EXECUTION COPY
LOAN AGREEMENT
AMONG
GREAT WESTERN DIRECTORIES, INC.;
THE FINANCIAL INSTITUTIONS WHOSE NAMES APPEAR AS LENDERS ON
THE SIGNATURE PAGES HEREOF;
AND
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
AS ADMINISTRATIVE AGENT
FOR THE LENDERS
DATED AS OF MAY 14, 1999
POWELL, GOLDSTEIN, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
ATLANTA, GEORGIA
LOAN AGREEMENT
AMONG
GREAT WESTERN DIRECTORIES, INC.;
THE FINANCIAL INSTITUTIONS WHOSE NAMES APPEAR AS LENDERS ON
THE SIGNATURE PAGES HEREOF;
AND
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
AS ADMINISTRATIVE AGENT
FOR THE LENDERS
INDEX
PAGE
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ARTICLE 1 - DEFINITIONS...........................................................................................1
ARTICLE 2 - LOANS................................................................................................16
SECTION 2.1 THE LOANS...................................................................................16
SECTION 2.2 MANNER OF BORROWING AND DISBURSEMENT........................................................16
SECTION 2.3 INTEREST....................................................................................19
SECTION 2.4 MANDATORY COMMITMENT REDUCTIONS.............................................................20
SECTION 2.5 OPTIONAL COMMITMENT REDUCTIONS..............................................................20
SECTION 2.6 PREPAYMENTS.................................................................................20
SECTION 2.7 REPAYMENTS..................................................................................21
SECTION 2.8 NOTES; LOAN ACCOUNTS........................................................................22
SECTION 2.9 MANNER OF PAYMENT...........................................................................22
SECTION 2.10 REIMBURSEMENT...............................................................................23
SECTION 2.11 PRO RATA TREATMENT..........................................................................24
SECTION 2.12 CAPITAL ADEQUACY............................................................................25
SECTION 2.13 LENDER TAX FORMS............................................................................25
SECTION 2.14 REPLACEMENT OF LENDERS......................................................................25
SECTION 2.15 COMMITMENT FEE..............................................................................26
ARTICLE 3 - CONDITIONS PRECEDENT.................................................................................26
SECTION 3.1 CONDITIONS PRECEDENT TO INITIAL ADVANCE.....................................................26
SECTION 3.2 CONDITIONS PRECEDENT TO EACH ADVANCE........................................................28
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES.......................................................................29
SECTION 4.1 REPRESENTATIONS AND WARRANTIES..............................................................30
SECTION 4.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC.............................................36
ARTICLE 5 - GENERAL COVENANTS....................................................................................36
SECTION 5.1 PRESERVATION OF EXISTENCE AND SIMILAR MATTERS...............................................37
SECTION 5.2 BUSINESS; COMPLIANCE WITH APPLICABLE LAW....................................................37
SECTION 5.3 MAINTENANCE OF PROPERTIES...................................................................37
SECTION 5.4 ACCOUNTING METHODS AND FINANCIAL RECORDS....................................................37
SECTION 5.5 INSURANCE...................................................................................37
SECTION 5.6 PAYMENT OF TAXES AND CLAIMS.................................................................38
PAGE
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SECTION 5.7 COMPLIANCE WITH ERISA.......................................................................38
SECTION 5.8 VISITS AND INSPECTIONS......................................................................40
SECTION 5.9 PAYMENT OF INDEBTEDNESS.....................................................................40
SECTION 5.10 USE OF PROCEEDS.............................................................................40
SECTION 5.11 INDEMNITY...................................................................................40
SECTION 5.12 COVENANTS REGARDING ACQUISITIONS AND PURCHASE OR FORMATION OF SUBSIDIARIES..................41
SECTION 5.13 PAYMENT OF WAGES............................................................................42
SECTION 5.14 FURTHER ASSURANCES..........................................................................42
SECTION 5.15 YEAR 2000 COMPLIANCE........................................................................42
ARTICLE 6 - INFORMATION COVENANTS................................................................................42
SECTION 6.1 QUARTERLY FINANCIAL STATEMENTS AND INFORMATION..............................................43
SECTION 6.2 ANNUAL FINANCIAL STATEMENTS AND INFORMATION.................................................43
SECTION 6.3 PERFORMANCE CERTIFICATES....................................................................43
SECTION 6.4 COPIES OF OTHER REPORTS.....................................................................44
SECTION 6.5 NOTICE OF LITIGATION AND OTHER MATTERS......................................................44
ARTICLE 7 - NEGATIVE COVENANTS...................................................................................45
SECTION 7.1 INDEBTEDNESS OF THE BORROWER AND ITS SUBSIDIARIES...........................................45
SECTION 7.2 LIMITATION ON LIENS.........................................................................46
SECTION 7.3 AMENDMENT AND WAIVER........................................................................46
SECTION 7.4 LIQUIDATION, MERGER OR DISPOSITION OF ASSETS................................................46
SECTION 7.5 LIMITATION ON GUARANTIES....................................................................46
SECTION 7.6 INVESTMENTS AND ACQUISITIONS................................................................47
SECTION 7.7 RESTRICTED PAYMENTS.........................................................................47
SECTION 7.8 LEVERAGE RATIO..............................................................................48
SECTION 7.9 INTEREST COVERAGE RATIO.....................................................................48
SECTION 7.10 AFFILIATE TRANSACTIONS......................................................................48
SECTION 7.11 REAL ESTATE.................................................................................48
SECTION 7.13 ERISA LIABILITIES...........................................................................48
ARTICLE 8 - DEFAULT..............................................................................................48
SECTION 8.1 EVENTS OF DEFAULT...........................................................................48
SECTION 8.2 REMEDIES....................................................................................52
SECTION 8.3 PAYMENTS SUBSEQUENT TO DECLARATION OF EVENT OF DEFAULT......................................53
ARTICLE 9 - THE ADMINISTRATIVE AGENT.............................................................................54
SECTION 9.1 APPOINTMENT AND AUTHORIZATION...............................................................54
SECTION 9.2 INTEREST HOLDERS............................................................................54
SECTION 9.3 CONSULTATION WITH COUNSEL...................................................................54
SECTION 9.4 DOCUMENTS...................................................................................54
SECTION 9.5 ADMINISTRATIVE AGENT AND AFFILIATES.........................................................55
SECTION 9.6 RESPONSIBILITY OF THE ADMINISTRATIVE AGENT..................................................55
SECTION 9.7 ACTION BY THE ADMINISTRATIVE AGENT..........................................................55
SECTION 9.8 NOTICE OF DEFAULT OR EVENT OF DEFAULT.......................................................56
SECTION 9.9 RESPONSIBILITY DISCLAIMED...................................................................56
SECTION 9.10 INDEMNIFICATION.............................................................................57
SECTION 9.11 CREDIT DECISION.............................................................................57
SECTION 9.12 SUCCESSOR ADMINISTRATIVE AGENT..............................................................57
SECTION 9.13 DELEGATION OF DUTIES........................................................................58
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PAGE
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SECTION 9.14 BORROWER'S RIGHT TO PROCEED AGAINST LENDERS.................................................58
ARTICLE 10 - CHANGE IN CIRCUMSTANCES AFFECTING LIBOR ADVANCES....................................................58
SECTION 10.1 LIBOR BASIS DETERMINATION INADEQUATE OR UNFAIR..............................................58
SECTION 10.2 ILLEGALITY..................................................................................58
SECTION 10.3 INCREASED COSTS.............................................................................59
SECTION 10.4 EFFECT ON OTHER ADVANCES....................................................................60
ARTICLE 11 - MISCELLANEOUS.......................................................................................60
SECTION 11.1 NOTICES.....................................................................................60
SECTION 11.2 EXPENSES....................................................................................62
SECTION 11.3 WAIVERS.....................................................................................62
SECTION 11.4 SET-OFF.....................................................................................63
SECTION 11.5 ASSIGNMENT..................................................................................63
SECTION 11.6 ACCOUNTING PRINCIPLES.......................................................................65
SECTION 11.7 COUNTERPARTS................................................................................66
SECTION 11.8 GOVERNING LAW...............................................................................66
SECTION 11.9 SEVERABILITY................................................................................66
SECTION 11.10 INTEREST....................................................................................66
SECTION 11.11 TABLE OF CONTENTS AND HEADINGS..............................................................67
SECTION 11.12 AMENDMENT AND WAIVER........................................................................67
SECTION 11.13 ENTIRE AGREEMENT............................................................................67
SECTION 11.14 OTHER RELATIONSHIPS.........................................................................67
SECTION 11.15 DIRECTLY OR INDIRECTLY......................................................................67
SECTION 11.16 RELIANCE ON AND SURVIVAL OF VARIOUS PROVISIONS..............................................68
SECTION 11.17 OBLIGATIONS SEVERAL.........................................................................68
SECTION 11.18 CONFIDENTIALITY.............................................................................68
ARTICLE 12 - WAIVER OF JURY TRIAL................................................................................69
SECTION 12.1 WAIVER OF JURY TRIAL........................................................................69
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EXHIBITS
Exhibit A - Form of Assignment and Assumption Agreement
Exhibit B - Form of Borrower's Pledge Agreement
Exhibit C - Form of Borrower's Security Agreement
Exhibit D - Form of Certificate of Financial Condition
Exhibit E - Form of Note
Exhibit F - Form of Parent Guaranty
Exhibit G - Form of Parent Pledge Agreement
Exhibit H - Form of Parent Security Agreement
Exhibit I - Form of Request for Advance
Exhibit J - Form of Subsidiary's Guaranty
Exhibit K - Form of Subsidiary's Pledge Agreement
Exhibit L - Form of Subsidiary's Security Agreement
Exhibit M - Form of Borrower's Loan Certificate
Exhibit N - Form of Parent's Loan Certificate
Exhibit O - Form of Subsidiary's Loan Certificate
Exhibit P - Form of Performance Certificate
Exhibit Q - Form of Acknowledgment
SCHEDULES
Schedule 1 Liens
Schedule 2 Non-Material Subsidiaries
Schedule 3 Litigation
Schedule 4 Affiliate Transactions
Schedule 5 Indebtedness
Schedule 6 Trademarks, Patents, Copyrights
Schedule 7 Lender's Addresses
Schedule 8 Consent States
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LOAN AGREEMENT
AMONG
GREAT WESTERN DIRECTORIES, INC.;
THE FINANCIAL INSTITUTIONS WHOSE NAMES APPEAR AS LENDERS ON
THE SIGNATURE PAGES HEREOF;
AND
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
AS ADMINISTRATIVE AGENT
FOR THE LENDERS
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrower has requested that the Lenders make available to
the Borrower certain credit facilities as more fully described herein; and
WHEREAS, the Lenders are willing to extend such financing to the
Borrower subject to the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the receipt, adequacy and sufficiency of
which are acknowledged by the parties hereto, it is hereby agreed as follows:
ARTICLE 1
DEFINITIONS
-----------
For the purposes of this Agreement:
"ACQUISITION" shall mean (whether by purchase, lease, exchange,
issuance of stock or other equity or debt securities, merger, reorganization or
any other method) (a) any acquisition by the Borrower or any Subsidiary of the
Borrower of any other Person, which Person shall then become consolidated with
the Borrower or any such Subsidiary in accordance with GAAP; (b) any acquisition
by the Borrower or any Subsidiary of the Borrower of all or any substantial part
of the assets of any other Person; or (c) any other acquisition by the Borrower
or any Subsidiary of the Borrower of the assets of another Person which
acquisition is not in the ordinary course of business for the Borrower or such
Subsidiary.
"ADMINISTRATIVE AGENT" shall mean Bank of America National Trust and
Savings Association, in its capacity as Administrative Agent for the Lenders or
any successor Administrative Agent appointed pursuant to Section 9.12 hereof.
"ADMINISTRATIVE AGENT'S OFFICE" shall mean the office of the
Administrative Agent located at ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, 11th Floor, Unit 3283, ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other office as may be designated pursuant to
the provisions of Section 11.1 hereof.
"ADVANCE" shall mean amounts advanced by the Lenders to the Borrower
pursuant to Article 2 hereof on the occasion of any borrowing and having the
same Interest Rate Basis and Interest Period; and "ADVANCES" shall mean more
than one Advance.
"AFFILIATE" shall mean, with respect to a Person, any other Person
directly or indirectly controlling, controlled by, or under common control with,
such first Person. As used in this definition, "CONTROL" (including, with its
correlative meanings, "CONTROLLED BY" and "UNDER COMMON CONTROL WITH") shall
mean possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise).
"AFFILIATE GUARANTORS" shall mean, collectively, each Subsidiary of the
Parent other than (a) the Borrower and its Subsidiaries, (b) the YP Tel Entities
and (c) each Non-Material Subsidiary.
"AFFILIATE GUARANTY" shall mean any Affiliate Guaranty made by each
Affiliate Guarantor (other than Telecom Resources, Inc. until such time as all
Necessary Authorizations to execute any of such documents are obtained) in favor
of the Administrative Agent and the Lenders, substantially in the form of
EXHIBIT J hereof.
"AFFILIATE PLEDGE AGREEMENT" shall mean any Affiliate Pledge Agreement
made by each Affiliate Guarantor (other than Telecom Resources, Inc. until such
time as all Necessary Authorizations to execute any of such documents are
obtained) having one or more of its own Subsidiaries in favor of the
Administrative Agent, substantially in the form of EXHIBIT K hereof.
"AFFILIATE SECURITY AGREEMENT" shall mean any Affiliate Security
Agreement made by each Affiliate Guarantor (other than Telecom Resources, Inc.
until such time as all Necessary Authorizations to execute any of such documents
are obtained) in favor of the Administrative Agent substantially in the form of
EXHIBIT L hereof.
"AGREEMENT" shall mean this Loan Agreement, as amended, supplemented,
restated or otherwise modified from time to time.
"AGREEMENT DATE" shall mean May 14, 1999.
-2-
"APPLICABLE LAW" shall mean, in respect of any Person, all provisions
of constitutions, statutes, rules, regulations and orders of governmental bodies
or regulatory agencies applicable to such Person, including, without limiting
the foregoing, the Communications Act, zoning ordinances and all Environmental
Laws, and all orders, decisions, judgments and decrees of all courts and
arbitrators in proceedings or actions to which the Person in question is a party
or by which it is bound.
"ASSIGNMENT AND ASSUMPTION AGREEMENT" shall mean any Assignment and
Assumption Agreement substantially in the form of EXHIBIT A attached hereto
pursuant to which any Lender, as further provided in Section 11.5 hereof, sells
a portion of its Commitments and/or Loans.
"AUTHORIZED SIGNATORY" shall mean such senior personnel of a Person as
may be duly authorized and designated in writing from time to time by such
Person to execute documents, agreements and instruments on behalf of such
Person.
"BASE RATE" shall mean, at any time, a fluctuating interest rate per
annum equal to the higher of (a) the rate of interest quoted from time to time
by the Administrative Agent as its "prime rate" or "base rate" or (b) the
Federal Funds Rate plus one-half of one percent (0.5%). The Base Rate is not
necessarily the lowest rate of interest charged by the Administrative Agent in
connection with extensions of credit.
"BASE RATE ADVANCE" shall mean an Advance which the Borrower requests
to be made as a Base Rate Advance or is reborrowed as a Base Rate Advance, in
accordance with the provisions of Section 2.2 hereof, and which shall be in a
principal amount of at least $1,000,000.00, and in an integral multiple of
$500,000.00.
"BASE RATE BASIS" shall mean a simple interest rate equal to the sum of
(i) the Base Rate and (ii) three-quarters of one percent (0.75%). The Base Rate
Basis shall be adjusted automatically as of the opening of business on the
effective date of each change in the Base Rate to account for such change.
"BORROWER" shall mean Great Western Directories, Inc., a Texas
corporation.
"BORROWER'S PLEDGE AGREEMENT" shall mean any Borrower's Pledge
Agreement between the Borrower and the Administrative Agent, substantially in
the form of EXHIBIT B attached hereto.
"BORROWER'S SECURITY AGREEMENT" shall mean that certain Borrower's
Security Agreement dated as of even date herewith between the Borrower and the
Administrative Agent, substantially in the form of EXHIBIT C attached hereof.
"BUSINESS DAY" shall mean a day on which banks and foreign exchange
markets are open for the transaction of business required for this Agreement in
Los Angeles, California and London, England, as relevant to the determination to
be made or the action to be taken.
-3-
"CAPITAL EXPENDITURES" shall mean, for any period, expenditures
(including the aggregate amount of Capitalized Lease Obligations required to be
paid during such period) incurred by any Person to acquire or construct fixed
assets, plant and equipment (including renewals, improvements and replacements,
but excluding repairs and maintenance) during such period, which would be
required to be capitalized on the balance sheet of such Person in accordance
with GAAP.
"CAPITAL STOCK" shall mean, as applied to any Person, any ownership
interests or capital stock of such Person, regardless of class or designation,
and all warrants, options, purchase rights, conversion or exchange rights,
voting rights, calls or claims of any character with respect thereto.
"CAPITALIZED LEASE OBLIGATION" shall mean that portion of any
obligation of a Person as lessee under a lease which at the time would be
required to be capitalized on the balance sheet of such lessee in accordance
with GAAP.
"CERTIFICATE OF FINANCIAL CONDITION" shall mean a certificate dated the
Agreement Date, substantially in the form of EXHIBIT D attached hereto, signed
by the chief financial officer of the Borrower, together with any schedules,
exhibits or annexes appended thereto.
"CHANGE OF CONTROL" shall mean the occurrence of any of the following
events:
(a) Any "person" or "group" (within the meaning of Sections
13(d)(3) and 14(d)(2) of the Exchange Act or any successor provision to either
of the foregoing, including any group acting for the purpose of acquiring,
holding or disposing of securities within the meaning of Rule 13d-5(b)(1) under
the Exchange Act) other than one (1) or more of the Permitted Holders is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of thirty-three and one-third percent (33-1/3%) or
more of the total voting power of the voting Capital Stock (on a fully-diluted
basis) of the Parent;
(b) During any period of two (2) consecutive years,
individuals who at the beginning of such period constituted the board of
directors of the Parent (together with any new directors whose election by the
board of directors of the Parent or whose nomination for election by the
shareholders of the Parent was approved by a vote of fifty-one percent (51%) of
the directors of the Parent then still in office who were either directors at
the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
Board of Directors of the Parent then in office;
(c) The failure of the Parent to own all of the voting and
economic Capital Stock of (i) its Subsidiaries (other than the Borrower and its
Subsidiaries) except in connection with the sale, lease, transfer or other
disposition of all or any part of the CLEC Business as contemplated herein, the
dissolution of any Non-Material Subsidiary and the sale, lease, transfer or
other disposition of Tele-Systems, Inc. or (ii) the Borrower and its
Subsidiaries; and
-4-
(d) ▇▇▇▇▇▇▇ ▇'▇▇▇▇ shall fail, for any reason, to be employed
by the Borrower, or any successor of the Borrower, as its President or as an
equivalent or more senior executive officer or manager of comparable authority
and responsibility.
"CIBC FACILITY" shall mean the existing $25,000,000.00 Credit Facility
dated as of August 6, 1998 by and between the Parent and Canadian Imperial Bank
of Commerce.
"CLEC BUSINESS" shall mean, collectively, the business operations of
(a) ▇▇▇▇▇ Long Distance Service, Inc., (b) FirsTel, Inc., (c) Valu-Line of
Longview, Inc. and (d) Telecom Resources, Inc.
"CLEC NET PROCEEDS" shall mean, with respect to any sale, lease,
transfer or other disposition of all or any part of the CLEC Business by the
Parent or any of its Subsidiaries, the aggregate amount of cash received by the
Parent or any of its Subsidiaries for such assets (including, without
limitation, any payments received for non-competition covenants, consulting or
management fees in connection with such sale, and any portion of the amount
received evidenced by a promissory note or other evidence of Indebtedness issued
by the purchaser), net of (a) amounts reserved, if any, for taxes payable with
respect to any such sale (after application (assuming application first to such
reserves) of any available losses, credits or other offsets), (b) reasonable and
customary transaction costs properly attributable to such transaction and
payable by the Parent or any of its Subsidiaries (other than to an Affiliate) in
connection with such sale, lease, transfer or other disposition of assets,
including, without limitation, commissions and severance and other payments to
employees due to termination of employment in an aggregate amount not to exceed
$1,500,000.00, and (c) until actually received by the Parent or any of its
Subsidiaries, any portion of the amount received held in escrow or evidenced by
a promissory note or other evidence of Indebtedness issued by a purchaser or
non-compete, consulting or management agreement or covenant or otherwise for
which compensation is paid over time. Upon receipt by the Parent or any of its
Subsidiaries of (i) amounts referred to in item (c) of the preceding sentence,
or (ii) if there shall occur any reduction in the tax reserves referred to in
item (a) of the preceding sentence resulting in a payment to the Parent or its
Subsidiaries, such amounts shall then be deemed to be "CLEC Net Proceeds."
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"COLLATERAL" shall mean any property of any kind constituting
collateral for the Obligations under any of the Security Documents.
"COMMITMENT" shall mean the several obligations of the Lenders to fund
their respective portion of the Loans to the Borrower in accordance with their
respective Commitment Ratios in an aggregate principal amount as of the
Agreement Date not to exceed Forty Million and No/100 Dollars ($40,000,000.00)
pursuant to the terms hereof, as such obligations may be reduced from time to
time pursuant to the terms hereof.
-5-
"COMMITMENT RATIOS" shall mean the percentages in which the Lenders are
severally bound to fund their respective portion of Advances to the Borrower
under the Commitment, which percentages are set forth below (together with
dollar amounts) as of the Agreement Date:
Lender Approximate Dollar
------ Percentage Commitment
---------- ----------
Bank of America National Trust 100.0000000% $40,000,000.00
and Savings Association
------------ --------------
------------ --------------
100.00% $40,000,000.00
"COMMUNICATIONS ACT" shall mean the Communications Act of 1934, as
amended, and any similar or successor federal statute, and the rules,
regulations and policies of the FCC thereunder, all as the same may be in effect
from time to time.
"DEFAULT" shall mean any Event of Default, and any of the events
specified in Section 8.1 hereof, regardless of whether there shall have occurred
any passage of time or giving of notice, or both, that would be necessary in
order to constitute such event an Event of Default.
"DEFAULT RATE" shall mean a simple per annum interest rate equal to the
sum of (a) the applicable Interest Rate Basis and (b) two percent (2%).
"EBITDA" shall mean, with respect to the Borrower and its Subsidiaries,
on a consolidated basis, the sum of (a) Net Income for any period (after
eliminating any extraordinary gains and losses) and, (b) to the extent deducted
in determining such Net Income, the sum of (i) depreciation and amortization,
(ii) Interest Expense, (iii) income taxes paid and (iv) all other non-cash
items, in each case, for such period.
"EMPLOYEE PENSION PLAN" shall mean any Plan which is maintained by the
Borrower, any of its Subsidiaries or any ERISA Affiliate.
"ENVIRONMENTAL LAWS" shall mean all applicable federal, state or local
laws, statutes, rules, regulations or ordinances, codes, common law, consent
agreements, orders, decrees, judgments or injunctions issued, promulgated,
approved or entered thereunder relating to public health, safety or the
pollution or protection of the environment, including, without limitation, those
relating to releases, discharges, emissions, spills, leaching, or disposals to
air, water, land or ground water, to the withdrawal or use of ground water, to
the use, handling or disposal of polychlorinated biphenyls, asbestos or urea
formaldehyde, to the treatment, storage, disposal or management of hazardous
substances (including, without limitation, petroleum, crude oil or any fraction
thereof, or other hydrocarbons), pollutants or contaminants, to exposure to
toxic, hazardous or other controlled, prohibited, or regulated substances,
including, without limitation,
-6-
any such provisions under the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended (42 U.S.C. ss. 9601 et seq.), or the
Resource Conservation and Recovery Act of 1976, as amended (42 U.S.C. ss. 6901
et seq.).
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as in effect from time to time.
"ERISA AFFILIATE" shall mean any Person, including a Subsidiary or an
Affiliate of the Borrower, that is a member of any group of organizations of
which the Borrower is a member and which is covered by a Plan.
"EURODOLLAR RESERVE PERCENTAGE" shall mean the percentage which is in
effect from time to time under Regulation D of the Board of Governors of the
Federal Reserve System, as such regulation may be amended from time to time, as
the maximum reserve requirement applicable with respect to Eurocurrency
Liabilities (as that term is defined in Regulation D), whether or not any Lender
has any such Eurocurrency Liabilities subject to such reserve requirement at
that time.
"EVENT OF DEFAULT" shall mean any of the events specified in Section
8.1 hereof, PROVIDED that any requirement for notice or lapse of time, or both,
has been satisfied.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"FCC" shall mean the Federal Communications Commission, or any other
similar or successor agency of the federal government administering the
Communications Act.
"FEDERAL FUNDS RATE" shall mean, as of any date, the weighted average
of the rates on overnight federal funds transactions with the members of the
Federal Reserve System arranged by federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three (3) federal
funds brokers of recognized standing selected by the Administrative Agent.
"GAAP" shall mean, as in effect from time to time, generally accepted
accounting principles in the United States, consistently applied.
"GUARANTY" or "GUARANTEED," as applied to an obligation, shall mean and
include (a) a guaranty, direct or indirect, in any manner, of all or any part of
such obligation, and (b) any agreement, direct or indirect, contingent or
otherwise, the practical effect of which is to assure in any way the payment or
performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, any
reimbursement obligations as to amounts drawn down by beneficiaries of
outstanding letters of credit or capital call requirements.
-7-
"INDEBTEDNESS" shall mean, with respect to any Person, and without
duplication, (a) all items, except items of shareholders', members' and
partners' equity or capital stock or surplus or general contingency or deferred
tax reserves, which in accordance with GAAP would be included in determining
total liabilities as shown on the liability side of a balance sheet of such
Person, including, without limitation, with respect to any secured non-recourse
obligations of such Person, the fair market value of the property or asset
securing such obligation (if less than the amount of such obligation), but
excluding accounts payable, accrued expenses (including taxes) and customer
advance payments incurred in the ordinary course of business, (b) all direct or
indirect obligations of any other Person secured by any Lien to which any
property or asset owned by such Person is subject, but only to the extent of the
higher of the fair market value or the book value of the property or asset
subject to such Lien (if less than the amount of such obligation), if the
obligation secured thereby shall not have been assumed, (c) to the extent not
otherwise included, all Capitalized Lease Obligations of such Person and all
obligations of such Person with respect to leases constituting part of a sale
and lease-back arrangement, (d) all reimbursement obligations with respect to
outstanding letters of credit, (e) to the extent not otherwise included, all
obligations subject to Guaranties of such Person or its Subsidiaries, and (f)
all obligations, determined on a marked-to-market basis on the calculation date,
of such Person under Interest Hedge Agreements.
"INDEBTEDNESS FOR MONEY BORROWED" shall mean, with respect to any
Person, Indebtedness for money borrowed and Indebtedness represented by notes
payable and drafts accepted representing extensions of credit, all obligations
evidenced by bonds, debentures, notes or other similar instruments, all
Indebtedness upon which interest charges are customarily paid (other than trade
payables arising in the ordinary course of business, but only if and so long as
such accounts are payable on customary trade terms), all Capitalized Lease
Obligations, all reimbursement obligations with respect to outstanding letters
of credit, all Indebtedness issued or assumed as full or partial payment for
property or services (other than trade payables arising in the ordinary course
of business, but only if and so long as such accounts are payable on customary
trade terms), whether or not any such notes, drafts, obligations or Indebtedness
represent Indebtedness for money borrowed, and, without duplication, Guaranties
of any of the foregoing. For purposes of this definition, interest which is
accrued but not paid on the scheduled due date for such interest shall be deemed
Indebtedness for Money Borrowed.
"INDEMNITEE" shall have the meaning ascribed thereto in Section 5.11
hereof.
"INTEREST EXPENSE" shall mean, for any period, all cash interest
expense (including imputed interest with respect to Capitalized Lease
Obligations) with respect to any Indebtedness for Money Borrowed of the Borrower
and its Subsidiaries on a consolidated basis during such period pursuant to the
terms of such Indebtedness for Money Borrowed, together with all fees payable in
respect thereof (excluding the underwriting fee paid on the Agreement Date in
connection with the credit facilities hereunder and any fees paid in connection
with consents, amendments or waivers hereunder), all as calculated in accordance
with GAAP; PROVIDED, HOWEVER, for all calculations of Interest Expense that
include periods prior to the Agreement
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Date, Interest Expense shall include the actual interest paid by the Parent in
connection with the CIBC Facility for such period.
"INTEREST HEDGE AGREEMENTS" shall mean the obligations of any Person
pursuant to any arrangement with any other Person whereby, directly or
indirectly, such Person is entitled to receive from time to time periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated notional amount in exchange for periodic payments made by such Person
calculated by applying a fixed or a floating rate of interest on the same
notional amount and shall include, without limitation, interest rate swaps,
caps, floors, collars and similar agreements.
"INTEREST PERIOD" shall mean (a) in connection with any Base Rate
Advance, the period beginning on the date such Advance is made and ending on the
last day of the calendar quarter in which such Advance is made, PROVIDED,
HOWEVER, that if a Base Rate Advance is made on the last day of any calendar
quarter, it shall have an Interest Period ending on, and its Payment Date shall
be, the last day of the following calendar quarter, and (b) in connection with
any LIBOR Advance, the term of such Advance selected by the Borrower or
otherwise determined in accordance with this Agreement. Notwithstanding the
foregoing, however, (i) any applicable Interest Period which would otherwise end
on a day which is not a Business Day shall be extended to the next succeeding
Business Day unless, with respect to LIBOR Advances only, such Business Day
falls in another calendar month, in which case such Interest Period shall end on
the next preceding Business Day, (ii) any applicable Interest Period, with
respect to LIBOR Advances only, which begins on a day for which there is no
numerically corresponding day in the calendar month during which such Interest
Period is to end shall (subject to clause (i) above) end on the last day of such
calendar month, and (iii) the Borrower shall not select an Interest Period which
extends beyond the Maturity Date, or such earlier date as would interfere with
the Borrower's repayment obligations under Section 2.4 or 2.6 hereof. Interest
shall be due and payable with respect to any Advance as provided in Section 2.3
hereof.
"INTEREST RATE BASIS" shall mean the Base Rate Basis or the LIBOR
Basis, as appropriate.
"INVESTMENT" shall mean, with respect to the Borrower or any of its
Subsidiaries, (a) any loan, advance or extension of credit (other than to
customers in the ordinary course of business) by such Person to, or any Guaranty
or other contingent liability with respect to the capital stock, indebtedness or
other obligations of, or any contributions to the capital of, any other Person,
or any ownership, purchase or other acquisition by such Person of any interest
in any capital stock, limited partnership interests, general partnership
interest, or other securities of such other Person, other than an Acquisition,
and (b) all expenditures by the Borrower or any of its Subsidiaries relating to
the foregoing.
"KNOWN TO THE BORROWER" or "TO THE KNOWLEDGE OF THE BORROWER" shall
mean known by or reasonably should have been known by the executive officers of
the Borrower (which shall include, without limitation, the chief executive
officer, the chief operating officer, the chief
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financial officer and the general counsel, if any, or any vice president of the
Borrower) at the time the event occurred.
"LENDERS" shall mean the Persons whose names appear as "LENDERS" on the
signature pages hereof and any other Person which becomes a "LENDER" hereunder
after the Agreement Date; and "LENDER" shall mean any one of the foregoing
Lenders.
"LEVERAGE RATIO" shall mean, as of any date, the ratio of (a) Total
Debt to (b) EBITDA for the twelve (12) calendar month period ending on such
date, or if such date is not the last day of a calendar month, as of the most
recently completed calendar month.
"LIBOR" shall mean, for any Interest Period, the average of the
interest rates per annum at which deposits in United States Dollars for such
Interest Period are offered to the Administrative Agent in the Eurodollar market
at approximately 11:00 a.m. (London, England time) two (2) Business Days before
the first day of such Interest Period, in an amount approximately equal to the
principal amount of, and for a length of time approximately equal to the
Interest Period for, the LIBOR Advance sought by the Borrower.
"LIBOR ADVANCE" shall mean an Advance which the Borrower requests to be
made as a LIBOR Advance or which is reborrowed as a LIBOR Advance, in accordance
with the provisions of Section 2.2 hereof, and which shall be in a principal
amount of at least $1,000,000.00 and in an integral multiple of $500,000.00.
"LIBOR BASIS" shall mean a simple per annum interest rate (rounded
upward, if necessary, to the nearest one-hundredth (1/100th) of one percent
(1%)) equal to the sum of (a) the quotient of (i) the LIBOR divided by (ii) the
difference between (x) one (1) and (y) the Eurodollar Reserve Percentage, if
any, stated as a decimal, and (b) two and three quarters of one percent (2.75%).
The LIBOR Basis shall apply to Interest Periods of one (1), two (2), three (3)
or six (6) months, and, once determined, shall remain unchanged during the
applicable Interest Period, except for changes to reflect adjustments in the
Eurodollar Reserve Percentage. The LIBOR Basis for any LIBOR Advance shall be
adjusted as of the effective date of any change in the Eurodollar Reserve
Percentage.
"LIEN" shall mean, with respect to any property, any mortgage, lien,
pledge, negative pledge or other agreement not to pledge, assignment, charge,
security interest, title retention agreement, levy, execution, seizure,
attachment, garnishment or other encumbrance of any kind in respect of such
property, whether created by statute, contract, the common law or otherwise, and
whether or not ▇▇▇▇▇▇, vested or perfected.
"LOANS" shall mean those amounts advanced by the Lenders to the
Borrower under the Commitment not to exceed the Commitment at any one time
outstanding and evidenced by the Notes.
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"LOAN DOCUMENTS" shall mean this Agreement, the Notes, the Security
Documents, all Requests for Advance, all Interest Hedge Agreements between the
Borrower, on the one hand, and the Administrative Agent and the Lenders, or any
of them, on the other hand, any fee letter agreements and all other documents
and agreements executed or delivered by the Borrower or its Subsidiaries in
connection with or contemplated by this Agreement.
"MARGIN STOCK" shall have the meaning ascribed thereto in Section
4.1(m) hereof.
"MATERIALLY ADVERSE EFFECT" shall mean (a) any materially adverse
effect upon the business, assets, liabilities, financial condition, results of
operations or properties of the Borrower and its Subsidiaries on a consolidated
basis, taken as a whole, or (b) a materially adverse effect upon the binding
nature, validity, or enforceability of this Agreement and the Notes; in either
case, whether resulting from any single act, omission, situation, status, event
or undertaking, or taken together with other such acts, omissions, situations,
statuses, events or undertakings.
"MATURITY DATE" shall mean May 13, 2000, or such earlier date as
payment of the Loans shall be due (whether by acceleration, reduction of the
Commitment to zero or otherwise).
"MULTIEMPLOYER PLAN" shall mean a multiemployer pension plan as defined
in Section 3(37) of ERISA to which the Borrower, any of its Subsidiaries or any
ERISA Affiliate is or has been required to contribute.
"NECESSARY AUTHORIZATIONS" shall mean all approvals and licenses from,
and all filings and registrations with, any governmental or other regulatory
authority, including, without limiting the foregoing, all approvals, licenses,
filings and registrations under the Communications Act.
"NET DEBT PROCEEDS" shall mean, with respect to the issuance of
Indebtedness (other than Indebtedness permitted under Section 7.1 hereof) by the
Borrower or any of its Subsidiaries, the difference between (a) the gross
principal amount of such Indebtedness issued and (b) reasonable and customary
transaction costs payable by the Borrower or any of its Subsidiaries, as the
case may be, in connection with such issuance.
"NET EQUITY PROCEEDS" shall mean, with respect to any primary sale or
issuance of any securities or equity of the Borrower or any of its Subsidiaries
(other than in connection with any employee stock option plans, stock purchase
plans and 401(k) plans maintained or established by the Borrower or its
Subsidiaries), the difference between (a) the gross sales price for the
securities or equity being sold and (b) reasonable and customary transaction
costs payable by the Borrower or any of its Subsidiaries, as the case may be, in
connection with such sale.
"NET INCOME" shall mean, for the Borrower and its Subsidiaries on a
consolidated basis, for any period, net income determined in accordance with
GAAP.
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"NET PROCEEDS" shall mean, with respect to any sale, lease, transfer or
other disposition of assets by the Borrower or any of its Subsidiaries, the
aggregate amount of cash received for such assets (including, without
limitation, any payments received for non-competition covenants, consulting or
management fees in connection with such sale, and any portion of the amount
received evidenced by a promissory note or other evidence of Indebtedness issued
by the purchaser), net of (a) amounts reserved, if any, for taxes payable with
respect to any such sale (after application (assuming application first to such
reserves) of any available losses, credits or other offsets), (b) reasonable and
customary transaction costs properly attributable to such transaction and
payable by the Borrower or any of its Subsidiaries (other than to an Affiliate)
in connection with such sale, lease, transfer or other disposition of assets,
including, without limitation, commissions, and (c) until actually received by
the Borrower or any of its Subsidiaries, any portion of the amount received held
in escrow or evidenced by a promissory note or other evidence of Indebtedness
issued by a purchaser or non-compete, consulting or management agreement or
covenant or otherwise for which compensation is paid over time. Upon receipt by
the Borrower or any of its Subsidiaries of (i) amounts referred to in item (c)
of the preceding sentence, or (ii) if there shall occur any reduction in the tax
reserves referred to in item (a) of the preceding sentence resulting in a
payment to the Borrower or its Subsidiaries, such amounts shall then be deemed
to be "Net Proceeds."
"NON-MATERIAL SUBSIDIARIES" shall mean, collectively, each Subsidiary
of the Parent (other than the Borrower and its Subsidiaries) which (a) is set
forth on SCHEDULE 2 attached hereto or (b) the Administrative Agent designates
in writing as not material; and "NON-MATERIAL SUBSIDIARY" shall mean any one of
the foregoing.
"NONPERFORMING LENDER" shall have the meaning ascribed thereto in
Section 9.14 hereof.
"NOTES" shall mean, collectively, those certain promissory notes in
the aggregate original principal amount equal to the Commitment, and issued to
each of the Lenders by the Borrower, each one substantially in the form of
EXHIBIT E attached hereto, any other promissory note issued by the Borrower to
evidence the Loans pursuant to this Agreement, and any extensions, renewals, or
amendments to, or replacements of, the foregoing.
"OBLIGATIONS" shall mean all payment and performance obligations of
every kind, nature and description of the Borrower, its Subsidiaries, and any
other obligors to the Lenders, or the Administrative Agent, or any of them,
under this Agreement and the other Loan Documents (including any interest, fees
and other charges on the Loans or otherwise under the Loan Documents that would
accrue but for the filing of a bankruptcy action with respect to the Borrower,
whether or not such claim is allowed in such bankruptcy action as they may be
amended from time to time, or as a result of making the Loans, whether such
obligations are direct or indirect, absolute or contingent, due or not due,
contractual or tortious, liquidated or unliquidated, arising by operation of law
or otherwise, now existing or hereafter arising).
"PARENT" shall mean Advanced Communications Group, Inc., a Delaware
corporation.
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"PARENT GUARANTY" shall mean that certain Parent Guaranty dated as of
even date herewith between the Parent and the Administrative Agent,
substantially in the form of EXHIBIT F attached hereto.
"PARENT PLEDGE AGREEMENT" shall mean that certain Parent Pledge
Agreement dated as of even date herewith between the Parent and the
Administrative Agent, substantially in the form of EXHIBIT G attached hereto.
"PARENT SECURITY AGREEMENT" shall mean that certain Parent Security
Agreement dated as of even date herewith between the Parent and the
Administrative Agent, substantially in the form of EXHIBIT H attached hereto.
"PAYMENT DATE" shall mean the last day of any Interest Period.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
"PERMITTED HOLDERS" shall mean ▇▇▇▇▇▇▇ ▇'▇▇▇▇ and ▇▇▇ ▇▇▇▇▇▇▇▇▇, their
estates, spouses, ancestors, and lineal descendants, the legal representatives
of any of the foregoing and the trustee of any bona fide trust of which the
foregoing are the sole beneficiaries or the grantors, or any Person of which the
foregoing or Consolidation Partners Founding Fund LLC, Consolidation Partners,
L.P., any shareholders of the YP Tel Entities, or any of their Affiliates
"beneficially owns" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act)
voting securities representing at least fifty-one percent (51%) of the total
voting power of all classes of Capital Stock of such Person (exclusive of any
matters as to which class voting rights exist).
"PERMITTED LIENS" shall mean, as applied to any Person:
(a) any Lien in favor of the Administrative Agent or any
Lender given to secure the Obligations or any other Liens in existence on the
Agreement Date and disclosed on Schedule 1 attached hereto;
(b) (i) Liens on real estate or other property for taxes,
assessments, governmental charges or levies not yet delinquent and (ii) Liens
for taxes, assessments, judgments, governmental charges or levies or claims the
non-payment of which is being contested in good faith by appropriate proceedings
and for which adequate reserves have been set aside on such Person's books, but
only so long as no foreclosure, distraint, sale or similar proceedings have been
commenced with respect thereto;
(c) Liens of carriers, warehousemen, landlords, mechanics,
vendors, (solely to the extent arising by operation of law) laborers and
materialmen incurred in the ordinary course of business for sums not yet due or
being diligently contested in good faith, if reserves or appropriate provisions
shall have been made therefor;
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(d) Liens incurred in the ordinary course of business in
connection with worker's compensation and unemployment insurance, social
security obligations, assessments or government charges which are not overdue
for more than sixty (60) days;
(e) restrictions on the transfer of assets of the Borrower or
its Subsidiaries imposed by the Communications Act and any regulations
thereunder;
(f) easements, rights-of-way, zoning restrictions, licenses,
reservations or restrictions on use and other similar encumbrances on the use of
real property which do not materially interfere with the ordinary conduct of the
business of such Person or the use of such property;
(g) Liens reflected by Uniform Commercial Code financing
statements filed in respect of true leases of the Borrower or any of its
Subsidiaries;
(h) Liens to secure performance of statutory obligations,
surety or appeal bonds, performance bonds, bids, tenders or escrow deposits in
connection with Acquisitions; and
(i) judgment Liens which do not result in an Event of Default
under Section 8.1(h) hereof.
"PERSON" shall mean an individual, corporation, limited liability
company, association, partnership, joint venture, trust or estate, an
unincorporated organization, a government or any agency or political subdivision
thereof, or any other entity.
"PLAN" shall mean an employee benefit plan within the meaning of
Section 3(3) of ERISA or any other employee benefit plan maintained for
employees of any Person or any affiliate of such Person.
"PROJECTIONS" shall have the meaning ascribed thereto in Section 4.1(q)
hereof.
"REGULATIONS" shall have the meaning ascribed thereto in Section 4.1(m)
hereof.
"REPLACED LENDER" shall have the meaning ascribed thereto in Section
2.14 hereof.
"REPLACEMENT LENDER" shall have the meaning ascribed thereto in
Section 2.14 hereof.
"REPORTABLE EVENT" shall mean, with respect to any Employee Pension
Plan, an event described in Section 4043(b) of ERISA.
"REQUEST FOR ADVANCE" shall mean a certificate designated as a "Request
for Advance," signed by an Authorized Signatory of the Borrower requesting an
Advance hereunder, which shall be in substantially the form of EXHIBIT I
attached hereto, and shall, among other things, (i) specify the date of the
Advance, which shall be a Business Day, the amount of the Advance,
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the type of Advance (LIBOR or Base Rate), and, with respect to LIBOR Advances,
the Interest Period selected by the Borrower and (ii) state that there shall not
exist, on the date of the requested Advance and after giving effect thereto, a
Default or Event of Default.
"REQUIRED LENDERS" shall mean (i) at any time that no Loans are
outstanding hereunder, Lenders the total of whose Commitment Ratios exceeds
fifty percent (50%) of the Commitment Ratios of all Lenders entitled to vote
hereunder, or (ii) at any time that there are Loans outstanding hereunder,
Lenders the total of whose Loans equals or exceeds fifty percent (50%) of the
sum of the Loans then outstanding of all Lenders entitled to vote hereunder.
"RESTRICTED PAYMENT" shall mean any direct or indirect distribution,
dividend or other payment to any Person (other than to the Borrower or any
Subsidiary of the Borrower) on account of any general or limited partnership
interest in, or shares of Capital Stock or other securities of, the Borrower or
any of its Subsidiaries (other than dividends payable solely in stock of such
Person and stock splits), including, without limitation, any direct or indirect
distribution, dividend or other payment to any Person (other than to the
Borrower or any Subsidiary of the Borrower) on account of any warrants or other
rights or options to acquire shares of Capital Stock of the Borrower or any of
its Subsidiaries.
"SECURITY DOCUMENTS" shall mean the Parent Guaranty, any Affiliate
Guaranty, any Subsidiary Guaranty, any Borrower's Pledge Agreement, the Parent
Pledge Agreement, any Affiliate Pledge Agreement, any Subsidiary Pledge
Agreement, the Borrower's Security Agreement, the Parent Security Agreement, any
Affiliate Security Agreement, any Subsidiary Security Agreement, any other
agreement or instrument providing collateral for the Obligations whether now or
hereafter in existence, and any filings, instruments, agreements and documents
related thereto or to this Agreement, and providing the Administrative Agent,
for the benefit of the Lenders, with Collateral for the Obligations.
"SECURITY INTEREST" shall mean all Liens in favor of the Administrative
Agent, for the benefit of the Lenders, created hereunder or under any of the
Security Documents to secure the Obligations.
"SUBSIDIARY" shall mean, as applied to any Person, (a) any corporation
of which more than fifty percent (50%) of the outstanding stock (other than
directors' qualifying shares) having ordinary voting power to elect a majority
of its board of directors, regardless of the existence at the time of a right of
the holders of any class or classes of securities of such corporation to
exercise such voting power by reason of the happening of any contingency, or any
partnership or limited liability company of which more than fifty percent (50%)
of the outstanding partnership or ownership interests, is at the time owned
directly or indirectly by such Person, or by one or more Subsidiaries of such
Person, or by such Person and one or more Subsidiaries of such Person, or (b)
any other entity which is directly or indirectly controlled or capable of being
controlled by such Person, or by one or more Subsidiaries of such Person, or by
such Person and one or more Subsidiaries of such Person.
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"SUBSIDIARY GUARANTY" shall mean any Subsidiary Guaranty made by each
Subsidiary of the Borrower in favor of the Administrative Agent and the Lenders,
substantially in the form of EXHIBIT J hereof.
"SUBSIDIARY PLEDGE AGREEMENT" shall mean any Subsidiary Pledge
Agreement made by each Subsidiary of the Borrower having one or more of its own
Subsidiaries in favor of the Administrative Agent, substantially in the form of
EXHIBIT K hereof.
"SUBSIDIARY SECURITY AGREEMENT" shall mean any Subsidiary Security
Agreement made by each Subsidiary of the Borrower in favor of the Administrative
Agent substantially in the form of EXHIBIT L hereof.
"TOTAL DEBT" shall mean, for the Borrower and its Subsidiaries on a
consolidated basis as of any date, the sum (without duplication) of (i) the
outstanding principal amount of the Loans, (ii) the aggregate amount of
Capitalized Lease Obligations and Indebtedness for Money Borrowed, and (iii) the
aggregate amount of all Guarantees.
"YP TEL ENTITIES" shall mean, collectively, (a) YP Tel Corporation, a
Canadian corporation, (b) Big Stuff, Inc., a Texas corporation, and (c) Web YP,
Inc., a Texas corporation.
Each definition of an agreement in this Article 1 shall include such
agreement as modified, amended or supplemented from time to time in accordance
herewith.
ARTICLE 2
LOANS
Section 2.1 THE LOANS. The Lenders agree, severally, in accordance with
their respective Commitment Ratios and not jointly, upon the terms and subject
to the conditions of this Agreement to lend to the Borrower, prior to the
Maturity Date, an aggregate principal amount not to exceed at any one time
outstanding, in the aggregate, the Commitment. Subject to the terms and
conditions hereof, Advances under the Commitment may be repaid and reborrowed
from time to time on a revolving basis.
Section 2.2 MANNER OF BORROWING AND DISBURSEMENT.
(a) CHOICE OF INTEREST RATE, ETC. Any Advance shall, at the
option of the Borrower, be made as a Base Rate Advance or a LIBOR Advance;
PROVIDED, HOWEVER, that at such time as there shall have occurred and be
continuing a Default hereunder, the Borrower shall not have the right to receive
a LIBOR Advance. Any notice given to the Administrative Agent in connection with
a requested Advance hereunder shall be given to the Administrative Agent prior
to 12:00 noon (Los Angeles, California time) in order for such Business Day to
count toward the minimum number of Business Days required.
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(b) BASE RATE ADVANCES.
(i) ADVANCES. The Borrower shall give the Administrative
Agent in the case of Base Rate Advances at least one (1) Business Day's
irrevocable prior telephonic notice followed immediately by a Request
for Advance; PROVIDED, HOWEVER, that the Borrower's failure to confirm
any telephonic notice with a Request for Advance shall not invalidate
any notice so given if acted upon by the Administrative Agent. Upon
receipt of such notice from the Borrower, the Administrative Agent
shall promptly notify each Lender by telephone or telecopy of the
contents thereof.
(ii) REPAYMENTS AND REBORROWINGS. The Borrower may repay
or prepay a Base Rate Advance without regard to its Payment Date and
(A) upon at least one (1) Business Day's irrevocable prior telephonic
notice followed by written notice, reborrow all or a portion of the
principal amount thereof as a Base Rate Advance, (B) upon at least
three (3) Business Days' irrevocable prior telephonic notice followed
by written notice, reborrow all or a portion of the principal thereof
as one or more LIBOR Advances, or (C) not reborrow all or any portion
of such Base Rate Advance. On the date indicated by the Borrower, such
Base Rate Advance shall be so repaid and, as applicable, reborrowed.
The failure to give timely notice hereunder with respect to the Payment
Date of any Base Rate Advance shall be considered a request for a Base
Rate Advance.
(c) LIBOR ADVANCES.
(i) ADVANCES. Upon request, the Administrative Agent,
whose determination in absence of manifest error shall be conclusive,
shall determine the available LIBOR Bases and shall notify the Borrower
of such LIBOR Bases. The Borrower shall give the Administrative Agent
in the case of LIBOR Advances at least three (3) Business Days'
irrevocable prior telephonic notice followed immediately by a Request
for Advance; provided, however, that the Borrower's failure to confirm
any telephonic notice with a Request for Advance shall not invalidate
any notice so given if acted upon by the Administrative Agent. Upon
receipt of such notice from the Borrower, the Administrative Agent
shall promptly notify each Lender by telephone or telecopy of the
contents thereof.
(ii) REPAYMENTS AND REBORROWINGS. At least three (3)
Business Days prior to the Payment Date for each LIBOR Advance, the
Borrower shall give the Administrative Agent telephonic notice followed
by written notice specifying whether all or a portion of such LIBOR
Advance (A) is to be repaid and then reborrowed in whole or in part as
one or more LIBOR Advances, (B) is to be repaid and then reborrowed in
whole or in part as a Base Rate Advance, or (C) is to be repaid and not
reborrowed. The failure to give such notice shall preclude the Borrower
from reborrowing such Advance as a LIBOR Advance on its Payment Date
and shall be considered a request for a Base
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Rate Advance. Upon such Payment Date such LIBOR Advance will, subject
to the provisions hereof, be so repaid and, as applicable, reborrowed.
(d) NOTIFICATION OF LENDERS. Upon receipt of a Request for
Advance, or a notice from the Borrower with respect to any outstanding Advance
prior to the Payment Date for such Advance, the Administrative Agent shall
promptly but no later than the close of business on the day of such notice
notify each Lender by telephone or telecopy of the contents thereof and the
amount of such Lender's portion of the Advance. Each Lender shall, not later
than 12:00 noon (Los Angeles, California time) on the date of borrowing
specified in such notice, make available to the Administrative Agent at the
Administrative Agent's Office, or at such account as the Administrative Agent
shall designate, the amount of its portion of any Advance which represents an
additional borrowing hereunder in immediately available funds.
(e) DISBURSEMENT.
(i) Prior to 2:00 p.m. (Los Angeles, California time) on
the date of an Advance hereunder, the Administrative Agent shall,
subject to the satisfaction of the conditions set forth in Article 3
hereof, disburse the amounts made available to the Administrative Agent
by the Lenders in like funds by (A) transferring the amounts so made
available by wire transfer pursuant to the Borrower's instructions, or
(B) in the absence of such instructions, crediting the amounts so made
available to the account of the Borrower maintained with the
Administrative Agent.
(ii) Unless the Administrative Agent shall have received
notice from a Lender prior to 12:00 noon (Los Angeles, California time)
on the date of any Advance that such Lender will not make available to
the Administrative Agent such Lender's ratable portion of such Advance,
the Administrative Agent may assume that such Lender has made or will
make such portion available to the Administrative Agent on the date of
such Advance and the Administrative Agent may in its sole discretion
and in reliance upon such assumption, make available to the Borrower on
such date a corresponding amount. If and to the extent the Lender does
not make such ratable portion available to the Administrative Agent,
such Lender agrees to repay to the Administrative Agent on demand such
corresponding amount together with interest thereon, for each day from
the date such amount is made available to the Borrower until the date
such amount is repaid to the Administrative Agent, at the Federal Funds
Rate.
(iii) If such Lender shall repay to the Administrative
Agent such corresponding amount, such amount so repaid shall constitute
such Lender's portion of the applicable Advance for purposes of this
Agreement. The failure of any Lender to fund its portion of any Advance
shall not relieve any other Lender of its obligation, if any, hereunder
to fund its respective portion of the Advance on the date of such
borrowing, but no Lender shall be responsible for any such failure of
any other Lender.
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(iv) In the event that, at any time when the Borrower is
not in Default and has otherwise satisfied each of the conditions in
Section 3.2 hereof, a Lender for any reason fails or refuses to fund
its portion of an Advance and such failure shall continue for a period
in excess of thirty (30) days, then, until such time as such Lender has
funded its portion of such Advance (which late funding shall not
absolve such Lender from any liability it may have to the Borrower), or
all other Lenders have received payment in full from the Borrower
(whether by repayment or prepayment) or otherwise of the principal and
interest due in respect of such Advance, such non-funding Lender shall
not have the right (A) to vote regarding any issue on which voting is
required or advisable under this Agreement or any other Loan Document,
and such Lender's portion of the Loans shall not be counted as
outstanding for purposes of determining "Required Lenders" hereunder,
and (B) to receive payments of principal, interest or fees from the
Borrower, the Administrative Agent or the other Lenders in respect of
its portion of the Loans.
Section 2.3 INTEREST.
(a) ON BASE RATE ADVANCES. Interest on each Base Rate Advance
shall be computed on the basis of a year of 365/366 days (360 days to the extent
based on the Federal Funds Rate) for the actual number of days elapsed (which
shall include the first day of such Interest Period, but exclude the last day)
and shall be payable at the Base Rate Basis for such Advance, in arrears on the
applicable Payment Date. Interest on Base Rate Advances then outstanding shall
also be due and payable on the Maturity Date.
(b) ON LIBOR ADVANCES. Interest on each LIBOR Advance shall be
computed on the basis of a 360-day year for the actual number of days elapsed
(which shall include the first day of such Interest Period but exclude the last
day) and shall be payable at the LIBOR Basis for such Advance, in arrears on the
applicable Payment Date, and, in addition, if the Interest Period for a LIBOR
Advance exceeds three (3) months, interest on such LIBOR Advance shall also be
due and payable in arrears on every three-month anniversary of the beginning of
such Interest Period. Interest on LIBOR Advances then outstanding shall also be
due and payable on the Maturity Date.
(c) INTEREST IF NO NOTICE OF SELECTION OF INTEREST RATE BASIS.
If the Borrower fails to give the Administrative Agent timely notice of its
selection of a LIBOR Basis, or if for any reason a determination of a LIBOR
Basis for any Advance is not timely concluded, the Base Rate Basis shall apply
to such Advance.
(d) INTEREST UPON DEFAULT. Immediately upon the occurrence of
a Default or an Event of Default, the outstanding principal balance of the Loans
shall bear interest at the Default Rate. Such interest shall be payable on
demand by the Required Lenders and shall accrue until the earlier of (i) waiver
or cure of the applicable Default or Event of Default, (ii) agreement by the
Required Lenders (or, if applicable to the underlying Default or Event of
Default, the Lenders) to rescind the charging of interest at the Default Rate,
or (iii) payment in full of the Obligations.
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(e) LIBOR CONTRACTS. At no time may the number of outstanding
LIBOR Advances exceed eight (8).
Section 2.4 MANDATORY COMMITMENT REDUCTIONS.
(a) SALES OF ASSETS. The Commitment shall be permanently
reduced by the amount of the aggregate Net Proceeds of sales, leases, transfer,
or other dispositions of the Borrower's or any of its Subsidiaries' assets
permitted hereunder (excluding such sales, leases, transfers or other
dispositions in the ordinary course of the Borrower's or any of its
Subsidiaries' business); PROVIDED, HOWEVER, that no such reduction shall be
required if the Borrower notifies the Administrative Agent on or before the date
such reduction would otherwise be required under this Section 2.4(a) that the
Borrower intends to use any or all of such Net Proceeds to invest in similar
assets within ninety (90) days of the date of such sale, lease, transfer or
other disposition, in which case, the reduction in the Commitment which is
otherwise required under this Section 2.4(a) up to the amount of such Net
Proceeds used need not be made, but if all or part of such Net Proceeds are not
used within such ninety (90) day period, the Commitment shall be permanently
reduced by an amount equal to the amount of such Net Proceeds.
(b) EQUITY AND DEBT ISSUANCES. The Commitment shall be
permanently reduced by the aggregate amount of (i) Net Equity Proceeds received
by the Borrower or any of its Subsidiaries from any issuance of equity interests
of the Borrower or any of its Subsidiaries, (ii) Net Debt Proceeds received by
the Borrower or its Subsidiaries from any issuance of Indebtedness of the
Borrower or its Subsidiaries permitted hereunder and (iii) any repayments of the
principal amount of any intercompany Indebtedness received by the Borrower or
any of its Subsidiaries in respect of any loans made by the Borrower or its
Subsidiaries pursuant to Section 7.6(b) hereof.
Section 2.5 OPTIONAL COMMITMENT REDUCTIONS. The Borrower shall have the
right, at any time and from time to time after the Agreement Date, upon at least
three (3) Business Days' prior written notice to the Administrative Agent,
without premium or penalty, to cancel or reduce permanently all or a portion of
the Commitment, on a pro rata basis among the Lenders, PROVIDED, HOWEVER, that
any such partial reduction shall be made in an amount not less than $1,000,000
and in integral multiples of not less than $1,000,000. As of the date of
cancellation or reduction set forth in such notice, the Commitment shall be
permanently reduced to the amount stated in the Borrower's notice for all
purposes herein, and the Borrower shall pay to the Administrative Agent for the
Lenders the amount necessary to reduce the principal amount of the Loans then
outstanding to not more than the amount of the Commitment as so reduced,
together with accrued interest on the amount so prepaid through the date of the
reduction with respect to the amount reduced.
Section 2.6 PREPAYMENTS. The principal amount of any Base Rate Advance
may be prepaid in full or ratably in part at any time, without penalty and
without regard to the Payment Date for such Advance. LIBOR Advances may be
prepaid prior to the applicable Payment Date,
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upon three (3) Business Days' prior written notice to the Administrative Agent,
PROVIDED that the Borrower shall reimburse the Lenders and the Administrative
Agent, on demand by the applicable Lender or the Administrative Agent, for any
loss (excluding lost profits) or reasonable out-of-pocket expense incurred by
any Lender or the Administrative Agent in connection with such prepayment, as
set forth in Section 2.10 hereof. Any prepayment hereunder shall be in amounts
of not less than $1,000,000 and in integral multiples of $1,000,000.
Section 2.7 REPAYMENTS.
(a) LOANS IN EXCESS OF COMMITMENT. If, at any time, the amount
of the Loans then outstanding shall exceed the Commitment, the Borrower shall,
on such date and subject to Sections 2.9 and 2.10 hereof, make a repayment of
the principal amount of the Loans in an amount equal to such excess, together
with any accrued interest with respect thereto.
(b) SALES OF ASSETS. On the date of any sales, leases,
transfer, or other dispositions of the Borrower's or any of its Subsidiaries'
assets permitted hereunder (excluding such sales, leases, transfers or other
dispositions in the ordinary course of the Borrower's or any of its
Subsidiaries' business), the Borrower shall make a repayment of the Loans then
outstanding in the amount of the Net Proceeds of such sale, lease, transfer or
other disposition; PROVIDED, HOWEVER, that no such repayment shall be required
if the Borrower notifies the Administrative Agent on or before the date such
repayment would otherwise be required under this Section 2.7(b) that the
Borrower intends to use any or all of such Net Proceeds to invest in similar
assets within ninety (90) days of the date of such sale, lease, transfer or
other disposition, in which case, the repayment of the Loans which is otherwise
required under this Section 2.7(b) up to the amount of the Net Proceeds to be
reinvested pursuant to this Section 2.7(b) need not be made, but if all or part
of such Net Proceeds are not used within such ninety (90) day period, then Loans
shall be repaid by an amount equal to the Net Proceeds calculated based on the
portion of Net Proceeds not invested pursuant to this Section 2.7(b) on the
ninety (90) day following such sale, lease transfer or other disposition, with a
reduction of the Commitment pursuant to Section 2.4(a) hereof.
(c) EQUITY AND DEBT ISSUANCES. On the date of (i) any issuance
of equity interests of the Borrower or any of its Subsidiaries, (ii) the
issuance of Indebtedness of the Borrower or its Subsidiaries permitted hereunder
or (iii) any repayment by the Parent or any Affiliate Guarantor of the principal
amount of any intercompany Indebtedness owing to the Borrower or any of its
Subsidiaries in connection with any loan made pursuant to Section 7.6(b) hereof,
the Borrower shall make a repayment of the Loans then outstanding in an amount
equal to, (A) with respect to any such issuance of equity, the Net Equity
Proceeds received by the Borrower or any of its Subsidiaries from such issuance,
(B) with respect to any such issuance of such Indebtedness, the Net Debt
Proceeds received by the Borrower or any of its Subsidiaries from such issuance
and, (C) with respect to any such repayment of intercompany Indebtedness, one
hundred percent (100%) of the amount of such repayment received by the Borrower
or any of its Subsidiaries.
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(d) MATURITY DATE. In addition to the foregoing, a final
payment of all Loans, together with accrued interest with respect thereto, shall
be due and payable on the Maturity Date.
Section 2.8 NOTES; LOAN ACCOUNTS.
(a) The Loans shall be repayable in accordance with the terms
and provisions set forth herein and shall be evidenced by the Notes. One Note
shall be payable to the order of each Lender in accordance with such Lender's
respective applicable Commitment Ratio. The Notes shall be issued by the
Borrower to the Lenders and shall be duly executed and delivered by one or more
Authorized Signatories.
(b) Each Lender may open and maintain on its books in the name
of the Borrower a loan account with respect to its portion of the Loans and
interest thereon. Each Lender which opens such a loan account shall debit such
loan account for the principal amount of its portion of each Advance made by it
and accrued interest thereon, and shall credit such loan account for each
payment on account of principal of or interest on its Loans. The records of a
Lender with respect to the loan account maintained by it shall be PRIMA FACIE
evidence of its portion of the Loans and accrued interest thereon absent
manifest error, but the failure of any Lender to make any such notations or any
error or mistake in such notations shall not affect the Borrower's repayment
obligations with respect to such Loans.
Section 2.9 MANNER OF PAYMENT.
(a) Each payment (including any prepayment) by the Borrower on
account of the principal of or interest on the Loans and any other amount owed
to the Lenders or the Administrative Agent or any of them under this Agreement
or the Notes shall be made not later than 2:00 p.m. (Los Angeles, California
time) on the date specified for payment under this Agreement to the
Administrative Agent at the Administrative Agent's Office, for the account of
the Lenders or the Administrative Agent, as the case may be, in lawful money of
the United States of America in immediately available funds. Any payment
received by the Administrative Agent after 2:00 p.m. (Los Angeles, California
time) shall be deemed received on the next Business Day. Receipt by the
Administrative Agent of any payment intended for any Lender or Lenders hereunder
prior to 2:00 p.m. (Los Angeles, California time) on any Business Day shall be
deemed to constitute receipt by such Lender or Lenders on such Business Day. In
the case of a payment for the account of a Lender, the Administrative Agent will
promptly, but no later than the close of business on the date such payment is
deemed received, thereafter distribute the amount so received in like funds to
such Lender. If the Administrative Agent shall not have received any payment
from the Borrower as and when due, the Administrative Agent will promptly notify
the Lenders accordingly. In the event that the Administrative Agent shall fail
to make distribution to any Lender as required under this Section 2.9, the
Administrative Agent agrees to pay such Lender interest from the date such
payment was due until paid at the Federal Funds Rate.
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(b) The Borrower agrees to pay principal, interest, fees and
all other amounts due hereunder or under the Notes without set-off or
counterclaim or any deduction whatsoever.
(c) Subject to any contrary provisions in the definition of
Interest Period, if any payment under this Agreement or any of the other Loan
Documents is specified to be made on a day which is not a Business Day, it shall
be made on the next Business Day, and such extension of time shall in such case
be included in computing interest and fees, if any, in connection with such
payment.
(d) So long as the applicable Lender has complied with Section
2.13 hereof, the Borrower agrees to pay principal, interest, fees and all other
amounts due hereunder, under the Notes or under any other Loan Document without
set-off or counterclaim or any deduction or withholding for taxes or levies or
any other deductions or withholdings whatsoever. So long as the applicable
Lender has complied with Section 2.13 hereof, if the Borrower is required by
Applicable Law to deduct any taxes from or in respect of any sum payable to the
such Lender hereunder, under any Note or under any other Loan Document: (i) the
sum payable hereunder or thereunder, as applicable, shall be increased to the
extent necessary to provide that, after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.9(d)), the Administrative Agent or such Lender, as applicable, receives an
amount equal to the sum it would have received had no such deductions been made;
(ii) the Borrower shall make such deductions from such sums payable hereunder or
thereunder, as applicable, and pay the amount so deducted to the relevant taxing
authority as required by Applicable Law; and (iii) the Borrower shall provide
the Administrative Agent or such Lender, as applicable, with evidence
satisfactory to the Administrative Agent or such Lender, as applicable, that
such deducted amounts have been paid to the relevant taxing authority. Before
making any such deductions, such Lender shall designate a different lending
office and shall take such reasonable alternative courses of action if such
designation or alternative courses of action will avoid the need for such
deductions and will not in the good faith judgment of such Lender be otherwise
materially disadvantageous to such Lender.
Section 2.10 REIMBURSEMENT.
(a) Whenever any Lender shall sustain or incur any loss
(excluding lost profits) or reasonable out-of-pocket expenses in connection with
(i) failure by the Borrower to borrow any LIBOR Advance after having given
notice of its intention to borrow in accordance with Section 2.2 hereof (whether
by reason of the Borrower's election not to proceed or the non-fulfillment of
any of the conditions set forth in Article 3 hereof), or (ii) prepayment (or
failure to prepay after giving notice thereof) of any LIBOR Advance in whole or
in part for any reason, the Borrower agrees to pay to such Lender, upon such
Lender's demand, an amount sufficient to compensate such Lender for all such
losses and out-of-pocket expenses. Such Lender's good faith determination of the
amount of such losses or out-of-pocket expenses, as set forth in writing and
accompanied by calculations in reasonable detail demonstrating the basis for its
demand, shall be presumptively correct absent manifest error.
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(b) Losses subject to reimbursement hereunder shall include
(but shall exclude lost profits), without limiting the generality of the
foregoing, out of pocket expenses incurred by any Lender or any participant of
such Lender permitted hereunder in connection with the re-employment of funds
prepaid, paid, repaid, not borrowed, or not paid, as the case may be, and will
be payable whether the Maturity Date is changed by virtue of an amendment hereto
(unless such amendment expressly waives such payment) or as a result of
acceleration of the Obligations.
(c) Each Lender shall notify the Borrower of any event that
will entitle such Lender to compensation under Section 10.3 or 2.12 hereof as
promptly as practicable, but in any event within ninety (90) days after such
Lender obtains actual knowledge thereof; PROVIDED, HOWEVER, that (i) if any
Lender fails to give such notice within ninety (90) days after it obtains actual
knowledge of such an event, such Lender shall, with respect to compensation
payable pursuant to this Section 2.10(c) in respect of any costs resulting from
such event, only be entitled to payment under this Section 2.10(c) for costs
incurred from and after the ninety (90) days prior to the date that such Lender
does give such notice and (ii) each Lender, will designate a different
applicable lending office for the Loans of such Lender affected by such event if
such designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the sole opinion of such Lender, be
disadvantageous to such Lender. Each Lender will furnish to the Borrower at the
time of request for compensation under Section 10.3 or 2.12 hereof a certificate
setting forth the basis, amount and reasonable detail of computation of each
request by such Lender for compensation under Section 10.3 or 2.12 hereof, which
certificate shall, except for demonstrable error, be final, conclusive and
binding for all purposes.
Section 2.11 PRO RATA TREATMENT.
(a) ADVANCES. Each Advance from the Lenders hereunder made on
or after the Agreement Date, shall be made pro rata on the basis of the
respective Commitment Ratios of the Lenders.
(b) PAYMENTS. Each payment and prepayment of principal of the
Loans, and, except as provided in Section 2.2(e) and Article 10 hereof, each
payment of interest on the Loans, shall be made to the Lenders pro rata on the
basis of their respective unpaid principal amounts outstanding under the
applicable Notes immediately prior to such payment or prepayment. If any Lender
shall obtain any payment (whether involuntary, through the exercise of any right
of set-off, or otherwise) on account of the Loans in excess of its ratable share
of the applicable Loans under its applicable Commitment Ratio, such Lender shall
forthwith purchase from the other Lenders such participations in the portion of
the applicable Loans made by them as shall be necessary to cause such purchasing
Lender to share the excess payment ratably with each of them; PROVIDED, HOWEVER,
that if all or any portion of such excess payment is thereafter recovered from
such purchasing Lender, such purchase from each Lender shall be rescinded and
such Lender shall repay to the purchasing Lender the purchase price to the
extent of such recovery. The Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 2.11(b) may, to the
fullest extent permitted by law, exercise all
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its rights of payment (including the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
Section 2.12 CAPITAL ADEQUACY. If after the date hereof, the adoption
of any Applicable Law regarding the capital adequacy of banks or bank holding
companies, or any change in Applicable Law (whether adopted before or after the
Agreement Date) or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by such Lender with any
directive regarding capital adequacy (whether or not having the force of law) of
any such governmental authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on any Lender's capital as a
consequence of its obligations hereunder with respect to the Loans and the
Commitment to a level below that which it could have achieved but for such
adoption, change or compliance (taking into consideration such Lender's policies
with respect to capital adequacy immediately before such adoption, change or
compliance and assuming that such Lender's capital was fully utilized prior to
such adoption, change or compliance) by an amount reasonably deemed by such
Lender to be material, then, upon demand by such Lender, the Borrower shall
promptly pay to such Lender such additional amounts as shall be sufficient to
compensate such Lender for such reduced return, together with interest on such
amount from the fourth (4th) Business Day after the date of demand, until
payment in full thereof at the Default Rate. A certificate of such Lender
setting forth the amount to be paid to such Lender by the Borrower as a result
of any event referred to in this paragraph and supporting calculations in
reasonable detail shall be presumptively correct absent manifest error.
Section 2.13 LENDER TAX FORMS. On or prior to the Agreement Date and on
or prior to the first Business Day of each calendar year thereafter, each Lender
which is organized in a jurisdiction other than the United States shall provide
each of the Administrative Agent and the Borrower with a properly executed
originals of Forms 4224 or 1001 (or any successor form) prescribed by the
Internal Revenue Service or other documents satisfactory to the Borrower and the
Administrative Agent, and properly executed Internal Revenue Service Forms W-8
or W-9, as the case may be, certifying (i) as to such Lender's status for
purposes of determining exemption from United States withholding taxes with
respect to all payments to be made to such Lender hereunder and under the Notes
or (ii) that all payments to be made to such Lender hereunder and under the
Notes are subject to such taxes at a rate reduced to zero by an applicable tax
treaty. Each such Lender agrees to provide the Administrative Agent and the
Borrower with new forms prescribed by the Internal Revenue Service upon the
expiration or obsolescence of any previously delivered form, or after the
occurrence of any event requiring a change in the most recent forms delivered by
it to the Administrative Agent and the Borrower.
Section 2.14 REPLACEMENT OF LENDERS. Borrower shall have the right, if
no Default then exists, to replace any Lender (the "REPLACED LENDER") with one
or more other assignees permitted under Section 11.5 hereof reasonably
acceptable to the Administrative Agent (the "REPLACEMENT LENDER") if (x) such
Lender is charging the Borrower increased costs pursuant to Section 10.3 hereof
in excess of those being charged generally by the other Lenders or such Lender
becomes
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incapable of making LIBOR Advances as provided in Section 10.3 hereof and/or (y)
as provided in Section 11.12 hereof such Lender refuses to consent to certain
proposed amendments, waivers or modifications with respect to this Agreement
and/or (z) such Lender fails to fund a properly requested Advance at a time when
there does not exist a Default or Event of Default; PROVIDED, HOWEVER, that (i)
at the time of any replacement pursuant to this Section 2.14, the Replacement
Lender shall enter into one or more assignment agreements (and with all fees
payable pursuant to said Section 11.5 hereof to be paid by the Replacement
Lender) pursuant to which the Replacement Lender shall acquire all of the
Commitment and outstanding Loans of the Replaced Lender and, in connection
therewith, shall pay to (x) the Replaced Lender, an amount equal to the sum of
the principal of, and all accrued interest on, all outstanding Loans of the
Replaced Lender shall be paid in full to such Replaced Lender concurrently with
such replacement. Upon the execution of the respective assignment agreement, the
payment of amounts referred to above and, if so requested by the Replacement
Lender, delivery to the Replacement Lender of Notes executed by Borrower, the
Replacement Lender shall become a Lender hereunder and the Replaced Lender shall
cease to constitute a Lender hereunder and be released of all its obligations as
a Lender, except with respect to indemnification provisions applicable to the
Replaced Lender under this Agreement, which shall survive as to such Replaced
Lender.
Section 2.15 COMMITMENT FEE. The Borrower agrees to pay to the Lenders,
in accordance with their respective Commitment Ratios as set forth in the
definition of Commitment Ratios, for each day from the Agreement Date until the
Maturity Date, a commitment fee equal to the product of (a) the aggregate
unborrowed balance of the Commitment and (b) one-half of one percent (0.50%).
Such commitment fees shall be computed on the basis of a year of 365/366 days
for the actual number of days elapsed, shall be payable quarterly in arrears,
commencing on June 30th and continuing on each March 31st, June 30th, September
30th and December 31st thereafter and on the Maturity Date, and shall be fully
earned when due and non-refundable when paid.
ARTICLE 3
CONDITIONS PRECEDENT
Section 3.1 CONDITIONS PRECEDENT TO INITIAL ADVANCE. The obligation of
the Lenders to undertake the Commitment and to make the initial Advance
hereunder are subject to the prior or contemporaneous fulfillment of each of the
following conditions:
(a) The Administrative Agent and the Lenders shall have
received each of the following, each of which shall be in form and substance
reasonably satisfactory to the Administrative Agent:
(i) this Agreement duly executed;
(ii) duly executed Notes;
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(iii) duly executed Borrower's Security Agreement,
together with duly executed appropriate Uniform Commercial Code
financing statement forms;
(iv) duly executed Parent Security Agreement,
together with duly executed appropriate Uniform Commercial Code
financing statement forms;
(v) duly executed Parent Pledge Agreement, together
with appropriate stock certificates and stock powers executed in blank;
(vi) duly executed Parent Guaranty;
(vii) duly executed Affiliate Security Agreement of each
Affiliate Guarantor (other than Telecom Resources, Inc.) existing as of
the Agreement Date, together with duly executed appropriate Uniform
Commercial Code financing statement forms;
(viii) duly executed Affiliate Guaranty of each Affiliate
Guarantor (other than Telecom Resources, Inc.) existing as of the
Agreement Date;
(ix) the loan certificate of the Borrower dated as of the
Agreement Date, in substantially the form attached hereto as EXHIBIT M,
including a certificate of incumbency with respect to each Authorized
Signatory of Borrower, together with the following items: (A) a true,
complete and correct copy of the Articles of Incorporation and By-laws
of the Borrower as in effect on the Agreement Date, (B) certificates of
good standing for the Borrower issued by the Secretary of State or
similar state official for the state of incorporation, principal place
of business and location of books and records of the Borrower (C) a
true, complete and correct copy of the corporate resolutions of the
Borrower authorizing the Borrower to execute, deliver and perform this
Agreement and the other Loan Documents, and (D) a true, complete and
correct copy of any shareholders' agreements or voting trust agreements
in effect with respect to the stock of the Borrower;
(x) the loan certificate of the Parent dated as of the
Agreement Date, in substantially the form attached hereto as EXHIBIT N,
including a certificate of incumbency with respect to each Authorized
Signatory of the Parent, together with the following items: (a) a true,
complete and correct copy of the Articles of Incorporation and By-laws
of the Parent as in effect on the Agreement Date, (B) certificates of
good standing for the Parent issued by the Secretary of State or
similar state official for the state of incorporation, principal place
of business and location of books and records of the Borrower of the
Parent (C) a true, complete and correct copy of the corporate
resolutions of the Parent authorizing the Parent to execute, deliver
and perform this Agreement and the other Loan Documents, and (D) a
true, complete and correct copy of any shareholders' agreements or
voting trust agreements in effect with respect to the stock of the
Parent;
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(xi) the loan certificate of each Affiliate Guarantor
(other than Telecom Resources, Inc.) and the Parent existing as of the
Agreement Date dated as of the Agreement Date, in substantially the
form attached hereto as EXHIBIT O, including a certificate of
incumbency with respect to each Authorized Signatory of such Person,
together with the following items: (A) a true, complete and correct
copy of the Articles of Incorporation and By-laws of such Affiliate
Guarantor as in effect on the Agreement Date, (B) certificates of good
standing for such Affiliate Guarantor issued by the Secretary of State
of similar state official for the state of incorporation, principal
place of business and location of books and records of such Affiliate
Guarantor (C) a true, complete and correct copy of the corporate
resolutions of such Affiliate Guarantor authorizing such Affiliate
Guarantor to execute, deliver and perform this Agreement and the other
Loan Documents, and (D) a true, complete and correct copy of any
shareholders' agreements or voting trust agreements in effect with
respect to the stock of such Affiliate Guarantor;
(xii) legal opinion of Blackwell, Sanders, ▇▇▇▇▇ & ▇▇▇▇▇▇,
counsel to the Borrower, the Parent and their respective Subsidiaries
addressed to each Lender and the Administrative Agent and dated as of
the Agreement Date;
(xiii) duly executed Certificate of Financial Condition for
the Borrower on a consolidated basis;
(xiv) duly executed pay-off letter of Canadian Imperial
Bank of Commerce dated as of the Agreement Date in connection with the
termination of the CIBC Facility; and
(xv) all such other documents as the Administrative Agent
or any Lender may reasonably request, certified by an appropriate
governmental official or an Authorized signatory if so requested.
(b) The Administrative Agent and the Lenders shall have
received evidence satisfactory to them that all Necessary Authorizations,
including all necessary consents to the closing of this Agreement, have been
obtained or made, are in full force and effect and are not subject to any
pending or, to the knowledge of the Borrower, threatened reversal or
cancellation, and the Administrative Agent and the Lenders shall have received a
certificate of an Authorized Signatory so stating.
Section 3.2 CONDITIONS PRECEDENT TO EACH ADVANCE. The obligation of
the Lenders to make each Advance on or after the Agreement Date is subject to
the fulfillment of each of the following conditions immediately prior to or
contemporaneously with such Advance:
(a) All of the representations and warranties of the Borrower
under this Agreement and the other Loan Documents (including, without
limitation, all representations and
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warranties with respect to the Borrower's Subsidiaries, if any), which, pursuant
to Section 4.2 hereof, are made at and as of the time of such Advance, shall be
true and correct at such time in all material respects, both before and after
giving effect to the application of the proceeds of such Advance, and after
giving effect to any updates to information provided to the Lenders in
accordance with the terms of such representations and warranties, and no Default
or Event of Default hereunder shall then exist or be caused thereby;
(b) With respect to Advances which, if funded, would increase
the aggregate principal amount of the Loans outstanding hereunder, the
Administrative Agent shall have received a duly executed Request for Advance;
(c) With respect to any Advance relating to any Acquisition or
the formation of any Subsidiary which is permitted hereunder, the Administrative
Agent and the Lenders shall have received such documents and instruments
relating to such Acquisition or formation of a new Subsidiary as are described
in Section 5.12 hereof or otherwise required herein;
(d) No event shall have occurred and no condition shall exist
which, in the reasonable judgment of the Required Lenders, has had or could
reasonably be expected to have a Materially Adverse Effect;
(e) No event or other change shall have occurred, and no
condition shall exist (other than in connection with the sale, lease, transfer
or other disposition or discontinuation of operations of the CLEC Business),
which, in the reasonable judgment of the Required Lenders, has had or could
reasonably be expected to have (a) any materially adverse effect upon the
business, assets, liabilities, financial condition, results of operations or
properties of the Parent or the Affiliate Guarantors, taken as a whole or (b) a
materially adverse effect upon the binding nature, validity, or enforceability
of the Loan Documents to which such Person is a party; in either case, whether
resulting from any single act, omission, situation, status, event or
undertaking; or taken together with other such acts, omissions, situations,
statuses, events or undertakings; and
(f) On the date of such Advance, after giving effect to the
Advance requested, the Borrower shall be in compliance on a PRO FORMA basis with
the covenants set forth in Sections 7.8 and 7.9 hereof.
The acceptance of proceeds of any Advance which would increase the aggregate
principal amount of Loans outstanding shall be deemed to be a representation and
warranty by the Borrower as to compliance with this Section 3.2 on the date any
such Loan is made.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
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Section 4.1 REPRESENTATIONS AND WARRANTIES. The Borrower hereby agrees,
represents and warrants, upon the Agreement Date, in favor of the Administrative
Agent and each Lender that:
(a) ORGANIZATION; OWNERSHIP; POWER; QUALIFICATION. The
Borrower is a corporation duly organized, validly existing and in good standing
under the laws of the State of Texas. The Borrower has the corporate power and
authority to own its properties and to carry on its business as now being and as
proposed hereafter to be conducted. The Borrower and each of its Subsidiaries,
if any, are duly qualified, in good standing and authorized to do business in
each jurisdiction in which the character of their respective properties or the
nature of their respective businesses requires such qualification or
authorization, except where failure to be so qualified, in the aggregate, could
not reasonably be expected to have a Materially Adverse Effect.
(b) AUTHORIZATION; ENFORCEABILITY. The Borrower has the
corporate power and has taken all necessary corporate action to authorize it to
borrow hereunder, to execute, deliver and perform this Agreement and each of the
other Loan Documents to which it is a party in accordance with their respective
terms, and to consummate the transactions contemplated hereby and thereby. This
Agreement has been duly executed and delivered by the Borrower and is, and each
of the other Loan Documents to which the Borrower is party is, a legal, valid
and binding obligation of the Borrower enforceable against the Borrower in
accordance with its terms, subject, as to enforcement of remedies, to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally, and subject, as
to enforceability, to general principles of equity.
(c) SUBSIDIARIES: AUTHORIZATION; ENFORCEABILITY. To the extent
that the Borrower has any Subsidiaries, the Borrower has the unrestricted right
to vote the issued and outstanding equity of the Subsidiaries owned by the
Borrower and such equity of such Subsidiaries has been duly authorized and
issued and is fully paid and nonassessable. Each Subsidiary of the Borrower, if
any, has the power and has taken all necessary action to authorize it to
execute, deliver and perform each of the Loan Documents to which it is a party
in accordance with their respective terms and to consummate the transactions
contemplated by this Agreement and by such Loan Documents. Each of the Loan
Documents to which any Subsidiary of the Borrower is party is a legal, valid and
binding obligation of such Subsidiary enforceable against such Subsidiary in
accordance with its terms, subject, as enforcement of remedies, to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally, and subject, as
to enforceability, to general principles of equity. The Borrower's ownership
interest in each of its Subsidiaries represents a direct or indirect controlling
interest of such Subsidiary for purposes of directing or causing the direction
of the management and policies of each Subsidiary.
(d) COMPLIANCE WITH OTHER LOAN DOCUMENTS AND CONTEMPLATED
TRANSACTIONS. The execution, delivery and performance, in accordance with their
respective terms, by the Borrower of this Agreement and the Notes, and by the
Borrower and its Subsidiaries of each of the other Loan Documents to which they
are respectively party, and the consummation of the
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transactions contemplated hereby and thereby, do not and will not (i) require
any consent or approval, governmental or otherwise, not already obtained, (ii)
violate any Applicable Law respecting the Borrower or any Subsidiary of the
Borrower, (iii) conflict with, result in a breach of, or constitute a default
under the certificate or articles of incorporation or by-laws or partnership
agreements, as the case may be, as amended, of the Borrower or of any Subsidiary
of the Borrower, or under any material indenture, agreement, or other
instrument, to which the Borrower or any of its Subsidiaries is a party or by
which any of them or their respective properties may be bound, or (iv) result in
or require the creation or imposition of any Lien upon or with respect to any
property now owned or hereafter acquired by the Borrower or any of its
Subsidiaries, except for Permitted Liens.
(e) DESCRIPTION OF BUSINESS. The Borrower, together with its
Subsidiaries, is engaged in the business of producing and distributing yellow
pages directories annually covering certain service areas in Oklahoma and Texas
and publishing three (3) yellow page directories in California. Through a
contractual relationship with Big Stuff, Inc. and Web YP, Inc., the Borrower and
its Subsidiaries markets "World Pages", a specialized web page service, to its
yellow pages customers in its target markets.
(f) NECESSARY AUTHORIZATIONS. The Borrower and its
Subsidiaries have secured all Necessary Authorizations and all such Necessary
Authorizations are in full force and effect. No Necessary Authorization is the
subject of any pending or, to the best of the Borrower's knowledge, threatened
revocation.
(g) COMPLIANCE WITH LAW. The Borrower and its Subsidiaries are
in compliance with all Applicable Law, except where the failure to be in
compliance would not individually or in the aggregate have a Materially Adverse
Effect.
(h) TITLE TO ASSETS. As of the Agreement Date, the Borrower
and its Subsidiaries have good, legal and marketable title to, or a valid
leasehold interest in, all of its assets. None of the properties or assets of
the Borrower or any of its Subsidiaries is subject to any Liens, except for
Permitted Liens. Except for financing statements evidencing Permitted Liens, no
financing statement under the Uniform Commercial Code as in effect in any
jurisdiction and no other filing which names the Borrower or any of its
Subsidiaries as debtor or which covers or purports to cover any of the assets of
the Borrower or any of its Subsidiaries is currently effective and on file in
any state or other jurisdiction, and neither the Borrower nor any of its
Subsidiaries has signed any such financing statement or filing or any security
agreement authorizing any secured party thereunder to file any such financing
statement or filing.
(i) LITIGATION. As of the date hereof, except as set forth on
SCHEDULE 3 attached hereto, there is no action, suit, proceeding or
investigation pending against, or, to the knowledge of the Borrower, threatened
against or in any other manner relating adversely to, the Borrower or any of its
Subsidiaries or to the knowledge of the Borrower any of their respective
properties, in any court or before any arbitrator of any kind or before or by
any governmental body (including, without limitation, the FCC). No action, suit,
proceeding or investigation
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(i) calls into question the validity of this Agreement or any other Loan
Document or, (ii) individually or collectively, involves the possibility of any
judgment or liability not fully covered by insurance which, if determined
adversely to the Borrower or any of its Subsidiaries, would have a Materially
Adverse Effect.
(j) TAXES. All federal, state and other tax returns of the
Borrower and each of its Subsidiaries required by law to be filed have been duly
filed and all federal, state and other taxes, including, without limitation,
withholding taxes, assessments and other governmental charges or levies required
to be paid by the Borrower or any of its Subsidiaries or imposed upon the
Borrower or any of its Subsidiaries or any of their respective properties,
income, profits or assets, which are due and payable, have been paid, except any
such taxes (i) (x) the payment of which the Borrower or any of its Subsidiaries
is diligently contesting in good faith by appropriate proceedings, (y) for which
adequate reserves have been provided on the books of the Borrower or the
Subsidiary of the Borrower involved, and (z) as to which no Lien other than a
Permitted Lien has attached and no foreclosure, distraint, sale or similar
proceedings have been commenced, or (ii) which may result from audits not yet
conducted. The charges, accruals and reserves on the books of the Borrower and
each of its Subsidiaries in respect of taxes are, in the judgment of the
Borrower, adequate.
(k) NO MATERIAL ADVERSE CHANGE. There has occurred no event,
condition or other change since December 31, 1998 which has had, or which could
reasonably be expected to have, a Materially Adverse Effect.
(l) ERISA. The Borrower and each Subsidiary of the Borrower
and each of their respective Plans are in compliance with ERISA and the Code and
neither the Borrower nor any of its ERISA Affiliates, including its
Subsidiaries, has incurred any accumulated funding deficiency with respect to
any such Plan within the meaning of ERISA or the Code. The Borrower, each of its
Subsidiaries, and each other ERISA Affiliate have complied in all material
respects with all requirements of ERISA. Neither the Borrower nor any of its
Subsidiaries has made any promises of retirement or other benefits to employees,
except as set forth in the Plans, in written agreements with such employees, or
in the Borrower's employee handbook and memoranda to employees. Neither the
Borrower nor any of its ERISA Affiliates, including its Subsidiaries, has
incurred any material liability to PBGC in connection with any such Plan. The
assets of each such Plan which is subject to Title IV of ERISA are sufficient to
provide the benefits under such Plan, the payment of which PBGC would guarantee
if such Plan were terminated, and such assets are also sufficient to provide all
other "benefit liabilities" (within the meaning of Section 4041 of ERISA) due
under the Plan upon termination. No Reportable Event has occurred and is
continuing with respect to any such Plan. No such Plan or trust created
thereunder, or party in interest (as defined in Section 3(14) of ERISA), or any
fiduciary (as defined in Section 3(21) of ERISA), has engaged in a "prohibited
transaction" (as such term is defined in Section 406 of ERISA or Section 4975 of
the Code) which would subject such Plan or any other Plan of the Borrower or any
of its Subsidiaries, any trust created thereunder, or any such party in interest
or fiduciary, or any party dealing with any such Plan or any such trust, to the
tax or penalty on "prohibited transactions" imposed by Section 502 of ERISA or
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Section 4975 of the Code. Neither the Borrower nor any of its ERISA Affiliates,
including its Subsidiaries, is or has been obligated to make any payment to a
Multiemployer Plan.
(m) COMPLIANCE WITH REGULATIONS T, U AND X. Neither the
Borrower nor any of the Borrower's Subsidiaries is engaged principally or as one
of its important activities in the business of extending credit for the purpose
of purchasing or carrying, and neither the Borrower nor any of the Borrower's
Subsidiaries owns or presently intends to acquire, any "margin security" or
"margin stock" (herein called "MARGIN STOCK") as defined in Regulations T, U,
and X (12 C.F.R. Parts 220, 221 and 224) of the Board of Governors of the
Federal Reserve System (the "REGULATIONS"). None of the proceeds of the Loans
will be used, directly or indirectly, for the purpose of purchasing or carrying
any margin stock or for the purpose of reducing or retiring any Indebtedness
which was originally incurred to purchase or carry margin stock or for any other
purpose which might constitute this transaction a "purpose credit" within the
meaning of said Regulations. The Borrower has not taken, caused or authorized to
be taken, and will not take any action which might cause this Agreement or the
Notes to violate the Regulations or any other regulation of the Board of
Governors of the Federal Reserve System or to violate the Securities Exchange
Act of 1934, in each case as now in effect or as the same may hereafter be in
effect. If so requested by the Administrative Agent, the Borrower will furnish
the Administrative Agent with (i) a statement or statements in conformity with
the requirements of Federal Reserve Forms G-3 and/or U-1 referred to in
Regulation U of said Board of Governors and (ii) other documents evidencing its
compliance with the margin regulations, reasonably requested by the
Administrative Agent. Neither the making of the Loans nor the use of proceeds
thereof will violate, or be inconsistent with, the provisions of the
Regulations.
(n) INVESTMENT COMPANY ACT. Neither the Borrower nor any of
its Subsidiaries is required to register under the provisions of the Investment
Company Act of 1940, as amended, and neither the entering into or performance by
the Borrower and its Subsidiaries of this Agreement and the Loan Documents nor
the issuance of the Notes violates any provision of such Act or requires any
consent, approval or authorization of, or registration with, the Securities and
Exchange Commission or any other governmental or public body or authority
pursuant to any provisions of such Act.
(o) GOVERNMENTAL REGULATION. Neither the Borrower nor any of
its Subsidiaries is required to obtain any consent, approval, authorization,
permit or license which has not already been obtained from, or effect any filing
or registration which has not already been effected with, any federal, state or
local regulatory authority in connection with the execution and delivery of this
Agreement or any other Loan Document. Neither the Borrower nor any of its
Subsidiaries is required to obtain any consent, approval, authorization, permit
or license which has not already been obtained from, or effect any filing or
registration which has not already been effected with, any federal, state or
local regulatory authority in connection with the performance, in accordance
with their respective terms, of this Agreement or any other Loan Document, other
than filing of appropriate Uniform Commercial Code financing statements and
mortgages.
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(p) ABSENCE OF DEFAULT, ETC. The Borrower and its Subsidiaries
are in compliance in all respects with all of the material provisions of their
respective, Certificates or Articles of Incorporation and By-Laws, as the case
may be, and no event has occurred or failed to occur (including, without
limitation, any matter which could create a Default hereunder by cross-default)
which has not been remedied or waived, the occurrence or non-occurrence of which
constitutes, (i) a Default or (ii) a material default by the Borrower or any of
its Subsidiaries under any indenture, agreement or other instrument relating to
Indebtedness of the Borrower or any of its Subsidiaries in the amount of
$1,000,000.00 or more in the aggregate, any material license, or any judgment,
decree or order to which the Borrower or any of its Subsidiaries is a party or
by which the Borrower or any of its Subsidiaries or any of their respective
properties may be bound or affected.
(q) ACCURACY AND COMPLETENESS OF INFORMATION. All information,
reports, prospectuses and other papers and data relating to the Borrower or any
of its Subsidiaries and furnished by the Borrower or any of its Subsidiaries to
the Administrative Agent or the Lenders, taken as a whole, were, at the time
furnished, believed to be true, complete and correct in all material respects to
the extent necessary to give the Administrative Agent and the Lenders true and
accurate knowledge of the subject matter, and all final projections, consisting
of a consolidated projected cash flow statement, an income statement, and a
balance sheet for Borrower and its Subsidiaries (the "PROJECTIONS") (i) disclose
all assumptions made with respect to costs, general economic conditions, and
financial and market conditions formulating the Projections; (ii) are based on
estimates and assumptions believed to be reasonable; and (iii) reflect, as of
the date prepared, the reasonable estimate of Borrower of the results of
operations and other information projected therein for the periods covered
thereby. The projections and pro forma financial information furnished at any
time by the Borrower to any Lender pursuant to this Agreement have been prepared
in good faith based on assumptions believed by the Borrower to be reasonable at
the time made, it being recognized by the Lenders that such financial
information as it relates to future events is not to be viewed as fact and that
actual results during the period or periods covered by such financial
information may differ from the projected results set forth therein by a
material amount and the Borrower, however, makes no representation as to its
ability to achieve the results set forth in any such projections. The Borrower
understands that all such statements, representations and warranties shall be
deemed to have been relied upon by the Lenders as a material inducement to make
each extension of credit hereunder.
(r) AGREEMENTS WITH AFFILIATES. Except for agreements or
arrangements with Affiliates (i) wherein (A) the Borrower or one or more of its
Subsidiaries provides services to such Affiliates or (B) the Parent provides
general management and operating services to the Borrower and its Subsidiaries,
in each case, for not in excess of fair consideration, (ii) in connection with
loans permitted under Section 7.6(b) hereof or (iii) which are set forth on
SCHEDULE 4 attached hereto, neither the Borrower nor any of its Subsidiaries has
(a) any written agreements or binding arrangements of any kind with any
Affiliate or (b) any management or consulting agreements of any kind with any
Affiliate.
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(s) PAYMENT OF WAGES. The Borrower and each of its
Subsidiaries are in compliance with the Fair Labor Standards Act, as amended, in
all material respects, and to the knowledge of the Borrower and each of its
Subsidiaries, such Persons have paid all minimum and overtime wages required by
law to be paid to their respective employees.
(t) PRIORITY. The Security Interest granted under the Borrower
Security Agreement and any Subsidiary Security Agreement is a valid and, upon
filing of appropriate Uniform Commercial Code financing statements and/or
mortgages, will be a perfected first priority security interest in the
Collateral in favor of the Administrative Agent, for the benefit of itself and
the Lenders, securing, in accordance with the terms of the Security Documents,
the Obligations, and the Collateral is subject to no Liens other than Permitted
Liens. The Liens created by the Security Documents to which the Borrower and its
Subsidiaries, or any of them, is a party are enforceable as security for the
Obligations in accordance with their terms with respect to the Collateral
subject, as to enforcement of remedies, to the following qualifications: (i) an
order of specific performance and an injunction are discretionary remedies and,
in particular, may not be available where damages are considered an adequate
remedy at law; and (ii) enforcement may be limited by bankruptcy, insolvency,
liquidation, reorganization, reconstruction and other similar laws affecting
enforcement of creditors' rights generally (insofar as any such law relates to
the bankruptcy, insolvency or similar event of the Borrower or any of its
Subsidiaries, as the case may be).
(u) INDEBTEDNESS. Except as described on SCHEDULE 5 attached
hereto, neither the Borrower nor any of its Subsidiaries has outstanding, as of
the Agreement Date, and after giving effect to the initial Advances hereunder on
the Agreement Date, any Indebtedness for Money Borrowed.
(v) SOLVENCY. As of the Agreement Date and after giving effect
to the transactions contemplated by the Loan Documents (i) the property of the
Borrower, at a fair valuation, will exceed its debt; (ii) the capital of the
Borrower will not be unreasonably small to conduct its business; (iii) the
Borrower will not have incurred debts, or have intended to incur debts, beyond
its ability to pay such debts as they mature; and (iv) the present fair salable
value of the assets of the Borrower will be greater than the amount that will be
required to pay its probable liabilities (including debts) as they become
absolute and matured. For purposes of this Section 4.1(v), "debt" means any
liability on a claim, and "claim" means (i) the right to payment, whether or not
such right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, undisputed, legal, equitable, secured or unsecured, or (ii)
the right to an equitable remedy for breach of performance if such breach gives
rise to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured, unmatured, undisputed, secured
or unsecured.
(w) PATENTS, TRADEMARKS, FRANCHISES, ETC.. The Borrower and
each of its Subsidiaries owns, possesses, or has the right to use all necessary
patents, trademarks, trademark rights, trade names, trade name rights, service
marks, copyrights, franchises, and licenses, and rights with respect thereof,
necessary to conduct its respective business as now conducted,
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without known conflict with any patent, trademark, trade name, service ▇▇▇▇,
franchise, license, or copyright of any other Person, and in each case, subject
to no mortgage, pledge, lien, lease, encumbrance, charge, security interest,
title retention agreement, or option except as disclosed on SCHEDULE 1 attached
hereto. All such material patents, trademark applications, trademarks, trademark
rights, trade names, trade name rights, service marks, copyrights, franchises,
and licenses are listed as of the Agreement Date on SCHEDULE 6 attached hereto
and are in full force and effect, the holder thereof is in full compliance in
all material respects with all of the provisions thereof, and no such material
asset or material agreement is subject to any pending or, to the best of the
Borrower's knowledge, threatened attack or revocation.
(x) COLLECTIVE BARGAINING. None of the employees of the
Borrower or any of its Subsidiaries is a party to any collective bargaining
agreement with the Borrower or any of its Subsidiaries and, to the knowledge of
the Borrower and its officers, there are no material grievances, disputes, or
controversies with any union or any other organization of the employees of the
Borrower or any of its Subsidiaries or threats of strikes, work stoppages, or
any asserted pending demands for collective bargaining by any union or other
organization.
(y) YEAR 2000 COMPLIANCE. The Borrower and its Subsidiaries
have reviewed the areas within their business and operations which could be
adversely affected by, and have developed or are developing a program to address
on a timely basis, the "YEAR 2000 PROBLEM" (that is, the risk that computer
applications used by the Borrower and its Subsidiaries may be unable to
recognize and perform properly date-sensitive functions involving certain dates
prior to and any date after December 31, 1999). Based on such review and
program, the Borrower reasonably believes that the Year 2000 Problem will not
have a Materially Adverse Effect on the financial condition, operations,
business, prospects or property of the Borrower and its Subsidiaries taken as a
whole since December 31, 1998.
Section 4.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC. All
representations and warranties made under this Agreement and any other Loan
Document shall be deemed to be made, and shall be true and correct in all
material respects, at and as of the Agreement Date and on the date of each
Advance except to the extent relating specifically to the Agreement Date. All
representations and warranties made under this Agreement and the other Loan
Documents shall survive, and not be waived by, the execution hereof by the
Lenders and the Administrative Agent, any investigation or inquiry by any Lender
or the Administrative Agent, or the making of any Advance under this Agreement.
ARTICLE 5
GENERAL COVENANTS
So long as any of the Obligations is outstanding and unpaid or the
Lenders have an obligation to fund Advances hereunder (whether or not the
conditions to borrowing have been or
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can be fulfilled), and unless the Required Lenders, or such greater number of
Lenders as may be expressly provided herein, shall otherwise consent in writing:
Section 5.1 PRESERVATION OF EXISTENCE AND SIMILAR MATTERS. Except as
permitted under Section 7.4 hereof, the Borrower will, and will cause each of
its Subsidiaries to:
(i) preserve and maintain its existence, and its
material rights, franchises, licenses and privileges in the state of
its incorporation, including, without limiting the foregoing, all other
Necessary Authorizations; and
(ii) qualify and remain qualified and authorized to do
business in each jurisdiction in which the character of its properties
or the nature of its business requires such qualification or
authorization, except for such failure to so qualify and be so
authorized as could not reasonably be expected to have a Materially
Adverse Effect.
Section 5.2 BUSINESS; COMPLIANCE WITH APPLICABLE LAW. The Borrower
will, and will cause each of its Subsidiaries to, (a) engage in the business
conducted as of the Agreement Date or any business related, ancillary or
complementary thereto, and (b) comply in all material respects with the
requirements of all Applicable Law.
Section 5.3 MAINTENANCE OF PROPERTIES. The Borrower will, and will
cause each of its Subsidiaries to, maintain or cause to be maintained in the
ordinary course of business in good repair, working order and condition
(reasonable wear and tear excepted) all properties used in their respective
businesses (whether owned or held under lease), other than obsolete equipment or
unused assets and from time to time make or cause to be made all needed and
appropriate repairs, renewals, replacements, additions, betterments and
improvements thereto.
Section 5.4 ACCOUNTING METHODS AND FINANCIAL RECORDS. The Borrower
will, and will cause each of its Subsidiaries on a consolidated and
consolidating basis to, maintain a system of accounting established and
administered in accordance with GAAP, keep adequate records and books of account
in which complete entries will be made in accordance with GAAP and reflecting
all transactions required to be reflected by GAAP and keep accurate and complete
records of their respective properties and assets. The Borrower and its
Subsidiaries will maintain a fiscal year ending on December 31st.
Section 5.5 INSURANCE. The Borrower will, and will cause each of its
Subsidiaries to:
(a) Maintain insurance including, but not limited to, business
interruption coverage and public liability coverage insurance from responsible
companies in such amounts and against such risks to the Borrower and each of its
Subsidiaries as is prudent for similarly situated companies engaged in similarly
situated industries.
(b) Keep their respective assets insured by insurers on terms
and in a manner reasonably acceptable to the Administrative Agent against loss
or damage by fire, theft, burglary,
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loss in transit, explosions and hazards insured against by extended coverage, in
amounts which are prudent for companies in similarly situated industries and
reasonably satisfactory to the Administrative Agent, all premiums thereon to be
paid by the Borrower and its Subsidiaries.
(c) Require that each insurance policy provide for at least
thirty (30) days' prior written notice to the Administrative Agent of any
termination of or proposed cancellation or nonrenewal of such policy, and name
the Administrative Agent as additional named lender loss payee and, as
appropriate, additional insured, to the extent of the Obligations.
Section 5.6 PAYMENT OF TAXES AND CLAIMS. The Borrower will, and will
cause each of its Subsidiaries to, pay and discharge all taxes, including,
without limitation, withholding taxes, assessments and governmental charges or
levies required to be paid by them or imposed upon them or their income or
profits or upon any properties belonging to them, prior to the date on which
penalties attach thereto, and all lawful claims for labor, materials and
supplies which, if unpaid, might become a Lien or charge upon any of their
properties; except that no such tax, assessment, charge, levy or claim need be
paid which is being diligently contested in good faith by appropriate
proceedings and for which adequate reserves shall have been set aside on the
appropriate books, but only so long as such tax, assessment, charge, levy or
claim does not become a Lien or charge other than a Permitted Lien and no
foreclosure, distraint, sale or similar proceedings shall have been commenced.
The Borrower will, and will cause each of its Subsidiaries to, timely file all
information returns required by federal, state or local tax authorities.
Section 5.7 COMPLIANCE WITH ERISA.
(a) The Borrower will, and will cause its Subsidiaries to,
make all contributions to any Employee Pension Plan when such contributions are
due and not incur any "accumulated funding deficiency" within the meaning of
Section 412(a) of the Code, whether or not waived, and will otherwise comply
with the requirements of the Code and ERISA with respect to the operation of all
Plans, except to the extent that the failure to so comply could not have a
Materially Adverse Effect.
(b) The Borrower will, and will cause its Subsidiaries to,
comply in all respects with the requirements of ERISA with respect to any Plans
subject to the requirements thereof, except to the extent that the failure to so
comply could not have a Materially Adverse Effect.
(c) The Borrower will furnish to Administrative Agent (i)
within 30 days after any officer of the Borrower obtains knowledge that a
"prohibited transaction" (within the meaning of Section 406 of ERISA or Section
4975 of the Code) has occurred with respect to any Plan of the Borrower or its
ERISA Affiliates, including its Subsidiaries, that any Reportable Event has
occurred with respect to any Employee Pension Plan or that PBGC has instituted
or will institute proceedings under Title IV of ERISA to terminate any Employee
Pension Plan or to appoint a trustee to administer any Employee Pension Plan, a
statement setting forth the details
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as to such prohibited transaction, Reportable Event or termination or
appointment proceedings and the action which it (or any other Employee Pension
Plan sponsor if other than the Borrower) proposes to take with respect thereto,
together with a copy of the notice of such Reportable Event given to PBGC if a
copy of such notice is available to the Borrower, any of its Subsidiaries or any
of its ERISA Affiliates, (ii) promptly after receipt thereof, a copy of any
notice the Borrower, any of its Subsidiaries or any of its ERISA Affiliates or
the sponsor of any Plan receives from PBGC, or the Internal Revenue Service or
the Department of Labor which sets forth or proposes any action or determination
with respect to such Plan, (iii) promptly after the filing thereof, any annual
report required to be filed pursuant to ERISA in connection with each Plan
maintained by the Borrower or any of its ERISA Affiliates, including the
Subsidiaries, and (iv) promptly upon the Administrative Agent's request
therefor, such additional information concerning any such Plan as may be
reasonably requested by the Administrative Agent.
(d) The Borrower will promptly notify the Administrative Agent
of any excise taxes which have been assessed or which the Borrower, any of its
Subsidiaries or any of its ERISA Affiliates has reason to believe may be
assessed against the Borrower, any of its Subsidiaries or any of its ERISA
Affiliates by the Internal Revenue Service or the Department of Labor with
respect to any Plan of the Borrower or its ERISA Affiliates, including its
Subsidiaries.
(e) Within the time required for notice to the PBGC under
Section 302(f)(4)(A) of ERISA, the Borrower will notify the Administrative Agent
of any lien arising under Section 302(f) of ERISA in favor of any Plan of the
Borrower or its ERISA Affiliates, including its Subsidiaries.
(f) The Borrower will not, and will not permit any of its
Subsidiaries or any of its ERISA Affiliates to take any of the following actions
or permit any of the following events to occur if such action or event together
with all other such actions or events would subject the Borrower, any of its
Subsidiaries, or any of its ERISA Affiliates to any tax, penalty, or other
liabilities which could have a Materially Adverse Effect:
(i) engage in any transaction in connection with which
the Borrower, any of its Subsidiaries or any ERISA Affiliate could be
subject to either a civil penalty assessed pursuant to Section 502(i)
of ERISA or a tax imposed by Section 4975 of the Code;
(ii) terminate any Employee Pension Plan in a manner, or
take any other action, which could result in any liability of the
Borrower, any of its Subsidiaries or any ERISA Affiliate to the PBGC;
(iii) fail to make full payment when due of all amounts
which, under the provisions of any Plan, the Borrower, any of its
Subsidiaries or any ERISA Affiliate is required to pay as contributions
thereto, or permit to exist any accumulated funding
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deficiency within the meaning of Section 412(a) of the Code, whether or
not waived, with respect to any Employee Pension Plan; or
(iv) permit the present value of all benefit liabilities
under all Employee Pension Plans which are subject to Title IV of ERISA
to exceed the present value of the assets of such Plans allocable to
such benefit liabilities (within the meaning of Section 4041 of ERISA),
except as may be permitted under actuarial funding standards adopted in
accordance with Section 412 of the Code.
Section 5.8 VISITS AND INSPECTIONS. The Borrower will, and will cause
each of its Subsidiaries, upon reasonable prior notice, to, permit (a)
representatives of the Administrative Agent and any of the Lenders to visit and
inspect the properties of the Borrower or any of its Subsidiaries during
business hours, (b) representatives of the Administrative Agent and, after the
occurrence and during the continuance of a Default, any of the Lenders to (i)
inspect and make extracts from and copies of their respective books and records
and (ii) discuss with their respective principal officers their respective
businesses, assets, liabilities, financial positions, results of operations and
business prospects. The Borrower and each of its Subsidiaries will also permit,
with the Borrower present if the Borrower elects to be so present,
representatives of the Administrative Agent and, after the occurrence and during
the continuance of a Default, any of the Lenders to discuss with their
respective accountants the Borrower's and the Borrower's Subsidiaries'
businesses, assets, liabilities, financial positions, results of operations and
business prospects.
Section 5.9 PAYMENT OF INDEBTEDNESS. Subject to any provisions herein
or in any other Loan Document, the Borrower will, and will cause each of its
Subsidiaries to, pay any and all of their respective Indebtedness when and as it
becomes due, other than amounts diligently disputed in good faith and for which
adequate reserves have been set aside in accordance with GAAP.
Section 5.10 USE OF PROCEEDS. The Borrower will, and will cause its
Subsidiaries to, use the aggregate proceeds of all Advances under the Loans
directly or indirectly:
(a) to make loans, subject to Section 7.6(b) hereof to (i) the
Parent to retire the CIBC Facility and for working capital needs and other
corporate purposes of the Parent and (ii) any Affiliate Guarantor for working
capital needs and other corporate purposes of such Affiliate Guarantor in
connection with the operation of the CLEC Business; and
(b) for working capital needs and other corporate purposes of
the Borrower and its Subsidiaries (including the fees and expenses incurred in
connection with the execution and delivery of this Agreement) which do not
otherwise conflict with this Section 5.10.
Section 5.11 INDEMNITY. The Borrower will indemnify and hold harmless
each Lender, the Administrative Agent, and each of their respective affiliates,
employees, representatives, shareholders, officers and directors (any of the
foregoing shall be an "INDEMNITEE") from and against any and all claims,
liabilities, losses, damages, actions, reasonable attorneys' fees and
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expenses (as such fees and expenses are incurred) and demands by any party,
including the costs of investigating and defending such claims, whether or not
the Borrower, any Subsidiary of the Borrower or the Person seeking
indemnification is the prevailing party (a) resulting from any breach or alleged
breach by the Borrower or any Subsidiary of the Borrower of any representation
or warranty made hereunder; or (b) otherwise arising out of (i) the Commitment,
the Loans or otherwise under this Agreement, any Loan Document or any
transaction contemplated hereby or thereby, including, without limitation, the
use of the proceeds of Loans hereunder in any fashion by the Borrower or the
performance of their respective obligations under the Loan Documents by the
Borrower or any of its Subsidiaries, (ii) allegations of any participation by
the Lenders, the Administrative Agent, or any of them, in the affairs of the
Borrower or any of its Subsidiaries, or allegations that any of them has any
joint liability with the Borrower or any of its Subsidiaries for any reason,
(iii) any claims against the Lenders, the Administrative Agent, or any of them,
by any shareholder or other investor in or lender to the Borrower or any
Subsidiary of the Borrower, by any brokers or finders or investment advisers or
investment bankers retained by the Borrower or by any other third party, arising
out of the Commitments or otherwise under this Agreement; or (c) in connection
with taxes (not including federal or state income or franchise taxes or other
taxes based solely upon the revenues or income of such Persons), fees, and other
charges payable in connection with the Loans, or the execution, delivery, and
enforcement of this Agreement, the Security Documents, the other Loan Documents,
and any amendments thereto or waivers of any of the provisions thereof; unless
the Person seeking indemnification hereunder is determined in such case to have
acted with gross negligence or willful misconduct, in any case, by a final,
non-appealable judicial order. The obligations of the Borrower under this
Section 5.11 are in addition to, and shall not otherwise limit, any liabilities
which the Borrower might otherwise have in connection with any warranties or
similar obligations of the Borrower in any other Loan Document.
Section 5.12 COVENANTS REGARDING ACQUISITIONS AND PURCHASE OR FORMATION
OF SUBSIDIARIES. At the time of (i) any Acquisition permitted hereunder, (ii)
the purchase by the Borrower or any of its Subsidiaries of any interests in any
Subsidiary of the Borrower, or (iii) the formation of any new Subsidiary of the
Borrower or any of its Subsidiaries which is permitted under this Agreement, the
Borrower will, and will cause its Subsidiaries, as appropriate, to (a) provide
to the Administrative Agent a duly executed (x) Subsidiary Security Agreement
for any new Subsidiary, together with appropriate Uniform Commercial Code
financing statements, (y) Subsidiary Pledge Agreement for any new Subsidiary,
together with appropriate stock certification and stock powers executed in blank
and (z) Subsidiary Guaranty for any new Subsidiary, each of which shall
constitute both Security Documents and Loan Documents for purposes of this
Agreement, as well as a loan certificate for such new Subsidiary, substantially
in the form of EXHIBIT N attached hereto, together with appropriate attachments;
(b) pledge to the Administrative Agent all of the stock or partnership interests
(or other instruments or securities evidencing ownership) of such Subsidiary or
Person which is acquired or formed, beneficially owned by the Borrower or any of
the Borrower's Subsidiaries, as the case may be, as additional Collateral for
the Obligations to be held by the Administrative Agent in accordance with the
terms of the Borrower's Pledge Agreement, or a new Subsidiary Pledge Agreement
and execute and deliver to the Administrative Agent all such documentation for
such pledge as, in the
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reasonable opinion of the Administrative Agent, is appropriate; and (c) with
respect to any Acquisition, provide revised financial projections for the
remainder of the fiscal year and for each subsequent year until the Maturity
Date which reflect such Acquisition, certified by the Chief Financial Officer of
the Borrower, together with a statement by such Person that no Default exists or
would be caused by such Acquisition or formation, and all other documentation,
including one or more opinions of counsel, reasonably satisfactory to the
Administrative Agent which in their reasonable opinion is appropriate with
respect to such Acquisition. Any document, agreement or instrument (other than
the Projections) executed or issued pursuant to this Section 5.12 shall be a
"Loan Document" for purposes of this Agreement.
Section 5.13 PAYMENT OF WAGES. The Borrower will, and will cause each
of its Subsidiaries to, at all times comply, in all material respects, with the
material requirements of the Fair Labor Standards Act, as amended, including,
without limitation, the provisions of such Act relating to the payment of
minimum and overtime wages as the same may become due from time to time.
Section 5.14 FURTHER ASSURANCES. The Borrower will promptly cure, or
cause to be cured, defects in the creation and issuance of any of the Notes and
the execution and delivery of the Loan Documents (including this Agreement),
resulting from any acts or failure to act by the Borrower or any of the
Borrower's Subsidiaries or any employee or officer of any of the foregoing
Persons. The Borrower at its expense will promptly execute and deliver to the
Administrative Agent and the Lenders, or cause to be executed and delivered to
the Administrative Agent and the Lenders, all such other and further documents,
agreements, and instruments in compliance with or accomplishment of the
covenants and agreements of the Borrower in the Loan Documents, including this
Agreement, or to correct any omissions in the Loan Documents, all as may be
reasonably necessary or reasonably appropriate in connection therewith and as
may be reasonably requested.
Section 5.15 YEAR 2000 COMPLIANCE. The Borrower will, and will cause
each of its Subsidiaries to, promptly notify the Administrative Agent in the
event that the Borrower or any of its Subsidiaries discovers or determines that
any computer application (including those of its suppliers, vendors, and
customers) that is material to the Borrower's or any of its Subsidiaries'
businesses and operations will not be Year 2000 compliant, except to the extent
that such failure could not reasonably be expected to have a Materially Adverse
Effect.
ARTICLE 6
INFORMATION COVENANTS
So long as any of the Obligations is outstanding and unpaid or the
Lenders have an obligation to fund Advances hereunder (whether or not the
conditions to borrowing have been or can be fulfilled) and unless the Required
Lenders shall otherwise consent in writing, the Borrower will furnish or cause
to be furnished to each Lender and the Administrative Agent, at their respective
offices:
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Section 6.1 QUARTERLY FINANCIAL STATEMENTS AND INFORMATION. Within
forty-five (45) days after the last day of each of the first three (3) quarters
of each fiscal year of the Borrower, the balance sheets of the Borrower on a
consolidated basis with its Subsidiaries as at the end of such quarter and as of
the end of the preceding fiscal year, and the related statements of operations
and the related statements of cash flows of the Borrower on a consolidated basis
with its Subsidiaries for such quarter and for the elapsed portion of the year
ended with the last day of such quarter, which shall set forth in comparative
form such figures as at the end of and for such quarter and appropriate prior
period and shall be certified by the chief financial officer of the Borrower to
have been prepared in accordance with GAAP and to present fairly in all material
respects the financial position of the Borrower on a consolidated basis with its
Subsidiaries as at the end of such period and the results of operations for such
period, and for the elapsed portion of the year ended with the last day of such
period, subject only to normal year-end and audit adjustments.
Section 6.2 ANNUAL FINANCIAL STATEMENTS AND INFORMATION. Within ninety
(90) days after the end of each fiscal year of the Borrower, the audited
consolidated balance sheet of the Borrower and its Subsidiaries as of the end of
such fiscal year and the related audited consolidated statements of operations
for such fiscal year and for the previous fiscal year, the related audited
consolidated statements of cash flow and members' equity for such fiscal year
and for the previous fiscal year, which shall be accompanied by an opinion,
which opinion shall be in scope and substance reasonably satisfactory to the
Administrative Agent, of independent certified public accountants of recognized
national standing reasonably acceptable to the Administrative Agent, together
with a statement of such accountants that in connection with their audit,
nothing came to their attention that caused them to believe that the Borrower
was not in compliance with the terms, covenants, provisions or conditions of
Sections 7.8 and 7.9 hereof insofar as they relate to accounting matters.
Section 6.3 PERFORMANCE CERTIFICATES. At the time the financial
statements are furnished pursuant to Sections 6.1 and 6.2 hereof, a certificate
of the president or chief financial officer of the Borrower as to its financial
performance, in substantially the form attached hereto as EXHIBIT O:
(a) setting forth as and at the end of such quarterly period
or fiscal year, as the case may be, the arithmetical calculations required to
establish whether or not the Borrower was in compliance with the requirements of
Sections 7.8 and 7.9 hereof;
(b) stating that, to the best of his or her knowledge, no
Default or Event of Default has occurred as at the end of such quarterly period
or year, as the case may be, or, if a Default or Event of Default has occurred,
disclosing each such Default or Event of Default and its nature, when it
occurred, whether it is continuing and the steps being taken by the Borrower
with respect to such Default or Event of Default; and
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(c) containing a list of all Acquisitions, Investments,
Restricted Payments and dispositions of assets from the Agreement Date through
the date of such certificate, together with the total amount for each of the
foregoing categories.
Section 6.4 COPIES OF OTHER REPORTS.
(a) Promptly upon receipt thereof copies of all material
reports, if any, submitted to the Borrower by the Borrower's independent public
accountants regarding the Borrower, including, without limitation, any
management report prepared in connection with the annual audit referred to in
Section 6.2 hereof.
(b) From time to time and promptly upon each request, such
data, certificates, reports, statements, documents or further information
regarding the business, assets, liabilities, financial position, projections,
results of operations or business prospects of the Borrower or any of its
Subsidiaries, as the Administrative Agent may reasonably request which are
reasonably available to the Borrower.
(c) Annually, certificates of insurance indicating that the
requirements of Section 5.5 hereof remain satisfied for such fiscal year,
together with, if requested by a Lender and reasonably available to the
Borrower, copies of any new or replacement insurance policies obtained during
such year.
(d) Prior to February 28th of each year, the annual budget for
the Borrower and the Borrower's Subsidiaries, including forecasts of the income
statement, the balance sheet and a cash flow statement for such year, on a
quarter by quarter basis.
Section 6.5 NOTICE OF LITIGATION AND OTHER MATTERS. Notice specifying
the nature and status of any of the following events, promptly, but in any event
not later than fifteen (15) days after the occurrence of any of the following
events becomes known to the Borrower:
(a) the commencement of all proceedings and investigations by
or before any governmental body and all actions and proceedings in any court or
before any arbitrator against the Borrower or any Subsidiary, or, to the extent
known to the Borrower, which could reasonably be expected to have a Materially
Adverse Effect if adversely determined;
(b) any material adverse change with respect to the business,
assets, liabilities, financial position, results of operations or business
prospects of the Borrower and its Subsidiaries, taken as a whole, other than
changes in the ordinary course of business which have not had and could not
reasonably be expected to have a Materially Adverse Effect and other than
changes in the industry in which Borrower or any of its Subsidiaries operate
which could not reasonably be expected to have a Materially Adverse Effect;
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(c) any material adverse amendment or change adopted by the
board of directors of the Borrower to the projections or annual budget provided
to the Administrative Agent by the Borrower;
(d) any Default or the occurrence or non-occurrence of any
event (A) which constitutes, or which with the passage of time or giving of
notice or both would constitute a default by the Borrower or any Subsidiary of
the Borrower under any material agreement other than this Agreement and the
other Loan Documents to which the Borrower or any Subsidiary of the Borrower is
party or by which any of their respective properties may be bound, or (B) which
could be reasonably expected to have a Materially Adverse Effect, giving in each
case a description thereof and specifying the action proposed to be taken with
respect thereto;
(e) the occurrence of any Reportable Event or a "prohibited
transaction" (as such term is defined in Section 406 of ERISA or Section 4975 of
the Code) with respect to any Plan of the Borrower or any of its Subsidiaries or
the institution or threatened institution by PBGC of proceedings under ERISA to
terminate or to partially terminate any such Plan or the commencement or
threatened commencement of any litigation regarding any such Plan or naming it
or the trustee of any such Plan with respect to such Plan or any action taken by
the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate of the
Borrower to withdraw or partially withdraw from any Plan or to terminate any
Plan.
ARTICLE 7
NEGATIVE COVENANTS
So long as any of the Obligations is outstanding and unpaid or the
Lenders have an obligation to fund Advances hereunder (whether or not the
conditions to borrowing have been or can be fulfilled) and unless the Required
Lenders, or such greater number of Lenders as may be expressly provided herein,
shall otherwise give their prior consent in writing:
Section 7.1 INDEBTEDNESS OF THE BORROWER AND ITS SUBSIDIARIES. The
Borrower shall not, and shall not permit any of its Subsidiaries to, create,
assume, incur or otherwise become or remain obligated in respect of, or permit
to be outstanding, any Indebtedness except:
(a) the Obligations;
(b) Indebtedness secured by Permitted Liens;
(c) obligations under Interest Hedge Agreements with
respect to the Loans; and
(d) Indebtedness of the Borrower or any of its Subsidiaries to
any such Subsidiary or to the Borrower or any other Subsidiary of the Borrower,
respectively, so long as
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the corresponding debt instruments, if any, are pledged to the Administrative
Agent as security for the Obligations.
Section 7.2 LIMITATION ON LIENS. The Borrower shall not, and shall not
permit any of its Subsidiaries to, create, assume, incur or permit to exist or
to be created, assumed, incurred or permitted to exist, directly or indirectly,
any Lien on any of its properties or assets, whether now owned or hereafter
acquired, except for Permitted Liens. The Borrower shall not, and shall not
permit any of its Subsidiaries to undertake, covenant or agree with any third
party that it will not create, assume, incur or permit to exist any lien in the
favor the Administrative Agent or the Lenders securing the Obligations on any of
its assets or properties, whether now owned or hereafter acquired except for
Permitted Liens.
Section 7.3 AMENDMENT AND WAIVER. The Borrower shall not, and shall not
permit any of its Subsidiaries to, enter into any amendment of, or agree to or
accept or consent to any waiver of any of the material provisions of its
operating agreement, articles or certificate of incorporation or partnership
agreement, as appropriate, if the effect thereof would be to adversely affect
the rights of the Lenders hereunder or under any Loan Document.
Section 7.4 LIQUIDATION, MERGER OR DISPOSITION OF ASSETS.
(a) DISPOSITION OF ASSETS. The Borrower shall not, and shall
not permit any of its Subsidiaries to, at any time sell, lease, abandon, or
otherwise dispose of any assets (other than assets including, but not limited
to, past due account receivables, disposed of in the ordinary course of
business).
(b) LIQUIDATION OR MERGER. The Borrower shall not, and shall
not permit any of its Subsidiaries to, at any time liquidate or dissolve itself
(or suffer any liquidation or dissolution) or otherwise wind up, or enter into
any merger, other than (i) a merger or consolidation among the Borrower and one
or more of its Subsidiaries, provided the Borrower is the surviving corporation,
or (ii) a merger between or among two or more Subsidiaries of the Borrower, or
(iii) in connection with an Acquisition permitted hereunder effected by a merger
in which the Borrower or, in a merger in which the Borrower is not a party, a
Subsidiary of the Borrower is the surviving corporation or the surviving
corporation becomes a Subsidiary of the Borrower.
Section 7.5 LIMITATION ON GUARANTIES. The Borrower shall not, and shall
not permit any of its Subsidiaries to, at any time Guaranty, assume, be
obligated with respect to, or permit to be outstanding any Guaranty of, any
obligation of any other Person other than (a) a guaranty by endorsement of
negotiable instruments for collection in the ordinary course of business, or (b)
Guaranties constituting Indebtedness permitted pursuant to Section 7.1 hereof,
or (c) as may be contained in any Loan Document including, without limitation,
the Parent Guaranty and any Subsidiary Guaranty.
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Section 7.6 INVESTMENTS AND ACQUISITIONS. The Borrower shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly make any
loan or advance, or otherwise acquire for consideration evidences of
Indebtedness, capital stock or other securities of any Person or other assets or
property (other than assets or property in the ordinary course of business), or
make any Acquisition or Investment except that:
(a) the Borrower and its Subsidiaries may, directly or through
a brokerage account, (i) purchase marketable, direct obligations of the United
States of America, its agencies and instrumentalities maturing within three
hundred sixty-five (365) days of the date of purchase, (ii) purchase commercial
paper, money-market funds and business savings accounts issued by corporations,
each of which shall have a combined net worth of at least $100,000,000.00 and
each of which conducts a substantial part of its business in the United States
of America, maturing within two hundred seventy (270) days from the date of the
original issue thereof, and rated "P-2" or better by ▇▇▇▇▇'▇ Investors Service,
Inc. or "A-2" or better by Standard and Poor's Ratings Group, a division of
▇▇▇▇▇▇-▇▇▇▇, Inc., and (iii) purchase repurchase agreements, bankers'
acceptances, and domestic and Eurodollar certificates of deposit maturing within
three hundred sixty-five (365) days of the date of purchase which are issued by,
or time deposits maintained with, a United States national or state bank the
deposits of which are insured by the Federal Deposit Insurance Corporation or
the Federal Savings and Loan Insurance Corporation and having capital, surplus
and undivided profits totaling more than $100,000,000.00 and rated "A" or better
by ▇▇▇▇▇'▇ Investors Service, Inc. or Standard and Poor's Ratings Group, a
division of ▇▇▇▇▇▇-▇▇▇▇, Inc.; and
(b) so long as no Default then exists or would be caused
thereby and the Borrower has demonstrated pro forma compliance with Sections 7.8
and 7.9 hereof, the Borrower may, prior to November 14, 1999, make loans (i) to
the Parent (A) to retire the CIBC Facility and, (B) in an aggregate amount not
to exceed $3,000,000.00, for working capital needs and other corporate purposes
of the Parent, and (ii) to any Affiliate Guarantor for working capital needs and
other corporate purposes of such Affiliate Guarantor in connection with the
operation of the CLEC Business in an aggregate amount not to exceed
$2,500,000.00 per calendar month (which amount shall be exclusive of payments
made to satisfy the obligation of the Parent to Northern Telecom in connection
with the purchase of certain switch equipment which amount shall not exceed
$3,000,000.00) or $10,000,000.00 prior to the Maturity Date, in each case, so
long as (x) each such loan is evidenced by a promissory note made by such Person
in favor of the Borrower in form and substance satisfactory to the
Administrative Agent and (y) each such promissory note is assigned as Collateral
and delivered to the Administrative Agent.
Section 7.7 RESTRICTED PAYMENTS. The Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly declare or make any
Restricted Payment; PROVIDED, HOWEVER, that so long as no Default or Event of
Default then exists or would be caused thereby, prior to November 14, 1999, the
Borrower may make Restricted Payments to the Parent in an amount not to exceed
$500,000.00 per calendar month.
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Section 7.8 LEVERAGE RATIO. (a) As of the end of any calendar quarter,
and (b) at the time of any Advance hereunder (after giving effect to such
Advance), the Borrower shall not permit its Leverage Ratio to exceed 6.25 to
1.00.
Section 7.9 INTEREST COVERAGE RATIO. (a) As of the end of any calendar
quarter, and (b) at the time of any Advance hereunder (after giving effect to
such Advance), the Borrower shall not permit the ratio of (i) its EBITDA (for
the twelve (12) calendar month period ending on the month end being tested in
the case of Section 7.9(a) hereof, or for the most recently completed calendar
month end, in the case of Section 7.9(b) hereof) to (ii) its Interest Expense
(for the same period) to be less than 1.75 to 1.00.
Section 7.10 AFFILIATE TRANSACTIONS. Except with respect to any loan
made pursuant to Section 7.6(b) hereof or as otherwise specifically provided
herein, and except as described on SCHEDULE 4 attached hereto, the Borrower
shall not, and shall not permit any of its Subsidiaries to, at any time engage
in any transaction with an Affiliate, or make an assignment or other transfer of
any of its properties or assets to any Affiliate, on terms less advantageous to
the Borrower or such Subsidiary than would be the case if such transaction had
been effected with a non-Affiliate.
Section 7.11 REAL ESTATE. The Borrower and its Subsidiaries shall not
purchase any real estate or enter into any sale-leaseback transaction, except as
contemplated in an Acquisition or Investment permitted under Section 7.6 hereof.
Section 7.13 ERISA LIABILITIES. The Borrower shall not, and shall cause
each of its ERISA Affiliates not to, (i) permit the assets of any of their
respective Plans to be less than the amount necessary to provide all accrued
benefits under such Plans, or (ii) enter into any Multiemployer Plan.
ARTICLE 8
DEFAULT
Section 8.1 EVENTS OF DEFAULT. Each of the following shall constitute
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
governmental or non-governmental body:
(a) Any representation or warranty made under this Agreement
shall prove incorrect or misleading in any material respect when made or deemed
to be made pursuant to Section 4.2 hereof;
(b) The Borrower shall default in the payment of (i) any
interest under any of the Notes or fees or other amounts payable to the Lenders
and the Administrative Agent under
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any of the Loan Documents, or any of them, when due, and such Default shall not
be cured by payment in full within three (3) Business Days from the due date or
(ii) any principal under any of the Notes when due;
(c) The Borrower shall default in the performance or
observance of any agreement or covenant contained in Articles 6 or 7 hereof;
(d) The Borrower shall default in the performance or
observance of any other agreement or covenant contained in this Agreement not
specifically referred to elsewhere in this Section 8.1, and such default shall
not be cured within a period of thirty (30) days from the occurrence of such
Default;
(e) There shall occur any default in the performance or
observance of any agreement or covenant or breach of any representation or
warranty contained in any of the Loan Documents (other than this Agreement or as
otherwise provided in Section 8.1 of this Agreement) by the Borrower, any of its
Subsidiaries, or any other obligor thereunder, which shall not be cured within a
period of thirty (30) days from the occurrence of such Default;
(f) There shall be entered and remain unstayed a decree or
order for relief in respect of the Borrower or any of the Borrower's
Subsidiaries under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other applicable Federal or state bankruptcy law or
other similar law, or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or similar official of the Borrower or any of the
Borrower's Subsidiaries, or of any substantial part of their respective
properties, or ordering the winding-up or liquidation of the affairs of the
Borrower, or any of the Borrower's Subsidiaries; or an involuntary petition
shall be filed against the Borrower or any of the Borrower's Subsidiaries and a
temporary stay entered, and (i) such petition and stay shall not be diligently
contested, or (ii) any such petition and stay shall continue undismissed for a
period of sixty (60) consecutive days;
(g) The Borrower or any of the Borrower's Subsidiaries shall
file a petition, answer or consent seeking relief under Title 11 of the United
States Code, as now constituted or hereafter amended, or any other applicable
Federal or state bankruptcy law or other similar law, or the Borrower or any of
the Borrower's Subsidiaries shall consent to the institution of proceedings
thereunder or to the filing of any such petition or to the appointment or taking
of possession of a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Borrower or any of the Borrower's
Subsidiaries or of any substantial part of their respective properties, or the
Borrower or any of the Borrower's Subsidiaries shall fail generally to pay their
respective debts as they become due or shall be adjudicated insolvent; the
Borrower shall suspend or discontinue its business; the Borrower or any of the
Borrower's Subsidiaries shall have concealed, removed any of its property with
the intent to hinder or defraud its creditors or shall have made a fraudulent or
preferential transfer under any applicable fraudulent conveyance or bankruptcy
law, or the Borrower or any of the Borrower's Subsidiaries shall take any action
in furtherance of any such action;
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(h) A judgment not covered by insurance or indemnification,
where the indemnifying party has agreed to indemnify and is financially able to
do so, shall be entered by any court against the Borrower or any of the
Borrower's Subsidiaries for the payment of money which exceeds singly or in the
aggregate with other such judgments, $1,000,000, or a warrant of attachment or
execution or similar process shall be issued or levied against property of the
Borrower or any of the Borrower's Subsidiaries which, together with all other
such property of the Borrower or any of the Borrower's Subsidiaries subject to
other such process, exceeds in value $1,000,000 in the aggregate, and if, within
forty-five (45) days after the entry, issue or levy thereof, such judgment,
warrant or process shall not have been paid or discharged or stayed pending
appeal or removed to bond, or if, after the expiration of any such stay, such
judgment, warrant or process shall not have been paid or discharged or removed
to bond;
(i) There shall be at any time any "accumulated funding
deficiency," as defined in ERISA or in Section 412 of the Code, with respect to
any Plan maintained by the Borrower or any of its Subsidiaries or any ERISA
Affiliate, or to which the Borrower or any of its Subsidiaries or any ERISA
Affiliate has any liabilities, or any trust created thereunder; or a trustee
shall be appointed by a United States District Court to administer any such
Plan; or PBGC shall institute proceedings to terminate any such Plan; or the
Borrower or any of its Subsidiaries or any ERISA Affiliate shall incur any
liability to PBGC in connection with the termination of any such Plan; or any
Plan or trust created under any Plan of the Borrower or any of its Subsidiaries
or any ERISA Affiliate shall engage in a "prohibited transaction" (as such term
is defined in Section 406 of ERISA or Section 4975 of the Code) which would
subject any such Plan, any trust created thereunder, any trustee or
administrator thereof, or any party dealing with any such Plan or trust to the
tax or penalty on "prohibited transactions" imposed by Section 502 of ERISA or
Section 4975 of the Code;
(j) There shall occur (i) any default under any instrument,
document or agreement relating to any Indebtedness of the Borrower or any of the
Borrower's Subsidiaries in an aggregate principal amount exceeding
$1,000,000.00; (ii) any event or condition the occurrence of which would permit
such acceleration of such Indebtedness, or which, as a result of a failure to
comply with the terms thereof, would make such Indebtedness otherwise due and
payable, and which event or condition has not been cured within any applicable
cure period or waived in writing prior to any declaration of an Event of Default
or acceleration of the Loans hereunder; or (iii) any material default under any
Interest Hedge Agreement which would permit the obligation of the Borrower to
make payments to the counterparty thereunder to be then due and payable;
(k) Any Loan Document or any material provision thereof, shall
at any time and for any reason be declared by a court of competent jurisdiction
to be null and void, or a proceeding shall be commenced by the Borrower or any
of the Borrower's Subsidiaries or by any governmental authority having
jurisdiction over the Borrower or any of the Borrower's Subsidiaries seeking to
establish the invalidity or unenforceability thereof (exclusive of questions of
interpretation of any provision thereof), or the Borrower or any of the
Borrower's Subsidiaries
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shall deny that it has any liability or obligation for the payment of principal
or interest purported to be created under any Loan Document prior to the payment
of such principal or interest;
(l) Any Security Document shall, for any reason, fail or cease
(except by reason of lapse of time) to create a valid and perfected and
first-priority Lien on or Security Interest in any material portion of the
Collateral purported to be covered thereby, subject only to Permitted Liens (as
defined herein or under the Parent Guaranty);
(m) There shall occur any Change of Control;
(n) The Parent and its Subsidiaries shall, for any reason,
sell, transfer or otherwise dispose of all or any part of the CLEC Business
other than (i) for cash or other consideration reasonably satisfactory to the
Administrative Agent and (ii) otherwise on terms and conditions reasonably
satisfactory to the Administrative Agent;
(o) Upon the sale, transfer or other disposition of all or any
part of the CLEC Business by the Parent or its Subsidiaries, the Parent shall,
for any reason, fail to use, or fail to cause any Affiliate Guarantor to use,
the aggregate CLEC Net Proceeds received by the Parent or any Affiliate
Guarantor in connection with such sale, transfer or other disposition of all or
any part of the CLEC Business, FIRST, to make a repayment of intercompany
Indebtedness owing to the Borrower or its Subsidiaries in connection with any
loan made pursuant to Section 7.6(b) hereof, and, SECOND, provided that all
intercompany Indebtedness owing to the Borrower or its Subsidiaries in
connection with any loan made pursuant to Section 7.6(b) hereof has been repaid
in full, to make a contribution of equity to the Borrower in an amount not less
than the Loans then outstanding after giving effect to payments under the
intercompany Indebtedness referred to above;
(p) On or prior to the effective date of any consolidation,
merger or acquisition by the Parent with or into one or more of the YP Tel
Entities, the Parent shall, for any reason, fail to have received a signed
commitment reasonably satisfactory in all respects to the Administrative Agent
(which commitment remains in effect on the date of such consolidation, merger or
acquisition) to provide financing to the Parent or its Subsidiaries to repay in
full the Obligations;
(q) The Parent shall fail, for any reason, to provide to the
Administrative Agent an acknowledgment of senior debt status, substantially in
the form of EXHIBIT Q attached hereto , executed by each holder of the
Subordinated Notes (as defined in the Parent's Guaranty) no later than May 28,
1999; or
(r) Telecom Resources, Inc. and/or the Parent shall fail to
(i) make any filings required under Applicable Law to obtain approval to ▇▇▇▇▇ ▇
▇▇▇▇ in favor of the Administrative Agent (for itself and the Lenders) on (A)
the software and other assets comprising the "Operations Systems Service" and
(B) the equity of Telecom Resources, Inc., in each case, no later than May 28,
1999, (ii) thereafter, to diligently pursue any additional steps required to
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permit the granting of such Lien, and (iii) promptly after receipt of all such
approvals, execute and deliver to the Administrative Agent such documents as are
necessary and reasonably requested by the Administrative Agent to grant to the
Administrative Agent a first priority perfected security interest in such
assets.
Section 8.2 REMEDIES.
(a) If an Event of Default specified in Section 8.1 hereof
(other than an Event of Default under Section 8.1(f) or(g) hereof) shall have
occurred and shall be continuing, the Administrative Agent, at the request of
the Required Lenders subject to Section 9.8(a) hereof, shall (i) terminate the
Commitment, and/or (ii) declare the principal of and interest on the Loans and
the Notes and all other amounts owed to the Lenders and the Administrative Agent
under this Agreement, the Notes and any other Loan Documents to be forthwith due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived, anything in this Agreement, the Notes
or any other Loan Document to the contrary notwithstanding, and the Commitment
shall thereupon forthwith terminate.
(b) Upon the occurrence and continuance of an Event of Default
specified in Section 8.1(f) or (g) hereof, all principal, interest and other
amounts due hereunder and under the Notes, and all other Obligations, shall
thereupon and concurrently therewith become due and payable and the Commitment
shall forthwith terminate and the principal amount of the Loans outstanding
hereunder shall bear interest at the Default Rate, all without any action by the
Administrative Agent or the Lenders or the Required Lenders or any of them and
without presentment, demand, protest or other notice of any kind, all of which
are expressly waived, anything in this Agreement or in the other Loan Documents
to the contrary notwithstanding.
(c) Upon acceleration of the Notes, as provided in subsection
(a) or (b) of this Section 8.2, the Administrative Agent and the Lenders shall
have all of the post-default rights granted to them, or any of them, as
applicable under the Loan Documents and under Applicable Law.
(d) Upon acceleration of the Notes, as provided in subsection
(a) or (b) of this Section 8.2, the Administrative Agent shall have the right
(but not the obligation) upon the request of the Lenders to operate the business
of the Borrower and its Subsidiaries in accordance with the terms of the
licenses and pursuant to the terms and subject to any limitations contained in
the Security Documents and, within guidelines established by the Required
Lenders, to make any and all payments and expenditures reasonably necessary in
connection therewith, including, without limitation, payment of wages as
required under the Fair Labor Standards Act, as amended, and of any necessary
withholding taxes to state or federal authorities. In the event the Required
Lenders fail to agree upon the guidelines referred to in the preceding sentence
within six (6) Business Days after the Administrative Agent has begun to operate
the business of the Borrower, the Administrative Agent may, after giving three
(3) days' prior written notice to the Lenders of its intention to do so, make
such payments and expenditures as it deems reasonable and advisable in its sole
discretion to maintain the normal day-to-day operation of such business.
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Such payments and expenditures in excess of receipts shall constitute Advances
under this Agreement, not in excess of the amount of the Commitment. Advances
made pursuant to this Section 8.2(d) shall bear interest as provided in Section
2.3(d) hereof and shall be payable on demand. The making of one or more Advances
under this Section 8.2(d) shall not create any obligation on the part of the
Lenders to make any additional Advances hereunder. No exercise by the
Administrative Agent of the rights granted to it under this Section 8.2(d) shall
constitute a waiver of any other rights and remedies granted to the
Administrative Agent and the Lenders, or any of them, under this Agreement or at
law. The Borrower hereby irrevocably appoints the Administrative Agent as agent
for the Lenders, the true and lawful attorney of the Borrower, in its name and
stead and on its behalf, to execute, receipt for or otherwise act in connection
with any and all contracts, instruments or other documents in connection with
the operation of the Borrower's business in the exercise of the Administrative
Agent's and the Lenders' rights under this Section 8.2(d). Such power of
attorney is coupled with an interest and is irrevocable. The rights of the
Administrative Agent under this Section 8.2(d) shall be subject to its prior
compliance with Applicable Law, including, without limitation, the
Communications Act and FCC rules and policies promulgated thereunder, to the
extent applicable to the exercise of such rights.
(e) Upon acceleration of the Notes, as provided in subsection
(a) or (b) of this Section 8.2, the Administrative Agent, upon request of the
Required Lenders, shall have the right to the appointment of a receiver for the
properties and assets of the Borrower and its Subsidiaries, and the Borrower,
for itself and on behalf of its Subsidiaries, hereby consents to such rights and
such appointment and hereby waives any objection the Borrower or any Subsidiary
may have thereto or the right to have a bond or other security posted by the
Administrative Agent on behalf of the Lenders, in connection therewith. The
rights of the Administrative Agent under this Section 8.2(e) shall be subject to
its prior compliance with Applicable Law, including, without limitation, the
Communications Act and FCC rules and policies promulgated thereunder, to the
extent applicable to the exercise of such rights.
(f) The rights and remedies of the Administrative Agent and
the Lenders hereunder shall be cumulative, and not exclusive.
Section 8.3 PAYMENTS SUBSEQUENT TO DECLARATION OF EVENT OF DEFAULT.
Subsequent to the acceleration of the Loans under Section 8.2 hereof, payments
and prepayments under this Agreement made to the Administrative Agent and the
Lenders or otherwise received by any of such Persons (from realization on
Collateral for the Obligations or otherwise) shall be paid over to the
Administrative Agent (if necessary) and distributed by the Administrative Agent
as follows: FIRST, to the Administrative Agent's reasonable costs and expenses,
if any, incurred in connection with the collection of such payment or
prepayment, including, without limitation, any reasonable costs incurred by it
in connection with the sale or disposition of any Collateral for the Obligations
and all amounts under Section 11.2(b) and (c) hereof; SECOND, to the Lenders or
the Administrative Agent for any fees hereunder or under any of the other Loan
Documents then due and payable; THIRD, to the Lenders pro rata on the basis of
their respective unpaid principal amounts (except as provided in Section 2.2(e)
hereof), to the payment of any unpaid interest
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which may have accrued on the Obligations; FOURTH, to the Lenders pro rata based
on the Loans, then outstanding until all Loans have been paid in full (and, for
purposes of this clause, obligations under Interest Hedge Agreements with the
Lenders or any of them shall be paid on a pro rata basis with the Loans); FIFTH,
to the Lenders pro rata on the basis of their respective unpaid amounts, to the
payment of any other unpaid Obligations; and SIXTH, to the Borrower or as
otherwise required by law.
ARTICLE 9
THE ADMINISTRATIVE AGENT
Section 9.1 APPOINTMENT AND AUTHORIZATION. Each Lender hereby
irrevocably appoints and authorizes, and hereby agrees that it will require any
transferee of any of its interest in its portion of the Loans and in its Note
irrevocably to appoint and authorize, the Administrative Agent to take such
actions as its agent on its behalf and to exercise such powers hereunder and
under the other Loan Documents as are delegated by the terms hereof and thereof,
together with such powers as are reasonably incidental thereto. Neither the
Administrative Agent, nor any of its respective directors, officers, employees
or agents, shall be liable 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 as determined by a final, non-appealable
judicial order of a court of competent jurisdiction.
Section 9.2 INTEREST HOLDERS. The Administrative Agent may treat each
Lender, or the Person designated in the last notice filed with the
Administrative Agent, as the holder of all of the interests of such Lender in
its portion of the Loans and in its Note until written notice of transfer,
signed by such Lender (or the Person designated in the last notice filed with
the Administrative Agent) and by the Person designated in such written notice of
transfer, in form and substance satisfactory to the Administrative Agent, shall
have been filed with the Administrative Agent.
Section 9.3 CONSULTATION WITH COUNSEL. The Administrative Agent may
consult with Powell, Goldstein, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, Atlanta, Georgia, special
counsel to the Administrative Agent, or with other legal counsel selected by it
and shall not be liable for any action taken or suffered by it in good faith in
consultation with the Required Lenders and in reasonable reliance on such
consultations.
Section 9.4 DOCUMENTS. The Administrative Agent shall be under no duty
to examine, inquire into, or pass upon the validity, effectiveness or
genuineness of this Agreement, any Note, any other Loan Document, or any
instrument, document or communication furnished pursuant hereto or in connection
herewith, and the Administrative Agent shall be entitled to assume that they are
valid, effective and genuine, have been signed or sent by the proper parties and
are what they purport to be.
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Section 9.5 ADMINISTRATIVE AGENT AND AFFILIATES. With respect to the
Commitments and the Loans, the Administrative Agent shall have the same rights
and powers hereunder as any other Lender and the Administrative Agent and
Affiliates of the Administrative Agent may accept deposits from, lend money to
and generally engage in any kind of business with the Borrower, any of its
Subsidiaries or any Affiliates of, or Persons doing business with, the Borrower,
as if they were not affiliated with the Administrative Agent and without any
obligation to account therefor.
Section 9.6 RESPONSIBILITY OF THE ADMINISTRATIVE AGENT. The duties and
obligations of the Administrative Agent under this Agreement are only those
expressly set forth in this Agreement. The Administrative Agent shall be
entitled to assume that no Default or Event of Default has occurred and is
continuing unless it has actual knowledge, or has been notified in writing by
the Borrower, of such fact, or has been notified by a Lender in writing that
such Lender considers that a Default or an Event of Default has occurred and is
continuing, and such Lender shall specify in detail the nature thereof in
writing. The Administrative Agent shall not be liable hereunder for any action
taken or omitted to be taken except for its own gross negligence or willful
misconduct as determined by a final, non-appealable judicial order of a court of
competent jurisdiction. The Administrative Agent shall provide each Lender with
copies of such documents received from the Borrower as such Lender may
reasonably request.
Section 9.7 ACTION BY THE ADMINISTRATIVE AGENT.
(a) The Administrative Agent shall be entitled to use its
discretion with respect to exercising or refraining from exercising any rights
which may be vested in it by, and with respect to taking or refraining from
taking any action or actions which it may be able to take under or in respect
of, this Agreement, unless the Administrative Agent shall have been instructed
by the Required Lenders to exercise or refrain from exercising such rights or to
take or refrain from taking such action, PROVIDED that the Administrative Agent
shall not exercise any rights under Section 8.2(a) hereof without the request of
the Required Lenders (or, where expressly required, all of the Lenders) unless
time is of the essence, in which case, such action can be taken at the request
of the Administrative Agent. The Administrative Agent shall incur no liability
under or in respect of this Agreement with respect to anything which it may do
or refrain from doing in the reasonable exercise of its judgment or which may
seem to it to be necessary or desirable in the circumstances, except for its
gross negligence or willful misconduct as determined by a final, non-appealable
judicial order of a court having jurisdiction over the subject matter.
(b) The Administrative Agent shall not be liable to the
Lenders or to any Lender or the Borrower or any of the Borrower's Subsidiaries
in acting or refraining from acting under this Agreement or any other Loan
Document in accordance with the instructions of the Required Lenders (or, where
expressly required, all of the Lenders), and any action taken or failure to act
pursuant to such instructions shall be binding on all Lenders, except for its
gross negligence or willful misconduct as determined by a final, non-appealable
judicial order of a court having jurisdiction over the subject matter. The
Administrative Agent shall not be
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obligated to take any action which is contrary to law or which would in its
reasonable opinion subject it to liability.
Section 9.8 NOTICE OF DEFAULT OR EVENT OF DEFAULT. In the event that
the Administrative Agent or any Lender shall acquire actual knowledge, or shall
have been notified, of any Default or Event of Default, the Administrative Agent
or such Lender shall promptly notify the Lenders (provided failure to give such
notice shall not result in any liability on the part of such Lender or
Administrative Agent), and the Administrative Agent shall take such action and
assert such rights under this Agreement and the other Loan Documents as the
Required Lenders shall request in writing, and the Administrative Agent shall
not be subject to any liability by reason of its acting pursuant to any such
request. If the Required Lenders shall fail to request the Administrative Agent
to take action or to assert rights under this Agreement or any other Loan
Documents in respect of any Default or Event of Default within ten (10) days
after their receipt of the notice of any Default or Event of Default from the
Administrative Agent or any Lender, or shall request inconsistent action with
respect to such Default or Event of Default, the Administrative Agent may, but
shall not be required to, take such action and assert such rights (other than
rights under Article 8 hereof) as it deems in its discretion to be advisable for
the protection of the Lenders, except that, if the Required Lenders have
instructed the Administrative Agent not to take such action or assert such
right, in no event shall the Administrative Agent act contrary to such
instructions unless time is of the essence, in which case, the Administrative
Agent may act in accordance with its reasonable discretion.
Section 9.9 RESPONSIBILITY DISCLAIMED. The Administrative Agent shall
not be under any liability or responsibility whatsoever as Administrative Agent:
(a) To the Borrower or any other Person as a consequence of
any failure or delay in performance by or any breach by, any Lender or Lenders
of any of its or their obligations under this Agreement;
(b) To any Lender or Lenders, as a consequence of any failure
or delay in performance by, or any breach by, (i) the Borrower of any of its
obligations under this Agreement or the Notes or any other Loan Document, or
(ii) any Subsidiary of the Borrower or any other obligor under any other Loan
Document;
(c) To any Lender or Lenders, for any statements,
representations or warranties in this Agreement, or any other document
contemplated by this Agreement or any information provided pursuant to this
Agreement, any other Loan Document, or any other document contemplated by this
Agreement, or for the validity, effectiveness, enforceability or sufficiency of
this Agreement, the Notes, any other Loan Document, or any other document
contemplated by this Agreement; or
(d) To any Person for any act or omission other than that
arising from gross negligence or willful misconduct of the Administrative Agent
as determined by a final, non-appealable judicial order of a court of competent
jurisdiction.
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Section 9.10 INDEMNIFICATION. The Lenders agree to indemnify the
Administrative Agent (to the extent not reimbursed by the Borrower) pro rata
according to their respective Commitment Ratios, from and against any and all
liabilities, obligations, losses (other than the loss of principal and interest
hereunder in the event of a bankruptcy or out-of-court `work-out' of the Loans),
damages, penalties, actions, judgments, suits, costs, expenses (including fees
and expenses of experts, agents, consultants and counsel), or disbursements of
any kind or nature whatsoever which may be imposed on, incurred by or asserted
against the Administrative Agent in any way relating to or arising out of this
Agreement, any other Loan Document, or any other document contemplated by this
Agreement or any other Loan Document or any action taken or omitted by the
Administrative Agent under this Agreement, any other Loan Document, or any other
document contemplated by this Agreement, except that no Lender shall be liable
to the Administrative Agent for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, or
disbursements resulting from the gross negligence or willful misconduct of the
Administrative Agent as determined by a final, non-appealable judicial order of
a court having jurisdiction over the subject matter.
Section 9.11 CREDIT DECISION. Each Lender represents and warrants to
each other and to the Administrative Agent that:
(a) In making its decision to enter into this Agreement and to
make its portion of the Loans it has independently taken whatever steps it
considers necessary to evaluate the financial condition and affairs of the
Borrower and that it has made an independent credit judgment, and that it has
not relied upon the Administrative Agent or information provided by the
Administrative Agent (other than information provided to the Administrative
Agent by the Borrower and forwarded by the Administrative Agent to the Lenders);
and
(b) So long as any portion of the Loans remains outstanding or
such Lender has an obligation to make its portion of Advances hereunder, it will
continue to make its own independent evaluation of the financial condition and
affairs of the Borrower.
Section 9.12 SUCCESSOR ADMINISTRATIVE AGENT. Subject to the appointment
and acceptance of a successor Administrative Agent as provided below, the
Administrative Agent may resign at any time by giving written notice thereof to
the Lenders and the Borrower and may be removed at any time for cause by the
Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint a successor Administrative Agent which
appointment shall, prior to a Default, be subject to the consent of the
Borrower, acting reasonably. If (a) no successor Administrative Agent shall have
been so appointed by the Required Lenders or (b) if appointed, no successor
Administrative Agent shall have accepted such appointment within thirty (30)
days after the retiring Administrative Agent gave notice of resignation or the
Required Lenders removed the retiring Administrative Agent, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent which shall be any Lender or a commercial bank organized
under the laws of the United States of America or any political subdivision
thereof which has combined capital and reserves in
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excess of $250,000,000 and which shall be reasonably acceptable to the Borrower.
Upon the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges,
duties and obligations of the retiring Administrative Agent and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents. After any retiring Administrative
Agent's resignation or removal hereunder as Administrative Agent the provisions
of this Article 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
Administrative Agent. In the event that the Administrative Agent or any of its
respective affiliates ceases to be a Lender hereunder, such Person shall resign
its agency hereunder.
Section 9.13 DELEGATION OF DUTIES. The Administrative Agent may execute
any of its duties under the Loan Documents by or through agents or attorneys
selected by it using reasonable care, and shall be entitled to advice of counsel
concerning all matters pertaining to such duties.
Section 9.14 BORROWER'S RIGHT TO PROCEED AGAINST LENDERS. In the event
that any Lender fails or refuses to perform its obligations as provided herein
(a "NONPERFORMING LENDER"), Borrower reserves and shall have the right to
proceed against any such Nonperforming Lender, including, without limitation,
the right to pursue all legal and equitable remedies available to Borrower in
connection with the breach of any Nonperforming Lender's obligations as provided
herein; each Lender hereby specifically acknowledges such right of Borrower.
ARTICLE 10
CHANGE IN CIRCUMSTANCES AFFECTING LIBOR ADVANCES
Section 10.1 LIBOR BASIS DETERMINATION INADEQUATE OR UNFAIR. If with
respect to any proposed LIBOR Advance for any Interest Period, the
Administrative Agent determines after consultation with the Lenders that
deposits in dollars (in the applicable amount) are not being offered to each of
the Lenders in the relevant market for such Interest Period, the Administrative
Agent shall forthwith give notice thereof to the Borrower and the Lenders,
whereupon until the Administrative Agent notifies the Borrower that the
circumstances giving rise to such situation no longer exist, the obligations of
any affected Lender to make its portion of such LIBOR Advances shall be
suspended.
Section 10.2 ILLEGALITY. If after the date hereof, the adoption of any
Applicable Law, or any change in any Applicable Law (whether adopted before or
after the Agreement Date), or any change in interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any Lender
with any directive (whether or not having the force of law) of any such
authority, central bank or comparable agency, shall make it unlawful or
impossible for any Lender to make, maintain or fund its portion of LIBOR
Advances, such Lender shall so notify the Administrative
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Agent, and the Administrative Agent shall forthwith give notice thereof to the
other Lenders and the Borrower. Before giving any notice to the Administrative
Agent pursuant to this Section 10.2, such Lender shall designate a different
lending office if such designation will avoid the need for giving such notice
and will not, in the sole reasonable judgment of such Lender, be otherwise
materially disadvantageous to such Lender. Upon receipt of such notice,
notwithstanding anything contained in Article 2 hereof, the Borrower shall repay
in full the then outstanding principal amount of such Lender's portion of each
affected LIBOR Advance, together with accrued interest thereon, on either (a)
the last day of the then current Interest Period applicable to such affected
LIBOR Advances if such Lender may lawfully continue to maintain and fund its
portion of such LIBOR Advance to such day or (b) immediately if such Lender may
not lawfully continue to fund and maintain its portion of such affected LIBOR
Advances to such day. Concurrently with repaying such portion of each affected
LIBOR Advance, the Borrower may borrow a Base Rate Advance from such Lender,
whether or not it would have been entitled to effect such borrowing and such
Lender shall make such Advance, if so requested, in an amount such that the
outstanding principal amount of the affected Note held by such Lender shall
equal the outstanding principal amount of such Note or Notes immediately prior
to such repayment. The obligation of such Lender to make LIBOR Advances is
suspended only until such time as it is once more possible and legal for such
Lender to make fund and maintain LIBOR Advances.
Section 10.3 INCREASED COSTS.
(a) If after the date hereof, the adoption of any Applicable
Law, or any change in any Applicable Law (whether adopted before or after the
Agreement Date), or any interpretation or change in interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof or compliance
by any Lender with any directive (whether or not having the force of law) of any
such authority, central bank or comparable agency:
(1) shall subject any Lender to any tax, duty or
other charge with respect to its obligation to make its portion of
LIBOR Advances, or its portion of existing Advances, or shall change
the basis of taxation of payments to any Lender of the principal of or
interest on its portion of LIBOR Advances or in respect of any other
amounts due under this Agreement, in respect of its portion of LIBOR
Advances or its obligation to make its portion of LIBOR Advances
(except for changes in the rate or method of calculation of tax on the
revenues or net income of such Lender); or
(2) shall impose, modify or deem applicable any
reserve (including, without limitation, any imposed by the Board of
Governors of the Federal Reserve System, but excluding any included in
an applicable Eurodollar Reserve Percentage), special deposit, capital
adequacy, assessment or other requirement or condition against assets
of, deposits with or for the account of, or commitments or credit
extended by, any Lender or shall impose on any Lender or the London
interbank borrowing market any
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other condition affecting its obligation to make its portion of such
LIBOR Advances or its portion of existing Advances;
and the result of any of the foregoing is to increase the cost to such Lender of
making or maintaining any of its portion of LIBOR Advances, or to reduce the
amount of any sum received or receivable by such Lender under this Agreement or
under its Note with respect thereto, then, within ten (10) days after demand by
such Lender, the Borrower agrees to pay to such Lender such additional amount or
amounts as will compensate such Lender for such increased costs. Each Lender
will promptly notify the Borrower and the Administrative Agent of any event of
which it has knowledge, occurring after the date hereof, which will entitle such
Lender to compensation pursuant to this Section 10.3 and will designate a
different lending office if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the sole reasonable judgment
of such Lender made in good faith, be otherwise materially disadvantageous to
such Lender.
(b) Any Lender claiming compensation under this Section 10.3
shall provide the Borrower with a written certificate setting forth the
additional amount or amounts to be paid to it hereunder and calculations
therefor in reasonable detail. Such certificate shall be presumptively correct
absent manifest error. In determining such amount, such Lender may use any
reasonable averaging and attribution methods. If any Lender demands compensation
under this Section 10.3, the Borrower may at any time, upon at least five (5)
Business Days' prior notice to such Lender, prepay in full such Lender's portion
of the then outstanding LIBOR Advances, together with accrued interest thereon
to the date of prepayment, along with any reimbursement required under Section
2.9 hereof. Concurrently with prepaying such portion of LIBOR Advances the
Borrower may, whether or not then entitled to make such borrowing, borrow a Base
Rate Advance, or a LIBOR Advance not so affected, from such Lender, and such
Lender shall, if so requested, make such Advance in an amount such that the
outstanding principal amount of the affected Note or Notes held by such Lender
shall equal the outstanding principal amount of such Note or Notes immediately
prior to such prepayment.
Section 10.4 EFFECT ON OTHER ADVANCES. If notice has been given
pursuant to Section 10.1, 10.2 or 10.3 suspending the obligation of any Lender
to make its portion of any type of LIBOR Advance, or requiring such Lender's
portion of LIBOR Advances to be repaid or prepaid, then, unless and until such
Lender notifies the Borrower that the circumstances giving rise to such
repayment no longer apply, all amounts which would otherwise be made by such
Lender as its portion of LIBOR Advances shall, unless otherwise notified by the
Borrower, be made instead as Base Rate Advances.
ARTICLE 11
MISCELLANEOUS
Section 11.1 NOTICES.
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(a) Except as otherwise expressly provided herein, all notices
and other communications under this Agreement and the other Loan Documents
(unless otherwise specifically stated therein) shall be in writing and shall be
deemed to have been given three (3) Business Days after deposit in the mail,
designated as certified mail, return receipt requested, postage-prepaid, or one
(1) Business Day after being entrusted to a reputable commercial overnight
delivery service for next day delivery, or when sent on a Business Day prior to
5:00 p.m. (Los Angeles, California time) by telecopy addressed to the party to
which such notice is directed at its address determined as provided in this
Section 11.1. All notices and other communications under this Agreement shall be
given to the parties hereto at the following addresses:
(i) If to the Borrower or its Subsidiaries, to it (or them) at:
Great Western Directories, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
WITH COPY TO:
Blackwell, Sanders, ▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇, Esq.
▇▇▇▇ ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) If to the Administrative Agent, to it at:
Bank of America National Trust and Savings Association
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
11th Floor, Unit 3283
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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WITH A COPY TO:
Powell, Goldstein, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
Sixteenth Floor
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(iii) If to the Lenders, to them at the addresses set forth on
SCHEDULE 7 hereto.
The failure to provide copies shall not affect the validity of the notice given
to the primary recipient.
(b) Any party hereto may change the address to which notices
shall be directed under this Section 11.1 by giving ten (10) days' written
notice of such change to the other parties.
Section 11.2 EXPENSES. The Borrower will promptly pay, or reimburse:
(a) all reasonable out-of-pocket expenses of the
Administrative Agent in connection with the preparation, negotiation, execution
and delivery of this Agreement and the other Loan Documents, and the
transactions contemplated hereunder and thereunder and the making of the initial
Advance hereunder (whether or not such Advance is made), including, but not
limited to, the reasonable fees and disbursements of Powell, Goldstein, ▇▇▇▇▇▇ &
▇▇▇▇▇▇ LLP, Atlanta, Georgia, special counsel for the Administrative Agent; and
(b) all reasonable out-of-pocket costs and expenses of the
Administrative Agent and the Lenders of enforcement under this Agreement or the
other Loan Documents and all reasonable out-of-pocket costs and expenses of
collection if an Event of Default occurs in the payment of the Notes, which in
each case shall include reasonable fees and out-of-pocket expenses of counsel
for the Administrative Agent and the Lenders.
Section 11.3 WAIVERS. The rights and remedies of the Administrative
Agent and the Lenders under this Agreement and the other Loan Documents shall be
cumulative and not exclusive of any rights or remedies which they would
otherwise have. No failure or delay by the Administrative Agent, the Required
Lenders, or the Lenders, or any of them, in exercising any right, shall operate
as a waiver of such right. The Administrative Agent and the Lenders expressly
reserve the right to require strict compliance with the terms of this Agreement
in connection with any future funding of a Request for Advance. In the event the
Lenders decide to fund a Request for Advance at a time when the Borrower is not
in strict compliance with the terms of this Agreement, such decision by the
Lenders shall not be deemed to constitute an undertaking by the Lenders to fund
any further Request for Advance or preclude the Lenders or the Administrative
Agent from exercising any rights available under the Loan Documents or at
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law or equity. Any waiver or indulgence granted by the Administrative Agent, the
Lenders, or the Required Lenders, shall not constitute a modification of this
Agreement or any other Loan Document, except to the extent expressly provided in
such waiver or indulgence, or constitute a course of dealing at variance with
the terms of this Agreement or any other Loan Document such as to require
further notice of their intent to require strict adherence to the terms of this
Agreement or any other Loan Document in the future.
Section 11.4 SET-OFF. In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
upon the occurrence of an Event of Default and during the continuation thereof,
the Administrative Agent and each of the Lenders are hereby authorized by the
Borrower at any time or from time to time, without notice to the Borrower or to
any other Person, any such notice being hereby expressly waived, to set off and
to appropriate and to apply any and all deposits (general or special, time or
demand, including, but not limited to, Indebtedness evidenced by certificates of
deposit, in each case whether matured or unmatured) and any other Indebtedness
at any time held or owing by any Lender or Administrative Agent, to or for the
credit or the account of the Borrower or any of its Subsidiaries, against and on
account of the obligations and liabilities of the Borrower to the Lenders and
the Administrative Agent, including, but not limited to, all Obligations and any
other claims of any nature or description arising out of or connected with this
Agreement, the Notes or any other Loan Document, irrespective of whether (a) any
Lender or Administrative Agent shall have made any demand hereunder or (b) any
Lender or Administrative Agent shall have declared the principal of and interest
on the Loans and other amounts due hereunder to be due and payable as permitted
by Section 8.2 hereof and although such obligations and liabilities or any of
them shall be contingent or unmatured. Upon direction by the Administrative
Agent with the consent of all of the Lenders each Lender holding deposits of the
Borrower or any of its Subsidiaries shall exercise its set-off rights as so
directed.
Section 11.5 ASSIGNMENT.
(a) The Borrower may not assign or transfer any of its rights
or obligations hereunder, under the Notes or under any other Loan Document
without the prior written consent of each Lender.
(b) Each Lender may sell (i) assignments of any amount of its
interest hereunder to any Lender, or (ii) assignments or participations of one
hundred percent (100%) (or, with the consent of the Borrower, a smaller
percentage) of its interest hereunder to (A) one or more wholly-owned Affiliates
of such Lender (PROVIDED that, if such Affiliate is not a financial institution,
such Lender shall be obligated to repurchase such assignment if such Affiliate
is unable to honor its obligations hereunder), or (B) 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 assignment shall relieve such Lender from its obligations hereunder).
(c) Each of the Lenders may at any time enter into assignment
agreements or participations with one or more other banks or other Persons
pursuant to which each Lender may
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assign or participate its interest under this Agreement and the other Loan
Documents, including, its interest in any particular Advance or portion thereof,
PROVIDED that (1) all assignments (other than assignments described in Section
11.5(b) hereof) shall be in minimum principal amounts of the LESSER of (X)
$5,000,000, and (Y) the amount of such Lender's Commitment, and (2) all
assignments (other than assignments described in Section 11.5(b) hereof) and
participations hereunder shall be subject to the following additional terms and
conditions:
(i) No assignment shall be sold without the prior
consent of the Administrative Agent and prior to the occurrence and
continuation of an Event of Default, the consent of the Borrower, which
consents shall not be unreasonably withheld;
(ii) Any Person purchasing a participation or an
assignment of any portion of the Loans from any Lender shall be
required to represent and warrant that its purchase shall not
constitute a "prohibited transaction" (as defined in Section 4.1(m)
hereof);
(iii) The Borrower, the Lenders, and the Administrative
Agent agree that assignments permitted hereunder (including the
assignment of any Advance or portion thereof) may be made with all
voting rights, and shall be made pursuant to an Assignment and
Assumption Agreement. An administrative fee of $3,500 shall be payable
to the Administrative Agent by the assigning Lender at the time of any
assignment under this Section 11.5(b);
(iv) No participation agreement shall confer any rights
under this Agreement or any other Loan Document to any purchaser
thereof, or relieve any issuing Lender from any of its obligations
under this Agreement, and all actions hereunder shall be conducted as
if no such participation had been granted; PROVIDED, HOWEVER, that any
participation agreement may confer on the participant the right to
approve or disapprove decreases in the interest rate, increases in the
principal amount of the Loans participated in by such participant,
decreases in fees, extensions of the Maturity Date, or other principal
payment date for the Loans and releases of Collateral;
(v) Each Lender agrees to provide the Administrative
Agent and the Borrower with prompt written notice of any issuance of
participations in or assignments of its interests hereunder;
(vi) No assignment, participation or other transfer of
any rights hereunder or under the Notes shall be effected that would
result in any interest requiring registration under the Securities Act
of 1933, as amended, or qualification under any state securities law;
(vii) No such assignment may be made to any bank or other
financial institution (x) with respect to which a receiver or
conservator (including, without limitation, the Federal Deposit
Insurance Corporation, the Resolution Trust Company or
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the Office of Thrift Supervision) has been appointed or (y) that is not
"adequately capitalized" (as such term is defined in Section
131(b)(1)(B) of the Federal Deposit Insurance Corporation Improvement
Act as in effect on the Agreement Date); and
(viii) If applicable, each Lender shall, and shall cause
each of its assignees to, provide to the Administrative Agent on or
prior to the effective date of any assignment an appropriate Internal
Revenue Service form as required by Applicable Law supporting such
Lender's or assignee's position that no withholding by the Borrower or
the Administrative Agent for United States. income tax payable by such
Bank or assignee in respect of amounts received by it hereunder is
required. For purposes of this Agreement, an appropriate Internal
Revenue Service form shall mean Form 1001 (Ownership Exemption or
Reduced Rate Certificate of the United States. Department of Treasury),
or Form 4224 (Exemption from Withholding of Tax on Income Effectively
Connected with the Conduct of a Trade or Business in the United
States), or any successor or related forms adopted by the relevant
United States taxing authorities.
(d) Except as specifically set forth in Section 11.5(b) or (c)
hereof, nothing in this Agreement or the Notes, expressed or implied, is
intended to or shall confer on any Person other than the respective parties
hereto and thereto and their successors and assignees permitted hereunder and
thereunder any benefit or any legal or equitable right, remedy or other claim
under this Agreement or the Notes.
(e) In the case of any participation, all amounts payable by
the Borrower under the Loan Documents shall be calculated and made in the manner
and to the parties hereto as if no such participation had been sold.
(f) The provisions of this Section 11.5 shall not apply to any
purchase of participations among the Lenders pursuant to Section 2.10 hereof.
(g) A Lender may furnish any information concerning the
Borrower in the possession of such Lender from time to time to assignees and
participants (including prospective assignees and participants) subject,
however, to and so long as the recipient agrees in writing to be bound by the
provision of Section 11.19 hereof. In addition, the Administrative Agent may
furnish any information concerning any Obligor or any of its Affiliates in the
Administrative Agent's possession to any Affiliate of Administrative Agent,
subject, however, to the provisions of Section 11.19 hereof. The Obligors shall
assist any Lender in effectuating any assignment or participation pursuant to
this Section 11.5 hereof (including during syndication) in whatever manner such
Lender reasonably deems necessary, including participation in meetings with
prospective transferees.
Section 11.6 ACCOUNTING PRINCIPLES. All references in this Agreement to
GAAP shall be to such principles as in effect from time to time. All accounting
terms used herein without definition shall be used as defined under GAAP. All
references to the financial statements of the
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Borrower and to its EBITDA, Interest Expense and Total Debt, and other such
terms shall be deemed to refer to such items of the Borrower and its
Subsidiaries, on a fully consolidated basis.
Section 11.7 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.
Section 11.8 GOVERNING LAW. This Agreement and the Notes shall be
construed in accordance with and governed by the internal laws of the State of
California applicable to agreements made and to be performed in California. If
any action or proceeding shall be brought by the Administrative Agent or any
Lender hereunder or under any other Loan Document in order to enforce any right
or remedy under this Agreement or under any Note or any other Loan Document, the
Borrower hereby consents and will, and the Borrower will cause each Subsidiary
to, submit to the jurisdiction of any state or federal court of competent
jurisdiction sitting within the area comprising the Southern District of
California on the date of this Agreement. The Borrower, for itself and on behalf
of its Subsidiaries, hereby agrees that, to the extent permitted by Applicable
Law, service of the summons and complaint and all other process which may be
served in any such suit, action or proceeding may be effected by mailing by
registered mail a copy of such process to the offices of the Borrower at the
address given in Section 11.1 hereof and that personal service of process shall
not be required. Nothing herein shall be construed to prohibit service of
process by any other method permitted by law, or the bringing of any suit,
action or proceeding in any other jurisdiction. The Borrower agrees that final
judgment in such suit, action or proceeding shall be conclusive and may be
enforced in any other jurisdiction by suit on the judgment or in any other
manner provided by Applicable Law.
Section 11.9 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof in that jurisdiction or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 11.10 INTEREST.
(a) In no event shall the amount of interest due or payable
hereunder or under the Notes exceed the maximum rate of interest allowed by
Applicable Law, and in the event any such payment is inadvertently made by the
Borrower or inadvertently received by the Administrative Agent or any Lender,
then such excess sum shall be credited as a payment of principal, unless the
Borrower shall notify the Administrative Agent or such Lender, in writing, that
it elects to have such excess sum returned forthwith. It is the express intent
hereof that the Borrower not pay and the Administrative Agent and the Lenders
not receive, directly or indirectly in any manner whatsoever, interest in excess
of that which may legally be paid by the Borrower under Applicable Law.
(b) Notwithstanding the use by the Lenders of the Base Rate
and the LIBOR as reference rates for the determination of interest on the Loans,
the Lenders shall be under no
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obligation to obtain funds from any particular source in order to charge
interest to the Borrower at interest rates related to such reference rates.
Section 11.11 TABLE OF CONTENTS AND HEADINGS. The Table of Contents and
the headings of the various subdivisions used in this Agreement are for
convenience only and shall not in any way modify or amend any of the terms or
provisions hereof, nor be used in connection with the interpretation of any
provision hereof.
Section 11.12 AMENDMENT AND WAIVER. Neither this Agreement nor any Loan
Document nor any term hereof or thereof may be amended orally, nor may any
provision hereof or thereof be waived orally but only by an instrument in
writing signed by or at the direction of the Required Lenders and, in the case
of an amendment, by the Borrower, except that in the event of (a) any increase
in the amount of any Lender's portion of the Commitment, (b) any delay or
extension in the terms of repayment of the Loans provided in Section 2.4 or 2.6
hereof, (c) any reduction in principal, interest or fees due hereunder or
postponement of the payment thereof without a corresponding payment of such
principal, interest or fee amount by the Borrower, (d) any release of any
portion of the Collateral for the Loans, except under Section 7.4 hereof or as
permitted under the Parent Guaranty, (e) any waiver of any Default due to the
failure by the Borrower to pay any sum due to any of the Lenders hereunder, (f)
any release of any Guaranty of all or any portion of the Obligations, except in
connection with a merger, sale or other disposition otherwise permitted
hereunder (in which case, such release shall require no further approval by the
Lenders or as permitted under the Parent Guaranty), (g) any amendment to the pro
rata treatment of the Lenders set forth in Section 2.10 hereof, or (h) any
amendment of this Section 11.12, of the definition of Required Lenders, or of
any Section herein to the extent that such Section requires action by all
Lenders, any amendment or waiver or consent may be made only by an instrument in
writing signed by each of the Lenders and, in the case of an amendment, by the
Borrower. Any amendment to any provision hereunder governing the rights,
obligations, or liabilities of the Administrative Agent in its capacity as such,
may be made only by an instrument in writing signed by such affected Person and
by each of the Lenders.
Section 11.13 ENTIRE AGREEMENT. Except as otherwise expressly provided
herein, this Agreement and the other documents described or contemplated herein
will embody the entire agreement and understanding among the parties hereto and
thereto and supersede all prior agreements and understandings relating to the
subject matter hereof and thereof.
Section 11.14 OTHER RELATIONSHIPS. No relationship created hereunder or
under any other Loan Document shall in any way affect the ability of the
Administrative Agent and each Lender to enter into or maintain business
relationships with the Borrower or any of its Affiliates beyond the
relationships specifically contemplated by this Agreement and the other Loan
Documents.
Section 11.15 DIRECTLY OR INDIRECTLY. If any provision in this
Agreement refers to any action taken or to be taken by any Person, or which such
Person is prohibited from taking, such provision shall be applicable whether
such action is taken directly or indirectly by such Person, whether or not
expressly specified in such provision.
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Section 11.16 RELIANCE ON AND SURVIVAL OF VARIOUS PROVISIONS. All
covenants, agreements, statements, representations and warranties made herein or
in any certificate delivered pursuant hereto (i) shall be deemed to have been
relied upon by the Administrative Agent and each of the Lenders notwithstanding
any investigation heretofore or hereafter made by them, and (ii) shall survive
the execution and delivery of the Notes and shall continue in full force and
effect so long as any Note is outstanding and unpaid. Any right to
indemnification hereunder, including, without limitation, rights pursuant to
Sections 2.10, 2.12, 5.11, 10.3 and 11.2 hereof, shall survive the termination
of this Agreement and the payment and performance of all Obligations for three
hundred and sixty-five (365) days after the termination of this Agreement and
the payment and performance of all Obligations.
Section 11.17 OBLIGATIONS SEVERAL. The obligations of the
Administrative Agent and each of the Lenders hereunder are several, not joint.
Section 11.18 CONFIDENTIALITY. Each Lender agrees to keep confidential
information obtained by it pursuant hereto and the other Loan Documents
confidential in accordance with such Lender's customary practices and agrees
that it will only use such information in connection with the transactions
contemplated by this Agreement and not disclose any of such information other
than (a) to such Lender's employees, representatives, directors, attorneys,
auditors, agents, professional advisors, trustees or affiliates who are advised
of the confidential nature of such information or to any direct or indirect
contractual counterparty in swap agreements or such contractual counterparty's
professional advisor (so long as such contractual counterparty or professional
advisor to such contractual counterparty agrees to be bound by the provision of
this Section 11.19), (b) to the extent such information presently is or
hereafter becomes available to such Lender on a non-confidential basis from any
source of such information that is in the public domain at the time of
disclosure, (c) to the extent disclosure is required by law (including
applicable securities laws), regulation, subpoena or judicial order or process
(PROVIDED that notice of such requirement or order shall be promptly furnished
to the Borrower unless such notice is legally prohibited) or requested or
required by bank, securities, insurance or investment company regulations or
auditors or any administrative body or commission (including the Securities
Valuation Office of the National Association of Insurance Commissioners) to
whose jurisdiction such Lender may be subject, (d) to any rating agency to the
extent required in connection with any rating to be assigned to such Lender, (e)
to assignees or participants or prospective assignees or participants who agree
to be bound by the provisions of this Section 11.19, (f) to the extent required
in connection with any litigation between any Obligor and any Lender with
respect to the Loans or this Agreement and the other Credit Documents or (g)
with the Borrower's prior written consent.
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ARTICLE 12
WAIVER OF JURY TRIAL
Section 12.1 WAIVER OF JURY TRIAL. THE BORROWER, FOR ITSELF AND ON
BEHALF OF ITS SUBSIDIARIES, AND THE ADMINISTRATIVE AGENT AND THE LENDERS, HEREBY
AGREE, TO THE EXTENT PERMITTED BY LAW, TO WAIVE AND HEREBY WAIVE THE RIGHT TO A
TRIAL BY JURY IN ANY COURT AND IN ANY ACTION OR PROCEEDING OF ANY TYPE IN WHICH
THE BORROWER, ANY OF THE BORROWER'S SUBSIDIARIES, ANY OF THE LENDERS, THE
ADMINISTRATIVE AGENT OR ANY OF THEIR RESPECTIVE SUCCESSORS OR ASSIGNS IS A
PARTY, AS TO ALL MATTERS AND THINGS ARISING DIRECTLY OR INDIRECTLY OUT OF THIS
AGREEMENT, ANY OF THE NOTES OR THE OTHER LOAN DOCUMENTS AND THE RELATIONS AMONG
THE PARTIES LISTED IN THIS SECTION 12.1. EXCEPT AS PROHIBITED BY LAW, EACH PARTY
TO THIS AGREEMENT WAIVES ANY RIGHTS IT MAY HAVE TO CLAIM OR RECOVER IN ANY
LITIGATION REFERRED TO IN THIS SECTION 12.1, ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES. EACH PARTY TO THIS AGREEMENT (i) CERTIFIES THAT NEITHER ANY
REPRESENTATIVE, AGENT OR ATTORNEY OF THE ADMINISTRATIVE AGENT OR ANY LENDER HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE ADMINISTRATIVE AGENT OR ANY LENDER
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND
(ii) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND EACH
OTHER LOAN DOCUMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 12.1. THE PROVISIONS OF THIS SECTION 12.1 HAVE
BEEN FULLY DISCLOSED BY AND TO THE PARTIES AND THE PROVISIONS SHALL BE SUBJECT
TO NO EXCEPTIONS. NO PARTY HAS IN ANY WAY AGREED WITH OR REPRESENTED TO ANY
OTHER PARTY THAT THE PROVISIONS OF THIS SECTION 12.1 WILL NOT BE FULLY ENFORCED
IN ALL INSTANCES.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused it to be executed by their duly authorized officers, all as of the day
and year first above written.
BORROWER: GREAT WESTERN DIRECTORIES, INC.
By:
--------------------------------
Name:
-------------------------
Title:
------------------------
ADMINISTRATIVE AGENT: BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By:
--------------------------------
Name:
-------------------------
Title:
------------------------
LENDERS: BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By:
--------------------------------
Name:
-------------------------
Title:
------------------------
SCHEDULE 1
DESCRIPTION OF OWNERSHIP INTERESTS OWNED BY PLEDGOR
100% of capital stock of each of:
Great Western Directories, Inc.;
FirsTel, Inc.;
▇▇▇▇▇ Long Distance Service, Inc.;
Telecom Resources, Inc.
and
Valu-Line of Longview, Inc.
AFFILIATE'S GUARANTY
(TELECOM RESOURCES, INC.)
THIS AFFILIATE'S GUARANTY (the "GUARANTY") is made as of the 14th day of
May, 1999, by TELECOM RESOURCES, INC. (the "GUARANTOR"), in favor of the Lenders
(as defined in the Loan Agreement described below) and BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION, as administrative agent (the "ADMINISTRATIVE
AGENT") for itself and on behalf of the Lenders.
W I T N E S S E T H:
WHEREAS, Great Western Directories, Inc. (the "BORROWER"), the Lenders and
the Administrative Agent are all parties to that certain Loan Agreement dated as
of even date herewith (as amended, restated or supplemented from time to time,
the "LOAN AGREEMENT"); and
WHEREAS, pursuant to the terms of the Loan Agreement, the Guarantor is
required to execute and deliver this Guaranty; and
WHEREAS, the Guarantor and the Borrower are subsidiaries of Advanced
Communications Group Inc, (the "PARENT"); and
WHEREAS, the Parent, the Borrower and the Guarantor are mutually dependent
on each other in the conduct of their respective businesses as an integrated
operation, and the Borrower's ability to obtain financing needed from time to
time is dependent, in part, on the ability of the Guarantor to supply capital or
obtain financing, including, without limitation this Guaranty; and
WHEREAS, the Guarantor has determined that its execution, delivery and
performance of this Guaranty directly benefit, and are within the corporate
purposes and in the best interests of, the Guarantor; and
WHEREAS, as a condition to the extension of the Loans by the Lenders and
pursuant to the Loan Agreement, the Lenders have required the Guarantor to, and
the Guarantor is willing to, execute this Guaranty guaranteeing the payment and
performance by the Borrower of its obligations and covenants under the Loan
Agreement, the Notes and the other Loan Documents (the Loan Agreement, the Notes
and the other Loan Documents, as executed on the date hereof and as they may be
amended, modified or extended from time to time being hereinafter referred to
collectively as the "GUARANTEED AGREEMENTS"); and
WHEREAS, capitalized terms used herein and not otherwise defined shall be
used as defined in the Loan Agreement;
NOW, THEREFORE, in consideration of the above premises, Ten Dollars
($10.00) in hand paid and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Guarantor hereby
unconditionally guarantees to the Lenders and the Administrative Agent full and
prompt payment and performance when due whether at maturity,
by acceleration or otherwise of all Obligations under the Loan Agreement. Each
Obligation shall rank PARI PASSU with each other Obligation.
The Guarantor hereby further agrees, for the benefit of the Lenders and the
Administrative Agent, that:
1. OBLIGATIONS SEVERAL. Regardless of whether any proposed guarantor or
any other Person or Persons is, are or shall become in any other way responsible
to the Lenders and the Administrative Agent, or any of them, for or in respect
of the Obligations or any part thereof, and regardless of whether or not any
Person or Persons now or hereafter responsible to the Lenders and the
Administrative Agent, or any of them, for the Obligations or any part thereof,
whether under this Guaranty or otherwise, shall cease to be so liable, the
Guarantor hereby declares and agrees that this Guaranty is and shall continue to
be a several obligation, shall be a continuing guaranty and shall be operative
and binding, and that the Guarantor shall have no right of subrogation with
respect to this Guaranty until the Obligations have been paid and satisfied in
full.
2. GUARANTY FINAL. Upon the execution and delivery of this Guaranty to
the Administrative Agent, this Guaranty shall be deemed to be finally executed
and delivered by the Guarantor and shall not be subject to or affected by any
promise or condition affecting or limiting the Guarantor's liability, and no
statement, representation, agreement or promise on the part of the Lenders and
the Administrative Agent, the Borrower, or any of them, or any officer, employee
or agent thereof, unless contained herein forms any part of this Guaranty or has
induced the making hereof or shall be deemed in any way to affect the
Guarantor's liability hereunder.
3. AMENDMENT AND WAIVER. No alteration or waiver of this Guaranty or of
any of its terms, provisions or conditions shall be binding upon the Persons
against whom enforcement is sought unless made in writing and signed by an
authorized officer of such Person.
4. DEALINGS WITH BORROWER. The Lenders and the Administrative Agent, or
any of them, may, from time to time, without exonerating or releasing the
Guarantor in any way under this Guaranty, (i) take such further or other
security or securities for the Obligations or any part thereof as the Lenders
and the Administrative Agent, or any of them, may deem proper, consistent with
the Loan Agreement, or (ii) release, discharge, abandon or otherwise deal with
or fail to deal with any guarantor of the Obligations or any security or
securities therefor or any part thereof now or hereafter held by the Lenders and
the Administrative Agent, or any of them, or (iii) consistent with the Loan
Agreement, amend, modify, extend, accelerate or waive in any manner any of the
provisions, terms, or conditions of the Guaranteed Agreements, all as the
Lenders and the Administrative Agent, or any of them, may consider expedient or
appropriate in their sole discretion. Without limiting the generality of the
foregoing, or of Section 10 hereof, it is understood that the Lenders and the
Administrative Agent, or any of them, may, without exonerating or releasing the
Guarantor, give up, or modify or abstain from perfecting or taking advantage of
any security for the Obligations and accept or make any compositions or
arrangements, and realize upon any security for the Obligations when, and in
such manner, as the
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Lenders and the Administrative Agent, or any of them, may deem expedient,
consistent with the Loan Agreement, all without notice to the Guarantor, except
as required by Applicable Law.
5. GUARANTY UNCONDITIONAL. The Guarantor acknowledges and agrees that no
change in the nature or terms of the Obligations or any of the Guaranteed
Agreements, or other agreements, instruments or contracts evidencing, related to
or attendant with the Obligations (including any novation), nor any
determination of lack of enforceability thereof, shall discharge all or any part
of the liabilities and obligations of the Guarantor pursuant to this Guaranty;
it being the purpose and intent of the Guarantor, the Lenders and the
Administrative Agent that the covenants, agreements and all liabilities and
obligations of the Guarantor hereunder are absolute, unconditional and
irrevocable under any and all circumstances. Without limiting the generality of
the foregoing, the Guarantor agrees that until each and every one of the
covenants and agreements of this Guaranty is fully performed, the Guarantor's
undertakings hereunder shall not be released, in whole or in part, by any action
or thing which might, but for this paragraph of this Guaranty, be deemed a legal
or equitable discharge of a surety or guarantor, or by reason of any waiver,
omission of the Lenders and the Administrative Agent, or any of them, or their
failure to proceed promptly or otherwise, or by reason of any action taken or
omitted by the Lenders and the Administrative Agent, or any of them, whether or
not such action or failure to act varies or increases the risk of, or affects
the rights or remedies of, the Guarantor or by reason of any further dealings
between the Borrower, the Lenders and the Administrative Agent, or any of them,
or any other guarantor or surety, and the Guarantor, to the extent permitted by
Applicable Law, hereby expressly waives and surrenders any defense to its
liability hereunder, or any right of counterclaim or offset of any nature or
description which it may have or which may exist based upon, and shall be deemed
to have consented to, any of the foregoing acts, omissions, things, agreements
or waivers.
6. SET-OFF. The Lenders and the Administrative Agent, or any of them,
may, without demand or notice of any kind upon or to the Guarantor, at any time
or from time to time when any amount shall be due and payable hereunder by the
Guarantor, if the Borrower shall not have timely paid its Obligations, set off
and appropriate any property, balances, credit accounts or moneys of the
Guarantor (other than those held in a trust) in the possession of the Lenders
and the Administrative Agent, or any of them, or under the control of any of
them for any purpose, which property, balances, credit accounts or moneys shall
thereupon be turned over and remitted to the Administrative Agent, to be held
and applied to the Obligations by the Administrative Agent in accordance with
the Loan Agreement, and the Guarantor hereby grants to the Lenders and the
Administrative Agent, a security interest in all such property. The
Administrative Agent shall give written notice to the Borrower of the exercise
of any of the foregoing rights within one (1) Business Day following the
exercise thereof.
7. MAXIMUM GUARANTEED AMOUNT. The creation or existence from time to time
of Obligations in excess of the amount committed to or outstanding on the date
of this Guaranty is hereby authorized by the Guarantor, without notice to the
Guarantor, and shall in no way impair or affect this Guaranty or the rights of
the Lenders and the Administrative Agent, or any of them, herein. Anything in
this Guaranty to be contrary notwithstanding, it is the intention of the
Guarantor, the Lenders and the Administrative Agent, that the Guarantor's
obligations hereunder
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shall be, but not in excess of, the Maximum Guaranteed Amount. The "MAXIMUM
GUARANTEED AMOUNT" shall mean the greater of (a) the amount of economic benefit
received (directly or indirectly) by the Guarantor pursuant to the Loan
Agreement and the other Loan Documents, and (b) the maximum amount which could
be paid out by the Guarantor without rendering this Guaranty void or voidable
under Applicable Law including, without limitation, (i) Title 11 of the United
States Code, as amended, and (ii) applicable state law regarding fraudulent
conveyances.
8. BANKRUPTCY. Upon the bankruptcy or winding up or other distribution of
assets of the Borrower or any Subsidiary of the Borrower or of any surety or
guarantor for the Obligations, the rights of the Lenders and the Administrative
Agent, or any of them, against the Guarantor shall not be affected or impaired
by the omission of the Lenders and the Administrative Agent, or any of them, to
prove its or their claim, as appropriate, or to prove its or their full claim,
as appropriate, and the Lenders and the Administrative Agent may prove such
claims as they see fit and may refrain from proving any claim and in their
respective discretion they may value as they see fit or refrain from valuing any
security held by the Lenders and the Administrative Agent, or any of them,
without in any way releasing, reducing or otherwise affecting the liability to
the Lenders and the Administrative Agent of the Guarantor.
9. APPLICATION OF PAYMENTS. Any amount received by the Lenders and the
Administrative Agent, or any of them, from whatsoever source and applied toward
the payment of the Obligations shall be applied in such order of application as
is set forth in the Loan Agreement.
10. WAIVERS BY GUARANTOR. The Guarantor hereby expressly waives, to the
extent permitted by Applicable Law: (a) notice of acceptance of this Guaranty,
(b) notice of the existence or creation of all or any of the Obligations, (c)
presentment, demand, notice of dishonor, protest, and all other notices
whatsoever, (d) all diligence in collection or protection of or realization upon
the Obligations or any part thereof, any obligation hereunder, or any security
for any of the foregoing and (e) all rights of subrogation, indemnification,
contribution and reimbursement against the Borrower, all rights to enforce any
remedy the Lenders and the Administrative Agent, or any of them, may have
against the Borrower and any benefit of, or right to participate in, any
collateral or security now or hereinafter held by the Lenders and the
Administrative Agent, or any of them, in respect of the Obligations, until
payment in full of the Obligations. Any money received by the Guarantor in
violation of this Section 10 shall be held in trust by the Guarantor for the
benefit of the Lenders and the Administrative Agent. If a claim is ever made
upon the Lenders and the Administrative Agent, or any of them, for the repayment
or recovery of any amount or amounts received by any of them in payment of any
of the Obligations and such Person repays all or part of such amount by reason
of (a) any judgment, decree, or order of any court or administrative body having
jurisdiction over such Person or any of its property, or (b) any good faith
settlement or compromise of any such claim effected by such Person with any such
claimant, including, without limitation, the Borrower, then in such event the
Guarantor agrees that any such judgment, decree, order, settlement, or
compromise shall be binding upon the Guarantor, notwithstanding any revocation
hereof or the cancellation of any promissory note or other instrument evidencing
any of the Obligations, and the Guarantor
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shall be and remain obligated to such Person hereunder for the amount so repaid
or recovered to the same extent as if such amount had never originally been
received by such Person.
11. ASSIGNMENT BY THE LENDERS AND THE ADMINISTRATIVE AGENT. To the extent
permitted under the Loan Agreement, the Lenders and the Administrative Agent may
each, and without notice of any kind, except as otherwise required by the Loan
Agreement, sell, assign or transfer all or any of the Obligations, and in such
event each and every immediate and successive assignee, transferee, or holder of
all or any of the Obligations, shall have the right to enforce this Guaranty, by
suit or otherwise, for the benefit of such assignee, transferee or holder as
fully as if such assignee, transferee or holder were herein by name specifically
given such rights, powers and benefits.
12. REMEDIES CUMULATIVE. No delay by the Lenders and the Administrative
Agent, or any of them, in the exercise of any right or remedy shall operate as a
waiver thereof, and no single or partial exercise by the Lenders and the
Administrative Agent, or any of them, of any right or remedy shall preclude
other or further exercise thereof or the exercise of any other right or remedy.
No action by the Lenders and the Administrative Agent, or any of them, permitted
hereunder shall in any way impair or affect this Guaranty. For the purpose of
this Guaranty, the Obligations shall include, without limitation, all
Obligations of the Borrower to the Lenders and the Administrative Agent
notwithstanding any right or power of any third party, individually or in the
name of the Borrower or any other Person, to assert any claim or defense as to
the invalidity or unenforceability of any such Obligation, and no such claim or
defense shall impair or affect the obligations of the Guarantor hereunder.
13. SUCCESSORS AND ASSIGNS. This Guaranty shall be binding upon the
Guarantor, its successors and assigns and inure to the benefit of the successors
and assigns of the Guarantor, the Lenders and the Administrative Agent. The
Guarantor shall not assign its rights or obligations under this Guaranty without
the consent of all the Lenders and the Administrative Agent, nor shall the
Guarantor amend this Guaranty, without the consent of the Administrative Agent
and the Required Lenders.
14. MISCELLANEOUS. This is a Guaranty of payment and not of collection. In
the event of a demand upon the Guarantor under this Guaranty, the Guarantor
shall be held and bound to the Lenders and the Administrative Agent directly as
debtor in respect of the payment of the amounts hereby guaranteed. All
reasonable costs and expenses, including, without limitation, attorneys' fees
and expenses, incurred by the Lenders and the Administrative Agent, or any of
them, in obtaining performance of or collecting payments due under this Guaranty
shall be deemed part of the Obligations guaranteed hereby. Any notice or demand
which the Lenders and the Administrative Agent, or any of them, may wish to give
shall be served upon the Guarantor in the fashion prescribed for notices in
Section 11.1 of the Loan Agreement in care of the Borrower at the address for
the Borrower set forth in or otherwise provided pursuant to Section 11.1 of the
Loan Agreement, and the notice so sent shall be deemed to be served as set forth
in Section 11.1 of the Loan Agreement.
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15. LOANS BENEFIT GUARANTOR. The Guarantor expressly represents and
acknowledges that any financial accommodations by the Lenders and the
Administrative Agent, or any of them, to the Borrower, including, without
limitation, the extension of the Loans, are and will be of direct interest,
benefit and advantage to the Guarantor.
16. SOLVENCY. The Guarantor expressly represents and warrants that as of
the date hereof and after giving effect to the transactions contemplated by the
Loan Documents (a) the property of the Guarantor, at a fair valuation, will
exceed its debt; (b) the capital of the Guarantor will not be unreasonably small
to conduct its business; (c) the Guarantor will not have incurred debts, or have
intended to incur debts, beyond its ability to pay such debts as they mature;
and (d) the present fair salable value of the assets of the Guarantor will be
materially greater than the amount that will be required to pay its probable
liabilities (including debts) as they become absolute and matured. For purposes
of this Section 20, "debt" means any liability on a claim, and "claim" means (i)
the right to payment, whether or not such right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, undisputed,
legal, equitable, secured or unsecured, or (ii) the right to an equitable remedy
for breach of performance if such breach gives rise to a right to payment,
whether or not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured, unmatured, undisputed, secured or unsecured.
17. VISITS AND INSPECTIONS. The Guarantor covenants and agrees that so
long as any amount is owing on account of Obligations or otherwise pursuant to
this Guaranty, the Guarantor shall permit representatives of the Lenders and the
Administrative Agent, or any of them, to visit and inspect properties of the
Guarantor to the extent set forth in Section 5.8 of the Loan Agreement.
18. GOVERNING LAW. This Guaranty shall be construed in accordance with and
governed by the internal laws of the State of California applicable to contracts
made and to be performed in the State of California.
19. JURISDICTION AND VENUE. If any action or proceeding shall be brought
by the Agent in order to enforce any right or remedy under this Guaranty, the
Guarantor hereby consents to the jurisdiction of any state or federal court of
competent jurisdiction sitting within the area comprising the Southern District
of California on the date of this Guaranty. The Guarantor hereby agrees, to the
extent permitted by Applicable Law that service of the summons and complaint and
all other process which may be served in any such suit, action or proceeding may
be effected by mailing by registered mail a copy of such process to the offices
of the Borrower, as set forth in or otherwise provided pursuant to Section 11.1
of the Loan Agreement, and that personal service of process shall not be
required. Nothing herein shall be construed to prohibit service of process by
any other method permitted by law, or the bringing of any suit, action or
proceeding in any other jurisdiction. The Guarantor agrees that final judgment
in such suit, action or proceeding shall be conclusive and may be enforced in
any other jurisdiction by suit on the judgment or in any other manner provided
by Applicable Law.
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20. WAIVER OF JURY TRIAL. EACH OF THE GUARANTOR, THE ADMINISTRATIVE AGENT
AND THE LENDERS WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY PROCEEDING ARISING
OUT OF THIS GUARANTY.
21. TIME OF THE ESSENCE. Time is of the essence with regard to the
Guarantor's performance of its obligations hereunder.
22. ADMINISTRATIVE AGENT. Each reference herein to any right granted to,
benefit conferred upon or power exercisable by the "Administrative Agent" shall
be a reference to the Administrative Agent for the benefit of all the Lenders
and the Administrative Agent, and each action taken or right exercised hereunder
shall be deemed to have been so taken or exercised by the Administrative Agent
for the benefit of and on behalf of itself and the Lenders.
23. RATIFICATIONS. The Guarantor hereby ratifies and affirms each
representation, warranty, covenant and other agreement made on its behalf by the
Borrower in the Loan Agreement.
24. FCC CONSENT. Notwithstanding anything herein which may be construed to
the contrary, no action shall be taken by any of the Lenders and the
Administrative Agent with respect to the Licenses (as defined in the Parent
Guaranty) (or any Collateral relating to such Licenses as defined in the Parent
Guaranty) unless and until all requirements of Applicable Law, including,
without limitation, any state law, or any required approval under the
Communications Act, and any applicable rules and regulations thereunder,
requiring the consent to or approval of such action by the FCC or any
governmental or other authority, have been satisfied. The Guarantor covenants
that upon request of any of the Lenders and the Administrative Agent after and
during the continuance of an Event of Default it will cause to be filed such
applications and take such other action as may be requested by such Person or
Persons to obtain consent or approval of the FCC or any governmental or other
authority which has granted any License (as defined in the Parent Guaranty) to
the Guarantor to any action contemplated by this Agreement and to give effect to
the Security Interest of the Administrative Agent, including, without
limitation, the execution of an application for consent by the FCC to a change
in ownership or control pursuant to the provisions of the Communications Act. To
the extent permitted by Applicable Law, the Administrative Agent is hereby
irrevocably appointed the true and lawful attorney-in-fact of the Guarantor, in
its name and stead, to execute and file, upon the occurrence and during the
continuance of an Event of Default after ten (10) Business Days prior notice to
Guarantor, all necessary applications with the FCC and with any governmental or
other authority. The power of attorney granted herein is coupled with an
interest and shall be irrevocable for so long as any of the Obligations remains
unpaid or unperformed or any of the Lenders have any obligation to make Advances
under the Loan Agreement, regardless of whether the conditions precedent to the
making of any such Advances has been or can be fulfilled.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed
by an Authorized Signatory as of the date first above written.
GUARANTOR: TELECOM RESOURCES, INC.
By: ________________________________
Name: __________________________
Title: _________________________
AFFILIATE'S SECURITY AGREEMENT
(TELECOM RESOURCES, INC.)
THIS AFFILIATE'S SECURITY AGREEMENT (this "AGREEMENT") is made as of this
14th day of May, 1999, by and between TELECOM RESOURCES, INC. (the "AFFILIATE")
and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as administrative
agent (the "ADMINISTRATIVE AGENT") for itself and on behalf of the Lenders (as
defined in the Loan Agreement described below).
W I T N E S S E T H:
WHEREAS, the Great Western Directories, Inc. (the "BORROWER"), the Lenders
and the Administrative Agent are all parties to that certain Loan Agreement
dated as of even date herewith (as the same may be amended, modified or
supplemented from time to time, the "LOAN AGREEMENT"); and
WHEREAS, pursuant to the terms of the Loan Agreement, the Affiliate is
required to execute and deliver this Agreement; and
WHEREAS, the Affiliate and the Borrower are subsidiaries of the Advanced
Communications Group, Inc. (the "PARENT"); and
WHEREAS, the Parent, the Borrower and the Affiliate are all mutually
dependent on each other in the conduct of their respective businesses as an
integrated operation, and the Affiliate has as one of its corporate purposes
assisting the Borrower to obtain financing needed from time to time by the
Affiliate, the Borrower and the Parent; and
WHEREAS, the Borrower's ability to obtain such financing is dependent, in
part, on the successful operations of the properties owned by the Affiliate; and
WHEREAS, the Affiliate has determined that its execution, delivery and
performance of this Agreement directly benefit, and are within the corporate
purposes and in the best interests of, the Affiliate;
NOW, THEREFORE, in consideration of the foregoing and to secure the payment
and performance of, among other things, the obligations of the Affiliate under
that certain Affiliate Guaranty dated as of even date herewith (as amended,
modified or supplemented from time to time, the "AFFILIATE GUARANTY") and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. SECURITY INTEREST. The Affiliate hereby grants and assigns to the
Administrative Agent, for itself and on behalf of the Lenders, a continuing
security interest in and security title to (hereinafter referred to as the
"SECURITY INTEREST") all of its property whether now owned or hereafter created,
acquired or reacquired, including, without limitation, the Affiliate's right,
title and interest
in and to the property described below and all substitutions therefor,
accessions thereto and improvements thereon:
INVENTORY
All of the Affiliate's inventory of whatsoever nature and kind and
wheresoever situated, including, without limitation, raw materials,
components, work in process, finished goods, goods in transit and packing
and shipping materials, accretions and accessions thereto, trust receipts
and similar documents covering the same products (the "INVENTORY");
EQUIPMENT
All machinery and equipment and supplies (installed and uninstalled)
not included in Inventory above, motor vehicles (other than leased motor
vehicles) and all accretions and accessions thereto, any distribution
systems and components thereof, and any other equipment used in connection
with the Affiliate's business or otherwise owned by Affiliate; (the
"EQUIPMENT");
ACCOUNTS
All right to payment for goods sold or leased or for services rendered
which is not evidenced by an instrument or chattel paper, whether or not it
has been earned by performance, including, without limitation, all
agreements with customers, and all books and records recording, evidencing
or relating to such accounts or any part thereof (the "ACCOUNTS");
CONTRACTS AND LEASES
(a) All material construction, subscriber, customer service,
management and capacity agreements and contracts, rights of way, easements
and service and public utility contracts to which the Affiliate is a party,
whether now existing or hereafter arising (the "CONTRACTS");
(b) all lease agreements for real property or personal property to
which the Affiliate is a party (the "LEASES"), whether now existing or
hereafter arising; and
(c) all other contracts and contractual rights, remedies or
provisions now existing or hereafter arising in favor of the Affiliate,
together with all amendments thereto and all other documents executed in
connection therewith (the "OTHER CONTRACTS");
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GENERAL INTANGIBLES
All general intangibles including personal property not included
above, such as, without limitation, all goodwill, trademarks, tradenames,
industrial designs, other industrial or intellectual property or rights
therein, whether under license or otherwise, programs, software, software
codes, programming material and tax refunds (the "INTANGIBLES");
MEMBERSHIP INTERESTS
All membership rights, privileges and interests of the Affiliate in
any Person, including, without limitation, (a) the right to receive
distributions at any time or from time to time in cash or other property,
(b) the right to any specific property of such Person, if any, and (c) all
of the Affiliate's right to participate in the management of such Person
(collectively, the "MEMBERSHIP INTERESTS");
INVESTMENT PROPERTY
All investment property, including, without limitation, all
securities, whether certificated or uncertificated, security entitlements,
securities accounts, commodity contracts and commodity accounts
(collectively, the "INVESTMENT PROPERTY");
FURNITURE AND FIXTURES
All furniture and fixtures in which the Affiliate has an interest (the
"FURNITURE AND FIXTURES");
MISCELLANEOUS ITEMS
All goods, chattel paper, documents, instruments, choses in action,
claims, money, deposits, certificates of deposit, stock or share
certificates and licenses and other rights in intellectual property, and
other tangible personal property not included above ("MISCELLANEOUS
ITEMS"); and
PROCEEDS
All proceeds of any of the above, and all proceeds of any loss of,
damage to or destruction of the above, whether insured or not insured, and
all other proceeds of any sale, lease or other disposition of any property
or interest therein referred to above, together with all proceeds of any
policies of insurance covering any or all of the above, the proceeds of any
award in condemnation with respect to any of the property of the Affiliate,
any rebates or refunds, whether for taxes or otherwise, and all proceeds of
any such proceeds (the "PROCEEDS").
-3-
The Inventory, Equipment, Accounts, Contracts, Other Contracts, Leases,
Intangibles, Furniture and Fixtures, Membership Interests, Investment Property,
Miscellaneous Items and Proceeds thereof, as described above, are hereinafter
collectively referred to as the "COLLATERAL." This Agreement and the Security
Interest secure payment of all of the Affiliate's obligations under the
Affiliate Guaranty. Notwithstanding anything to the contrary contained in the
foregoing provisions of this Section 1, the types or items of Collateral shall
not include any rights or interest in any contract, lease, authorization, permit
or license agreement covering real or personal property of the Affiliate, or to
which the Affiliate is a party, if under the terms of such contract, lease,
authorization, permit or license agreement, or Applicable Law with respect
thereto, the valid grant of a security interest or lien therein to the
Administrative Agent is prohibited and such prohibition has not been or is not
waived or the consent of the other party to such contract, lease, permit or
license agreement has not been or is not otherwise obtained; PROVIDED THAT the
foregoing exclusion shall in no way be construed (a) to apply if any party to
such prohibition is unenforceable under Section 9-318 of the Uniform Commercial
Code or other Applicable Law or (b) so as to limit, impair or otherwise affect
the Administrative Agent's unconditional continuing security interests in and
liens upon any rights or interests of the Affiliate in or to monies due or to
become due under any such contract, authorization, lease, permit or license
agreement.
2. DEFINITIONS. Unless otherwise defined or limited herein, terms defined
in the Loan Agreement are used herein as therein defined.
3. FURTHER ASSURANCES. The Affiliate hereby authorizes the Administrative
Agent to file such financing statements and such other documents as the
Administrative Agent may deem necessary or desirable to protect or perfect the
interest of the Administrative Agent and the Lenders in the Collateral, and to
the extent now or hereafter permitted by Applicable Law, the Affiliate further
irrevocably appoints the Administrative Agent (for itself and on behalf of the
Lenders) as the Affiliate's attorney-in-fact, with power of attorney to execute
on behalf of the Affiliate such Uniform Commercial Code financing statement
amendment forms as the Administrative Agent, may from time to time deem
necessary or desirable to protect or perfect such interest. Such power of
attorney is coupled with an interest and shall be irrevocable for so long as any
of the Obligations remains unpaid or unperformed or any of the Lenders have any
obligation to make Advances under the Loan Agreement, regardless of whether the
conditions precedent to the making of any such Advances have been or can be
fulfilled. In addition, the Affiliate agrees to make, execute, deliver or cause
to be done, executed and delivered, from time to time, all such further acts,
documents and things as the Administrative Agent may reasonably require for the
purpose of perfecting or protecting its rights (or the rights of the Lenders)
hereunder or otherwise giving effect to this Agreement, all promptly upon
request therefor. The Affiliate shall take or cause to be performed such acts
and actions as shall be necessary or appropriate to assure that the Security
Interest upon the Collateral shall not become subordinate or junior to the
security interests, liens or claims of any other Person, except for Permitted
Liens.
4. REPRESENTATIONS AND WARRANTIES. The Affiliate represents and warrants
to the Administrative Agent and the Lenders that:
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(a) the execution of this Agreement and the fulfillment of the terms
hereof will not result in a breach of any of the terms or provisions of, or
constitute a default under its articles of incorporation, as presently in
effect, or any material Applicable Law with respect to the Affiliate, or
result in the termination or cancellation of or any default under any
material indenture, mortgage, deed of trust, deed to secure debt or other
agreement or instrument to which the Affiliate is a party or by which the
Affiliate is bound or affected;
(b) the Affiliate has taken all necessary legal action to authorize
the execution and delivery of this Agreement;
(c) the Security Interest in the Collateral granted to the
Administrative Agent, for itself and on behalf of the Lenders, hereunder
shall constitute, upon the completion of all necessary filings or notices
in proper public offices or the taking of any necessary possessions or
similar acts, a perfected first priority security interest in the
Collateral, subject only to Permitted Liens (as defined in the Parent
Guaranty).
5. LOCATION OF COLLATERAL; FEIN; NAME CHANGE. Except as noted on SCHEDULE
1 attached hereto, the Affiliate further represents and warrants that it now
keeps all of its records concerning its Collateral at its chief executive office
located at the following address, and that its Federal Employer Identification
Number is as follows:
ADDRESS:
____________________________
____________________________
____________________________
FEIN:
____________________________
The Affiliate hereby covenants and agrees that it shall not keep any of such
records at any other address unless written notice thereof is given to the
Administrative Agent at least thirty (30) days prior to the effective date of
any new address for the keeping of such records. The Affiliate further agrees
that it shall promptly advise the Administrative Agent in writing making
reference to this Section 5, of (a) the opening of any new place of business
outside the State of South Dakota if such state has not previously been notified
to the Administrative Agent, (b) the closing of any existing place of business,
and (c) any change in the location(s) set forth herein or in SCHEDULE 1 attached
hereto of the place where it keeps the Collateral if such location(s) is/are
outside the State of South Dakota and such state location(s) has/have not
previously been notified to the Administrative Agent. The Parent hereby
covenants and agrees that it shall not change its name unless written notice
thereof is given to the Administrative Agent at least thirty (30) days prior to
the effective date of such name change
6. COLLATERAL NOT FIXTURES. The parties intend that, to the extent
permitted by Applicable Law, the Collateral shall remain personal property
irrespective of the manner of its attachment or affixation to realty.
-5-
7. GENERAL COVENANTS. Any and all injury to, or loss or destruction of,
the Collateral shall be at the risk of the Affiliate, and shall not release the
Affiliate from its obligations hereunder. Except as permitted under the Loan
Agreement or the Parent Guaranty, the Affiliate agrees not to sell, transfer,
assign, dispose of, mortgage, grant a security interest in, or encumber any of
the Collateral in any manner. The Affiliate agrees to maintain in force with
reputable insurers acceptable to the Required Lenders such insurance with
respect to the Collateral as is required under the Parent Guaranty. Each such
insurance policy shall name the Administrative Agent, for itself and on behalf
of the Lenders, as additional named loss payee to the extent of the Affiliate's
obligations hereunder and shall provide for at least thirty (30) days' prior
written notice to the Administrative Agent of any default under, expiration of,
termination of or proposed cancellation of such policy. The Affiliate further
agrees that the Administrative Agent may, but shall in no event be obligated to,
insure any of the Collateral in such form and amount as the Administrative Agent
may deem necessary or desirable if the Affiliate fails to obtain insurance as
required by the Parent Guaranty, and that the Administrative Agent may pay or
discharge any taxes, liens, or encumbrances on any of the Collateral, and the
Affiliate agrees to pay upon demand any such sum so expended by the
Administrative Agent with interest at the Default Rate, and such sums and
interest shall be deemed to be a part of the Obligations secured by the
Collateral under the terms of this Agreement.
8. COVENANTS CONCERNING CONTRACTS AND LEASES. The Affiliate shall (a)
fulfill, perform and observe each and every material condition and covenant
contained in any of the Contracts, the Other Contracts or the Leases, (b) give
prompt notice to the Administrative Agent of any claim of default under any of
the Contracts, the Other Contracts or the Leases given to the Affiliate or by
the Affiliate, (c) at the sole cost and expense of the Affiliate and to the
extent deemed reasonable or appropriate by the Borrower in its business
judgment, enforce the performance and observance of each and every material
covenant and condition of the Contracts, the Other Contracts or the Leases to be
performed or observed by other parties to any of the Contracts, Other Contracts
or Leases, and (d) appear in and defend any action growing out of or in any
manner connected with any Contract, Other Contract or Lease. The rights and
interest transferred and assigned to the Administrative Agent hereunder include
all of the Affiliate's rights and titles, (a) to modify the Contracts, the Other
Contracts and Leases, (b) to terminate the Contracts, the Other Contracts and
the Leases, and (c) to waive or release the performance or observance of any
obligation or condition of the Contracts, the Other Contracts and the Leases;
PROVIDED, HOWEVER, that these rights shall not be exercised unless there shall
exist and be continuing an Event of Default.
9. REMEDIES.
(a) Upon the occurrence and during the continuance of an Event of
Default, the Administrative Agent, for the benefit of the Lenders, shall have
such rights and remedies as are set forth in the Loan Agreement and herein, all
the rights, powers and privileges of a secured party under the Uniform
Commercial Code of the State of California or any other applicable jurisdiction,
and all other rights and remedies available to the Administrative Agent, for the
benefit of itself and the Lenders, at law or in equity. The Affiliate covenants
and agrees that any notification of intended disposition of any Collateral, if
such notice is required by law, shall be deemed reasonably and properly given if
given in the manner provided for in Section 15 hereof at least ten (10) days
prior to such disposition. The Administrative Agent, for the benefit of itself
and the Lenders, shall have the
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right to the appointment of a receiver for the properties and assets of the
Affiliate, and the Affiliate hereby consents to such rights and such appointment
and hereby waives any objection the Affiliate may have thereto or the right to
have a bond or other security posted by the Administrative Agent, for the
benefit of itself and the Lenders, in connection therewith. The rights of the
Administrative Agent shall be subject to its prior compliance with the
Communications Act, FCC rules and policies promulgated thereunder and state laws
and regulations, to the extent applicable to the exercise of such rights, before
foreclosing on any Collateral constituting Equipment.
(b) Upon the occurrence and during the continuance of an Event of
Default, the Administrative Agent, for itself and on behalf of the Lenders, may
proceed to perform any and all of the obligations of the Affiliate contained in
any of the Contracts, the Other Contracts or the Leases and exercise any and all
rights of the Affiliate therein contained as fully as the Affiliate itself
could. To the extent now or hereafter permitted by Applicable law, the Affiliate
hereby appoints the Administrative Agent, for itself and on behalf of the
Lenders, its attorney-in-fact, effective upon the occurrence and during the
continuance of an Event of Default, with power of substitution, to take such
action, execute such documents, and perform such work as the Administrative
Agent may deem appropriate in exercise of the rights and remedies granted the
Administrative Agent herein. The powers herein granted shall include, but not be
limited to, powers to ▇▇▇ on the Contracts, the Other Contracts, or the Leases.
The power of attorney granted herein is coupled with an interest and shall be
irrevocable for so long as any of the Obligations remain unpaid or unperformed
or any of the Lenders have any obligation to make Advances under the Loan
Agreement, regardless of whether the conditions precedent to the making of any
such Advances have been or can be fulfilled.
(c) Upon the occurrence and during the continuance of an Event of
Default, should the Affiliate fail to perform or observe any covenant or comply
with any condition contained in any of the Contracts, the Other Contracts or the
Leases, then the Administrative Agent, for itself and on behalf of the Lenders,
but without obligation to do so and without releasing the Affiliate from its
obligation to do so, may perform such covenant or condition and, to the extent
that the Administrative Agent shall incur any costs or pay any expenses in
connection therewith, including any costs or expenses of litigation associated
therewith, such costs, expenses or payments shall be included in the Obligations
secured hereby and shall bear interest from the payment of such costs or
expenses at the Default Rate. None of the Administrative Agent and the Lenders,
or any of them, shall be obligated to perform or discharge any obligation of the
Affiliate under any of the Contracts, the Other Contracts or the Leases, and,
except as may result from the gross negligence or willful misconduct of the
Administrative Agent and the Lenders, the Affiliate agrees to indemnify and hold
the Administrative Agent and the Lenders harmless against any and all liability,
loss and damage which the Administrative Agent and the Lenders, or any of them,
may incur under any of the Contracts, the Other Contracts or the Leases or under
or by reason of this Agreement, and any and all claims and demands whatsoever
which may be asserted against the Affiliate by reason of an act of any of the
Administrative Agent and the Lenders under any of the terms of this Agreement or
under the Contracts, the Other Contracts or the Leases.
(d) The Affiliate hereby acknowledges that the Obligations arose out
of a commercial transaction, and agrees that if an Event of Default shall occur
and be continuing, the Administrative Agent and the Lenders shall have the right
to an immediate writ of possession
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without notice of a hearing, and hereby knowingly and intelligently waives any
and all rights it may have to any notice and posting of a bond by the
Administrative Agent and the Lenders, or any of them, prior to seizure by the
Administrative Agent and the Lenders, or any of their transferees, assigns or
successors in interest, of the Collateral or any portion thereof.
10. ADMINISTRATIVE AGENT ATTORNEY-IN-FACT. To the extent now or hereafter
permitted by Applicable Law, the Affiliate hereby further appoints the
Administrative Agent, for itself and on behalf of the Lenders, as its
attorney-in-fact, effective upon the occurrence and during the continuance of an
Event of Default, with power of substitution, and with authority to receive,
open and dispose in an appropriate manner of all mail addressed to the
Affiliate, and to notify the postal authorities to change the address for
delivery of mail addressed to the Affiliate to such address as the
Administrative Agent may designate, to endorse the name of the Affiliate on any
note, acceptance, check, draft, money order or other evidence of debt or of
payment which may come into the possession of any of the Administrative Agent
and the Lenders, and generally to do such other things and acts in the name of
the Affiliate as are necessary or appropriate to protect or enforce the rights
hereunder of the Administrative Agent and the Lenders. To the extent now or
hereafter permitted by Applicable Law, the Affiliate further authorizes the
Administrative Agent, for itself and on behalf of the Lenders, effective upon
the occurrence and during the continuance of an Event of Default, to compromise
and settle or to sell, assign or transfer or to ask, collect, receive or issue
any and all claims possessed by the Affiliate all in the name of the Affiliate.
After deducting all reasonable expenses and charges (including the
Administrative Agent's reasonable attorneys' fees) of retaking, keeping, storing
and selling the Collateral, the Administrative Agent shall apply the proceeds in
payment of any of the Obligations in such order of application as is set forth
in the Loan Agreement, and, if a deficiency results after such application, the
Affiliate covenants and agrees to pay such deficiency to the Administrative
Agent, for the benefit of itself and the Lenders. The power of attorney granted
herein is coupled with an interest and shall be irrevocable for so long as any
of the Obligations remains unpaid or unperformed or any of the Lenders have any
obligation to make Advances under the Loan Agreement, regardless of whether the
conditions precedent to the making of any such Advances have been or can be
fulfilled. The Affiliate agrees that if steps are taken by the Administrative
Agent to enforce rights hereunder, or to realize upon any of the Collateral, the
Affiliate shall pay to the Administrative Agent the amount of the reasonable
costs, including reasonable attorneys' fees, incurred in connection with such
enforcement, and the Affiliate's obligation to pay such amounts shall be deemed
to be a part of the Obligations secured hereunder.
11. INDEMNIFICATION. The Affiliate shall indemnify and hold harmless the
Administrative Agent and the Lenders, and each of them, and any other Person
acting hereunder for all losses, costs, damages, fees and expenses whatsoever
associated with the exercise of the powers of attorney granted herein and shall
release the Administrative Agent and the Lenders and any other Person acting
hereunder from all liability whatsoever for the exercise of the foregoing powers
of attorney and all actions taken pursuant thereto, except in the case of gross
negligence or willful misconduct by any of the Administrative Agent and the
Lenders and such other Person or Persons acting hereunder.
-8-
12. REMEDIES CUMULATIVE. The Affiliate agrees that the rights of the
Administrative Agent and the Lenders under this Agreement, the Loan Agreement or
the Loan Documents shall be cumulative, and that the Administrative Agent and
the Lenders, or any of them, may from time to time exercise such rights and such
remedies as the Administrative Agent and the Lenders, or any of them, may have
thereunder and under the laws of the United States and any state, as applicable,
in the manner and at the time that the Administrative Agent and the Lenders, or
any of them, in its or their sole discretion desire. The Affiliate further
expressly agrees that the Administrative Agent shall not in any event be under
any obligation to resort to any Collateral prior to exercising any other rights
that the Administrative Agent and the Lenders, or any of them, may have against
the Affiliate or its properties, or to resort to any other collateral for the
Obligations prior to the exercise of remedies hereunder.
13. WAIVER. No transfer or renewal, extension, assignment or termination
of this Agreement or of the Loan Agreement, any other Loan Document, or any
other instrument or document in connection therewith executed and delivered by
the Affiliate to the Administrative Agent and the Lenders, or any of them, nor
any additional Advances made by the Lenders to the Borrower, nor the taking of
further security, nor the retaking or re-delivery of the Collateral to the
Affiliate by any of the Administrative Agent and the Lenders, nor any other act
of any of the Administrative Agent and the Lenders shall release the Affiliate
from any obligation under the Affiliate Guaranty or this Agreement, except a
release or discharge executed in writing by the Administrative Agent and the
Lenders, with respect to the Affiliate's obligations hereunder or payment of the
Affiliate's obligations hereunder or upon full payment to the Administrative
Agent and the Lenders and satisfaction of all the Obligations. None of the
Administrative Agent and the Lenders shall by any act, delay, omission or
otherwise, be deemed to have waived any of their rights or remedies hereunder,
unless such waiver is in writing and signed by the Administrative Agent and the
Lenders. A waiver by the Administrative Agent and the Lenders, of any right or
remedy on any occasion shall not be construed as a bar to the exercise of any
such right or remedy which any of the Administrative Agent and the Lenders would
otherwise have had on any other occasion.
14. ASSIGNMENTS. The Affiliate agrees that this Agreement and rights of
the Administrative Agent and the Lenders hereunder may in the discretion of such
Person be assigned in whole or in part by such Person in connection with any
permitted assignment under the Loan Agreement. The Administrative Agent may also
be replaced under the circumstances set forth in the Loan Agreement. The
Affiliate agrees that if this Agreement shall be properly assigned, the rights
of any and all assignees shall be independent of any claims the Affiliate may
have against the assignor or assignors. In the event this Agreement is so
assigned by any of the Administrative Agent and the Lenders, the terms
"Administrative Agent" and "Lenders" wherever used herein shall be deemed to
refer to and include any such assignee or assignees, as appropriate.
15. NOTICES. All notices and other communications required or permitted
hereunder shall be in writing and shall be given in a manner prescribed in
Section 11.1 of the Loan Agreement.
16. GOVERNING LAW. The provisions of this Agreement shall be construed and
interpreted, and all rights and obligations of the parties hereto determined, in
accordance with the laws of the State of California. This Agreement, together
with all documents referred to herein,
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constitutes the entire Agreement among the Affiliate, the Administrative Agent
and the Lenders with respect to the matters addressed herein, and may not be
modified except by a writing executed by the Administrative Agent, for itself
and on behalf of the Lenders, and delivered by the Administrative Agent, for
itself and on behalf of the Lenders, to the Affiliate.
17. SEVERABILITY. If any paragraph or part thereof shall for any reason be
held or adjudged to be invalid, illegal or unenforceable by any court of
competent jurisdiction, such paragraph or part thereof so adjudicated invalid,
illegal or unenforceable shall be deemed separate, distinct and independent, and
the remainder of this Agreement shall remain in full force and effect and shall
not be affected by such holding or adjudication.
18. FCC CONSENT. Notwithstanding anything herein which may be construed to
the contrary, no action shall be taken by any of the Lenders and the
Administrative Agent with respect to the Licenses (as defined in the Parent
Guaranty) (or any Collateral relating to such Licenses (as defined in the Parent
Guaranty)) unless and until all requirements of Applicable Law, including,
without limitation, any state law, or any required approval under the
Communications Act, and any applicable rules and regulations thereunder,
requiring the consent to or approval of such action by the FCC or any
governmental or other authority, have been satisfied. The Affiliate covenants
that upon request of any of the Lenders and the Administrative Agent after and
during the continuance of an Event of Default it will cause to be filed such
applications and take such other action as may be requested by such Person or
Persons to obtain consent or approval of the FCC or any governmental or other
authority which has granted any License (as defined in the Parent Guaranty) to
the Affiliate to any action contemplated by this Agreement and to give effect to
the Security Interest of the Administrative Agent, including, without
limitation, the execution of an application for consent by the FCC to a change
in ownership or control pursuant to the provisions of the Communications Act. To
the extent permitted by Applicable Law, the Administrative Agent is hereby
irrevocably appointed the true and lawful attorney-in-fact of the Affiliate, in
its name and stead, to execute and file, upon the occurrence and during the
continuance of an Event of Default after ten (10) Business Days' prior notice to
Affiliate, all necessary applications with the FCC and with any governmental or
other authority. The power of attorney granted herein is coupled with an
interest and shall be irrevocable for so long as any of the Obligations remains
unpaid or unperformed or any of the Lenders have any obligation to make Advances
under the Loan Agreement, regardless of whether the conditions precedent to the
making of any such Advances has been or can be fulfilled.
19. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the undersigned, as an Authorized Signatory, has caused
this instrument to be executed as of the day and year first above written.
AFFILIATE: TELECOM RESOURCES, INC.
By: ________________________________________
Name: __________________________________
Title: _________________________________
ADMINISTRATIVE AGENT: BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Administrative Agent
By: ________________________________________
Name: __________________________________
Title: _________________________________
SCHEDULE 1
TO
AFFILIATE'S SECURITY AGREEMENT
AFFILIATE: TELECOM RESOURCES, INC.
COLLATERAL LOCATIONS
The Collateral of Affiliate is located at the following locations on the date
hereof:
1. Affiliate's chief executive office as set forth in Section 5.
2. Affiliate's general ledger records are maintained at the office of the
Parent at:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
although such records are available at Affiliate's chief executive office
on its computers.
3. Other: