follows: first, to accrued
interest (including, in the case of a prepayment of the Term Loans, Deferred
Interest) and then to the outstanding principal of the Loans. For purposes of
the calculation of interest and the determination of whether any LIBOR
Prepayment Premium is due in connection with any such prepayment, such principal
prepayments shall be applied first to the Base Rate Loans and then to the LIBOR
Loans with the shortest remaining Interest Periods.
(ii) Application to Reducing Loans, Working Capital Loans
----------------------------------------------------
and Term Loans. All mandatory prepayments of principal required to be made
--------------
pursuant to Section 2.7(b)(ii), (iii) or (iv) shall be applied first to the
Reducing Loans and then, after the Reducing Loans and the Reducing Commitment
have been reduced to zero, to the Working Capital Loans and then, after the
Working Capital Loans and the Working Capital Commitment have been reduced to
zero, to the Term Loans. All voluntary and mandatory prepayments of the Term
Loans shall be applied to the subsequent principal installments due under
Section 2.3(b) in the inverse order of maturity.
-29-
(iii) Application to the Reducing Loans and the Reducing
--------------------------------------------------
Commitment. Any mandatory prepayment of the Reducing Loans (other than pursuant
----------
to Section 2.7(b)(i)) shall cause the Reducing Commitment to be immediately and
automatically reduced by the amount of such prepayment, and each such mandatory
reduction shall be applied to the subsequent Reducing Commitment reductions set
forth in Section 2.1(b) in the inverse order of maturity.
(iv) Application to the Working Capital Loans and the
------------------------------------------------
Working Capital Commitment. Any mandatory prepayment of the Working Capital
--------------------------
Loans (other than pursuant to Section 2.7(b)(i)) shall cause the Working Capital
Commitment to be immediately and automatically reduced by the amount of such
prepayment.
(d) Prepayment Premiums. The Borrower shall pay to the Agent,
-------------------
for the benefit of the Banks, the applicable LIBOR Prepayment Premium upon any
prepayment or conversion (whether voluntary or involuntary) of any LIBOR Loan
not made on the last day of the applicable Interest Period. The Borrower shall
pay to the Agent, for the benefit of the Banks, the applicable Term Loan
Prepayment Premium, if any, upon any prepayment (whether voluntary or
involuntary) of the Term Loans.
2.8 Reserves or Deposit Requirements, Etc. If at any time any
-------------------------------------
Regulatory Change (including without limitation, any change in Regulation D of
the Board of Governors of the Federal Reserve System) shall impose any reserve
and/or special deposit requirement (other than reserves included in the LIBOR
Reserve Percentage, the effect of which is reflected in the interest rate of any
LIBOR Loan) against assets held by, or deposits in or for the amount of any
loans by, any Bank, and the result of the foregoing is to increase the cost
(whether by incurring a cost or adding to a cost) to such Bank of taking or
maintaining hereunder any LIBOR Loan or to reduce the amount of principal,
interest or fees received by such Bank with respect to any such Loan, then such
Bank shall notify the Borrower and the Agent of such occurrence. Thereafter,
within ten days after written demand by such Bank the Borrower shall pay to such
Bank additional amounts sufficient to compensate and indemnify such Bank for
such increased cost or reduced amount. A statement as to the increased cost or
reduced amount as a result of any event mentioned in this Section shall be
submitted by such Bank to the Agent and to the Borrower and shall, in the
absence of manifest error, be conclusive and binding as to the amount thereof.
2.9 Tax Law, Increased Costs, Etc. In the event that by reason of
-----------------------------
any Regulatory Change, any Bank shall, with respect to this Agreement or any
transaction under this Agreement, be subjected to any tax, levy, impost, charge,
fee, duty, deduction or withholding of any kind whatsoever (other than any tax
imposed
-30-
upon the net income of such Bank and other than changes in franchise taxes), and
if any such measure or any other similar measure shall result in an increase in
the costs to such Bank of making or maintaining any LIBOR Loan or in a reduction
in the amount of principal or interest ultimately receivable by such Bank in
respect of such Loan, then such Bank shall notify the Borrower and the Agent
stating the reasons therefor. The Borrower shall thereafter pay to such Bank
within ten days after written demand such additional amounts as will compensate
such Bank for such increased cost or reduced amount. A statement as to any such
increased cost or reduced amount shall be submitted by such Bank to the Agent
and to the Borrower and shall, in the absence of manifest error, be conclusive
and binding as to the amount thereof.
2.10 Eurodollar Deposits Unavailable or Interest Rate
------------------------------------------------
Unascertainable. If any Bank determines that dollar deposits of the relevant
---------------
amount for the relevant Interest Period are not available to it in the
applicable Eurodollar market or if the Agent determines that, by reason of
circumstances affecting such market, adequate and reasonable means do not exist
for ascertaining the LIBOR Rate applicable to such Interest Period, or if any
Bank determines that the LIBOR Rate does not adequately reflect the cost to such
Bank of making such Loan, as the case may be, the Agent or such Bank shall
promptly give notice of such determination to the Agent and to the Borrower, and
any request for a new LIBOR Loan or notice of conversion of an existing Loan to
a LIBOR Loan given thereafter or previously given by the Borrower and not yet
converted shall be deemed a notice to make a Base Rate Loan.
2.11 Changes in Law Rendering LIBOR Loans Unlawful. If at any time
---------------------------------------------
any Regulatory Change shall make it unlawful for any Bank to fund any LIBOR Loan
which it has committed to make hereunder with moneys obtained in the applicable
Eurodollar market, such Bank shall notify the Agent and the Borrower, and the
obligation of the Banks to fund such Loan shall, upon the happening of such
event, forthwith be suspended for the duration of such illegality. If any such
change makes it unlawful for any Bank to continue in effect the funding in the
applicable Eurodollar market of any LIBOR Loan previously made by it hereunder,
such Bank shall, upon the happening of such event, notify the Agent and the
Borrower thereof in writing stating the reasons therefor, and the Borrower
shall, on the earlier of (a) the last day of the then current Interest Period or
(b) if required by such Regulatory Change on such date as shall be specified in
such notice, either convert all such Loans to Base Rate Loans or prepay all such
Loans in full.
2.12 Funding. Any Bank may, but shall not be required to, make LIBOR
-------
Loans hereunder with funds obtained outside the United States.
-31-
2.13 Indemnity. Without prejudice to any other provisions of
---------
Sections 2.8 through 2.12, the Borrower hereby agrees to indemnify each Bank
against any loss or expense which it may sustain or incur as a consequence of
the Borrower's failure to borrow any LIBOR Loan requested pursuant to this
Agreement or any default by the Borrower in payment when due of any amount due
hereunder in respect of any LIBOR Loan or any prepayment or conversion by the
Borrower of a LIBOR Loan prior to the end of its Interest Period, whether
voluntarily or as required pursuant to the terms hereof, including, but not
limited to, any premium or penalty incurred by such Bank in respect of funds
borrowed by it for the purpose of making or maintaining such Loan, as determined
by such Bank; provided, however, that such indemnification shall be net of any
-------- -------
LIBOR Prepayment Premium received by such Bank in respect of any such action or
inaction of the Borrower. A statement as to any such loss or expense shall be
submitted by such Bank to the Agent and the Borrower for payment under the
aforesaid indemnification, which statement shall, in the absence of manifest
error, be conclusive and binding as to the amount thereof.
2.14 Capital Adequacy. If any Bank shall determine that any
----------------
Regulatory Change regarding capital adequacy or compliance by such Bank (or its
lending office) with any request or directive regarding capital adequacy
(whether or not having the force of law) of any governmental authority, central
bank or comparable agency has or would have the effect of reducing the rate of
return on such Bank's capital (or on the capital of such Bank's holding company)
as a consequence of its obligations hereunder to a level below that which such
Bank (or its holding company) could have achieved but for such Regulatory Change
or compliance (taking into consideration such Bank's policies or the policies of
its holding company with respect to capital adequacy) by an amount which such
Bank deems to be material, then from time to time, within ten days after demand
by such Bank, the Borrower shall pay to such Bank such additional amount or
amounts as will compensate such Bank (or its holding company) for such
reduction. A certificate of such Bank claiming compensation under this Section
and setting forth the additional amount or amounts to be paid to it hereunder
shall be conclusive in the absence of manifest error. In determining such
amount, such Bank may use any reasonable averaging and attribution methods. The
protection of this Section shall be available to each Bank regardless of any
possible contention of the invalidity or inapplicability of the law, regulation
or other condition which shall have been imposed.
2.15 Taxes. All sums payable by the Borrower hereunder or under the
-----
Notes, whether of principal, interest, fees, expenses or otherwise, shall be
paid in full, free of any deductions or withholdings for any and all present and
future taxes, levies, imposts, stamps, duties, fees, assessments, deductions,
withholdings, and other governmental charges and all
-32-
liabilities with respect thereto (collectively referred to as "Taxes"). If the
-----
Borrower is prohibited by law from making payments hereunder or under the Notes
free of such deductions or withholdings, then the Borrower shall pay such
additional amount as may be necessary in order that the actual amount received
by the Banks after such deduction or withholding shall equal the full amount
stated to be payable hereunder or under the Notes. The Borrower shall pay
directly to all appropriate taxing authorities any and all present and future
Taxes, and all liabilities with respect thereto imposed by law or by any taxing
authority on or with regard to any aspect of the transactions contemplated by
this Agreement or the execution and delivery of this Agreement or the Notes,
except for any Taxes or other liabilities that the Borrower is contesting in
good faith by appropriate proceedings, provided that the Borrower hereby
--------
indemnifies the Agent and each of the Banks and holds them harmless from and
against any and all liabilities, fees or additional expense with respect to or
resulting from any delay in paying, or omission to pay, Taxes. Within thirty
days after the payment by the Borrower of any Taxes, the Borrower shall furnish
the Agent with the original or a certified copy of the receipt evidencing
payment thereof, together with any other information the Agent may reasonably
require to establish to its satisfaction that full and timely payment of such
Taxes has been made. The Agent shall notify the Borrower of any payment of Taxes
required or requested of it and shall give due consideration to any advice or
recommendation given in response thereto by the Borrower, and upon notice from
the Agent or any Bank that Taxes or any liability relating thereto (including
penalties and interest) have been paid, the Borrower shall pay or reimburse the
paying Bank therefor within ten days of such notice. Without prejudice to the
survival of any other agreement of the Borrower hereunder, the agreements and
obligations of the Borrower contained in this Section shall survive the payment
in full of principal and interest hereunder and under the Notes.
SECTION 3. INTEREST; PAYMENTS.
------------------
3.1 Interest.
--------
(a) Subject to Section 3.1(c) below, prior to maturity, (i)
Reducing Loans and Working Capital Loans which are LIBOR Loans shall bear
interest at the LIBOR Rate plus the Applicable Margin, (ii) Reducing Loans and
Working Capital Loans which are Base Rate Loans shall bear interest at the Base
Rate plus the Applicable Margin and (iii) Term Loans shall bear interest at 16%
per annum.
(b) The Applicable Margin shall be determined by the Agent
annually based on the financial statements delivered to the Banks pursuant to
Section 7.5(a) below. Any change in the
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interest rate on the Loans due to a change in the Applicable Margin shall be
effective on the fifth Banking Day after delivery of such financial statements;
provided, however, that if any such annual financial statements indicate an
-------- -------
increase in the Applicable Margin and such financial statements are not provided
within the time period required in Section 7.5(a), the increase in the interest
rate due to such increase in the Applicable Margin shall be effective
retroactively as of the fifth Banking Day after the date on which such financial
statements were due; and provided, further, that at all times that any of the
-------- -------
Stockholder Debt is secured, the Applicable Margin shall be calculated as if the
ratio of Total Debt to Operating Cash Flow were greater than 5.0 to 1.0. The
Borrower shall deliver to the Banks with each set of annual financial statements
which indicate a change in the Applicable Margin a notice with respect to such
change.
(c) Upon the occurrence of any Event of Default, (i) the entire
outstanding principal amount of each Reducing Loan and each Working Capital Loan
and (to the extent permitted by law) unpaid interest thereon shall bear interest
until paid in full at the Default Interest Rate which shall be payable upon
demand and (ii) the entire outstanding principal amount of each Term Loan and
(to the extent permitted by law) unpaid interest thereon shall bear interest
until paid in full at a rate of interest equal to the rate otherwise applicable
to such Term Loan plus 2% per annum which shall be payable upon demand.
(d) Interest shall be computed on a Three Hundred Sixty day year
basis calculated for the actual number of days elapsed. Interest accrued on
each Base Rate Loan shall be paid quarterly in arrears on each Quarterly Date
after the date hereof until such Loan is paid in full. Interest accrued on each
LIBOR Loan shall be paid on the last day of the Interest Period thereof.
Interest accrued on the Term Loans shall be paid as follows: (i) interest at the
rate of 10% per annum shall be paid quarterly in arrears on each Quarterly Date
after the date hereof until such Loan is paid in full and (ii) the balance of
the accrued interest (6% per annum) shall accrue and compound annually and shall
be paid on the earlier of (A) the date that all outstanding principal of the
Term Loans is paid and (B) the Termination Date (the "Deferred Interest"). The
Borrower shall not have the right to prepay Deferred Interest; provided,
--------
however, that the Borrower shall have the right on each March Quarterly Date to
-------
make a prepayment of Deferred Interest in an amount not to exceed 25% of Excess
Cash Flow for the prior fiscal year.
(e) The rate of interest payable on any Note from time to time shall
in no event exceed the maximum rate, if any, permissible under applicable law.
If the rate of interest payable on any Note is ever reduced as a result of the
preceding
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sentence and at any time thereafter the maximum rate permitted by applicable law
shall exceed the rate of interest provided for on such Note, then the rate
provided for on such Note shall be increased to the maximum rate permitted by
applicable law for such period as is required so that the total amount of
interest received by the holder of such Note is that which would have been
received by such holder but for the operation of the preceding sentence.
3.2 Manner of Payments.
------------------
(a) Prior to each Quarterly Date and the end of each Interest
Period, the Agent shall render a statement to the Borrower of all amounts due to
the Banks for principal, interest and fees hereunder. All amounts listed on each
such statement shall be due and payable on the Quarterly Date or, as the case
may be, the last day of such Interest Period, in respect of which such statement
was sent. As to all other Obligations which become due and payable other than on
a fixed date by their terms, the Agent shall advise the Borrower by a written
statement that they are due and payable, and the Borrower shall pay the same
within ten days of receipt of such statement. If any amounts are not paid by the
Borrower when due and payable, such amounts shall bear interest at the Default
Interest Rate, and the Banks may then charge any account of the Borrower for
such Obligation in the amount due to the Banks. Any failure by the Agent to
render any such statement or give any such advice shall in no way relieve the
Borrower of any liability for or obligation to pay any amount due and payable
hereunder.
(b) Whenever any payment to be made hereunder, including without
limitation any payment to be made on a Note, shall be stated to be due on a day
which is not a Banking Day, such payment may be made on the next succeeding
Banking Day, and such extension of time shall in each case be included in the
computation of the interest payable on such Note.
(c) Unless otherwise provided in this Agreement, all payments or
prepayments made or due hereunder or under the Notes shall be made in
immediately available funds by federal funds wire transfer, and without setoff,
deduction or counterclaim, to the Agent prior to 11:00 A.M., Cleveland time, on
the date when due, at its offices at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
or at such other place as may be designated by the Agent. Funds received after
11:00 A.M., Cleveland time, shall be deemed to have been received on the next
Banking Day. To the extent any such payment is made for the ratable benefit of
the Banks, the Agent shall promptly distribute such payment to the Banks in
accordance with their respective Ratable Shares.
-35-
SECTION 4. CLOSING.
-------
The closing of the transactions contemplated by this Agreement shall
take place on or about April 26, 1995, or such other date as to which the
parties may agree (the "Closing" and the "Closing Date"). Subject to the terms
and conditions hereof, upon the fulfillment or waiver in writing of all the
conditions precedent set out in Section 6, and the delivery to the Banks of the
Notes, the Banks shall make such Loans as may be requested by the Borrower.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE BORROWER.
----------------------------------------------
To induce the Banks to enter into this Agreement and to make the
Loans, the Borrower represents and warrants as follows:
5.1 Organization and Powers. The Borrower is a corporation, duly
-----------------------
organized, validly existing and in good standing under the laws of the State of
Delaware. The Borrower is duly qualified or registered to conduct business and
in good standing under the laws of each jurisdiction in which any Tower is
located and of each other jurisdiction in which the character of its business or
the ownership of its assets makes such qualification or registration necessary,
except where failure to so qualify or register could not reasonably be expected
to have a Material Adverse Effect. The Borrower has all requisite power and
authority to own and operate its properties, to carry on its business as now
conducted and proposed to be conducted, to enter into the Purchase Agreement,
this Agreement and the Collateral Documents to which it is a party and all other
documents to be executed by it in connection with the transactions contemplated
hereby and thereby and to carry out the terms hereof and thereof.
5.2 Authorization. All necessary corporate, stockholder or other
-------------
actions on the part of the Borrower to authorize the execution and delivery of
the Purchase Agreement, this Agreement and the Collateral Documents, and the
performance of the obligations of the Borrower herein and therein, have been
taken. This Agreement, the Purchase Agreement and each Collateral Document have
been duly authorized and executed and are valid and legally binding upon the
Borrower to the extent it is a party thereto, and enforceable in accordance with
their respective terms, except to the extent that the enforceability thereof may
be limited by bankruptcy, insolvency or like laws affecting creditors rights
generally and the availability of equitable remedies.
5.3 Financial Statements. Exhibit D attached hereto contains the
-------------------- ---------
Borrower's unaudited financial statements as of March 31, 1995, and for the
three month period then ended,
-36-
including a balance sheet, income statement and statement of cash flows (the
"Financial Statements"). The Financial Statements are true and complete in all
material respects, disclose all material contingent liabilities and present
fairly the financial condition and results of operations of the Borrower as of
the dates and for the periods indicated and have been prepared in accordance
with GAAP, subject in the case of statements for interim periods to normal year-
end adjustments and to the absence of footnotes.
5.4 Projections. Exhibit E attached hereto are the Borrower's
----------- ---------
projections for the calendar years 1995 through 2001. Such projections were
prepared on an operating basis and assume the consummation of the transactions
contemplated in the Purchase Agreement. Such projections represent the
Borrower's best estimate of projected future operations as of the date of this
Agreement.
5.5 Capitalization of the Borrower. The capitalization of Holdco and
------------------------------
of the Borrower as of the date hereof is as set forth on Exhibit F attached
---------
hereto, including the identity of each Stockholder and the number of shares of
stock of each Stockholder. Holdco owns all of the issued and outstanding
capital stock of the Borrower. All of the issued and outstanding shares of
capital stock of the Borrower have been duly and validly issued and are fully
paid and nonassessable. All of the authorized, issued and outstanding shares of
capital stock of the Borrower are free and clear of any Liens, except as
disclosed on Exhibit F, and except for the Lien in favor of the Agent. None of
---------
such capital stock has been issued in violation of the Securities Act of 1933,
as amended, or the securities or "Blue Sky" or any other applicable laws, rules
or regulations of any applicable jurisdiction. Except as set forth on Exhibit
-------
F, as of the date hereof, the Borrower has no commitment or obligation, either
-
firm or conditional, to issue, deliver, purchase or sell, under any offer,
option agreement, bonus agreement, purchase plan, incentive plan, compensation
plan, warrant, conversion rights, contingent share agreement, stockholders
agreement, partnership agreement or otherwise, any capital stock or other equity
securities or securities convertible into shares of capital stock or other
equity securities.
5.6 Subsidiaries. The Borrower has no Subsidiaries.
------------
5.7 Title to Properties; Patents, Trademarks, Etc. The Borrower has,
----------------------------------------------
and will have after giving effect to the closing under the Purchase Agreement,
good and marketable title to all of its material assets, whether real or
personal, tangible or intangible, free and clear of any Liens or adverse claims
or interests, except Permitted Liens. The Borrower owns or possesses, and will
own or possess after giving effect to the closing under the Purchase Agreement,
the valid right to use all
-37-
the material patents, trademarks, service marks, trade names, copyrights and
licenses and rights in respect of the foregoing necessary for the conduct of its
business, without any known conflict with the rights of others.
5.8 Litigation; Proceedings. Except as disclosed on Exhibit G
----------------------- ---------
attached hereto, there is no action, suit, proceeding, inquiry or investigation
at law or in equity, or by or before any court or governmental instrumentality
or agency, nor any order, decree or judgment in effect, now pending or, to the
best of the Borrower's knowledge, threatened against or affecting the Borrower,
any Material Towers or any of the properties or rights relating to any Material
Towers, which could reasonably be expected to have a Material Adverse Effect.
Except as disclosed on Exhibit G hereto, there is no application, petition,
---------
complaint, proceeding or investigation pending or, to the best of the Borrower's
knowledge, threatened, with respect to any License or which could restrict in
any material manner the ownership, operation or license status of any Material
Towers.
5.9 Taxes. All Federal, state and local tax returns, reports and
-----
statements (including, without limitation, those relating to income taxes,
withholding, social security and unemployment taxes, sales and use taxes and
franchise taxes) required to be filed by the Borrower have been properly filed
with the appropriate governmental agencies in all jurisdictions in which such
returns, reports and statements are required to be filed, which returns, reports
and statements are complete and accurate, and all taxes and other impositions
due and payable have been timely paid prior to the date on which any fine,
penalty, interest, late charge or loss may be added thereto for non-payment
thereof. As of the date hereof, the Borrower has not filed with the Internal
Revenue Service or any other governmental authority any agreement or other
document extending or having the effect of extending the period for assessment
or collection of any Federal, state, local or foreign taxes or other
impositions. All tax deficiencies asserted or assessments made as a result of
any examinations conducted by the Internal Revenue Service or any other
governmental authority relating to the Borrower have been fully paid or are
being contested in accordance with the provisions of Section 7.4. Proper and
accurate amounts have been withheld by the Borrower from its employees for all
periods to fully comply with the tax, social security and unemployment
withholding provisions of applicable Federal, state, local and foreign law. The
charges, accruals and reserves on the books of the Borrower in respect of any
taxes or other governmental charges for the Borrower are adequate.
5.10 Absence of Conflicts. The execution, delivery and performance of
--------------------
the Purchase Agreement, this Agreement and the Collateral Documents and all
actions and transactions contemplated hereby and thereby will not (a) violate,
be in
-38-
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under (i) any provision of the Certificate of
Incorporation or By-laws of the Borrower, (ii) any arbitration award or any
order of any court or of any other governmental agency or authority, (iii) any
License relating to any Material Towers or under which the Borrower operates or
will operate after giving effect to the closing under the Purchase Agreement
which breach or default of such License could reasonably be expected to have a
Material Adverse Effect, or (iv) any applicable law, rule, order or regulation
(including without limitation, (A) any law, rule, regulation or policy of the
FAA or any other Licensing Authority or (B) Regulations G, T, U or X of the
Board of Governors of the Federal Reserve System) or any material agreement,
instrument or document relating to any Material Towers or to which the Borrower
is a party, or by which the Borrower or any of its properties is bound,
including, without limitation, the License Agreement or any of the leases
relating to Material Towers, or (b) result in the creation or imposition of any
Lien of any nature whatsoever, other than those Liens arising hereunder or under
the Collateral Documents, upon any of the properties of the Borrower.
5.11 Indebtedness. The Borrower has no Indebtedness of any nature,
------------
whether due or to become due, absolute, contingent or otherwise, including
Indebtedness for taxes and any interest or penalties relating thereto, except
(a) liabilities reflected in the Financial Statements, (b) the liability to pay
legal and accounting fees and reasonable closing expenses in connection with
this Agreement and the Purchase Agreement, (c) to the extent disclosed on
Exhibit H attached hereto and (d) Indebtedness permitted pursuant to Section
---------
8.1.
5.12 Compliance. Except as disclosed on Exhibit G attached hereto,
---------- ---------
neither the Borrower nor, to the best of the Borrower's knowledge, either
Seller, is in violation of any statute, ordinance, law, rule, regulation or
order of the United States of America, the FAA, or any other federal, state,
county, municipal or other governmental agency or authority applicable to it,
its properties, the maintenance of any Material Towers or the conduct of its
business, which violation could reasonably be expected to have a Material
Adverse Effect. The Borrower has not violated or breached in any material
respect the provisions of any material indenture, License, agreement, note,
lease or other instrument or document to which it is a party or by which it is
bound, nor does there exist any material default, or any event or condition
which, upon notice or lapse of time, or both, would become a material default,
under any such material indenture, License, agreement, note, lease, or other
instrument or document. The Borrower has the legal right and authority,
including without limitation, necessary authorizations from the FAA, to conduct
its business as now conducted or proposed to be conducted.
-39-
5.13 Statements Not Misleading. No statement, representation or
-------------------------
warranty made by the Borrower or any other party (other than the Agent and the
Banks) in or pursuant to this Agreement or the Exhibits attached hereto or any
of the Collateral Documents contains or will contain any untrue statement of a
material fact, nor omits or will omit to state a material fact necessary to make
such statement not misleading or otherwise violates any federal or state
securities law, rule or regulation. There is no fact known to the Borrower
(other than matters of a general economic nature) that has had or could
reasonably be expected to have a Material Adverse Effect and that has not been
disclosed herein.
5.14 Consents or Approvals. No consent, approval or authorization
---------------------
of, or filing, registration or qualification with, any governmental authority or
any other Person (including, without limitation, the FAA or any other Licensing
Authority) is required to be obtained by the Borrower in connection with the
execution, delivery or performance of the Purchase Agreement, this Agreement or
any of the Collateral Documents, including, without limitation, in connection
with the granting of liens and security interests in the assets of the Borrower
and in the capital stock of the Borrower, which has not already been obtained or
completed, except for the filing of financing statements and the Mortgages and
other actions expressly required to be taken pursuant to the Collateral
Documents.
5.15 Material Contracts and Commitments. Exhibit I attached hereto
---------------------------------- ---------
contains a true and complete description of all material contracts and
commitments of the Borrower as of the Closing Date (after giving effect to the
closing under the Purchase Agreement), whether oral or written, including,
without limitation, (a) those governing any Indebtedness; (b) any security
agreement, pledge agreement, mortgage or guaranty; (c) management, construction
supervision, service or employment agreements, conditional sales contracts or
leases of real or personal property, which involve expenditures in excess of
$50,000 in any single case; (d) collective bargaining agreements; (e) contracts
or commitments for the future purchase or sale of goods by the Borrower, other
than those which involve the payment or receipt of less than $50,000 in any
single case; (f) contracts or commitments which involve a Capital Expenditure in
excess of $50,000 in any single case; (g) bonus, pension, retirement, insurance
or other employee benefit plans; (h) all Licenses and (i) all Land Lease
Agreements. All of the agreements, contracts and commitments listed on Exhibit
-------
I are in full force and effect without material default. Exhibit I further
- ---------
identifies each such contract which requires consent to the granting of a Lien
in favor of the Agent, for the benefit of the Banks, on the rights of the
Borrower under such contract. The Borrower has made available to the Agent true
and complete copies of all of the agreements, contracts and commitments listed
on Exhibit I.
---------
-40-
5.16 Employee Benefit Plans. Exhibit J contains a true and complete
---------------------- ---------
list of all Plans maintained by the Borrower or any member of the Controlled
Group. Neither the Borrower nor any member of the Controlled Group has or will
have, as of the closing under the Purchase Agreement, any liability, or
reasonably anticipates any liability, of any kind in excess, in the aggregate,
of $50,000, to or in respect of any Plan or Benefit Arrangement. With respect
to the Plans and Benefit Arrangements currently maintained by the Borrower or
any member of the Controlled Group: (a) each Plan that is intended to be
qualified under Code Section 401(a) is so qualified and has been so qualified
since its adoption, and each trust forming a part thereof is exempt from tax
under Code Section 501(a); (b) each Plan complies in all material respects with
all applicable requirements of law, has been administered in accordance with its
terms and all required contributions have been made; (c) neither the Borrower
nor any member of the Controlled Group knows or has reason to know that the
Borrower or any member of the Controlled Group has engaged in a transaction
which would subject it to any tax, penalty or liability under ERISA or the Code
for any prohibited transaction; (d) no Plan is subject to the minimum funding
requirements under ERISA Section 302 or Code Section 412, is a multiemployer
plan (as defined in ERISA Section 4001(a)(3)), is a defined benefit plan (as
defined under ERISA Section 3(35) or Code Section 414(j)), or is a multiple
employer plan (as defined in ERISA Section 4063). No Plan or Benefit
Arrangement maintained by the Borrower or any member of the Controlled Group is
a multiple employer welfare arrangement (as defined in ERISA Section 3(40)).
5.17 Licenses. The Licenses shown on Exhibit I constitute all of the
-------- ---------
Licenses which are necessary for the lawful operation of the business of the
Borrower (after giving effect to the closing under the Purchase Agreement) in
the manner and to the full extent they are currently operated. Exhibit I sets
---------
forth a correct and complete list of each pending application for a License
filed by the Borrower. All of the FAA Licenses have been duly and validly
issued to and are legally held by the Borrower and are in full force and effect
without condition except those of general application. The Licenses have been
issued in compliance with all applicable laws and regulations, are legally
binding and enforceable in accordance with their terms and are in good standing.
The Borrower knows of no facts or conditions which would constitute grounds for
any Licensing Authority to deny any pending material application for a License,
to suspend, revoke, materially adversely modify or annul any License or to
impose a material financial penalty on the Borrower.
5.18 Material Restrictions. The Borrower is not a party to any
---------------------
agreement or other instrument or subject to any other restriction which
materially and adversely affects or could
-41-
materially and adversely affect its business, property, assets, operations or
condition, financial or otherwise.
5.19 Investment Company Act. The Borrower (a) is not an investment
----------------------
company as that term is defined in the Investment Company Act of 1940, as
amended, (b) does not directly or indirectly control, and is not directly or
indirectly controlled by a company which is an investment company as that term
is defined in such act and (c) is not otherwise subject to regulation under such
act.
5.20 Absence of Material Adverse Changes. No Material Adverse Effect
-----------------------------------
has occurred.
5.21 Defaults. No Possible Default or Event of Default now exists or
--------
will exist upon the making of any Loan.
5.22 Real Property. Exhibit K attached hereto lists as of the
------------- ---------
Closing Date (a) all real estate owned by the Borrower or which the Borrower
will acquire pursuant to the Purchase Agreement and all leases pursuant to which
the Borrower has acquired or will acquire pursuant to the Purchase Agreement a
leasehold interest in real estate, (b) all such leases that have been recorded
in the real property records of any jurisdiction, (c) all such owned and leased
property for which the Borrower has obtained title insurance or a commitment for
title insurance and (d) the use of such owned and leased property in the
Borrower's operations and the Borrower's good faith estimate of the fair market
value of each such owned parcel.
5.23 Securities Laws. No proceeds of any Loan will be used by the
---------------
Borrower to acquire any security in any transaction which is subject to Section
13 or 14 of the Securities Exchange Act of 1934, as amended. Neither the
registration of any security under the Securities Act of 1933, as amended, or
the securities laws of any state, nor the qualification of an indenture in
respect thereof under the Trust Indenture Act of 1939, as amended, is required
in connection with the consummation of this Agreement or the Purchase Agreement.
5.24 Insurance. All policies of insurance of any kind or nature
---------
owned by or issued to the Borrower, including, without limitation, policies of
fire, theft, public liability, property damage, other casualty, employee
fidelity, worker's compensation, employee health and welfare, title, property
and liability insurance, are in full force and effect and are of a nature and
provide such coverage as is sufficient and as is customarily carried by
companies of the size and character of the Borrower and engaged in a similar
business. In the past three years, the Borrower has not been refused insurance
for which it applied or had any policy of insurance terminated (other than at
its request).
-42-
5.25 Labor Disputes. There are no strikes or other material labor
--------------
disputes or grievances pending against the Borrower. To the best knowledge of
the Borrower, there are no such strikes and no such disputes threatened which
could reasonably be expected to have a Material Adverse Effect. There are no
material unfair labor practice charges or grievances pending or in process or,
to the best knowledge of the Borrower, threatened by or on behalf of any
employee or group of employees of the Borrower. The Borrower has not received
any written complaints, and has no knowledge of any threatened complaints, nor
to the best of the Borrower's knowledge are any such complaints on file with any
Federal, state or local governmental agency, alleging employment discrimination
by the Borrower. All payments due from the Borrower pursuant to the provisions
of any collective bargaining agreement have been paid or accrued as a liability
on the books of the Borrower.
5.26 Environmental Compliance.
------------------------
(a) The Borrower has obtained all material permits, licenses
and other authorizations which are required under all Environmental Laws. The
Borrower is in material compliance with all terms and conditions of all such
permits, licenses and authorizations, and is also in material 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, including, without limitation, all Environmental Laws in all
jurisdictions in which the Borrower owns, maintains or manages a Tower, a
facility or site, arranges or has arranged for disposal or treatment of
Hazardous Materials, solid waste or other wastes, accepts or has accepted for
transport any Hazardous Materials, solid waste or other wastes or holds or has
held any interest in real property or otherwise.
(b) No Environmental Claim has been issued, no complaint has
been filed, no penalty has been assessed and no litigation, proceeding,
investigation or review is pending or, to the best of the Borrower's knowledge,
threatened by any Person with respect to any alleged failure by the Borrower to
comply with any Environmental Law or to have any permit, license or
authorization required in connection with the conduct of the business of the
Borrower or with respect to any generation, treatment, storage, recycling,
transportation, use, disposal or Release of any Hazardous Materials generated by
the Borrower or with respect to any real property in which the Borrower holds or
has held an interest or any past or present operation of the Borrower.
-43-
(c) There are no Environmental Laws requiring any material
work, repairs, construction, Capital Expenditures or other remedial work of any
nature whatsoever, with respect to any real property in which the Borrower holds
or has held an interest or any past or present operation of the Borrower.
(d) To the best of the Borrower's knowledge, the Borrower has
not handled any Hazardous Material, on any property now or previously owned or
leased by the Borrower to an extent that it has, or could reasonably be expected
to have, a Material Adverse Effect, and to the best of the Borrower's knowledge,
except as could not reasonably be expected to have a Material Adverse Effect:
(i) no PCBs are present at any property now or
previously owned or any premises now or previously leased by the Borrower;
(ii) no asbestos is present at any property now or
previously owned or any premises now or previously leased by the Borrower;
(iii) no underground storage tanks for Hazardous
Materials, active or abandoned, are now or were previously operated at any
property now or previously owned by the Borrower, and, with respect to premises
now or previously leased by the Borrower, no underground storage tanks for
Hazardous Materials, active or abandoned, are now or were previously operated by
the Borrower;
(iv) no Hazardous Materials have been Released, in a
reportable quantity, where such a quantity has been established by statute,
ordinance, rule, regulation or order, at, on or under any property now or
previously owned by the Borrower; and
(v) no Hazardous Materials have been otherwise Released
at, on or under any property now or previously owned or any premises now or
previously leased by the Borrower.
(e) The Borrower has not transported or arranged for the
transportation of any material amount of Hazardous Material to any location that
is listed on the National Priorities List ("NPL") under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended
("CERCLA"), listed for possible inclusion on the NPL by the Environmental
Protection Agency in the Comprehensive Environmental Response and Liability
Information System, as provided for by 40 C.F.R. (S)300.5 ("CERCLIS"), or on any
similar state or local list or that is the subject of Federal, state or local
enforcement actions or other investigations that may lead to any material
Environmental Claims against the Borrower.
-44-
(f) No material amount of Hazardous Material generated by the
Borrower has been recycled, treated, stored, disposed of or Released by the
Borrower at any location.
(g) No oral or written notification of a Release of any
material amount of a Hazardous Material has been filed by or on behalf of the
Borrower and no property now, or, to the best of the Borrower's knowledge,
previously, owned or leased by the Borrower is listed or proposed for listing on
NPL or on any similar state list of sites requiring investigation or clean-up.
(h) There are no Liens arising under or pursuant to any
Environmental Laws on any of the property owned or premises leased by the
Borrower, and no government actions have been taken or are in process which
could subject any of such property to such Liens, and the Borrower would not be
required to place any notice or restriction relating to the presence of
Hazardous Materials at any property owned by it in any deed to such property.
(i) The Borrower has not retained or assumed any liabilities
(contingent or otherwise) in respect of any Environmental Claims (i) under the
terms of any contract or agreement or (ii) by operation of law as a result of
merger, consolidation or the sale, exchange or contribution of assets or stock.
(j) There have been no environmental investigations, studies,
audits, tests, reviews or other analyses conducted by or which are in the
possession of the Borrower in relation to any property or facility now or
previously owned or leased by the Borrower which have not been disclosed in
writing and made available to the Banks.
5.27 Solvency. The Borrower has received, or has the right hereunder
--------
to receive, consideration which is the reasonable equivalent value of the
obligations and liabilities that the Borrower has incurred to the Banks. The
Borrower is not insolvent as defined in Section 101 of Title 11 of the United
States Code or any applicable state insolvency statute, nor, after giving effect
to the consummation of the transactions contemplated herein, will the Borrower
be rendered insolvent by the execution and delivery of this Agreement, the Notes
or the Collateral Documents to the Banks or the consummation of the Purchase
Agreement. The Borrower is not engaged, and is not about to engage, in any
business or transaction for which the assets retained by it shall be an
unreasonably small capital, taking into consideration the obligations to the
Banks incurred hereunder. The Borrower does not intend to, and does not believe
that it will, incur debts beyond its ability to pay them as they mature.
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5.28 Purchase Agreement. The Borrower has provided to the Agent a
------------------
complete and correct copy of the Purchase Agreement, together with all exhibits
thereto. To the best of the Borrower's knowledge, all of the representations
and warranties of the Sellers in the Purchase Agreement are true and correct in
all material respects as of the date hereof as if given as of the date hereof.
No party to the Purchase Agreement has given notice of any breach of its
representations or agreements therein. All of the representations and
warranties of the Borrower in this Section 5 shall be deemed to be given as of
the moment following consummation of the closing under the Purchase Agreement,
and the Towers being acquired pursuant to the Purchase Agreement shall be deemed
to be Towers for all purposes of these representations and warranties.
SECTION 6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE BANKS.
------------------------------------------------
The obligations of the Banks to make the initial Loans on the Closing
Date, to issue any Letter of Credit and to make any subsequent Loan are subject
to the fulfillment or waiver in writing of each of the following conditions
precedent. The Borrower shall deliver to the Agent copies for each Bank of each
document, instrument or other item to be delivered pursuant to this Section 6.
6.1 Compliance. All of the representations and warranties of the
----------
Borrower herein and in the Collateral Documents shall be true in all material
respects on and as of the Closing Date, the date of issuance of any Letter of
Credit and the date of any subsequent Loan (other than a Loan resulting from the
funding of a Letter of Credit), as if made on and as of such date. The Borrower
shall be in compliance with all the provisions of this Agreement and each
Collateral Document, and no Possible Default or Event of Default shall have
occurred and be continuing. On the Closing Date and on the date of each
subsequent Loan (other than a Loan resulting from the funding of a Letter of
Credit) and the date of issuance of any Letter of Credit, the Borrower shall
deliver to the Banks a certificate, dated as of such date, and signed by the
President or the chief financial officer of the Borrower, certifying compliance
with the conditions of this Section 6.1. Each request by the Borrower for a
Loan shall, in and of itself, constitute a representation and warranty that the
Borrower, as of the date of such Loan, is in compliance with this Section.
6.2 Security Agreement. The Borrower shall have executed and
------------------
delivered to the Agent a Security Agreement (the "Security Agreement"), in form
and substance satisfactory to the Agent, granting to the Agent, for the benefit
of the Banks, a perfected, first priority security interest in substantially all
of the personal property of the Borrower, in form and substance
-46-
satisfactory to the Agent; and the Security Agreement, and the security
interests granted pursuant thereto, shall be in full force and effect.
6.3 Guaranty and Pledge Agreements.
------------------------------
(a) Holdco shall have executed and delivered to the Agent a
Guaranty (the "Guaranty"), in form and substance satisfactory to the Agent, of
all of the Borrower's Obligations hereunder, under the Notes and under each
Collateral Document.
(b) Holdco shall have executed and delivered to the Agent a
Pledge Agreement (the "Holdco Pledge Agreement"), in form and substance
satisfactory to the Agent, granting to the Agent, for the benefit of the Banks,
a perfected, first priority security interest in all of the issued and
outstanding shares of capital stock of the Borrower; and Holdco shall have
delivered to the Agent stock certificates evidencing all of such shares and duly
executed blank stock powers in respect thereof and shall have taken all other
actions as may be required to effect the grant and perfection of the Agent's
security interest in such stock; and the Holdco Pledge Agreement, and the
security interests granted pursuant thereto, shall be in full force and effect.
(c) Centennial Fund IV, L.P. shall have executed and delivered
to the Agent a Pledge Agreement (the "Stockholder Pledge Agreement"), in form
and substance satisfactory to the Agent, granting to the Agent, for the benefit
of the Banks, a perfected, first priority security interest in all of the notes
evidencing the Stockholder Debt; and Centennial Fund IV, L.P. shall have
delivered to the Agent all of such notes and shall have taken all other actions
as may be required to effect the grant and perfection of the Agent's security
interest in such notes; and the Stockholder Pledge Agreement, and the security
interests granted pursuant thereto, shall be in full force and effect.
6.4 Real Property Matters.
---------------------
(a) With respect to each parcel of real property owned by the
Borrower, including real property being acquired pursuant to the Purchase
Agreement, the Borrower shall have executed and delivered a first priority
mortgage or deed of trust, in form and substance satisfactory to the Agent,
covering such parcel of real property. With respect to each parcel of real
property leased by the Borrower, including real property being acquired pursuant
to the Purchase Agreement, the Borrower shall have executed and delivered a
first priority leasehold mortgage or collateral assignment of lease, in form and
substance satisfactory to the Agent, covering such leasehold interest. Such
mortgages, deeds of trust, leasehold mortgages and
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collateral assignments of leases may be referred to hereinafter collectively as
the "Mortgages". Each Mortgage covering owned property and each Mortgage
covering leased property in respect of which a lease or memorandum of lease has
been recorded in the real property records of the jurisdiction where the leased
property is located shall have been duly recorded, and the Borrower shall have
paid all taxes, fees or charges incurred in connection with the execution or
recording thereof.
(b) The Borrower shall have procured and delivered to the Agent
a commitment from a title insurance company satisfactory to the Agent for an
ALTA mortgagee's policy of title insurance (Form 1970 if available, or 1984 or
1990 with 1970 Endorsement or state equivalent) covering each parcel of owned or
leased real property which is subject to a Mortgage that shall have been duly
recorded pursuant to Section 6.4(a), which policy shall be for the benefit of
the Agent on behalf of the Banks and reasonably satisfactory to the Agent and
shall insure that such Mortgage is a valid first mortgage lien on the property
covered thereby. Such policy shall, to the extent available and appropriate: (i)
insure title to the real property and all recorded easements benefitting such
real property, (ii) contain a commercial revolving line of credit endorsement
insuring that advances made subsequent to the date of the title insurance policy
are included in the title coverage, not to exceed the face amount of the title
policy, (iii) contain a last dollar endorsement insuring that the Banks may
apply all payments from Borrower to the release of security or collateral other
than the real property until the aggregate outstanding indebtedness equals the
face amount of the title insurance policy and (iv) contain first loss
endorsement insuring the Agent may realize upon the real property without
requiring maturity of the entire indebtedness by acceleration and regardless of
the existence of and without pursuing other security or collateral. No title
indemnities shall be established in connection with the issuance of the
aforesaid lender's title insurance policy.
(c) With respect to each parcel of real property owned by the
Borrower, including real property being acquired pursuant to the Purchase
Agreement, with respect to which the Borrower has granted a Mortgage to the
Agent, for the benefit of the Banks, the Borrower shall have procured and
delivered to the Agent evidence as to whether such parcel of property is located
within a flood hazard area for purposes of the National Flood Insurance Act of
1968, as amended.
(d) The Borrower shall obtain from each lessor under a lease,
in respect of which lease the Borrower has granted to the Agent, for the benefit
of the Banks, a Mortgage, written consent to such grant in form and substance
satisfactory to the Agent, to the extent such lease requires such consent.
-48-
(e) The Borrower shall have provided to the Agent a copy of the
environmental report (transaction screen) prepared by Arter, Hadden, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ in January, 1995.
6.5 Financing Statements. Any financing statements or fixture
--------------------
filings required by the Security Agreement and the Mortgages shall have been
filed for record with the appropriate governmental authorities.
6.6 Subordination Agreements. The Sellers shall have executed and
------------------------
delivered to the Agent a Subordination Agreement (the "Sellers Subordination
Agreement"), in form and substance satisfactory to the Agent, in favor of the
Agent, for the benefit of the Banks, and Centennial Fund IV, L.P. shall have
executed and delivered to the Agent a Subordination Agreement (the "Stockholder
Subordination Agreement"), in form and substance satisfactory to the Agent, in
favor of the Agent, for the benefit of the Banks. The Borrower shall have
caused to be delivered to the Agent a certificate in form and substance
satisfactory to the Agent calculating the amount of Stockholder Debt that must
be secured in order for the Borrower not to be deemed to be a "United States
Real Property Holding Corporation" for purposes of Section 897 of the Code.
Centennial Fund IV, L.P. shall have delivered to the Agent executed but undated
releases, in form and substance satisfactory to the Agent, of all Liens held by
it securing Stockholder Debt, which the Agent shall have the right to file for
record upon the occurrence and during the continuance of an Event of Default.
6.7 Assignment of Seller Escrow Deposit. The Borrower shall deliver
-----------------------------------
to the Agent an assignment, in form and substance satisfactory to the Agent, of
the Seller Escrow Deposit, and all of the Borrower's rights therein, in favor of
the Agent, for the benefit of the Banks.
6.8 Consummation of Purchase Agreement.
----------------------------------
(a) The transactions contemplated by the Purchase Agreement
shall have been consummated, or shall be so consummated simultaneously with the
making of the initial Loans hereunder, without the waiver of any material term
or condition by any party thereto. Without limiting the foregoing sentence, the
Borrower shall have acquired from the Sellers all of the Sites (as that term is
defined in the Purchase Agreement) free and clear of all Liens, except Permitted
Liens, except for any Sites with respect to which the Agent has approved the
Borrower's decision not to acquire such Site. No Site acquired by the Borrower
shall have any Defect (as that term is defined in the Purchase Agreement) except
as approved by the Agent. The consummation of the transactions contemplated by
the Purchase Agreement shall be completed in a manner satisfactory to the Agent
and its counsel, who shall be present at the closing thereof and shall receive
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conformed copies or photocopies of all documents relating thereto, including,
without limitation, copies of all conveyance documents and financial information
delivered by the parties to the Purchase Agreement. The Borrower shall use its
best efforts to cause all opinions and certificates of the Sellers delivered in
connection with such closing to be addressed to the Banks.
(b) As of the Closing Date, the Borrower shall have submitted
to the Agent (i) a list of all Sites which have not been acquired by the
Borrower as of the Closing Date and a statement of the reduction to the purchase
price payable under the Purchase Agreement relating to such non-transferred
Sites and (ii) a list of all Defects (as that term is defined in the Purchase
Agreement) which have not been cured and which relate to Sites which have been
transferred to the Borrower, and all such submissions shall be satisfactory to
the Agent.
(c) The Promissory Note dated January 10, 1995, by the Borrower
to the Sellers in the principal amount of $8,031,330 shall have been paid down
to an outstanding principal amount of less than $1,000,000 (or shall be so paid
with the proceeds of the initial Loan hereunder) and all security granted by the
Borrower to the Sellers securing the PCI Debt shall have been released and
terminated.
6.9 No Indebtedness. The Agent shall have received evidence
---------------
satisfactory to it that (a) the Borrower shall have no Indebtedness to any
Stockholder, any Affiliate of the Borrower or any Affiliate of any Stockholder
(other than the Stockholder Debt), (b) all Liens in favor of any Stockholder
(other than Centennial Fund IV, L.P.) in any assets of the Borrower shall have
been terminated and released and (c) the Liens securing the Stockholder Debt
held by Centennial Fund IV, L.P. shall have been subordinated to all of the
Obligations.
6.10 Opinion of Borrower's and Stockholder's Counsel. On the Closing
-----------------------------------------------
Date, the Agent shall have received the favorable written opinions of general
counsel to the Borrower and Centennial Fund IV, L.P. and of counsel to the
Borrower in the States of Texas, New Mexico and Arizona, in each case dated the
Closing Date, addressed to the Banks and in form and substance satisfactory to
the Agent.
6.11 Insurance Certificates. The Borrower shall have furnished to the
----------------------
Agent on or prior to the Closing Date certificates of insurance together with
copies of all policies or other satisfactory evidence that the insurance
required by Section 7.3 is in full force and effect.
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6.12 Financial Information. On the Closing Date, the Borrower shall
---------------------
have delivered to the Agent a pro forma balance sheet and income statement as of
the Closing Date giving effect to the closing under the Purchase Agreement.
6.13 Engineer's Report. The Agent shall have received from the
-----------------
Borrower an engineering report from an engineer, satisfactory to the Agent,
acceptable in form and substance to the Agent, with respect to the construction,
engineering and maintenance of the Towers.
6.14 Borrowing Request, Statement of Application of Proceeds and
-----------------------------------------------------------
Acquisition Advance Worksheet. The Borrower shall have delivered to the Agent
-----------------------------
in respect of each Loan a borrowing request, in form and substance satisfactory
to the Agent, setting forth the application of the proceeds of the requested
Loan, evidence that such application is permitted pursuant to Sections 2 and
7.1, the recipient of such proceeds and wire transfer instructions. The initial
Borrowing Request shall also set forth the Borrower's estimate of closing costs
incurred in connection with this transaction and the Purchase Agreement. The
Borrower shall have delivered to the Agent the Acquisition Advance Worksheet, as
required pursuant to Section 2.4(d)(iii), in advance of any borrowing the
proceeds of which will be used for a Qualified Acquisition.
6.15 Rate Hedging Obligations. On the Closing Date, the Borrower
------------------------
shall have entered into agreements in form and substance reasonably satisfactory
to the Agent regarding Rate Hedging Obligations so that the notional amount
subject to such agreements equals at least 67% of the principal amount of the
Loans then outstanding for an average maturity of three years.
6.16 Corporate Documents. On the Closing Date, the Borrower shall
-------------------
deliver to the Agent the following:
(a) certificates of good standing for the Borrower from the
Secretary of State of each of the States of Delaware, Texas, Colorado, New
Mexico, Arizona, Oklahoma and Nevada and from the Secretary of State of each
other state in which the Borrower is qualified to do business, in each case
dated as of a date as near to the Closing Date as practicable;
(b) a certificate signed by the Secretary or Assistant
Secretary of the Borrower dated as of the Closing Date certifying that attached
thereto are true and complete copies of (i) the Certificate of Incorporation and
By-Laws of the Borrower, (ii) the Certificate of Incorporation and By-Laws of
Holdco, (iii) the Purchase Agreement, the Securities Purchase Agreement (as
amended), the Securities Exchange Agreement among the Borrower, Holdco and the
Stockholders, the Stockholders Agreement, the License Agreement and the
Management Agreement,
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and (iv) resolutions adopted by its Board of Directors and by Holdco and the
Stockholders, if necessary, authorizing the execution, delivery and performance
of the Borrower of the Purchase Agreement, this Agreement and the Collateral
Documents to which it is a party and the Obligations to be performed by the
Borrower hereunder and thereunder;
(c) an incumbency certificate for the Borrower; and
(d) such other documents as any Bank may reasonably request in
connection with the proceedings taken by the Borrower, Holdco or the
Stockholders authorizing this Agreement, the Collateral Documents and the
transactions contemplated hereby, to the extent it is a party thereto.
6.17 Consents and Releases of Liens. The Agent shall have received
------------------------------
on or prior to the Closing Date: (a) consents to the granting of Liens in all
material Licenses and other material contracts and leases (other than the Land
Lease Agreements, except as provided in Section 6.4(d)) of the Borrower which by
their terms require such consent, and (b) releases of any existing Liens
encumbering any of the Borrower's assets (including, without limitation, assets
being acquired pursuant to the Purchase Agreement and the Land Lease
Agreements), except for Permitted Liens.
6.18 Fees and Expenses. The Borrower shall have paid all fees,
-----------------
expenses and other amounts which are due pursuant hereto or pursuant to any
separate fee agreement with the Agent on or prior to the date of such initial or
subsequent Loan.
6.19 Legal Approval. All legal matters incident to this Agreement
--------------
and the consummation of the transactions contemplated hereby shall be reasonably
satisfactory to Dow, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, special counsel to the Banks.
6.20 Other Documents. The Agent shall have received all Collateral
---------------
Documents duly executed, and each Bank shall have received such other
certificates, opinions, agreements and documents, in form and substance
satisfactory to it, as it may reasonably request.
SECTION 7. AFFIRMATIVE COVENANTS OF THE BORROWER.
-------------------------------------
So long as this Agreement remains in effect or any of the Obligations
remain unpaid or to be performed, or any Letter of Credit remains outstanding,
the Borrower shall perform and comply with the affirmative covenants contained
in this Section.
7.1 Use of Proceeds.
---------------
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(a) The Borrower shall use the proceeds of the Reducing Loans
only as follows: (i) [$____________] shall be used at Closing to pay a portion
of the purchase price pursuant to the Purchase Agreement and to pay all fees and
expenses in connection with the transactions contemplated by the Purchase
Agreement, (ii) to voluntarily prepay the Term Loans, subject to satisfaction of
the provisions of Section 2.7(a)(ii), (iii) for Qualified Acquisitions on or
prior to June 30, 1997, and (iv) for Capital Expenditures made pursuant to the
last sentence of Section 8.7.
(b) The Borrower shall use the proceeds of the Working Capital
Loans only for working capital purposes.
(c) The Borrower shall use the proceeds of the Term Loans only
to pay a portion of the purchase price pursuant to the Purchase Agreement.
7.2 Continued Existence; Compliance with Law. The Borrower shall do
----------------------------------------
or cause to be done all things necessary to preserve, renew and keep in full
force and effect its existence and its material rights, Licenses and Land Lease
Agreements. Without limiting the generality of the foregoing, the Borrower shall
obtain and maintain and preserve in full force and effect any and all material
Licenses and Land Lease Agreements and other material contracts necessary to
maintain, operate and manage the Towers, not breach or violate the same, and
take all actions which may be required to comply in all material respects with
all laws, statutes, rules, regulations, orders and decrees now in effect or
hereafter promulgated by any governmental authority. The Borrower shall obtain,
renew and extend all of the foregoing rights, franchises, permits, Licenses,
Land Lease Agreements and the like which may be necessary for the continuance of
the operation, maintenance and management of the Towers.
7.3 Insurance. The Borrower shall keep its insurable properties
---------
insured to the full replacement cost thereof at all times by financially sound
and reputable insurers acceptable to the Agent, and maintain such other
insurance, to such extent and against such risks, including fire, lightning,
vandalism, malicious mischief, flood (if the Borrower's property is located in
an identified flood hazard area, in which insurance has been made available
pursuant to the National Flood Insurance Act of 1968) and other risks insured
against by extended coverage, as is customary with companies engaged in the same
or similar business similarly situated. All such insurance shall be in amounts
sufficient to prevent the Borrower from becoming a coinsurer, shall name the
Agent, for the benefit of the Banks, as loss payee and may contain loss
deductible provisions of not to exceed $25,000. The Borrower shall maintain in
full force and effect liability insurance and general accident and public
liability insurance against claims for personal or bodily injury, death or
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property damage occurring upon, in, about or in connection with the use or
operation of any property or motor vehicles owned, occupied, controlled or used
by the Borrower and its employees or agents, or arising in any other manner out
of the business conducted by the Borrower. All of such insurance shall be in
amounts reasonably satisfactory to the Agent and shall be obtained and
maintained by means of policies with generally recognized, responsible insurance
companies authorized to do business in such states as may be necessary depending
upon the locations of the Borrower's assets and shall name the Agent, for the
benefit of the Banks, as an additional insured or loss payee, as the case may
be. The insurance to be provided may be blanket policies. Each policy of
insurance shall be written so as not to be subject to cancellation or
substantial modification without not less than thirty days advance written
notice to the Agent. The Borrower shall furnish the Agent annually with
certificates or other evidence satisfactory to the Agent that the insurance
required hereby has been obtained and is in full force and effect and, prior to
the expiration of any such insurance, the Borrower shall furnish the Agent with
evidence satisfactory to the Agent that such insurance has been renewed or
replaced. The Borrower shall, upon request of the Agent, furnish the Agent such
information about the Borrower's insurance as the Agent may from time to time
reasonably request. The Agent may, in its discretion, advise the Borrower that
such insurance coverage should be increased or extended, and by what amounts,
based upon how other companies engaged in the same or similar business similarly
situated are insuring or may be insuring, and these amounts shall become the
insurance coverage required hereunder.
7.4 Obligations and Taxes. The Borrower shall pay or perform all of
---------------------
its material Indebtedness and other material liabilities and obligations in a
timely manner in accordance with normal business practices and with the terms
governing the same. The Borrower shall comply with the terms and covenants of
all material agreements and all material leases of real or personal property,
including, without limitation, the Land Lease Agreements. The Borrower shall
pay and discharge promptly all taxes, assessments and governmental charges or
levies imposed upon it or in respect of its property before the imposition of
any penalty, as well as all lawful claims for labor, materials, supplies or
other matters which, if unpaid, might become a Lien or charge upon such
properties or any part thereof; provided, however, that the Borrower shall not
-------- -------
be required to pay and discharge or cause to be paid and discharged any such
tax, assessment, charge, levy or claim so long as (a) the validity thereof is
being contested diligently and in good faith by appropriate proceedings and the
enforcement thereof is stayed, pending the outcome of such proceedings, (b) the
Borrower has set aside on its books adequate reserves (to the extent required by
GAAP or sound business practice) with respect thereto, and (c)
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such contest will not endanger the Lien of the Agent or the Banks in any of the
Borrower's assets.
7.5 Financial Statements and Reports. The Borrower shall maintain
--------------------------------
true and complete books and records of account in accordance with GAAP. The
Borrower shall furnish to the Agent, for delivery to the Banks, the following
financial statements, projections and notices at the following times:
(a) As soon as available, but in no event later than ninety days
after the end of each fiscal year of the Borrower, the Borrower shall furnish
(i) audited financial statements, including a balance sheet and income
statement, showing the financial condition of the Borrower as of the close of
such fiscal year and the results of its operations during such fiscal year,
together with a statement of cash flows of the Borrower and additional
statements, schedules and footnotes as are customary in a complete accountant's
report; such financial statements shall set forth, in comparative form,
corresponding figures for the prior year and shall be certified by nationally
recognized independent certified public accountants selected by the Borrower and
acceptable to the Agent and accompanied by the management letter of such
accountants to the Borrower, and the opinion of such accountants shall be
unqualified and in a form reasonably satisfactory to the Agent; and (ii) a
statement signed by such accountants to the effect that in connection with their
examination of such financial statements they have reviewed the provisions of
this Agreement and have no knowledge of any event or condition which constitutes
an Event of Default or Possible Default or, if they have such knowledge,
specifying the nature and period of existence thereof; provided, however, that
-------- -------
in issuing such statement, such independent accountants shall not be required to
go beyond normal auditing procedures conducted in connection with their opinion
referred to above;
(b) As soon as available, but in no event later than forty-five
days after the end of each quarter of the Borrower, the Borrower shall furnish
(i) unaudited financial statements, including a balance sheet and income
statement, showing the financial condition of the Borrower as of the end of such
period and the results of its operations during such period and for the then
elapsed portion of the fiscal year, which shall be accompanied by a statement of
cash flows of the Borrower, (ii) a statement showing Capital Expenditures
(including a comparison to Capital Expenditures budgeted for such period) and
income taxes paid, each for such period, and (iii) for periods ending prior to
July 1, 1997, separate income statements for such period for all Division A
Acquisitions and Division B Acquisitions; all such financial statements shall
set forth, in comparative form, corresponding figures for the equivalent period
of the prior year and a comparison to budget for the relevant period, shall be
in form and detail satisfactory to the Agent, and shall be certified
-55-
as to accuracy and completeness by the chief financial officer of the Borrower;
(c) As soon as available, but in no event later than thirty days
after the end of each month, the Borrower shall furnish an unaudited statement
of income and expense for the Borrower for such month and for the then elapsed
portion of the fiscal year, containing comparisons with the budget for such
period and with the prior year; each such statement shall be in form and detail
satisfactory to the Agent and shall be certified as to accuracy and completeness
by the chief financial officer of the Borrower;
(d) The financial statements required under (a) and (b) above,
shall be accompanied by a compliance certificate in the form attached hereto as
Exhibit L executed by the chief financial officer of the Borrower setting forth
---------
the computations showing compliance with the financial covenants set forth in
Section 8, and certifying that no Possible Default or Event of Default has
occurred, or if any Event of Default or Possible Default has occurred, stating
the nature thereof and the actions the Borrower intends to take in connection
therewith;
(e) The Borrower shall deliver (i) within forty-five days after
the end of each fiscal year, an annual operating budget for the Borrower for the
next succeeding fiscal year, (ii) promptly upon preparation thereof, any
material revisions of such annual budget and (iii) after each monthly period in
which there is a material adverse deviation from budget a certificate of the
chief financial officer of the Borrower explaining the deviation and the action,
if any, the Borrower has taken or proposes to take with respect thereto;
(f) The Borrower shall furnish (i) upon request, promptly after
the filing thereof with the Internal Revenue Service, copies of each annual
report with respect to each Plan established or maintained by the Borrower or
any member of the Controlled Group for each plan year, including (A) where
required by law, a statement of assets and liabilities of such Plan as of the
end of such plan year and statements of changes in fund balance and in financial
position, or a statement of changes in net assets available for plan benefits,
for such plan year, certified by an independent public accountant satisfactory
to the Agent, and (B) if prepared by or available to the Borrower, an actuarial
statement of such Plan applicable to such plan year, certified by an enrolled
actuary of recognized standing acceptable to the Agent; and (ii) promptly after
receipt thereof, a copy of any notice the Borrower or a member of the Controlled
Group may receive from the Department of Labor or the Internal Revenue Service
with respect to any Plan (other than notices of general application) which could
result in a material liability to the Borrower; the Borrower will promptly
notify the Agent of
-56-
any material taxes assessed, proposed to be assessed or which the Borrower has
reason to believe may be assessed against the Borrower or any member of the
Controlled Group by the Internal Revenue Service with respect to any Plan or
Benefit Arrangement; and
(g) Upon the Agent's written request, such other information about
the financial condition, properties and operations of the Borrower as any Bank
may from time to time reasonably request.
7.6 Notices. The Borrower shall give the Agent, for distribution to
-------
the Banks, notice (i) promptly after its receipt of notice thereof, of any
action, suit or proceeding by or against the Borrower at law or in equity, or
before any governmental instrumentality or agency, or of any of the same which
may be threatened, which, if adversely determined, could have a Material Adverse
Effect, including, without limitation, any citation or order by any Licensing
Authority or any admonition, censure or adverse citation from the FAA or any
other regulatory agency, (ii) within three days after its receipt of notice
thereof, of any action or event constituting an event of default or violation of
any License, Land Lease Agreement or other material contract to which the
Borrower is a party or by which the Borrower is bound, or any investigation,
assertion, claim or challenge relating thereto, in either case which could
reasonably be expected to have a Material Adverse Effect, (iii) within three
days after the occurrence thereof, of any Possible Default or Event of Default
and the actions the Borrower intends to take in connection therewith, (iv)
within five days after its receipt of notice thereof, of any cancellation of or
any material amendment to any of the insurance policies maintained in accordance
with the requirements of this Agreement, except for cancellations and amendments
that occur in the ordinary course of business, (v) promptly after the occurrence
thereof, of any strike, labor dispute, slow down or work stoppage due to a labor
disagreement (or any material development regarding any thereof) affecting the
Borrower which could reasonably be expected to have a Material Adverse Effect,
(vi) promptly after the occurrence thereof, of any other event, condition,
situation, occurrence or circumstance which could reasonably be expected to have
a Material Adverse Effect; (vii) promptly after its receipt of notice thereof,
of any material Environmental Claims and (viii) with respect to all rights,
franchises, permits, Licenses and the like which may be necessary for the
continuance of the operation, maintenance and management of its Towers, (A) any
citation or order relating thereto, (B) any lapse, suspension, revocation,
rescission, adverse modification or other termination thereof, (C) any alleged
breach or violation thereof by the Borrower or any other Person, (D) any
proceeding relating thereto and (E) any refusal of any Person to grant, renew or
extend the same.
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7.7 Maintenance of Property. The Borrower shall at all times
-----------------------
maintain and preserve its Towers, machinery, equipment, motor vehicles, fixtures
and other property in good working order, condition and repair, normal wear and
tear excepted, and in compliance with all material applicable standards, rules
or regulations imposed by any governmental authority or agency (including,
without limitation, the Federal Communications Commission, the FAA and any other
Licensing Authority) or by any insurance policy held by the Borrower, except for
such property which, in the good faith judgment of the Borrower, can no longer
be profitably employed in the business of the Borrower.
7.8 Information and Inspection. The Borrower shall furnish to the
--------------------------
Banks from time to time, upon request, full information pertaining to any
covenant, provision or condition hereof, or to any matter connected with its
books, records, operations, financial condition, properties, activities or
business. The Borrower shall upon request supply the Banks with copies of all
correspondence, documents, reports or information filed with or received from
any Licensing Authority relating to the Borrower, any Tower or any License. At
all reasonable times, the Borrower shall permit any authorized representatives
designated by any Bank to visit and inspect any of the properties of the
Borrower and its books and records, and to take extracts therefrom and make
copies thereof, and to discuss the Borrower's affairs, finances and accounts
with the management and independent accountants of the Borrower.
7.9 Maintenance of Liens. The Borrower shall do all things necessary
--------------------
to preserve and perfect the Liens of the Agent, for the benefit of the Banks,
arising pursuant hereto and pursuant to the Collateral Documents as first
priority Liens, except for Permitted Liens, and to insure that the Agent, for
the benefit of the Banks, has a Lien on substantially all of the assets of the
Borrower, including, without limitation, all assets acquired pursuant to the
Purchase Agreement. If the Borrower purchases any real property or enters into
any material lease for real property, the Borrower shall (a) notify the Agent
and execute, deliver and cause to be recorded any Mortgage requested by the
Agent in connection therewith, which shall be a first lien, except for Permitted
Liens and (b) obtain from each lessor under such lease, in respect of which
lease the Borrower has granted to the Agent, for the benefit of the Banks, a
Mortgage, written consent to such grant in form and substance satisfactory to
the Agent. If the Borrower enters into any other new material contract which
prohibits the assignment thereof or the granting of a security interest therein
without the consent of the other party, the Borrower shall obtain the written
consent of such other party to the grant to the Agent, for the benefit of the
Banks, of a security interest therein pursuant to the Security Agreement.
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7.10 Title To Property. The Borrower shall own and hold title to all
-----------------
of its assets in its own name and not in the name of any nominee.
7.11 Environmental Compliance and Indemnity.
--------------------------------------
(a) The Borrower shall comply in all material respects with any
and all Environmental Laws, including, without limitation, all Environmental
Laws in jurisdictions in which the Borrower owns, maintains, operates or manages
a Tower, facility or site, arranges for disposal or treatment of Hazardous
Materials, solid waste or other wastes, accepts for transport any Hazardous
Materials, solid wastes or other wastes or holds any interest in real property
or otherwise. The Borrower shall not cause or allow the Release of Hazardous
Materials, solid waste or other wastes on, under or to any real property in
which the Borrower holds any interest or performs any of its operations, in
material violation of any Environmental Law. The Borrower shall promptly notify
the Agent and the Banks (i) of any material Release of a Hazardous Material on,
under or from the real property in which the Borrower holds or has held an
interest, upon the Borrower's learning thereof by receipt of notice that the
Borrower is or may be liable to any Person as a result of such Release or that
the Borrower has been identified as potentially responsible for, or is subject
to investigation by any governmental authority relating to, such Release, and
(ii) of the commencement or threat of any judicial or administrative proceeding
alleging a violation of any Environmental Laws.
(b) The Borrower shall defend, indemnify and hold the Agent and
the Banks, and their respective officers, directors, stockholders, employees,
agents, affiliates, successors and assigns harmless from and against all costs
(including clean up costs), expenses, fines, claims, demands, damages, penalties
and liabilities of every kind or nature whatsoever (including reasonable
attorneys', consultants' and experts' fees) arising out of, resulting from or
relating to, directly or indirectly, (i) the noncompliance of the Borrower or
any property owned or leased by the Borrower with any Environmental Law, or (ii)
any investigatory or remedial action involving the Borrower or any property
owned or leased by the Borrower and required by Environmental Laws or by order
of any governmental authority having jurisdiction under any Environmental Laws,
or (iii) any injury to any Person whatsoever or damage to any property arising
out of, in connection with or in any way relating to the breach of any of the
environmental warranties or covenants contained in this Agreement or any facts
or circumstances that cause any of the environmental representations or
warranties contained in this Agreement to cease to be true, or (iv) the Release
of any Hazardous Material on or affecting any property owned or leased by the
Borrower, or (v) the presence of any asbestos-containing material or
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underground storage tanks, whether in use or closed, under or on any property
owned or leased by the Borrower.
7.12 Appraisals. If at any time any Bank determines that it must
----------
have current appraisals of any of the real property subject to a Mortgage to
comply with any law, rule or regulation applicable to it, then, upon request by
such Bank, the Borrower shall, at its expense, order appraisals of such real
property. Such appraisals shall be in form and substance acceptable to the
Banks, shall be prepared by appraisers acceptable to the Banks and shall be
delivered to the Agent within forty-five days of the request therefor.
7.13 Rate Hedging Obligations. The Borrower shall maintain, as of
------------------------
the end of each calendar quarter ending prior to July 1, 2001, and on the date
of closing of each Qualified Acquisition having a Purchase Price of $1,000,000
or more, in full force and effect agreements in form and substance reasonably
satisfactory to the Agent regarding Rate Hedging Obligations so that the
notional amount subject to such agreements equals at least 67% of the principal
amount of the Loans then outstanding for an average maturity of three years or,
if less, the period remaining prior to the Termination Date.
7.14 Depository Accounts and Cash Management System. Within thirty
----------------------------------------------
days after the Closing, the Borrower shall establish, and at all times
thereafter maintain, a deposit account with the Agent for the payment of
expenses in the ordinary course of business, and within one year after the
Closing, the Borrower shall establish, and at all times thereafter maintain, a
lockbox arrangement and such other cash management systems as the Agent shall
reasonably request. The Borrower shall, promptly after the establishment of
such deposit account, instruct all licensees of space on its Towers to make all
payments due to the Borrower to such deposit account.
7.15 Liens Securing Stockholder Debt. At the request of the Agent,
-------------------------------
which shall not be made more frequently than once in any twelve month period,
the Borrower shall provide, or cause to be provided, to the Agent a certificate
in form and substance reasonably satisfactory to the Agent calculating the
amount of Stockholder Debt that must be secured in order for the Borrower not to
be deemed to be a "United States Real Property Holding Corporation" for purposes
of Section 897 of the Code. At such time as the affected Stockholder determines
that the Stockholder Debt is no longer required to prevent the Borrower from
being deemed to be a "United States Real Property Holding Corporation" for
purposes of Section 897 of the Code, all Liens securing the Stockholder Debt
shall be released.
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SECTION 8. NEGATIVE COVENANTS OF THE BORROWER.
----------------------------------
So long as this Agreement remains in effect or any of the Obligations
remains unpaid or to be performed, or any Letter of Credit remains outstanding,
the Borrower shall not, directly or indirectly, take any of the actions set out
in this Section 8 nor permit any of the conditions set out herein to occur.
8.1 Indebtedness. The Borrower shall not incur, create, assume or
------------
permit to exist any Indebtedness, except:
(a) the Obligations;
(b) Indebtedness permitted under Section 8.4, 8.5 or 8.6;
(c) existing Indebtedness set forth on Exhibit H;
---------
(d) (i) Indebtedness to the Sellers in a principal amount not to
exceed $1,050,957, so long as such Indebtedness is unsecured and is subject to
the Sellers Subordination Agreement, (ii) secured Indebtedness to the Sellers in
a principal amount not to exceed $1,000,000, so long as such Indebtedness (A) is
non-recourse to the Borrower, (B) is secured only by the Borrower's interest in
accounts and contract rights attributable to Sites (as that term is defined in
the Purchase Agreement) not conveyed to the Borrower, (C) is for a term of no
more than ninety days from the Closing Date, and (D) is subject to the Sellers
Subordination Agreement, (iii) Stockholder Debt to Centennial Fund IV, L.P. in a
principal amount not to exceed $3,125,264, so long as such Indebtedness is
subject to the Stockholder Subordination Agreement, and (iv) Seller Debt in an
amount not to exceed $5,000,000;
(e) unsecured trade accounts payable and other unsecured current
Indebtedness incurred in the ordinary course of business and not more than one
hundred twenty days past due (but excluding any Indebtedness for borrowed
money);
(f) Indebtedness for taxes, assessments, governmental charges,
liens or similar claims to the extent that payment thereof shall not be required
to be made by the provisions of Section 7.4; and
(g) Indebtedness arising under Rate Hedging Obligations required
pursuant to Section 6.15 and 7.13.
8.2 Liens. The Borrower shall not incur, create, assume or permit to
-----
exist any Lien of any nature whatsoever, including those arising in connection
with conditional sales or other title retention agreements, on any property or
assets now owned or hereafter acquired by the Borrower, other than (a)
-61-
Permitted Liens, (b) Liens securing Stockholder Debt held by Centennial Fund IV,
L.P. to the extent required to prevent the Borrower from being deemed to be a
"United States Real Property Holding Corporation" for purposes of Section 897 of
the Code and (c) Liens in favor of the Sellers in the Borrower's interest in
accounts and contract rights attributable to Sites (as that term is defined in
the Purchase Agreement) not conveyed to the Borrower securing the Indebtedness
of the Borrower permitted pursuant to Section 8.1(d)(ii).
8.3 Guaranties. The Borrower shall not become a Guarantor for any
----------
Person, except with respect to endorsements of negotiable instruments for
collection in the ordinary course of business.
8.4 Rental and Conditional Sale Obligations. The Borrower shall not
---------------------------------------
incur, create, assume or permit to exist, with respect to any personal property,
any conditional sale obligation, any purchase money obligation, any rental
obligation, any purchase money security interest or any other arrangement for
the use of personal property of any other Person, other than an arrangement
classifiable as a capital lease which is permitted in Section 8.6, if the
aggregate amount payable by the Borrower pursuant to such arrangements (other
than any such arrangements incurred in connection with a Qualified Acquisition)
would exceed $50,000 in any fiscal year.
8.5 Real Property Interests. Notwithstanding any contrary provisions
-----------------------
of Section 7.9, the Borrower shall not enter into, assume or permit to exist any
lease or rental obligation for real property, including, without limitation,
towers and related facilities, if the aggregate amount payable in respect
thereof by the Borrower (other than any such arrangements incurred in connection
with a Qualified Acquisition) would exceed $50,000 in any fiscal year. Except
as permitted in Section 8.10(b), the Borrower shall not purchase or lease any
real property.
8.6 Capital Leases. The Borrower shall not incur, create, assume or
--------------
permit to exist any Capitalized Lease Obligations under any lease of personal or
real property if the aggregate amount payable in respect of all such Capitalized
Lease Obligations (other than Capitalized Lease Obligations incurred in
connection with a Qualified Acquisition) would exceed $50,000 in any fiscal
year.
8.7 Capital Expenditures. Except for Qualified Acquisitions
--------------------
permitted pursuant to Section 10(b), the Borrower shall not make Capital
Expenditures (not including (x) any payments in respect of Capitalized Lease
Obligations or (y) expenditures of proceeds of casualty insurance policies
reasonably and promptly applied to replace insured assets) which
-62-
exceed the sum of (a) (i) $175,000 in the aggregate in either of fiscal years
1995 or 1996, and (ii) $75,000 in the aggregate in any fiscal year thereafter,
plus (b) an amount equal to 10% of operating cash flow, for the twelve month
period most recently ended prior to such acquisition, of Towers acquired in each
Qualified Acquisition. In addition to the Capital Expenditures permitted
pursuant to the foregoing sentence, the Borrower may make Capital Expenditures
in fiscal years 1995 and 1996 in an amount not to exceed $1,000,000 per year for
the purpose of constructing new Towers.
8.8 Notes, Accounts Receivable and Claims. The Borrower shall not
-------------------------------------
(a) sell, discount or otherwise dispose of any note, account receivable or other
right to receive payment, with or without recourse, except for collection in the
ordinary course of business; or (b) fail to timely assert any claim, cause of
action or contract right which it possesses against any third party nor agree to
settle or compromise any such claim, cause of action or contract right except in
any case in the exercise of good business judgment and except for settlements or
compromises made in the reasonable exercise of business judgment in the ordinary
course of business.
8.9 Capital Distributions. The Borrower shall not make, or declare
---------------------
or incur any liability to make, any Capital Distribution.
8.10 Disposal of Property; Mergers; Acquisitions; Reorganizations.
------------------------------------------------------------
(a) Except as expressly permitted pursuant to Section 8.10(b),
the Borrower shall not (i) dissolve or liquidate; (ii) sell, lease, transfer or
otherwise dispose of any material portion of its properties or assets to any
Person; (iii) be a party to any consolidation, merger, recapitalization or other
form of reorganization; (iv) make any acquisition of all or substantially all
the assets of any Person, or of a business division or line of business of any
Person, or of any other assets constituting a going business; (v) create,
acquire or hold any Subsidiary; or (vi) be or become a party to any joint
venture or other partnership.
(b) The Borrower may make the acquisitions contemplated by the
Purchase Agreement and other Division A Acquisitions and Division B
Acquisitions, subject to the satisfaction of the following conditions (any such
acquisition, or series of related acquisitions, which satisfies such conditions
being referred to hereinafter as a "Qualified Acquisition"):
(i) the Borrower shall have given to the Agent written
notice of such acquisition at least thirty days
-63-
prior to executing any binding commitment with respect thereto and shall have
delivered to the Agent a properly completed Acquisition Advance Worksheet no
later than ten Banking Days prior to the closing of such acquisition, in
accordance with the provisions of Section 2.4(d)(iii);
(ii) the Borrower shall have demonstrated to the satisfaction of the
Agent that the Borrower will be in compliance with all of the covenants
contained herein after giving effect to such acquisition and that no Event of
Default or Possible Default then exists or would exist after giving effect to
such acquisition;
(iii) the Borrower shall have delivered to the Agent within twenty
days prior to the consummation of such acquisition an acquisition report signed
by the chief financial officer of the Borrower in form and substance
satisfactory to the Agent which shall contain calculations demonstrating on a
pro forma basis the Borrower's compliance with the financial covenants set forth
in this Section 8 after giving effect to the Qualified Acquisition and, if the
borrowing hereunder in connection with such acquisition is in an amount in
excess of $500,000, projections for the Borrower for a five year period after
the closing of the Qualified Acquisition giving effect to the Qualified
Acquisition and including a statement of sources and uses of funds for such
acquisition showing, among other things, the source of financing for such
acquisition;
(iv) after giving effect to such acquisition, the Borrower shall have
(A) marketable fee simple title or an assignable and insurable leasehold
interest in each property on which an acquired Tower is located and (B) either
(I) written agreements for licensing of space on such Tower with at least 75% of
the licensees of space on such Tower existing immediately prior to such
acquisition or (II) in its good faith judgment, a strong probability of
retaining 90% of the licensees of space on such Tower existing immediately prior
to such acquisition, in each case, with respect to such license agreements, on
substantially the same terms and conditions as existed immediately prior to such
acquisition;
(v) the Agent shall have received from the Borrower an engineering
report from an engineer, satisfactory to the Agent, acceptable in form and
substance to the Agent, with respect to the construction, engineering and
maintenance of the Towers to be acquired or managed and their compliance with
applicable laws, rules and regulations; provided, however, that delivery of an
-------- -------
engineering report in form and substance substantially similar to the
engineering reports prepared in connection with the Purchase Agreement shall be
deemed to have satisfied this subsection (v);
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(vi) the agreement governing such acquisition and all related
documents and instruments shall be satisfactory to the Agent in form and
substance and no Event of Default or Possible Default shall exist immediately
prior to, or after giving effect to the consummation of, such acquisition;
(vii) the Purchase Price of such acquisition shall be payable in cash
at the closing of such acquisition or by the delivery of the Borrower's note, so
long as such note satisfies the following conditions (the aggregate Indebtedness
evidenced by all such notes being referred to herein collectively as "Seller
Debt"):
(A) such note shall be secured by a Letter of Credit issued
pursuant hereto (subject to the satisfaction of the conditions to such issuance
set forth herein) in the amount of such note but shall not be secured by any
Lien on any property of the Borrower;
(B) such note shall bear interest at a fixed rate which shall
not exceed the lower of the rate of interest on United States Treasury
obligations having a term of one year or 7% per annum;
(C) the term of such note shall not extend beyond December 31,
2001;
(D) the sum of the principal amount of such note and the
principal amount of all other notes issued by the Borrower in connection with
Qualified Acquisitions shall not exceed $5,000,000; and
(E) no more than five notes issued by the Borrower pursuant to
Qualified Acquisitions shall be outstanding at any one time.
(viii) the Borrower shall have taken any actions as may be necessary
or reasonably requested by the Agent to grant to the Agent, for the benefit of
the Banks, first priority, perfected Liens in all assets, real and personal,
tangible and intangible, acquired by the Borrower in such Qualified Acquisition
pursuant to the Collateral Documents, subject to no prior Liens except Permitted
Liens; and if the Borrower acquires a Subsidiary or creates a Subsidiary
pursuant to or in connection with such acquisition,
(A) the Borrower shall execute a Pledge Agreement, in form and
substance satisfactory to the Agent, pursuant to which all of the stock or other
securities or equity interests of such acquired or created Subsidiary are
pledged to the Agent, for the benefit of the Banks, as security for the
Obligations of the Borrower hereunder and under the Notes;
-65-
(B) such acquired or created Subsidiary shall execute and
deliver to the Agent, for the benefit of the Banks, a Guaranty, in form and
substance satisfactory to the Agent, and shall grant to the Agent, for the
benefit of the Banks, a first priority, perfected lien or security interest in
all of its assets, real and personal, tangible and intangible, subject to no
prior liens or security interests except for Permitted Liens, pursuant to a
Security Agreement and Mortgages, in form and substance satisfactory to the
Agent, and shall take all actions required pursuant thereto; and
(C) the Borrower shall have entered into an amendment to this
Agreement, in form and substance reasonably satisfactory to the Agent, which
shall make the covenants, defaults and other provisions of this Agreement
applicable to such Subsidiary;
(ix) the Borrower shall have delivered to the Agent evidence
reasonably satisfactory to the Agent to the effect that all approvals, consents
or authorizations required in connection with such acquisition from any
Licensing Authority or other governmental authority shall have been obtained,
and such opinions as the Agent may reasonably request as to the liens and
security interests granted to the Agent, for the benefit of the Banks, as
required pursuant to this Section, and as to any required regulatory approvals
for such acquisition;
(x) the Agent shall have received copies of all documents relating
to the Qualified Acquisition, and the Borrower shall have caused all opinions
and certificates of the seller of such Towers delivered in connection with such
closing to be addressed to the Banks;
(xi) if such acquisition involves an aggregate Purchase Price of at
least $2,000,000, then the Agent shall have received a statement from KPMG Peat
Marwick (or another nationally recognized firm of independent certified public
accountants selected by the Borrower and acceptable to the Agent) certifying as
to the operating cash flow of the acquired Towers or, in the case of a
management agreement, such management agreement, for the twelve month period
most recently ended prior to the closing of such acquisition and as to such
other matters as the Agent may reasonably request;
(xii) if such acquisition involves an aggregate Purchase Price in
excess of $6,000,000, then the Agent in its sole discretion shall have approved
such acquisition; and
(xiii) the closing of such acquisition shall occur no later than June
30, 1997.
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8.11 Investments. The Borrower shall not purchase or otherwise
-----------
acquire, hold or invest in any stock or other securities or evidences of
indebtedness of, or any interest or investment in, or make or permit to exist
any loans or advances to, any other Person, except:
(a) direct obligations of the United States Government maturing
within one year;
(b) certificates of deposit of a member bank of the Federal
Reserve System having capital, surplus and undivided profits in excess of
$100,000,000; and
(c) any investment in commercial paper which at the time of
such investment is assigned the highest quality rating in accordance with the
rating systems employed by either ▇▇▇▇▇'▇ Investors Service, Inc. or Standard &
Poor's Corporation.
8.12 Amendment of Governing Documents. The Borrower shall not, and
--------------------------------
shall not permit any other Person to, amend, modify or supplement its
Certificate of Incorporation, its By-Laws, the Stockholders Agreement or any
other organizational or governing document of the Borrower, unless required by
law.
8.13 Financial Covenants.
-------------------
(a) Leverage Ratio. The Borrower shall not permit the
--------------
Leverage Ratio as of any date in any period listed in Column A below to be
greater than the ratio set forth in Column B below opposite such period:
Column A Column B
-------- --------
Period: Permitted Ratio:
------ ---------------
Closing to June 29, 1997: 5.50:1.0
June 30, 1997, to December 30, 5.25:1.0
1997:
December 31, 1997, to June 29, 4.50:1.0
1998:
June 30, 1998, to December 30, 4.25:1.0
1998:
December 31, 1998, to December 3.50:1.0
30, 1999:
December 31, 1999, and 3.00:1.0;
thereafter:
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provided, however, that if the Borrower uses any proceeds of a Reducing Loan to
-------- -------
make any prepayment of the Term Loans pursuant to Section 8.4(d)(i), then the
ratio set forth in Column B above for all periods ending prior to December 30,
1997, shall be reduced to 5.0:1.0.
(b) Fixed Charge Coverage Ratio. The Borrower shall not permit
---------------------------
the Fixed Charge Coverage Ratio as of any date to be less than 1.05:1.0.
(c) Projected Debt Service Coverage Ratio. The Borrower shall
-------------------------------------
not permit the ratio of the excess of (i) Annualized Operating Cash Flow as of
the end of any quarter over (ii) federal and state income taxes (to the extent
added back to Net Earnings in calculating Operating Cash Flow) for the four
quarter period then ended, to Projected Debt Service as of the end of such
quarter to be less than 1.10:1.00.
(d) Minimum Annualized Operating Cash Flow. The Borrower shall
--------------------------------------
not permit Annualized Operating Cash Flow as of the end of any quarter ending in
any period listed in Column A below to be less than or equal to the amount set
forth in Column B below opposite such period:
Column A Column B
-------- --------
Period: Amount:
------ ------
Closing to December 30, 1996: $2,000,000
December 31, 1996, to December $2,300,000
30, 1997:
December 31, 1997, to December $2,850,000
30, 1998:
December 31, 1998, and $3,000,000
thereafter:
(e) Minimum Cash Reserve. The Borrower shall not permit the
--------------------
sum of the aggregate amount of its cash and cash equivalents permitted pursuant
to Section 8.11 plus the undrawn amount of the Working Capital Commitment to be
less than or equal to, at any time, $300,000.
8.14 Management Agreements and Fees. Except for the Management
------------------------------
Agreement, the Borrower shall not make or enter into, nor pay any management
fees pursuant to, any so-called management or service agreement whereby
management, supervision or control of its business, or any significant aspect
thereof, shall be delegated to or placed in any Person other than an employee of
the Borrower. Except to the extent approved by the Banks, the Borrower shall
not pay management fees or other compensation to the Sellers pursuant to the
Management Agreement in an amount in any year which exceeds 15% of the
Borrower's tower revenues.
-68-
Upon the termination of the Management Agreement, the Borrower shall not enter
into a replacement management agreement unless the terms and conditions of such
agreement and the manager thereunder are reasonably acceptable to the Agent. Any
such replacement management agreement approved by the Agent shall be deemed to
be the Management Agreement for all purposes hereof.
8.15 Fiscal Year. The Borrower shall not change its fiscal year,
-----------
which shall be the calendar year.
8.16 ERISA. Neither the Borrower nor any member of the Controlled
-----
Group shall fail to make any contributions which are required pursuant to the
terms of any Plan or any Benefit Arrangement. Neither the Borrower nor any
member of the Controlled Group shall contribute to or agree to contribute to any
Plan which is (a) subject to the minimum funding requirements under ERISA
Section 302 or Code Section 412; (b) a multiemployer plan (as defined in ERISA
Section 4001(a)(3)); (c) a defined benefit plan (as defined under ERISA Section
3(35) or Code Section 414(j)); (d) a multiple employer plan (as defined in ERISA
Section 4063); or (e) a multiple employer welfare arrangement (as defined in
ERISA Section 3(40)).
8.17 Affiliates. The Borrower shall not enter into any transaction or
----------
agreement with any Stockholder or other Affiliate of the Borrower or of a
Stockholder unless the terms of such transaction or agreement are no less
favorable to the Borrower than could be obtained in an arms-length transaction.
8.18 Change of Name or Corporate Structure. The Borrower shall not
-------------------------------------
change its name or corporate structure without thirty days prior written notice
to the Agent.
8.19 Amendments or Waivers. The Borrower shall not amend, alter or
---------------------
modify, or consent to or suffer any amendment, alteration or modification, (a)
of the Securities Purchase Agreement, the Purchase Agreement, the License
Agreement or the Management Agreement, or (b) of any License, Land Lease
Agreement or other material contract (or waive a material right thereunder)
except, in the case of the agreements listed in this clause (b) for any
amendments, alterations or modifications which could not reasonably be expected
to have a Material Adverse Effect.
8.20 Issuance or Transfer of Capital Stock. The Borrower shall not
-------------------------------------
sell or issue any capital stock or other equity interests or any warrants,
options or other securities convertible into or exercisable for any capital
stock or other equity interests, and the Borrower shall not permit the transfer
of any capital stock.
8.21 Change in Business. The Borrower shall not change the nature of
------------------
its business in any material respect.
8.22 Payments to Stockholders and Affiliates. The Borrower shall not
---------------------------------------
pay any compensation or salary to any
-69-
Stockholder or any other Person who owns any right to acquire capital stock of
Holdco or the Borrower by warrant, option or otherwise, or to any Affiliate of
any such owner unless such owner or Affiliate performs services required by the
Borrower for the normal conduct of its business and the compensation paid to
such Person is not materially in excess of the fair value of the services
rendered to the Borrower.
8.23 Regulation U. The Borrower shall not, directly or indirectly,
------------
(a) apply any part of the proceeds of the Loans to the purchasing or carrying of
any "margin stock" within the meaning of Regulations G, T, U or X of the Federal
Reserve Board, or any regulations, interpretations or rulings thereunder, (b)
extend credit to others for the purpose of purchasing or carrying any such
margin stock, or (c) retire Indebtedness which was incurred to purchase or carry
any such margin stock.
8.24 Subordinated Debt. The Borrower shall not make, or cause or
-----------------
permit to be made, any payments in respect of any Indebtedness which is
subordinated to the Obligations in contravention of the subordination provisions
contained in the evidence of such subordinated Indebtedness or in contravention
of the Sellers Subordination Agreement or the Stockholder Subordination
Agreement or any other subordination agreement or other written agreement
pertaining to Subordinated Debt.
8.25 Rights of First Refusal and Call Rights. The Company shall not
---------------------------------------
exercise any right of first refusal, call right or other right to acquire any of
its outstanding capital stock or other equity interests from any Person, unless
the entire amount paid by the Borrower to such Person (or his estate) in respect
of such exercise is funded entirely from the proceeds of key man life insurance
maintained by the Borrower on the life of such Person.
SECTION 9. EVENTS OF DEFAULT.
-----------------
The occurrence of any one or more of the following events, whether
voluntarily or involuntarily or by operation of law, shall constitute an Event
of Default hereunder:
9.1 Non-Payment. The Borrower shall (a) fail to pay when due,
-----------
whether by acceleration of maturity or otherwise, any installment of principal
under any Note or (b) fail to pay when due, whether by acceleration of maturity
or otherwise, or within two days thereafter, any installment of interest or any
fee or other payment obligation in respect of the Obligations.
9.2 Failure of Performance in Respect of Other Obligations. (a) The
------------------------------------------------------
Borrower shall fail to observe, perform or be in compliance with any of the
provisions of Section 8, Sections 7.1 or 7.3 or the first sentence of Section
7.2; or (b) the Borrower or any other party to a Collateral Document (other than
the Agent or a Bank) shall fail to observe, perform or be in
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compliance with the terms of any Obligation, covenant or agreement, other than
those referred to in Section 9.1, Section 8, Sections 7.1 or 7.3 or the first
sentence of Section 7.2, to be observed, performed or complied with by the
Borrower or such other party hereunder or under any Collateral Document and,
provided that such failure is of a type which can be cured, such failure shall
--------
continue and not be cured for thirty days after: (i) notice thereof from the
Agent or a Bank or (ii) the Banks are notified thereof or should have been
notified thereof pursuant to the provisions of Section 7.6, whichever is
earlier; or (c) any party to any Pledge Agreement shall, or shall attempt to,
voluntarily or involuntarily, encumber, subject to any further pledge or
security interest, sell, transfer or otherwise dispose of any of the Pledged
Collateral (as that term is defined in any Pledge Agreement) or any interest
therein except as expressly provided herein or therein.
9.3 Breach of Warranty. Any financial statement, representation,
------------------
warranty, statement or certificate made or furnished by the Borrower or any
other party to a Collateral Document (other than the Agent or a Bank) to the
Agent or the Banks in or in connection with this Agreement or any Collateral
Document, or as an inducement to the Agent or the Banks to enter into this
Agreement, including, without limitation, those in Section 5 above or in any
Collateral Document, shall have been false, incorrect or incomplete when made or
deemed made in any material respect;
9.4 Cross-Defaults. The Borrower shall default in any payment due on
--------------
any Indebtedness in excess of $50,000 and such default shall continue for more
than the period of grace, if any, applicable thereto; or the Borrower shall
default in the performance of or compliance with any term of any evidence of
such Indebtedness or of any mortgage, indenture or other agreement relating
thereto, and any such default shall continue for more than the period of grace,
if any, specified therein and shall not have been waived pursuant thereto if
such default causes, or permits the holder thereof to cause, the acceleration of
such Indebtedness; or the Borrower shall default in the performance of any
material covenant or agreement set forth in the Securities Purchase Agreement or
the Securities Exchange Agreement among the Borrower, Holdco and the
Stockholders or shall breach in any material respect any representation or
warranty therein.
9.5 Assignment for Benefit of Creditors. The Borrower shall make an
-----------------------------------
assignment for the benefit of its creditors, or shall admit its insolvency or
shall fail to pay its debts generally as such debts become due.
9.6 Bankruptcy. Any petition seeking relief under Title 11 of the
----------
United States Code, as now constituted or hereafter amended, shall be filed by
or against the Borrower or any proceeding shall be commenced by or against the
Borrower with respect to relief under the provisions of any other applicable
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bankruptcy, insolvency or other similar law of the United States or any State
providing for the reorganization, winding-up or liquidation of Persons or an
arrangement, composition, extension or adjustment with creditors; provided,
--------
however, that no Event of Default shall be deemed to have occurred if any such
-------
involuntary petition or proceeding shall be discharged within sixty days of its
filing or commencement.
9.7 Appointment of Receiver; Liquidation. A receiver or trustee
------------------------------------
shall be appointed for the Borrower or for any substantial part of its assets,
and such receiver or trustee shall not be discharged within sixty days of his
appointment; any proceedings shall be instituted for the dissolution or the full
or partial liquidation of the Borrower, and such proceedings shall not be
dismissed or discharged within sixty days of their commencement; or the Borrower
shall discontinue its business.
9.8 Judgments. The Borrower shall incur a final judgment for the
---------
payment of money in an amount which, together with all other final judgments
against the Borrower, exceeds $50,000, and shall not discharge (or make adequate
provision for the discharge of) the same within a period of thirty days unless,
pending further proceedings, execution thereon has been effectively stayed.
9.9 Impairment of Collateral; Invalidation of any Loan Document. (a)
-----------------------------------------------------------
A creditor of the Borrower or any other party to a Collateral Document shall
obtain possession of any of the collateral for the Obligations by any means,
including, without limitation, attachment, levy, distraint, replevin or self-
help, or any creditor shall establish or obtain any right in such collateral; or
(b) the Agent shall cease to have a perfected, first priority Lien on all of the
issued and outstanding capital stock of the Borrower; or (c) any Lien created or
purported to be created by this Agreement or any Collateral Document shall cease
or fail to be perfected with respect to any of the collateral purported to be
covered thereby; or (d) any material portion of such collateral shall be lost,
stolen, damaged or destroyed for which there is either no insurance coverage or
in, in the reasonable opinion of the Agent, there is insufficient insurance
coverage; or (e) this Agreement, any Note or any Collateral Document ceases to
be a legal, valid, binding agreement or obligation enforceable against any party
thereto (including the Agent and the Banks) in accordance with its terms, or
shall be terminated, invalidated, set aside or declared ineffective or
inoperative.
9.10 Termination of License or Agreements. The FAA or any other
------------------------------------
Licensing Authority shall revoke, terminate, substantially and adversely modify
or fail to renew any material License of the Borrower or commence proceedings to
suspend, revoke, terminate or substantially and adversely modify any such
License and such proceedings shall not be dismissed or discharged within sixty
days; or any License Agreements or Land Lease Agreements or other agreements
which are necessary to the
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operation of the business of the Borrower shall be revoked, terminated or
adversely modified and not replaced by substitutes acceptable to the Agent
within thirty days of such revocation, termination or modification and without
which agreements a Material Adverse Effect could reasonably be expected.
9.11 Change of Control. Holdco shall cease to own all of the issued
-----------------
and outstanding capital stock of the Borrower; or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇. and
▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. shall cease to own in the aggregate 10% of the capital stock
of Holdco, or the persons who are Stockholders of Holdco as of the date of this
Agreement shall cease to own in the aggregate 60% of the capital stock of
Holdco.
9.12 Default under Collateral Document. The Borrower or any other
---------------------------------
party (other than the Agent and the Banks) shall default under any Collateral
Document after any required notice and such default shall continue beyond any
applicable grace period.
9.13 Condemnation. Any court, government or governmental agency
------------
shall condemn, seize, or otherwise appropriate, or take custody or control of
any substantial portion of the assets of the Borrower.
9.14 Put, Call and Redemption Rights. The Borrower shall exercise
-------------------------------
any call right or right of first refusal in respect of any of its capital stock,
or any Person shall exercise any put right in respect of any of the capital
stock of the Borrower, unless the entire amount paid by the Borrower to such
Person (or his estate) in respect of such exercise of a put or call right is
funded entirely from the proceeds of key man life insurance maintained by the
Borrower on the life of such Person, or Holdco or any other stockholder of the
Borrower shall exercise any redemption right pursuant to the Certificate of
Incorporation of the Borrower.
9.15 Material Adverse Change. Any Material Adverse Effect shall
-----------------------
occur.
SECTION 10. REMEDIES.
--------
Notwithstanding any contrary provision or inference herein or
elsewhere,
10.1 Optional Defaults.
-----------------
If any Event of Default referred to in Sections 9.1-9.4 or 9.8-9.15
shall occur, the Agent, with the consent of the Majority Banks, upon written
notice to the Borrower, may
(a) terminate the Commitments and the credit hereby
established and forthwith upon such election the obligations of the Banks to
make any further Loans (other than
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Loans resulting from the funding of Letters of Credit) or issue any Letters of
Credit hereunder immediately shall be terminated, and/or
(b) accelerate the maturity of the Loans and all other
Obligations (including Rate Hedging Obligations subject to the terms and
conditions of the agreements governing such Rate Hedging Obligations), whereupon
all Obligations shall become and thereafter be immediately due and payable in
full without any notice of intent to accelerate or notice of acceleration and
without any presentment or demand and without any further or other notice of any
kind, all of which are hereby waived by the Borrower, and/or
(c) demand the payment to the Banks of the aggregate principal
amounts of the Letter of Credit Notes, which amounts the Banks shall hold as
security for the obligations incurred under the Letters of Credit, this
Agreement or the Notes.
10.2 Automatic Defaults. If any Event of Default referred to in
------------------
Sections 9.5-9.7 shall occur,
(a) the Commitments and the credit hereby established shall
automatically and forthwith terminate, and the Banks thereafter shall be under
no obligation to grant any further Loans hereunder (other than Loans resulting
from the funding of Letters of Credit) or issue any Letters of Credit, and
(b) the principal of and interest on the Notes, then
outstanding, and all of the other Obligations shall thereupon become and
thereafter be immediately due and payable in full, all without any notice of
intent to accelerate or notice of acceleration and without any presentment,
demand or other notice of any kind, which are hereby waived by the Borrower, and
(c) the aggregate principal amounts of the Letter of Credit
Notes shall be immediately payable by the Borrower to the Banks.
10.3 Performance by the Banks. If at any time the Borrower fails or
------------------------
refuses to pay or perform any obligation or duty to any third Person, except for
payments which are the subject of bona fide disputes in the ordinary course of
business, the Banks may, in their sole discretion, but shall not be obligated
to, pay or perform the same on behalf of the Borrower, and the Borrower shall
promptly repay all amounts so paid, and all costs and expenses so incurred.
This repayment obligation shall become one of the Obligations of the Borrower
hereunder and shall bear interest at the Default Interest Rate.
10.4 Other Remedies. Upon the occurrence of an Event of Default, the
--------------
Agent and the Banks may exercise any other right, power or remedy as may be
provided herein, in any Note or in any other Collateral Document, or as may be
provided at law or in
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equity, including, without limitation, the right to recover judgment against the
Borrower for any amount due either before, during or after any proceedings for
the enforcement of any security or any realization upon any security.
10.5 Enforcement and Waiver by the Banks. The Agent and the Banks
-----------------------------------
shall have the right at all times to enforce the provisions of this Agreement
and all Collateral Documents in strict accordance with the terms hereof and
thereof, notwithstanding any conduct or custom on the part of the Agent or the
Banks in refraining from so doing at any time, unless the Banks shall have
waived such enforcement in writing in respect of a particular instance. The
failure of the Banks at any time to enforce their rights under such provisions
shall not be construed as having created a custom or course of dealing in any
way contrary to the specific provisions of this Agreement or the Collateral
Documents, or as having in any way modified or waived the same. All rights,
powers and remedies of the Banks are cumulative and concurrent and the exercise
of one right, power or remedy shall not be deemed a waiver or release of any
other right, power or remedy.
SECTION 11. THE AGENT.
---------
11.1 Appointment. Society National Bank is hereby appointed Agent
-----------
hereunder, and each of the Banks irrevocably authorizes the Agent to act as the
agent of such Bank. The Agent agrees to act as such upon the express conditions
contained in this Section 11. The Agent shall not have a fiduciary relationship
in respect of any Bank by reason of this Agreement.
11.2 Powers. The Agent shall have and may exercise such powers
------
hereunder as are specifically delegated to it by the terms hereof, together with
such powers as are reasonably incidental thereto. The Agent shall not have any
implied duties or any obligation to the Banks to take any action hereunder
except any action specifically provided by this Agreement to be taken by the
Agent.
11.3 General Immunity. Neither the Agent nor any of its directors,
----------------
officers, affiliates, agents or employees shall be liable to the Banks or any
Bank for any action taken or omitted to be taken by it or them hereunder or in
connection herewith except for its or their own gross negligence or willful
misconduct. Without limiting the foregoing, neither the Agent nor any of its
directors, officers, affiliates, agents or employees shall be responsible for,
or have any duty to examine (a) the genuineness, execution, validity,
effectiveness, enforceability, value or sufficiency of this Agreement, any
Collateral Document, or any other document or instrument furnished pursuant to
or in connection with this Agreement or any Collateral Document, (b) the
collectibility of any amounts owed by the Borrower, (c) any recitals,
statements, reports, representations or warranties made in connection with this
-75-
Agreement or any Collateral Document, (d) the performance or satisfaction by the
Borrower of any covenant or agreement contained herein or in any Collateral
Document, (e) any failure of any party to this Agreement to receive any
communication sent, including any telegram, teletype, bank wire, cable,
radiogram or telephone message sent or any writing, application, notice, report,
statement, certificate, resolution, request, order, consent letter or other
instrument or paper or communication entrusted to the mails or to a delivery
service, or (f) the assets or liabilities or financial condition or results of
operations or business or credit-worthiness of the Borrower. The Agent shall
not be bound to ascertain or inquire as to the performance or observance of any
of the terms of this Agreement or any Collateral Document.
11.4 Action on Instructions of the Banks. The Agent shall not be
-----------------------------------
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Majority Banks (subject to
Section 11.12 hereof), and such instructions shall be binding upon all the Banks
and all holders of the Notes; provided, however, that the Agent shall not be
-------- -------
required to take any action which exposes it to personal liability or which is
contrary to this Agreement or applicable law. The foregoing provisions of this
Section 11.4 shall not limit in any way the exercise by any Bank of any right or
remedy granted to such Bank pursuant to the terms of this Agreement or any
Collateral Document. Except as otherwise expressly provided herein, any
reference in this Agreement to action by the Banks shall be deemed to be a
reference to the Majority Banks.
11.5 Employment of Agents and Counsel. The Agent may execute any of
--------------------------------
its duties as Agent hereunder by or through employees, agents and attorneys-in-
fact and shall not be answerable to the Banks, except as to money or securities
received by it or its authorized agents, for the default or misconduct of any
such agents or attorneys-in-fact selected by it with reasonable care.
11.6 Reliance on Documents; Counsel. The Agent shall be entitled to
------------------------------
rely upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, with respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent, concerning all matters pertaining to the agency
hereby created and its duties hereunder.
11.7 Agent's Reimbursement and Indemnification. The Banks agree to
-----------------------------------------
reimburse and indemnify the Agent (which indemnification shall be shared by the
Banks ratably in proportion to their respective Ratable Shares) (a) for any
amounts not reimbursed by the Borrower for which the Agent is
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entitled to reimbursement by the Borrower hereunder or under any Collateral
Document, (b) for any other expenses reasonably incurred by the Agent on behalf
of the Banks, in connection with the preparation, execution, delivery,
administration, amendment or enforcement hereof or of any of the Collateral
Documents and (c) for any liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind and
nature whatsoever which may be imposed on, incurred by or asserted against the
Agent in any way relating to or arising out of this Agreement, any Collateral
Document or any other document related hereto or thereto or the transactions
contemplated hereby or the enforcement of any of the terms hereof or thereof or
of any such other documents, provided that no Bank shall be liable for any of
--------
the foregoing to the extent they arise from the gross negligence or willful
misconduct of the Agent.
11.8 Rights as a Bank. With respect to its Ratable Share of the
----------------
Commitments, the Loans made by it, the Letters of Credit issued by it and the
Notes issued to it, the Agent shall have the same rights and powers hereunder as
any Bank and may exercise the same as though it were not the Agent, and the term
"Bank" or "Banks" shall, unless the context otherwise indicates, include the
Agent in its individual capacity. The Agent may accept deposits from, lend
money to, and generally engage in any kind of banking or trust business with the
Borrower as if it were not the Agent hereunder.
11.9 Bank Credit Decision. Each Bank acknowledges that it has,
--------------------
independently and without reliance upon the Agent or any other Bank and based on
the financial statements prepared by the Borrower and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Collateral Documents. Each
Bank also acknowledges that it will, independently and without reliance upon the
Agent or any other Bank and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Collateral
Documents. The Agent shall not be required to keep the Banks informed as to the
performance or observance by the Borrower of this Agreement or any other
document referred to or provided for herein or to inspect the properties or
books of the Borrower. Except for notices, reports and other documents and
information expressly required to be furnished to the Banks by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Bank with any credit or other information concerning the affairs, financial
condition or business of the Borrower which may come into its possession.
11.10 Successor Agent. The Agent may resign at any time by giving
---------------
written notice thereof to the Banks. Upon any such resignation, the Majority
Banks shall have the right to appoint a successor Agent. If no successor Agent
shall have been so appointed by the Majority Banks and shall have accepted such
appointment within thirty days after the notice of resignation,
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then the retiring Agent may appoint a successor Agent. Such successor Agent
shall be a commercial bank having capital and retained earnings of at least
$500,000,000. Upon the acceptance of any appointment as the Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation hereunder as the Agent, the
provisions of this Section 11 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
the Agent hereunder.
11.11 Ratable Sharing. All principal and interest payments on Loans
---------------
and commitment fees received by the Agent shall be remitted to the Banks in
accordance with their Ratable Shares. Any amounts received by the Agent or any
other Bank upon the sale of any collateral for the Loans or upon the exercise of
any remedies hereunder or under any of the Collateral Documents or upon the
exercise of any right of setoff shall be remitted to the Banks in accordance
with their Ratable Shares; provided, however, that, solely for purposes of the
-------- -------
sharing of any amounts received by the Agent or any other Bank, if at the time
of any such receipt the Borrower has defaulted under any agreements regarding
Rate Hedging Obligations with any Bank or the Affiliate of any Bank, such Bank's
Ratable Share shall be proportionately increased and the Ratable Shares of the
other Banks shall be proportionately decreased based upon the amount due to such
Bank pursuant to the such agreements. If any Bank shall obtain any payment
hereunder (whether voluntary, involuntary, through exercise of any right of set-
off or otherwise) in excess of its Ratable Share, then such Bank shall
immediately remit such excess to the other Banks pro rata.
11.12 Actions by the Agent and the Banks. The Agent shall take formal
----------------------------------
action only upon the agreement of the Majority Banks; provided, however, that if
-------- -------
the Agent gives notice to the Banks of a Possible Default or an Event of
Default, and the Majority Banks cannot agree (which agreement shall not be
unreasonably withheld) on a mutual course of action within ten days following
such notice, the Agent may (but shall not be required to) pursue such legal
rights and remedies against the Borrower as it deems necessary and appropriate
to protect the Banks and any collateral under the circumstances.
SECTION 12. MISCELLANEOUS.
-------------
12.1 Construction. The provisions of this Agreement shall be in
------------
addition to those of the Collateral Documents and to those of any other
guaranty, security agreement, note or other evidence of the liability relating
to the Borrower held by the Banks, all of which shall be construed as
complementary to each other. Nothing contained herein shall prevent the Banks
from enforcing any or all of such instruments in accordance with their
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respective terms. Each right, power or privilege specified or referred to in
this Agreement or in any Collateral Document is in addition to any other rights,
powers or privileges that the Banks may otherwise have or acquire by operation
of law, by other contract or otherwise. No course of dealing in respect of, nor
any omission or delay in the exercise of, any right, power or privilege by the
Banks shall operate as a waiver thereof, nor shall any single or partial
exercise thereof preclude any further or other exercise thereof or of any other,
as each right, power or privilege may be exercised independently or concurrently
with others and as often and in such order as the Banks may deem expedient.
Notwithstanding any other provision of this Agreement, the Borrower shall not be
required to pay any amount pursuant hereto which is in excess of the maximum
amount permitted by law.
12.2 Further Assurance. From time to time, the Borrower shall
-----------------
execute and deliver to the Agent and the Banks such additional documents and
take such additional actions as the Agent may require to carry out the purposes
of this Agreement or any of the Collateral Documents, or to preserve and protect
the rights of the Agent and the Banks hereunder or thereunder.
12.3 Expenses of the Agent and the Banks; Indemnification.
----------------------------------------------------
(a) Whether or not the transactions contemplated by this
Agreement are consummated, the Borrower shall pay the costs and expenses,
including the reasonable fees and disbursements of the Agent's special counsel,
incurred by the Banks in connection with (i) the negotiation, preparation,
administration, amendment or enforcement of this Agreement and the Collateral
Documents and the closing of the transactions contemplated hereby and thereby;
(ii) the perfection of the Liens granted pursuant hereto or the Collateral
Documents; (iii) the making of the Loans and issuance of the Letters of Credit
hereunder; (iv) the negotiation, preparation or enforcement of any other
document in connection with this Agreement, the Collateral Documents or the
Loans made hereunder; (v) any proceeding brought or formal action taken by the
Banks to enforce any provision of this Agreement or any Collateral Document, or
to enforce or exercise or preserve any right, power or remedy hereunder or
thereunder; or (vi) any action which may be taken or instituted by any Person
against any Bank as a result of any of the foregoing. The fees and expenses of
the Agent's special counsel through the Closing shall be paid on the Closing
Date. If any taxes, charges or fees shall be payable, or ruled to be payable, to
any state or Federal authority in respect of the execution, delivery or
performance of this Agreement, any Note or any other Collateral Document by
reason of any existing or hereinafter enacted Federal or state statute (other
than any such taxes on the net income of the Banks and any taxes, charges or
fees which are included in the LIBOR Reserve Percentage), the Borrower will pay
all such taxes, charges or fees, including interest and penalties thereon, if
any, and will indemnify and
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hold harmless the Agent and the Banks against any liability in connection
therewith.
(b) The Borrower hereby indemnifies and holds harmless the Agent
and each Bank and their respective directors, officers, employees, agents,
counsel, subsidiaries and affiliates (the "Indemnified Persons") from and
against any and all losses, liabilities, obligations, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever (including reasonable attorneys fees) which may be imposed on,
incurred by, or asserted against any Indemnified Person in any way relating to
or arising out of this Agreement, the Collateral Documents, or any of them or
any of the transactions contemplated hereby or thereby or the business, assets
or operations of the Borrower or the ownership, maintenance, operation or
management of the Towers; provided, however, that the Borrower shall not be
-------- -------
liable to any Indemnified Person, if there is a final judicial determination
that such losses, liabilities, obligations, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulted solely from the
gross negligence or willful misconduct of such Indemnified Person.
12.4 Notices. Except as otherwise expressly provided herein, all
-------
notices, demands and requests required or permitted to be given under the
provisions of this Agreement shall be in writing and shall be deemed to have
been duly delivered and received (a) on the date of personal delivery, (b) on
the date of receipt (as shown on the return receipt) if mailed by registered or
certified mail, postage prepaid and return receipt requested, (c) on the next
business day after delivery to a courier service that guarantees delivery on the
next business day if the conditions to the courier's guarantee are complied
with, or (d) on the date of receipt (if such date is a Banking Day, otherwise on
the next Banking Day) by telecopy, in each case addressed as follows:
TO THE AGENT:
Society National Bank
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Media Finance Division
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Dow, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
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TO THE BANKS, AT THE ADDRESSES LISTED ON THE SIGNATURE PAGES
HEREOF OR IN THE ASSIGNMENT INSTRUMENT DELIVERED PURSUANT TO
SECTION 12.7(b)
TO THE BORROWER:
Castle Tower Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
or to such other address or addresses as the party to which such notice is
directed may have designated in writing to the other parties hereto.
12.5 Waiver and Release by the Borrower. The Borrower hereby
----------------------------------
releases the Agent and each Bank from, and hereby waives, all claims for loss or
damage caused by any act or omission on the part of the Agent or any Bank or
their respective officers, attorneys, agents and employees, except gross
negligence and willful misconduct.
12.6 Right of Set Off. Upon the occurrence and during the
----------------
continuance of any Event of Default, each Bank is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set-off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Bank to
or for the credit or the account of the Borrower against any and all of the
obligations of the Borrower now or hereafter existing hereunder or under any
Collateral Document, irrespective of whether or not such Bank shall have made
any demand under any Collateral Document and although such obligations may be
unmatured. The rights of the Banks under this Section are in addition to other
rights and remedies (including without limitation, other rights of set-off)
which the Banks may have. The Borrower agrees, to the fullest extent it may
effectively do so under applicable law, that any other holder of a participation
in any Note may exercise rights of set-off or counterclaim and other rights with
respect to such participation as fully as if such holder of a participation were
a direct creditor of the Borrower in the amount of such participation.
12.7 Successors and Assigns; Participations.
--------------------------------------
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(a) Whenever in this Agreement any of the parties hereto is
referred to, such reference shall be deemed to include the successors and
assigns of such party; provided, however, that the Borrower shall not assign or
-------- -------
transfer any of its rights or obligations hereunder or under any Note without
the prior written consent of all of the Banks and the Agent.
(b) Each Bank may, with the consent of the Agent, assign all or
any part of the Loans, any Note and the Commitments to a financial institution;
provided, however, that any partial assignment shall be an amount of at least
-------- -------
$5,000,000. Upon execution and delivery by the assignee and such Bank of an
instrument in writing pursuant to which such assignee agrees to become a "Bank"
hereunder having the share of the Commitments and Loans specified in such
instrument, the assignee shall have, to the extent of such assignment (unless
otherwise provided in such assignment), the obligations, rights and benefits of
a Bank hereunder holding the share of the Commitments and Loans (or portions
thereof) assigned to it (in addition to the share of the Commitments and Loans,
if any, theretofore held by such assignee) and the assigning Bank shall, to the
extent of such assignment, be released from the share of the Commitments and the
obligations hereunder so assigned. The assignee shall pay to the Agent a
processing and recordation fee of $5,000.
(c) Within five business days after receipt of notice of any
assignment pursuant to Section 12.7(b) above, the Borrower, at its expense,
shall execute and deliver in exchange for any surrendered Notes new Notes to the
order of the assignee in an amount equal to the share of the Commitments and of
the Loans assumed by the assignee and, if the assigning Bank has retained a
portion of the Commitments and the Loans hereunder, new Notes to the order of
the assigning Bank in an amount equal to the share of the Commitments and the
Loans retained by it hereunder. Such new Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such surrendered
Notes, shall be dated the effective date of such assignment and shall otherwise
be in substantially the form of Exhibit A, Exhibit B or Exhibit C hereto, as the
--------- --------- ---------
case may be. The cancelled Notes shall be returned to the Borrower.
(d) A Bank may sell or agree to sell to one or more other
Persons a participation in all or any part of the Loans or in the Commitments,
in which event each purchaser of a participation (a "Participant") shall be
-----------
entitled to the rights and benefits of the provisions of Section 7.5 with
respect to its participation in such Loans and share of the Commitments as if
(and the Borrower shall be directly obligated to such Participant under such
provisions as if) such Participant were a "Bank" for purposes of said Section,
but, except as otherwise provided in the last sentence of this Section 12.7(d),
shall not have any other rights or benefits under this Agreement or any Note or
any other Collateral Documents (the Participant's rights against such Bank in
respect of such participation to be those set forth in the agreements executed
by such Bank in favor of the
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Participant). All amounts payable by the Borrower to any Bank under Section 2 in
respect of the Loans shall be determined as if such Bank had not sold or agreed
to sell any participations in such Loans and as if such Bank were funding each
of such Loans in the same way that it is funding the portion of such Loan in
which no participations have been sold. The Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.7 through 2.13 and
Section 12.6 with respect to its participating interest.
(e) In addition to the assignments and participations permitted
under the foregoing provisions of this Section 12.7, any Bank may assign and
pledge all or any portion of its Loans and the Notes to any Federal Reserve Bank
as collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal Reserve
Bank. No such assignment shall release the assigning Bank from its obligations
hereunder.
(f) A Bank may furnish any information concerning the Borrower
in the possession of such Bank from time to time to assignees and participants
(including prospective assignees and participants).
(g) Anything in this Section 12.7 to the contrary
notwithstanding, no Bank may assign or participate any interest in any Loan held
by it hereunder to the Borrower or any of its Affiliates without the prior
written consent of each Bank.
12.8 Applicable Law. THIS AGREEMENT AND THE COLLATERAL DOCUMENTS, AND
--------------
THE DUTIES, RIGHTS, POWERS AND REMEDIES OF THE PARTIES HERETO AND THERETO, SHALL
BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF OHIO
(WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS THEREOF), EXCEPT TO THE
EXTENT THAT ANY COLLATERAL DOCUMENT PROVIDES THAT THE LOCAL LAW OF ANOTHER
JURISDICTION GOVERNS THE GRANT, PERFECTION AND ENFORCEMENT OF THE LIENS GRANTED
PURSUANT TO SUCH COLLATERAL DOCUMENT.
12.9 Binding Effect and Entire Agreement; No Oral Agreements. This
-------------------------------------------------------
Agreement shall inure to the benefit of, and shall be binding upon, the
respective successors and permitted assigns of the parties hereto. This
Agreement, the Schedules and Exhibits hereto, which are hereby incorporated in
this Agreement, and the Collateral Documents constitute the entire agreement
among the parties on the subject matter hereof. There are no unwritten or oral
agreements between the Borrower and the Banks, and this written Agreement, the
Notes, the other Collateral Documents, and the instruments and documents
executed in connection herewith, represent the final agreement between the
parties and may not be contradicted by evidence of prior, contemporaneous or
subsequent oral agreements of the parties.
12.10 Counterparts. This Agreement may be executed in any number of
------------
counterparts or duplicate originals, each of which
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shall be deemed to be an original, but all of which together shall constitute
one and the same instrument.
12.11 Survival of Agreements. All covenants, agreements,
----------------------
representations and warranties made herein or in any Collateral Document shall
survive any investigation and the Closing Date, and shall continue in full force
and effect so long as any of the Obligations remain to be performed or paid or
the Banks have any obligation to advance sums or issue Letters of Credit
hereunder or any Letter of Credit remains outstanding.
12.12 Modification. Any term of this Agreement or of any Note may be
------------
amended and the observance of any term of this Agreement or of any Note may be
waived (either generally or in a particular instance and either retroactively or
prospectively) only with the written consent of the Borrower and the Majority
Banks. Any amendment or waiver effected in accordance with this Section 12.12
shall be binding upon each holder of a Note at the time outstanding, each future
holder of a Note and the Borrower; provided, however, that no such amendment or
-------- -------
waiver or other action shall, without the prior written consent of all of the
Banks or the holders of all of the Notes at the time outstanding, (a) extend the
maturity or reduce the principal amount of, or reduce the rate or extend the
time of payment of interest on, or reduce the amount or extend the time of
payment of any principal of, any Note, (b) reduce the amount or extend the time
of payment of the commitment fees, (c) change the Commitments or the Ratable
Share of any Bank (other than any change in Commitments or Ratable Share
resulting from the sale of a participation in or assignment of any Bank's
interest in the Commitments and Loans in accordance with Section 12.7), (d)
change the percentage referred to in the definition of "Majority Banks"
contained in Section 1.1, (e) amend this Section 12.12, (f) amend or waive
compliance with Section 2.7(b), or (g) release any collateral for the Loans
except for collateral which the Borrower is not prohibited pursuant hereto from
selling; and provided, further, that notwithstanding the foregoing provisions of
-------- -------
this Section 12.12, this Agreement and the Notes may be amended or modified in
the manner contemplated by Section 12.7 for the purpose of permitting any Bank
to assign its interest, rights and obligations hereunder to another bank or
financial institution, if the appropriate assignment agreement or counterparts
thereof are executed by the Borrower (to the extent required), the Agent and the
appropriate Bank assignor and assignee. Any amendment or waiver effected in
accordance with this Section 12.12 shall be binding upon each holder of any Note
at the time outstanding, each future holder of any Note and the Borrower.
12.13 Separability. If any one or more of the provisions contained in
------------
this Agreement or any Collateral Document should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of all
remaining provisions shall not in any way be affected or impaired. Any
provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to
-84-
the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.
12.14 Section Headings. The section headings contained herein are for
----------------
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
12.15 Enforcement. THE BORROWER (A) HEREBY IRREVOCABLY SUBMITS TO THE
-----------
JURISDICTION OF THE STATE COURTS OF THE STATE OF OHIO AND TO THE JURISDICTION OF
THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OHIO, FOR THE
PURPOSE OF ANY SUIT, ACTION OR OTHER PROCEEDING ARISING OUT OF OR BASED UPON
THIS AGREEMENT OR ANY COLLATERAL DOCUMENT OR THE SUBJECT MATTER HEREOF OR
THEREOF BROUGHT BY THE BANKS OR THEIR SUCCESSORS OR ASSIGNS AND (B) HEREBY
WAIVES, AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE, OR OTHERWISE,
IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT SUBJECT
PERSONALLY TO THE JURISDICTION OF THE ABOVE-NAMED COURTS, THAT ITS PROPERTY IS
EXEMPT OR IMMUNE FROM ATTACHMENT OR EXECUTION, THAT THE SUIT, ACTION OR
PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT,
ACTION OR PROCEEDING IS IMPROPER OR THAT THIS AGREEMENT OR ANY COLLATERAL
DOCUMENT OR THE SUBJECT MATTER HEREOF OR THEREOF MAY NOT BE ENFORCED IN OR BY
SUCH COURT, AND (C) HEREBY WAIVES AND AGREES NOT TO SEEK ANY REVIEW BY ANY COURT
OF ANY OTHER JURISDICTION WHICH MAY BE CALLED UPON TO GRANT AN ENFORCEMENT OF
THE JUDGMENT OF ANY SUCH OHIO STATE OR FEDERAL COURT. THE BORROWER HEREBY
CONSENTS TO SERVICE OF PROCESS BY REGISTERED MAIL AT THE ADDRESS TO WHICH
NOTICES ARE TO BE GIVEN. THE BORROWER AGREES THAT ITS SUBMISSION TO JURISDICTION
AND ITS CONSENT TO SERVICE OF PROCESS BY MAIL IS MADE FOR THE EXPRESS BENEFIT OF
THE BANKS. FINAL JUDGMENT AGAINST THE BORROWER IN ANY SUCH ACTION, SUIT OR
PROCEEDING MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT, ACTION OR PROCEEDING
ON THE JUDGMENT, OR IN ANY OTHER MANNER PROVIDED BY OR PURSUANT TO THE LAWS OF
SUCH OTHER JURISDICTION; PROVIDED, HOWEVER, THAT THE BANKS MAY AT THEIR OPTION
-------- -------
BRING SUIT, OR INSTITUTE OTHER JUDICIAL PROCEEDINGS, AGAINST THE BORROWER OR ANY
OF ITS ASSETS IN ANY ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ OR OF ANY
COUNTRY OR PLACE WHERE THE BORROWER, OR SUCH ASSETS, MAY BE FOUND.
12.16 Termination. This Agreement shall terminate when all amounts due
hereunder, under each Note and under each Collateral Document shall have been
indefeasibly paid in full in cash and all other Obligations hereunder or
thereunder shall have been fully performed, so long as no Letters of Credit are
then outstanding and the Banks have no further obligation to advance sums or
issue Letters of Credit hereunder. Notwithstanding the foregoing, this Agreement
shall continue to be effective or be reinstated and relate back to such time as
though this Agreement had always been in effect, as the case may be, if at any
time any amount received by any Bank in respect of the Obligations is rescinded
or must otherwise be restored or returned by such Bank upon the insolvency,
bankruptcy, dissolution, liquidation or
-85-
reorganization of the Borrower or upon the appointment of any intervenor or
conservator of, or trustee or similar official for, the Borrower or any
substantial part of its properties, or other wise, all as though such payments
had not been made.
12.17 Jury Trial Waiver. THE BORROWER AND THE BANKS EACH WAIVE ANY
-----------------
RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, BETWEEN THE BANKS AND THE BORROWER ARISING OUT OF,
IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THEM IN CONNECTION WITH THIS AGREEMENT OR ANY NOTE OR OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE
TRANSACTIONS RELATED THERETO.
12.18 Interest Limitation. It is the intention of the Borrower and the
-------------------
Banks to conform strictly to the respective usury laws applicable to the Banks.
Accordingly, if the transactions contemplated hereby would be usurious under
applicable law as to any Bank, then, in that event, notwithstanding anything to
the contrary in the Notes or this Agreement or in any other Collateral Document,
it is agreed as follows: (a) the aggregate of all consideration which
constitutes interest under law applicable to such Bank that is contracted for,
taken, reserved, charged or received under any Note payable to such Bank or this
Agreement or under any other Collateral Document or otherwise in connection with
such Note shall under no circumstances exceed the maximum amount allowed by such
Note (or, if the principal amount of such Note shall have been or would thereby
be paid in full, refunded to the Borrower); and (b) in the event that the
maturity of any Note payable to a Bank is accelerated or in the event of any
required or permitted prepayment, then such consideration that constitutes
interest under law applicable to such Bank may never include more than the
maximum amount allowed by such applicable law, and excess interest, if any,
provided for in this Agreement or otherwise shall be cancelled automatically as
of the date of such acceleration or prepayment and, if theretofore paid, shall
be credited by such Bank on the principal amount of such Note (or, if the
principal amount of such Note shall have been or would thereby be paid in full,
refunded by such Bank to the Borrower). All calculations made to compute the
rate of interest that is contracted for, taken, reserved, charged or received
under any Note payable to any Bank or under this Agreement or under any other
Collateral Document or otherwise in connection with such Note for the purpose of
determining whether such rate exceeds the maximum amount allowed by law
applicable to such Bank shall be made, to the extent permitted by such
applicable law, by amortizing, prorating, and spreading in equal parts during
the period of the full stated term of the Loan or Loans evidenced by such Note
all interest at any time contracted for, taken, reserved, charged or received by
such Bank in connection therewith.
12.19 DTPA Waiver. TO THE MAXIMUM EXTENT NOT PROHIBITED BY APPLICABLE
-----------
LAW FROM TIME TO TIME IN EFFECT, THE
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BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY (AND AFTER THE BORROWER
HAS CONSULTED WITH ITS OWN ATTORNEY), IRREVOCABLY AND UNCONDITIONALLY WAIVES THE
PROVISIONS OF THE TEXAS DECEPTIVE TRADE PRACTICES - CONSUMER PROTECTION ACT
(TEXAS BUSINESS AND COMMERCE CODE, CHAPTER 17, SECTION 17.41 - 17.63).
-87-
TO WITNESS THE ABOVE, the Borrower, the Banks and the Agent have
caused this Loan Agreement to be executed by their respective representatives
thereunto duly authorized as of the date first above written.
BORROWER:
CASTLE TOWER CORPORATION
By: /s/ ▇▇▇ ▇▇▇▇▇▇, JR.
--------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇, Jr.
------------------------------
Title: President
-----------------------------
AGENT:
SOCIETY NATIONAL BANK
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
BANKS:
SOCIETY NATIONAL BANK
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Media Finance Division
-▇▇-
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
Address: First Interstate Bank Plaza
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
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LIST OF SCHEDULES AND EXHIBITS
------------------------------
Schedule 1.1 Acquisition Advance Worksheet
Schedule 1.2 List of Banks and Ratable Shares
Exhibit A Form of Reducing Note
Exhibit B Form of Working Capital Note
Exhibit C Form of Term Note
Exhibit D Financial Statements
Exhibit E Projections
Exhibit F Capitalization
Exhibit G Proceedings, Litigation and Non-
Compliance with Law
Exhibit H Liens and Indebtedness
Exhibit I List of Contracts, Commitments and Licenses
Exhibit J ERISA Liabilities and Plans
Exhibit K Real Property List
Exhibit L Form of Compliance Certificate
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SCHEDULE 1.1
------------
Acquisition Advance Worksheet
-----------------------------
Pursuant to the Loan Agreement, this Acquisition Advance Worksheet shall be used
to determine borrowing availability under the Reducing Commitment and must be
presented to the Agent prior to each draw under such facility. This Worksheet
should be completed according to the steps detailed herein, in sequential order.
=========
Step #1
=========
Specifically excluding the acquisition for which availability is being
calculated herein ("Current Acquisition"), enter Annualized Operating Cash Flow
-------------------
("AOCF") for each Division A and Division B Acquisition for the most recently
completed fiscal quarter. (For Division A and Division B Acquisitions made
since the beginning of the most recently completed fiscal quarter, use the
trailing twelve month operating cash flow of such acquired towers or of the
acquired management agreement.) Operating expenses should be allocated between
the Divisions according to each Division's gross profit contribution (Division
gross profit/total gross profit).
----------------
Division A: AOCF (a)
----------------
Division B: AOCF (b)
----------------
=========
Step #2
=========
Pursuant to the definitions of Division A Acquisition and Division B Acquisition
in the Loan Agreement, indicate the division classification for the Current
Acquisition and enter the trailing twelve month operating cash flow of such
acquired towers or of the acquired management agreement.
----------------
Division Classification (c)
----------------
Acquisition OCF (d)
----------------
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=========
Step #3
=========
If the Current Acquisition is a Division B Acquisition, enter the required
information regarding the Current Acquisition in the "Division B - Average
Acquisition Leverage Worksheet", set forth below, immediately after the
information regarding the most recent Division B Acquisition (if any), including
the number of towers purchased, date of purchase, name of seller, operating cash
flow for the most recently completed twelve month period (figure does not change
from original for subsequent calculations), and the funds to be paid to the
seller. An acquisition from a single buyer cannot be sub-divided into multiple
purchases for division classification purposes. Excluding the Purchase
Agreement, any assets covered by a single purchase agreement, but to be
purchased in stages, must be classified according to their consolidated purchase
multiple. In addition, multiple purchases from the same seller (excluding the
Sellers) on a trailing three month basis must be classified according to their
blended purchase multiple. The "Division B -Average Acquisition Leverage
Worksheet" calculates an "Acquisition Leverage Multiple" for each acquisition
equal to 73% of the Purchase Multiple (or 67%, pursuant to Section 2.4(d)(i) of
the Loan Agreement, if the Borrower uses any proceeds of the Reducing Loans to
prepay any portion of the Term Loans). A Weighted Average Leverage Multiple is
then calculated for all Division B Acquisitions.
DIVISION B -- AVERAGE ACQUISITION LEVERAGE WORKSHEET:
--------------------------------------------------------------------------------------------------------------------------
Acquisition
Leverage
Multiple Weighted
(initially, Avg
# of Date of OCF as of Purchase Purchase 73% of Leverage
Tower Towers Purchase Seller date of Cost Multiple Purchase Multiple
Acquisi- Multiple)
tion
--------------------------------------------------------------------------------------------------------------------------
1.
2.
3.
--------------------------------------------------------------------------------------------------------------------------
TOTAL
--------------------------------------------------------------------------------------------------------------------------
DIVISION B - AVERAGE ACQUISITION LEVERAGE MULTIPLE
-------------------------------------------------------------------------------------------
=========
Step #4
=========
This step calculates borrowing capacity by Division under the Reducing
Commitment. Enter the following information and calculate figures according to
designated formulas.
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Enter balance from box (a) (e)
-----------------------
If Current Acquisition classified Division A, enter balance from box (d) (f)
-----------------------
(e) + (f) (g)
-----------------------
Multiply box (g) by 5.50 (h)
-----------------------
Enter balance from box (b) (i)
-----------------------
If Current Acquisition classified Division B, enter balance from box (d) (j)
-----------------------
(i) + (j) (k)
-----------------------
Enter Division B - Average Acquisition Leverage Multiple from Step #3 (l)
or the last completed Acquisition Advance Worksheet
-----------------------
Multiply (k) by (l) (m)
-----------------------
=========
Step #5
=========
This step calculates total availability under the Reducing Commitment for the
Current Acquisition contemplated herein. Enter the following information and
calculate figures according to designated formulas.
[Total Borrowing Capacity] (h) + (m) (n)
-----------------------
Total Debt Outstanding (other than PCI Debt) (o)
-----------------------
[Acquisition Availability] (n) - (o) (p)
-----------------------
Current Acquisition purchase price (q)
-----------------------
Box (p) indicates availability under the Reducing Commitment for the Current
Acquisition. If box (q) exceeds box (p), the difference must be funded with
equity.
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SCHEDULE 1.2
------------
List of Banks and Ratable Shares
--------------------------------
Banks: Reducing Working Term Loan
------ Loan Amount Capital Loan Amount and
and Ratable Amount and Ratable
Share of Ratable Share of
Reducing Share of Term Loans:
Commitment: Working --------------
----------- Capital
Commitment:
-----------
Society $13,020,000 $600,000 $1,380,000
(60%) (60%) (60%)
First $8,680,000 400,000 $920,000
Interstate (40%) (40%) (40%)
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