1
EXHIBIT 10.15
CREDIT AGREEMENT
dated as of December 31, 1996
and
amended and restated as of June 27, 1997
among
TELEPHONE WAREHOUSE, INC.,
NATIONAL CELLULAR, INCORPORATED,
LET'S TALK CELLULAR & WIRELESS, INC.,
TEXAS CELLULAR PARTNERS, L.P.,
The LENDERS referred to herein
and
NATIONSCREDIT COMMERCIAL CORPORATION,
as Agent
2
TABLE OF CONTENTS
PAGE
----
ARTICLE 1
---------
DEFINITIONS
-----------
SECTION 1.01. Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.02. Accounting Terms and Determinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 1.03. Other Definitional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 2
---------
TERM LOANS
----------
SECTION 2.01. Term Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.02. Term Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.03. Interest on the Term Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 2.04. Repayments and Prepayments of Term Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE 3
---------
WORKING CAPITAL LOANS
---------------------
SECTION 3.01. Working Capital Loans and Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 3.02. Working Capital Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 3.03. Interest on Working Capital Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 3.04. Advancing Working Capital Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 3.05. Mandatory Repayments and Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 3.06. Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 3.07. Application of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 3.08. Obligation to Make Working Capital Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 3.09. Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 4
---------
GUARANTY
--------
SECTION 4.01. The Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 4.02. Guaranty Unconditional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 4.03. Discharge Only upon Payment in Full; Reinstatement
In Certain Circumstances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 4.04. Waiver by the Guarantors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 4.05. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 4.06. Stay of Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE 5
---------
CONDITIONS
----------
SECTION 5.01. Conditions to Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.02. Conditions to Each Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
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ARTICLE 6
---------
REPRESENTATIONS AND WARRANTIES
------------------------------
SECTION 6.01. Legal Existence and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 6.02. Authorization; No Contravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 6.03. Binding Effect; Liens of Security Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 6.04. Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 6.05. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6.06. Ownership of Property, Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 6.07. No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 6.08. No Burdensome Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 6.09. Labor Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 6.10. Subsidiaries; Other Equity Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 6.11. Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 6.12. Margin Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 6.13. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 6.14. Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 6.15. Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 6.16. Related Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 6.17. Employment, Shareholders and Subscription Agreements . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 6.18. Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 6.19. Representations and Warranties from Other
Operative Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 6.20. Private Offering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 6.21. Compliance with Environmental Requirements; No
Hazardous Materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 6.22. Initial Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE 7
---------
AFFIRMATIVE COVENANTS
---------------------
SECTION 7.01. Financial Statements and Other Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 7.02. Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 7.03. Conduct of Business and Maintenance of Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 7.04. Maintenance of Property; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 7.05. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 7.06. Inspection of Property, Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 7.07. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 7.08. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 7.09. Board Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
SECTION 7.10. Lenders' Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 7.11. Consummation of the Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
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SECTION 7.12. Hazardous Materials; Remediation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 7.13. Collateral Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 7.14. Collections; Right to Notify Account Debtors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 7.15. Enforcement of Covenants Not to Compete . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 7.16. Landlord and Warehouseman Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
ARTICLE 8
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NEGATIVE COVENANTS
------------------
SECTION 8.01. Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SECTION 8.02. Negative Pledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 8.03. Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 8.04. Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 8.05. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 8.06. Consolidations, Mergers and Sales of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 8.07. Purchase of Assets, Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 8.08. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 8.09. Amendments or Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 8.10. Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 8.11. Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 8.12. Total Debt Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 8.13. Lease Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 8.14. Minimum EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 8.15. Limitations on Activities by Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 8.16. Investor Affiliate Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 8.17. Subordinated Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
ARTICLE 9
---------
EVENTS OF DEFAULT
-----------------
SECTION 9.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 9.02. Cash Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
ARTICLE 10
----------
FEES, EXPENSES AND INDEMNITIES; GENERAL PROVISIONS RELATING TO
--------------------------------------------------------------
PAYMENTS
--------
SECTION 10.01. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 10.02. Computation of Interest and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 10.03. General Provisions Regarding Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 10.04. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 10.05. Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 10.06. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 10.07. Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
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PAGE
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SECTION 10.08. Maximum Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
ARTICLE 11
----------
THE AGENT
---------
SECTION 11.01. Appointment and Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 11.02. Agent and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 11.03. Action by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 11.04. Consultation with Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 11.05. Liability of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 11.06. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 11.07. Credit Decision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 11.08. Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
ARTICLE 12
----------
MISCELLANEOUS
-------------
SECTION 12.01. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 12.02. No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 12.03. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 12.04. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 12.05. Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 12.06. Successors and Assigns; Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 12.07. Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 12.08. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 12.09. GOVERNING LAW; SUBMISSION TO JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 12.10. Notice of Breach by Agent or Lender . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 12.11. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
SECTION 12.12. Counterparts; Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
EXHIBIT A-1 - National Cellular Term Note
EXHIBIT A-2 - TWI Term Note
EXHIBIT A-3 - LTC Term Note
EXHIBIT B - Working Capital Note
EXHIBIT C - Company Security Agreement
EXHIBIT D - Holdings Pledge Agreement
EXHIBIT E - HIG Pledge Agreement
EXHIBIT F - LTC Pledge Agreement
EXHIBIT G - Borrowing Base Certificate
EXHIBIT H - Opinion of Xxxxxxxxx Xxxxxxx, Counsel for
the Companies
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EXHIBIT I - Opinion of Xxxxx Xxxx & Xxxxxxxx, Special Counsel for the Agent
EXHIBIT J - Lender Interest Warrants
EXHIBIT K - Warrantholders Rights Agreement
SCHEDULE 1.01 - Existing LTC Loan Agreements
SCHEDULE 6.17 - Employment, Shareholders' and Subscription Agreements
SCHEDULE 6.21 - Environmental Matters
SCHEDULE 6.22 - Initial Capitalization
SCHEDULE 6.23 - Real Property Leases
SCHEDULE 7.04 - Required Insurance
SCHEDULE 8.01 - Outstanding Debt
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CREDIT AGREEMENT
CREDIT AGREEMENT dated as of December 31, 1996, as amended and restated as
of June 27, 1997, among TELEPHONE WAREHOUSE, INC., NATIONAL CELLULAR,
INCORPORATED, LET'S TALK CELLULAR & WIRELESS, INC., TEXAS CELLULAR PARTNERS,
L.P., the LENDERS listed on the signature pages hereof and NATIONSCREDIT
COMMERCIAL CORPORATION, as Agent.
W I T N E S S E T H:
WHEREAS, Telephone Warehouse, Inc. (f/k/a HIG Cellular Acquisition
Corporation) , National Cellular, Incorporated (f/k/a HIG Cellular Acquisition
Corporation II), Texas Cellular Partners, L.P. and NationsCredit Commercial
Corporation, as Lender and Agent, are parties to a Credit Agreement dated as of
December 31, 1996 (the "Original Credit Agreement");
WHEREAS, in connection with (i) the proposed merger of Merger Sub 1,
Inc., a wholly-owned subsidiary of Let's Talk Cellular & Wireless, Inc., with
and into Telephone Warehouse, Inc. and (ii) the proposed merger of Merger Sub
2, Inc., a wholly-owned subsidiary of Let's Talk Cellular & Wireless, Inc.,
with and into National Cellular, Incorporated, the parties hereto desire to
amend the Original Credit Agreement to increase the commitments of
NationsCredit Commercial Corporation as Lender, to add Let's Talk Cellular &
Wireless, Inc. as a borrower thereunder, to modify certain financial covenants
and to make numerous other changes thereto, all as hereinafter set forth; and
WHEREAS, in order to set forth in one document, for the convenience
of the parties, the text of the Original Credit Agreement as amended by the
amendments to be made upon the effectiveness hereof, the Original Credit
Agreement will, upon satisfaction of the conditions set forth in Section 5.01
hereof, be amended and restated to read in full as set forth herein;
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Certain Defined Terms. The following terms have the
following meanings:
8
"Affiliate" means, with respect to any Person (the "Subject
Company") (i) any other Person that directly, or indirectly through one or more
intermediaries, controls the Subject Company (a "Controlling Person") or (ii)
any Person (other than the Subject Company or any of its Subsidiaries) which is
controlled by or is under common control with a Controlling Person. As used
herein, the term "control" of a Person means the possession, directly or
indirectly, of the power to vote 10% or more of any class of voting securities
of such Person or to direct or cause the direction of the management or
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
"Agent" means NationsCredit in its capacity as agent for the Lenders
hereunder, and its successors in such capacity.
"Applicable Premium Percentage" has the meaning set forth in Section
2.04(c).
"Asset Sale" means any sale, lease or other disposition (including
any such transaction effected by way of merger or consolidation) by Holdings,
any Company or any of their respective Subsidiaries of any asset, but excluding
(i) dispositions of inventory in the ordinary course of business, (ii)
dispositions of Temporary Cash Investments and cash payments otherwise
permitted under this Agreement and (iii) dispositions of equipment no longer
used or useful in the business of any Company to the extent the Net Cash
Proceeds from any such disposition are used to replace such equipment with the
same or similar equipment; provided that a disposition of assets not excluded
by clauses (i), (ii) or (iii) above during any Fiscal Year shall not constitute
an Asset Sale unless and until (and only to the extent that) the aggregate Net
Cash Proceeds from such disposition, when combined with all other such
dispositions previously made during such Fiscal Year, exceeds $100,000.
"Assumption Agreement" means the Assumption Agreement dated December
31, 1996 signed by National Cellular, Incorporated.
"Benefit Arrangement" means at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"Borrowing Base" means, on any date, a dollar amount equal to the
sum of 85% of Eligible Receivables determined as of such date and 60% of
Eligible Inventory determined as of the last day of the month most recently
ended prior to the tenth day prior to such date.
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"Borrowing Base Certificate" means a certificate, duly executed by
the chief executive officer, chief financial officer, president, or treasurer
of LTC, appropriately completed and substantially in the form of Exhibit G.
"Business Day" means any day except a Saturday, Sunday or other day
on which commercial banks in Chicago or New York City are authorized by law to
close.
"Capital Lease" of any Person means any lease of any property
(whether real, personal or mixed) by such Person as lessee which would, in
accordance with GAAP, be required to be accounted for as a capital lease on the
balance sheet of such Person.
"Casualty Insurance Policy" means any insurance policy maintained by
Holdings or any of its Subsidiaries covering losses with respect to tangible
real or personal property or improvements or losses from business interruption.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C. Sections 9601 et seq.), as
amended from time to time, and regulations promulgated thereunder.
"Class" refers, with respect to Loans, to whether such Loans are
Term Loans or Working Capital Loans and, with respect to Commitments, to
whether such Commitments are Term Commitments or Working Capital Commitments.
"Closing Date" means December 31, 1996.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" means all property mortgaged, pledged or otherwise
purported to be subjected to a Lien pursuant to the Security Documents.
"Commitment" means the Term Commitment or a Working Capital
Commitment, or any combination of the foregoing, as the context may require.
"Company" means National Cellular, TWI or LTC, as the context may
require, and "Companies" means National Cellular, TWI and LTC.
"Company Account" means, with respect to each Company, the account
specified on the signature page hereof into which all Loans to such Company
shall be made available, or such other account as such Company shall from time
to time specify by notice to the Lenders.
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"Company Security Agreement" means the Security Agreement dated as
of December 31, 1996, as amended and restated as of June 27, 1997, between the
Companies and the Agent, substantially in the form of Exhibit C.
"Consolidated Capital Expenditures" with respect to any Company
means, for any period, the aggregate amount of expenditures by such Company and
its Consolidated Subsidiaries for plant, property and equipment during such
period (including any such expenditure by way of acquisition of a Person or by
way of assumption of indebtedness or other obligations of a Person, to the
extent reflected as plant, property and equipment), but excluding any such
expenditures made for the replacement or restoration of assets to the extent
financed by condemnation awards or proceeds of insurance received with respect
to the loss or taking of or damage to the asset or assets being replaced or
restored.
"Consolidated Current Assets" means, at any date, the consolidated
current assets (excluding cash and cash equivalents) of LTC and its
Consolidated Subsidiaries determined as of such date.
"Consolidated Current Liabilities" means, at any date, (i) the
consolidated current liabilities (excluding Debt) of LTC and its Consolidated
Subsidiaries plus (ii) the current liabilities of any Person (other than LTC or
any of its Consolidated Subsidiaries) which are Guaranteed by LTC or any of its
Consolidated Subsidiaries, all determined as of such date.
"Consolidated Free Cash Flow" with respect to any Company means, for
any period, EBITDA of such Company for such period minus (a) all cash payments
of income taxes by such Company and its Consolidated Subsidiaries during such
period; (b) Consolidated Capital Expenditures of such Company for such period,
to the extent that such Consolidated Capital Expenditures are permitted by
Section 8.11 and are not financed during such period (and will not be financed
in any future period) with the proceeds of Debt of any Company permitted by
Section 8.01(c); and (c) any net gain by such Company or any of its
Consolidated Subsidiaries in respect of Asset Sales during such period; plus
(d) any expenditures made by such Company or any of its Consolidated
Subsidiaries during such period for the replacement or restoration of assets to
the extent financed by condemnation awards or proceeds of insurance received
with respect to the loss or taking of or damage to the asset or assets being
replaced or restored.
"Consolidated Subsidiary" means, with respect to any Person at any
date, any Subsidiary or other entity the accounts of which would be
consolidated with those of such Person in its consolidated financial statements
if such statements were prepared as of such date.
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"Consulting Agreement" means the Amended and Restated Consulting
Agreement dated as of June 27, 1997 by and between LTC, TWI and H.I.G. Capital
Management, Inc.
"Debt" of a Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments,
(iii) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in the ordinary
course of business, (iv) all Capital Leases of such Person, (v) all obligations
of such Person to purchase securities (or other property) which arise out of or
in connection with the sale of the same or substantially similar securities (or
property), (vi) all non-contingent obligations of such Person to reimburse any
bank or other Person in respect of amounts paid under a letter of credit or
similar instrument, (vii) all equity securities of such Person subject to
repurchase or redemption otherwise than at the sole option of such Person
(other than the Lender Interest), (viii) all Debt secured by a Lien on any
asset of such Person, whether or not such Debt is otherwise an obligation of
such Person, and (ix) all Debt of others Guaranteed by such Person.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"EBITDA" with respect to any Company means, for any period, the
consolidated net income of such Company and its Consolidated Subsidiaries for
such period plus depreciation, interest, amortization and income and franchise
taxes, determined in accordance with GAAP eliminating (i) all intercompany
items, (ii) all earnings (or losses) attributable to equity interests in
Persons that are not Subsidiaries of such Company unless, in the case of
earnings, actually received by such Company or any of its Consolidated
Subsidiaries, (iii) all income (or loss) arising from the forgiveness,
adjustment, or negotiated settlement of any indebtedness, (iv) any
extraordinary items of income or expense, and (v) any increase or decrease in
income arising from any change in such Company's method of accounting, subject
to Section 1.02(a).
"Eligible Inventories" means, at any date of determination thereof,
the aggregate value (determined at the lower of cost or market on a basis
consistent with that used in the preparation of the financial statements
referred to in Section 6.04(a)) at such date of all Inventories owned by any
Company and located in any jurisdiction in the United States of America as to
which appropriate UCC financing statements have been filed naming such Company
as "debtor" and the Agent as "secured party", all net of any amounts payable by
such Company in respect of
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commissions, processing fees or other charges, excluding, however, without
duplication (i) any such Inventory which has been shipped to a customer, even
if on a consignment or "sale or return" basis and whether or not such Inventory
has been subsequently returned by such customer; (ii) any Inventory subject to
a Lien, including a landlord's or warehouseman's Lien (other than Liens created
pursuant to the Company Security Agreement), other than (x) Inventory subject
to a Lien in favor of any vendor to such Company but only to the extent that
the aggregate value of such Inventory (determined as set forth above) exceeds
110% of the aggregate amount of all obligations owed by such Company to such
vendor and (y) in the case of LTC, Inventory subject to a landlord's lien in
favor of any landlord of LTC; (iii) any item of Inventory against which such
Company has taken a reserve or that is aged more than 365 days; (iv) any
Inventory not subject to a valid and perfected first-priority Lien in favor of
the Agent under the Company Security Agreement subject to no prior or equal
Lien; (v) any Inventory not produced in compliance with the applicable
requirements of the Fair Labor Standards Act; and (vi) any supply, scrap or
obsolete Inventory (other than scrap metal or supplies that are used in the
manufacturing process that are readily marketable) and any Inventory that is
not reasonably marketable.
"Eligible Receivables" means, at any date of determination thereof,
the aggregate amount of all Receivables at such date due to any Company other
than the following (determined without duplication):
(a) (i) any Receivable due from a Foreign Account Debtor to the
extent that all Receivables due from Foreign Account Debtors exceed $100,000 at
any time, other than any Receivable that is backed by a letter of credit issued
by a bank organized under the laws of the United States of America or a State
thereof having combined capital and surplus in excess of $250,000,000 and
having outstanding senior unsecured long-term debt securities rated A or higher
by Standard & Poor's Corporation or A2 or higher by Xxxxx'x Investor Service,
Inc. (so long as such letter of credit has been delivered to the Agent as
additional collateral under the Security Documents), and (ii) any Receivable
that is not denominated and payable in U.S. dollars;
(b) any Receivable that does not comply with all applicable legal
requirements, including, without limitation, all laws, rules, regulations and
orders of any governmental or judicial authority;
(c) any Receivable in respect of which there is any unresolved
dispute with the account debtor, but only to the extent of such dispute;
(d) any Receivable payable by its terms more than 30 days, in the
case of any Receivable owing by any paging or other retail customer, and 60
days, in the
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case of any other Receivable, after the date of the issuance of the original
invoice therefor;
(e) any Receivable that remains unpaid for more than 45 days, in
the case of any Receivable owing by any paging or other retail customer, and 60
days, in the case of any other Receivable, from the original due date specified
at the time of the original issuance of the invoice therefor;
(f) any unbilled Receivable and any Receivable in respect of
goods not yet shipped;
(g) any Receivable arising outside the ordinary course of
business of such Company.
(h) any Receivable in respect of which there has been established
a contra account, or which is due from an account debtor to whom such Company,
as the case may be, owes a trade payable, but only to the extent of such
account or trade payable;
(i) any Receivable that is not subject to a first priority
perfected Lien under the Company Security Agreement and any Receivable
evidenced by an "instrument" (as defined in the UCC) not in the possession of
the Agent;
(j) any Receivable due from an account debtor (I) as to which on
such date Receivables representing more than 30% of the aggregate amount of all
Receivables of such account debtor have remained unpaid for more than 90 days
from the original due date specified at the time of the original issuance of
the invoice therefor, (II) in respect of which a credit loss has been
recognized or reserved by such Company, (III) in respect of which the Agent
shall have notified such Company that such account debtor does not have a
satisfactory credit standing as determined in good faith by the Agent, (IV)
that is a Subsidiary or Affiliate of such Company, (V) that is the United
States of America or any department, agency or instrumentality thereof, unless
such Company has complied in all respects with the Federal Assignment of Claims
Act of 1940, or (VI) that is the subject of a case or proceeding of the type
described in clauses (g) and (h) of Section 9.01;
(k) any Receivable due from an account debtor that such Company
has not instructed such account debtor in the invoice therefor to make payments
in respect of such Receivable to the applicable Lockbox Account (as defined in
the Company Security Agreement) or from any account debtor that makes payments
in a form that cannot be accepted in the applicable Lockbox Account; and
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(l) any Receivables due from an account debtor (other than Xxxx
South Mobility, Xxxx Atlantic/Nynex, L.A. Cellular, CellularOne, Airtouch
Cellular and AT&T Wireless Services) at any time, to the extent that the
aggregate outstanding amount of Receivables due from such account debtor and
its affiliates at such time exceeds 30% of the aggregate amount of all
Receivables due to such Company at such time, but only to the extent of such
excess.
"Employment Contracts" means the Employment Contract dated as of
December 31, 1996 between TWI and Xxx Xxxxxxxx, amended and restated as of June
27, 1997, and the employment agreements delivered by Holdings to NationsCredit
on the LTC Closing Date pursuant to Section 5.01(o).
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, codes, plans, injunctions, permits, concessions,
grants, franchises, licenses, agreements and governmental restrictions, whether
now or hereafter in effect, relating to human health, the environment or to
emissions, discharges or releases of pollutants, contaminants, Hazardous
Materials or wastes into the environment, including ambient air, surface water,
ground water or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, Hazardous Materials or wastes or the clean-up or
other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, or any successor statute.
"ERISA Group" means Holdings, any Company, any Subsidiary of any
Company and all members of a controlled group of corporations and all trades or
businesses (whether or not incorporated) under common control which, together
with Holdings, any Company or any Subsidiary of any Company are treated as a
single employer under Section 414 of the Code.
"Equity Agreement" means the Equity Agreement dated as of December
31, 1996 among Holdings, the Partners listed on the signature pages thereof and
NationsCredit.
"Event of Default" has the meaning set forth in Section 9.01.
"Excess Cash Flow" means, for any period, an amount equal to (i)
Consolidated Free Cash Flow of LTC for such period plus (or minus) (ii) any net
cash extraordinary gains (or extraordinary cash losses) for such period of LTC
and its Consolidated Subsidiaries (except any such gains or losses in respect
of Asset Sales) plus (or minus) (iii) to the extent reflected in Consolidated
Free Cash Flow
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of LTC for such period, any non-cash charges (or non-cash gains) for such
period of LTC and its Consolidated Subsidiaries plus (or minus) (iv) any
decrease (or increase) in average of the Net Working Investment at the end of
each fiscal month ended during such period, when compared with average of the
Net Working Investment at the end of each fiscal month ended during the
corresponding period in the prior Fiscal Year, minus (v) the sum for such
period of (A) Total Debt Service of LTC (exclusive of amortization of debt
discount or premium) for such period, (B) all optional payments of the Term
Notes during such period pursuant to Section 2.04(c) and (C) the aggregate
amount of Restricted Payments made during such period in accordance with
clauses (i), (ii), (iii) or (iv) of the proviso to Section 8.04(a).
"Financing Documents" means this Agreement, the Notes and the
Security Documents.
"Fiscal Year" means a fiscal year of each Company and Holdings.
"Foreign Account Debtor" means an account debtor that is not both
domiciled in the United States of America and (if not a natural person)
organized under the laws of the United States of America or any political
subdivision thereof.
"GAAP" has the meaning set forth in Section 1.02.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring in
any other manner the obligee of such Debt or other obligation of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part), provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Guarantor" means each of the Companies and Holdings in their
capacity as a guarantor pursuant to Article 4.
"Hazardous Materials" means (i) any "hazardous substance" as defined
in CERCLA; (ii) asbestos; (iii) polychlorinated biphenyls; (iv) petroleum, its
derivatives, by-products and other hydrocarbons; and (v) any other toxic,
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radioactive, caustic or otherwise hazardous substance regulated under
Environmental Laws.
"Hazardous Materials Contamination" means contamination which is
subject to clean-up, remediation, removal, permitting or other regulation under
any Environmental Law (a) of the improvements, buildings, facilities,
personalty, soil, groundwater, air or other elements on or of the relevant
property by Hazardous Materials, or any derivatives thereof, or (b) on or of
any other property as a result of Hazardous Materials, or any derivatives
thereof, generated on, emanating from or disposed of in connection with the
relevant property.
"HIG" means HIG Fund V, Inc., a Cayman Islands corporation, and its
successors.
"HIG Investor" means HIG Texas Cellular Company, a Cayman Islands
corporation.
"HIG Pledge Agreement" means the HIG Pledge Agreement dated as of
the date hereof between HIG and the Agent, substantially in the form of Exhibit
E.
"Holdings" means Texas Cellular Partners, L.P., a Delaware limited
partnership, and its successors.
"Holdings Documents" has the meaning set forth in Section 8.16.
"Holdings Pledge Agreement" means the Holdings Pledge Agreement
dated as of December 31, 1996, as amended and restated as of June 27, 1997,
between Holdings and the Agent, substantially in the form of Exhibit D.
"Indemnitees" has the meaning set forth in Section 10.05.
"Insurance Accounts" has the meaning set forth in the Company
Security Agreement.
"Intercreditor Agreement" means the Intercreditor Agreement dated as
of December 31, 1996 by and between NationsCredit and the Seller.
"Inventory" means inventory (as defined in Article 9 of the UCC) to
the extent comprised of readily marketable materials of a type manufactured,
consumed or held for resale (including raw materials and work-in-process) by
any Company in the ordinary course of its business as presently conducted, or
as modified from time to time in a manner not prohibited by this Agreement.
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"Investment" means any investment in any Person, whether by means of
share purchase, capital contribution, loan, time deposit or otherwise.
"IPO" means the initial sale of shares of common stock of LTC by and
for the account of LTC and certain selling shareholders pursuant to an
underwritten public offering registered under the Securities Act.
"LC Collateral Account" has the meaning set forth in the Company
Security Agreement.
"LC Credit Event" has the meaning set forth in Section 3.09(a).
"LC Issuer" means NationsCredit in its capacity as issuer of Letters
of Credit pursuant to Section 3.09(a).
"Lender" means NationsCredit and each other Person that becomes a
holder of a Note pursuant to Section 12.06, and their respective successors,
and "Lenders" means all of the foregoing.
"Lender Interest" has the meaning set forth in Section 2.05.
"Lender Interest Warrants" has the meaning set forth in Section
2.05.
"Letter of Credit" means a letter of credit issued for the account
of any Company by the LC Issuer.
"Letter of Credit Liabilities" means, at any time and in respect of
any Letter of Credit, the sum, without duplication, of (i) the amount available
for drawing under such Letter of Credit (without regard to whether any
conditions to drawing thereunder can then be met) plus (ii) the aggregate
unpaid amount of all Reimbursement Obligations in respect of previous drawings
made under such Letter of Credit.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind, or any other type of
preferential arrangement that has the practical effect of creating a security
interest, in respect of such asset. For the purposes of this Agreement and the
other Financing Documents, any Company or any of such Company's Subsidiaries
shall be deemed to own subject to a Lien any asset which it has acquired or
holds subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement relating to such
asset.
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"Loans" means the Term Loans and the Working Capital Loans, or any
combination of the foregoing, as the context may require.
"Lockbox Accounts" has the meaning set forth in the Company Security
Agreement.
"Lockbox Agreements" has the meaning set forth in the Company
Security Agreement.
"LTC" means Let's Talk Cellular & Wireless, Inc., a Florida
corporation, together with its successors.
"LTC Merger" means the transactions contemplated by the LTC Merger
Documents to be consummated on or before the LTC Closing Date.
"LTC Merger Documents" means the LTC Merger Agreement, including the
exhibits and schedules thereto, and all agreements, documents and instruments
executed and delivered pursuant thereto or in connection therewith, including
without limitation the LTC Shareholders' Agreement.
"LTC Closing Date" has the meaning set forth in Section 5.01.
"LTC Merger Agreement" means the Agreement and Plan of Merger by and
among LTC, Xxxxxx Xxx 0, Xxxxxx Xxx 0, XXX, XXX and Holdings, dated as of April
11, 1997.
"LTC Pledge Agreement" means the LTC Pledge Agreement dated as of
June 27, 1997 between LTC and the Agent, substantially in the form of Exhibit
F.
"LTC Shareholders' Agreement" means the Shareholders' Agreement
dated as of June 27, 1997 by and among LTC and the Current Shareholders and
Investors party thereto.
"LTC Term Loan" has the meaning set forth in Section 2.01.
"LTC Term Note" has the meaning set forth in Section 2.02.
"LTC Working Capital Loan" means any Working Capital Loan of LTC
made pursuant to Section 3.01.
"LTC Working Capital Note" means any Working Capital Note of LTC
issued pursuant to Section 3.02.
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"Major Casualty Proceeds" means (i) the aggregate insurance proceeds
received in connection with one or more related events by LTC or any of its
Subsidiaries under any Casualty Insurance Policy or (ii) any award or other
compensation with respect to any condemnation of property (or any transfer or
disposition of property in lieu of condemnation) received by LTC or any of its
Subsidiaries, if the amount of such aggregate insurance proceeds or award or
other compensation exceeds $250,000.
"Margin Stock" has the meaning assigned thereto in Regulation G, U
or X of the Federal Reserve Board, as the same may be amended, supplemented or
modified from time to time.
"Material Debt" means Debt (other than the Notes) of LTC and/or one
or more of its Subsidiaries, arising in one or more related or unrelated
transactions, in an aggregate principal or face amount not exceeding $100,000.
"Material Plan" means at any time a Plan having Unfunded
Liabilities.
"Merger Sub 1" means Merger Sub 1, Inc., a Delaware corporation.
"Merger Sub 1 Merger" means the merger of Merger Sub 1 with and into
Telephone Warehouse, Inc. (with Telephone Warehouse, Inc., as the surviving
corporation) pursuant to the LTC Merger Agreement on the LTC Closing Date.
"Merger Sub 2" means Merger Sub 2, Inc., a Texas corporation.
"Merger Sub 2 Merger" means the merger of Merger Sub 2 with and into
National Cellular, Incorporated (with National Cellular, Incorporated, as the
surviving corporation) pursuant to the LTC Merger Agreement on the LTC Closing
Date.
"Multiemployer Plan" means at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which any member of
the ERISA Group is then making or accruing an obligation to make contributions
or has within the preceding five plan years made contributions, including for
these purposes any Person which ceased to be a member of the ERISA Group during
such five year period.
"National Cellular" means National Cellular, Incorporated, a Texas
corporation and the surviving corporation in the Merger Sub 2 Merger, together
with its successors.
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"National Cellular Merger Agreement" means the Merger Agreement
dated as of December 31, 1996 between HIG Cellular Acquisition Corporation II
and National Cellular.
"National Cellular Term Loan" has the meaning set forth in Section
2.01.
"National Cellular Term Note" has the meaning set forth in Section
2.02.
"National Cellular Working Capital Loan" means any Working Capital
Loan of National Cellular made pursuant to Section 3.01.
"National Cellular Working Capital Note" means any Working Capital
Note of National Cellular issued pursuant to Section 3.02.
"NationsCredit" means NationsCredit Commercial Corporation, a
Delaware corporation, and its successors and assigns.
"Net Cash Proceeds" means, with respect to any transaction, an
amount equal to the cash proceeds received by Holdings, any Company or any of
their respective Subsidiaries from or in respect of such transaction (including
any cash proceeds received as income or other proceeds of any non-cash proceeds
of such transaction), less (x) any expenses (including commissions) reasonably
incurred by such Person in respect of such transaction and (y) in the case of
an Asset Sale, the amount of any Debt secured by a Lien on the related asset
and discharged from the proceeds of such Asset Sale and any taxes paid or
payable by such Person (as estimated by the chief financial officer of
Holdings) in respect of such Asset Sale.
"Net Working Investment" means, at any date, Consolidated Current
Assets minus Consolidated Current Liabilities, all determined at such date.
"New Lease" means, for any Fiscal Year, any operating lease entered
into by any Company or any of such Company's Subsidiaries during such Fiscal
Year, and includes (i) any renewal, renegotiation or material change in any
operating lease existing prior to the first day of such Fiscal Year and (ii)
any operating lease existing prior to the first day of such Fiscal Year that
provides for liability for rental payments in such Fiscal Year in excess of the
liability for rental payments under such lease for the immediately preceding
Fiscal Year.
"Notes" means the Term Notes and the Working Capital Notes, or any
combination of the foregoing, as the context may require.
"Notice of Borrowing" has the meaning set forth in Section 3.04.
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"Notice of LC Credit Event" has the meaning set forth in Section
3.09(d).
"Officers' Certificate" means a certificate executed on behalf of a
Person by its chairman of the board (if an officer), chief executive officer or
president or one of its vice presidents and by its chief financial officer or
treasurer.
"Operative Documents" means the Financing Documents, the Original
Acquisition Documents, the LTC Merger Documents, the Assumption Agreement, the
Partnership Agreement, the Employment Contracts, the Consulting Agreement, the
Subscription Agreements, the Equity Agreement, the Lender Interest Warrants,
the Warrantholders Rights Agreement, the Seller Note, the Seller Pledge
Agreement, the InterCreditor Agreement, the Subordination Agreements and the
Seller Subsidiary Guaranties.
"Original Acquisition" means the transactions contemplated by the
Original Acquisition Documents consummated on or before the Closing Date.
"Original Acquisition Documents" means the Purchase Agreement,
including the exhibits and schedules thereto, and the Original Merger
Agreements, and all agreements, documents and instruments executed and
delivered pursuant thereto or in connection therewith.
"Partnership Agreement" means the Agreement of Limited Partnership
dated as of December 16, 1996 under which Holdings is organized.
"Original Credit Agreement" has the meaning set forth in the first
recital to this Agreement.
"Original Merger Agreements" means the National Cellular Merger
Agreement and the TWI Merger Agreement.
"Partnership Interests" means partnership interests of Holdings.
"Payment Account" means, with respect to each Lender, the account
specified on the signature pages hereof into which all payments by or on behalf
of any Company to such Lender under the Financing Documents shall be made, or
such other account as such Lender shall from time to time specify by notice to
such Company.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
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"Permitted Contest" means a contest maintained in good faith by
appropriate proceedings promptly instituted and diligently conducted and with
respect to which such reserve or other appropriate provision, if any, as shall
be required in conformity with GAAP shall have been made; provided that
compliance with the obligation that is the subject of such contest is
effectively stayed during such challenge.
"Permitted Liens" means Liens permitted pursuant to Section 8.02.
"Person" means any natural person, corporation, limited partnership,
general partnership, joint stock company, joint venture, association, company,
trust, bank, trust company, land trust, business trust or other organization,
whether or not a legal entity, and any government agency or political
subdivision thereof.
"Plan" means at any time an employee pension benefit plan (other
than a Multiemployer Plan) which is covered by Title IV of ERISA or subject to
the minimum funding standards under Section 412 of the Code and either (i) is
maintained, or contributed to, by any member of the ERISA Group for employees
of any member of the ERISA Group or (ii) has at any time within the preceding
five years been maintained, or contributed to, by any Person which was at such
time a member of the ERISA Group for employees of any Person which was at such
time a member of the ERISA Group.
"Purchase Agreement" means the Amended and Restated Stock Purchase
Agreement dated as of December 6, 1996 among HIG Cellular Acquisition
Corporation I, HIG Cellular Acquisition Corporation II and the Seller.
"Quarterly Date" means the first Business Day of each February, May,
August and November occurring after the Closing Date.
"Real Property" means the premises known as 000 X. Xxxxxxx Xxxxxxx,
Xxxxxx, Xxxxx, all as more fully described in Exhibit A to the TWI Mortgage.
"Receivable" means, with respect to any Company as at any date of
determination thereof, the unpaid portion of the obligation, as stated in the
respective invoice, of a customer such Company in respect of Inventory sold or
services rendered in the ordinary course of business, which amount has been
earned by performance under the terms of the related contract and recognized as
revenue on the books of such Company net of any credits, rebates or offsets
owed to the customer and also net of any commissions payable to Persons other
than employees of such Company or its respective Subsidiaries.
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"Reimbursement Obligations" means, at any date, the obligations of
the Companies then outstanding to reimburse the LC Issuer and/or the Lenders
for payments made by the LC Issuer under a Letter of Credit and/or the Lenders
under Section 3.09(a) or Section 3.09(b).
"Reimbursement Refunding Borrowing" means a Working Capital
Borrowing made solely for the purpose of repaying Reimbursement Obligations
coming due not later than the date of such borrowing, and in an aggregate
amount equal to the aggregate amount of such Reimbursement Obligations.
"Required Lenders" means at any time Lenders holding Notes
evidencing at least 51% of the aggregate unpaid principal amount of the Loans
or, if no Loans are outstanding, having at least 51% of the aggregate amount of
the Commitments.
"Restricted Payment" means (i) any dividend or other distribution on
any shares of any Company's capital stock (except dividends payable solely in
shares of its capital stock of the same class) or (ii) any payment on account
of the purchase, redemption, retirement or acquisition of (a) any shares of any
Company's capital stock or (b) any option, warrant or other right to acquire
shares of any Company's capital stock.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, and the rules and regulations promulgated thereunder.
"Security Documents" means the Company Security Agreement, the
Holdings Pledge Agreement, the HIG Pledge Agreement, the LTC Pledge Agreement,
the TWI Mortgage and any other agreement pursuant to which Holdings, any
Company or any of their respective Subsidiaries or Affiliates provides a Lien
on its assets in favor of the Agent for the benefit of the Lenders, and all
supplementary assignments, security agreements, pledge agreements,
acknowledgments or other documents delivered or to be delivered pursuant to the
terms hereof or of any other Security Document.
"Seller" means Xx. Xxx Xxxxxxxx.
"Seller Note" means the Subordinated Note in the principal amount of
$3,585,000 issued by Holdings to the Seller on December 31, 1996 and amended
and restated on June 27, 1997.
"Seller Pledge Agreement" means the Stock Pledge Agreement dated
December 31, 1996 between Holdings and the Seller.
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"Seller Subsidiary Guaranties" means each of the Subsidiary Guaranty
Agreements dated December 31, 1996 by each of National Cellular and TWI in
favor of the Seller.
"Subordination Agreements" means each of the Subordination
Agreements dated as of December 31, 1996 between the Seller, NationsCredit and
each of Holdings, TWI and National Cellular.
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which securities or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions are at the time directly or indirectly owned by
such Person.
"Temporary Cash Investment" means any Investment in (i) direct
obligations of the United States or any agency thereof, or obligations
guaranteed by the United States or any agency thereof, (ii) commercial paper
rated at least A-1 by Standard & Poor's Ratings Service and P-1 by Xxxxx'x
Investors Service, Inc., (iii) time deposits with, including certificates of
deposit issued by, any office located in the United States of any bank or trust
company which is organized under the laws of the United States or any State
thereof and has capital, surplus and undivided profits aggregating at least
$500,000,000 and which issues (or the parent of which issues) certificates of
deposit or commercial paper with a rating described in clause (ii) above, or
(iv) repurchase agreements with respect to securities described in clause (i)
above entered into with an office of a bank or trust company meeting the
criteria specified in clause (iii) above, provided in each case that such
Investment matures within one year from the date of acquisition thereof by any
Company or any of such Company's Subsidiaries.
"Total Debt Service" with respect to any Company means, for any
period, the sum of (i) the aggregate interest charges incurred by such Company
and its Consolidated Subsidiaries for such period, whether expensed or
capitalized, including the portion of any obligation under Capital Leases
allocable to interest expense in accordance with GAAP and the portion of any
debt discount or premium (but not expenses of issuance) that shall be amortized
in such period and (ii) the aggregate amount during such period of mandatory
principal payments payable by such Company pursuant to Section 2.04(a) and all
other scheduled principal payments on all other Debt payable by such Company or
any of its Consolidated Subsidiaries, including the portion of any payments
under Capital Leases that is allocable to principal.
"Term Commitment" means, for NationsCredit as Lender, an amount
equal to $2,000,000.
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"Term Loan" has the meaning set forth in Section 2.01.
"Term Notes" has the meaning set forth in Section 2.02.
"TWI" means Telephone Warehouse, Inc., a Delaware corporation and
the surviving corporation of the Merger Sub 1 Merger, together with its
successors.
"TWI Merger Agreement" means the Merger Agreement dated as of
December 31, 1996 among HIG Cellular Acquisition Corporation, Telephone
Warehouse - San Antonio, Inc., Telephone Warehouse - KC, Inc. and Telephone
Warehouse Inc.
"TWI Mortgage" means the Mortgage, Assignment, Assignment of Leases
and Rents, Security Agreement and Fixture Filing dated as of December 31, 1996
between TWI and the Agent.
"TWI Term Loan" has the meaning set forth in Section 2.01.
"TWI Term Note" has the meaning set forth in Section 2.02.
"TWI Working Capital Loan" means any Working Capital Loan of TWI
made pursuant to Section 3.01.
"TWI Working Capital Note" means any Working Capital Note of TWI
issued pursuant to Section 3.02.
"UCC" has the meaning set forth in the Security Agreement.
"Unfunded Liabilities" means, with respect to any Plan at any time,
the amount (if any) by which (i) the value of all benefit liabilities under
such Plan, determined on a plan termination basis using the assumptions
prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the
fair market value of all Plan assets allocable to such liabilities under Title
IV of ERISA (excluding any accrued but unpaid contributions), all determined as
of the then most recent valuation date for such Plan, but only to the extent
that such excess represents a potential liability of a member of the ERISA
Group to the PBGC or any other Person under Title IV of ERISA.
"Warrantholders Rights Agreement" means the Warrantholders Rights
Agreement dated as of June 27, 1997 among LTC, HIG and NationsCredit,
substantially in the form of Exhibit K hereto.
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"Working Capital Borrowing" means the aggregation of Working Capital
Loans of the Lenders to be made to any Company pursuant to Section 3.01 on a
single date.
"Working Capital Commitment" means, (i) for NationsCredit as Lender,
initially $9,000,000, less any amount assigned to another Person that becomes a
Lender after the date hereof (a "Subsequent Lender") and (ii) for any
Subsequent Lender, the amount of Working Capital Commitment assigned to such
Lender.
"Working Capital Loans" has the meaning set forth in Section 3.01.
"Working Capital Note" has the meaning set forth in Section 3.02.
"Working Capital Outstandings" means at any time, as to any Lender,
the sum of the aggregate outstanding principal amount of such Lender's Working
Capital Loans and its pro rata share of the aggregate outstanding Letter of
Credit Liabilities.
SECTION 1.02. Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles as in effect from time
to time ("GAAP"), applied, with respect to any of any Company or Holdings, on a
basis consistent (except for changes concurred in by such Company's and
Holdings' independent public accountants) with the most recent audited
consolidated and consolidating financial statements of LTC and its Consolidated
Subsidiaries delivered to the Lenders; provided that, if LTC notifies the
Lenders that LTC wishes to amend any covenant in Article 8 or the definition of
"Excess Cash Flow" or any related definition to eliminate the effect of any
change in GAAP on the operation of such covenant or the determination of
"Excess Cash Flow" (or if the Agent notifies LTC that the Required Lenders wish
to amend Article 8 or the definition of "Excess Cash Flow" or any related
definition for such purpose), then LTC's compliance with such covenant or
"Excess Cash Flow", as the case may be, shall be determined on the basis of
GAAP in effect immediately before the relevant change in GAAP became effective,
until either such notice is withdrawn or such covenant is amended in a manner
satisfactory to Holdings and the Required Lenders.
SECTION 1.03. Other Definitional Provisions. References in this
Agreement to "Articles", "Sections", "Schedules" or "Exhibits" shall be to
Articles, Sections, Schedules or Exhibits of or to this Agreement unless
otherwise specifically provided. Any of the terms defined in Section 1.01 may,
unless the
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context otherwise requires, be used in the singular or plural depending on the
reference. "Include", "includes" and "including" shall be deemed to be
followed by "without limitation" whether or not they are in fact followed by
such words or words of like import. "Writing", "written" and comparable terms
refer to printing, typing and other means of reproducing words in a visible
form. References to any agreement or contract are to such agreement or
contract as amended, modified or supplemented from time to time in accordance
with the terms hereof and thereof. References to any Person include the
successors and assigns of such Person. References "from" or "through" any date
mean, unless otherwise specified, "from and including" or "through and
including", respectively.
ARTICLE 2
TERM LOANS
SECTION 2.01. Term Loans. (a) On the Closing Date, NationsCredit
made one senior floating rate loan in the amount of $5,600,000 to NCI (such
loan, or any portion thereof assigned to any other Lender in accordance with
Section 12.06, a "National Cellular Term Loan") and one senior floating rate
loan in the amount of $5,600,000 to TWI pursuant to this Agreement (such loan,
or any portion thereof assigned to any other Lender in accordance with Section
12.06, a "TWI Term Loan"). As of the LTC Closing Date, $5,537,500 in principal
amount of the NCI Term Loan and $5,537,500 in principal amount of the TWI Term
Loan remain outstanding.
(b) Upon the terms and subject to the conditions set forth
herein, NationsCredit agrees to make an additional senior floating rate loan to
LTC on the LTC Closing Date pursuant to this Section 2.01(b) in a principal
amount equal to its Term Commitment (such loan, or any portion thereof assigned
to any other Lender in accordance with Section 12.06, a "LTC Term Loan", and,
together with the National Cellular Term Loans and the TWI Term Loans, the
"Term Loans"). Term Loans are not revolving in nature and amounts of such
Loans repaid or prepaid may not be reborrowed. The Term Commitment shall
terminate at the close of business on the LTC Closing Date.
SECTION 2.02. Term Notes. Each National Cellular Term Loan
shall be evidenced by a Term Note of National Cellular substantially in the
form of Exhibit A-1 (each such note, a "National Cellular Note"), dated the
Closing Date in a principal amount equal to the initial principal amount of
such National Cellular Term Loan, duly executed and delivered by National
Cellular and payable to the Lender of such Term Loan. Each TWI Term Loan shall
be evidenced by a Term Note of TWI substantially in the form of Exhibit A-2
(each such note, a "TWI
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Term Note"), dated the Closing Date in a principal amount equal to the initial
principal amount of such TWI Term Loan, duly executed and delivered by TWI and
payable to the Lender of such TWI Term Loan. Each LTC Term Loan shall be
evidenced by a Term Note of LTC substantially in the form of Exhibit A-3 (each
such note, a "LTC Term Note" and, together with National Cellular Term Notes
and TWI Term Notes, "Term Notes"), dated the LTC Closing Date in a principal
amount equal to the initial principal amount of such LTC Term Loan, duly
executed and delivered by LTC and payable to the Lender of such LTC Term Loan.
SECTION 2.03. Interest on the Term Loans. Interest on each
Term Loan shall accrue from the date on which such Term Loan was made on the
outstanding principal amount thereof at the rate set forth in the Term Note in
respect thereof, and shall be payable monthly in arrears as set forth therein.
SECTION 2.04. Repayments and Prepayments of Term Notes. (a)
Mandatory Scheduled Repayments. There shall become due and payable and each
Company shall repay an aggregate principal amount of the Term Notes issued by
such Company on each Quarterly Date, commencing with the Quarterly Date
occurring on August 1, 1997, equal to the applicable installment amount set
forth below (or, if less, the aggregate outstanding principal amount of the
Applicable Term Notes), in each case together with accrued and unpaid interest
on the principal amount being repaid to and but excluding the date of payment:
AMORTIZATION SCHEDULE
---------------------
PRINCIPAL AMOUNT OF TERM PRINCIPAL AMOUNT PRINCIPAL AMOUNT OF
NOTES OF OF TERM NOTES OF TERM NOTES OF
INSTALLMENT NATIONAL CELLULAR TWI LTC
----------- ----------------- --- ---
No. 1 $ 62,500 $ 62,500 25,000
No. 2 62,500 62,500 25,000
No. 3 62,500 62,500 25,000
No. 4 125,000 125,000 25,000
No. 5 125,000 125,000 25,000
No. 6 125,000 125,000 25,000
No. 7 125,000 125,000 25,000
No. 8 187,500 187,500 25,000
No. 9 187,500 187,500 25,000
No. 10 187,500 187,500 25,000
No. 11 187,500 187,500 25,000
No. 12 275,000 275,000 25,000
No. 13 275,000 275,000 100,000
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PRINCIPAL AMOUNT OF TERM PRINCIPAL AMOUNT PRINCIPAL AMOUNT OF
NOTES OF OF TERM NOTES OF TERM NOTES OF
INSTALLMENT NATIONAL CELLULAR TWI LTC
----------- ----------------- --- ---
No. 14 275,000 275,000 100,000
No. 15 275,000 275,000 100,000
No. 16 62,500 62,500 100,000
No. 17 62,500 62,500 100,000
No. 18 62,500 62,500 100,000
No. 19 62,500 62,500 100,000
No. 20 312,500 312,500 100,000
No. 21 312,500 312,500 100,000
No. 22 312,500 312,500 100,000
No. 23 312,500 312,500 100,000
No. 24 375,000 375,000 100,000
No. 25 375,000 375,000 125,000
No. 26 375,000 375,000 125,000
No. 27 375,000 375,000 125,000
No. 28 -0- -0- 125,000
(b) Mandatory Incremental Prepayments. (i) There shall become due
and payable, and the Companies shall prepay, an aggregate principal amount of
the Term Notes (or, if less, the aggregate outstanding principal amount of the
Term Notes) in the following amounts at the following times, together with, in
the case of any prepayment of the remaining Term Notes in whole, accrued and
unpaid interest on the principal amount being prepaid to but excluding the date
of such payment:
(A) on the earlier of (x) the date on which the
financial statements required by Section 7.01(b) are delivered to
the Agent and (y) the 120th day following the last day of each
Fiscal Year, beginning with the Fiscal Year ending July 31, 1998,
an amount equal to 50% of the Excess Cash Flow for such Fiscal
Year; and
(B) promptly upon receipt by Holdings or LTC of the
proceeds from the issuance and sale of limited partnership
interests or other equity securities, as the case may be, in a
public offering after the LTC Closing Date, an amount equal to
100% of the Net Cash Proceeds of such issuance and sale.
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(ii) There shall become due and payable, and each Company shall
prepay, an aggregate principal amount of the Term Notes of such Company
(or, if less, the aggregate outstanding principal amount of such Term
Notes) in the following amounts at the following times, together with, in
the case of any payment of the remaining such Term Notes in whole,
accrued and unpaid interest on the principal amount being prepaid to but
excluding the date of such payment:
(A) on the date on which such Company or any of its
Subsidiaries receives any payment which constitutes Major Casualty
Proceeds, an amount equal to the amount of such payment, unless
the Required Lenders shall otherwise direct (in which case the
amount of such payment shall be deposited into the applicable
Insurance Account to be held and applied in accordance with
Section 5 of the Company Security Agreement); and
(B) promptly upon receipt by such Company or any of
its Subsidiaries of the proceeds of any Asset Sale by such Company
(or promptly upon receipt by Holdings or LTC of the proceeds of
any Asset Sale consisting of equity securities or other interests
in such Company) after the LTC Closing Date, other than a sale
pursuant to and in accordance with Section 8.06(c), an amount
equal to 100% of the Net Cash Proceeds of such Asset Sale.
(c) Optional Prepayments. (i) Each Company may prepay the Term
Notes of such Company in whole or in part (in principal amounts of $125,000 or
in any integral multiple of $50,000 in excess thereof) upon at least 10 days'
prior irrevocable written notice to the Lenders (and such amounts specified in
such notice shall become due and payable on the date so specified), by paying
an amount equal to the Applicable Premium Percentage on the date of payment of
the aggregate principal amount being prepaid together with, in the case of any
prepayment of the remaining Term Notes in whole, accrued and unpaid interest on
the principal amount being prepaid to but excluding the date of payment.
"Applicable Premium Percentage" means (i) in the case of any
prepayment made with proceeds of Debt of Holdings or any of its Subsidiaries,
(1) in the case of any prepayment with respect to National Cellular Term Loans
or TWI Term Loans, (x) for any date from December 31, 1996 to but excluding
December 31, 1999, the excess of (A) 101.25% over (B) the product of .0347%
multiplied by the number of times the first day of a month has occurred
subsequent to December 31, 1996 and (y) for any date from and after December
31, 1999, 100%, and (2) in the case of any prepayment with respect to LTC Term
Loans, (x) for any date from June 27, 1997 to but excluding June 27, 2000, the
excess of (A) 101.25% over (B)
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the product of .0347% multiplied by the number of times the first day of a
month has occurred subsequent to June 27, 1997 and (y) for any date from and
after June 27, 2000, 100%, and (ii) in any other case, 100%.
(ii) Notwithstanding the foregoing, no Company may
prepay its Term Notes in whole pursuant to this subsection (c)
with the proceeds of other Debt unless simultaneously with such
prepayment (x) (A) the Companies prepay any outstanding balance
of the Term Notes, together with accrued interest thereon, in
accordance with this subsection (c) and (B) the Companies prepay
all Working Capital Loans, cash collateralize all outstanding
Letter of Credit Liabilities in accordance with Section 3.09(f)
(or provide for the replacement or cancellation thereof on terms
acceptable to each Lender) and terminate the Working Capital
Commitments and (y) Holdings redeems in cash, as provided in
Section 5.3 of the Equity Agreement, the portion of Lender
Interest which any Lender holding such portion of Lender
Interest requests Holdings in writing to redeem.
(d) Application of Payments. Each repayment or prepayment of less
than all the outstanding aggregate principal amount of the Term Notes shall be
applied pro rata to all the Term Notes according to their respective
outstanding principal amounts. Each repayment or prepayment of less than all
the outstanding aggregate principal amount of the Term Notes of any Company
pursuant to Section 2.04(a), 2.04(b)(ii) or 2.04(c) shall be applied pro rata
to their respective outstanding principal amounts. The principal amount of
each payment pursuant to Section 2.04(b) or (c) shall be applied to reduce the
remaining payments required by Section 2.04(a) in pro rata order of the
maturity thereof. No payment pursuant to Section 2.04(a) or (c) shall (except
as reflected in any determination of Excess Cash Flow) reduce the amount of any
payment required by Section 2.04(b).
Section 2.5. Lender Interest. On the Closing Date, NationsCredit
acquired from Holdings, in consideration for making the initial Term Loans,
Partnership Interests (as defined in the Partnership Agreement) equivalent to
5% of the Partnership Interests on a fully diluted basis (taking into account
all of the Partnership Interests of Holdings issued and outstanding as of the
Closing Date (the "Lender Interest"). Holdings and NationsCredit agree that,
for Federal income tax purposes, (i) the initial Term Loans and the Lender
Interest constitute an investment unit and (ii) the aggregate issue price of
the initial Term Loans drawn on the Closing Date is $11,100,000 and the
aggregate purchase price for the Lender Interest on the Closing Date is
$100,000. On the LTC Closing Date, LTC issued to NationsCredit, as an
adjustment to the Lender Interest in connection with the LTC Merger, Warrants
initially exercisable for shares of
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common stock of LTC initially equivalent to 1.72% of the common stock of LTC on
a fully diluted basis (taking into account all of the common stock of LTC
issued and outstanding as of the LTC Closing Date (the "Lender Interest
Warrants"). None of the Companies, Holdings nor any Lender shall voluntarily
take any action inconsistent with the agreement set forth in the immediately
preceding sentence.
ARTICLE 3
WORKING CAPITAL LOANS
SECTION 3.01. Working Capital Loans and Commitments. Upon the
terms and subject to the conditions set forth herein, each Lender severally and
not jointly agrees to make working capital loans ("Working Capital Loans") from
time to time to any Company in an aggregate principal amount at any time
outstanding such that, after giving effect to the application of the proceeds
of any Working Capital Loan made by it on any date, the Working Capital
Outstandings as to such Lender do not exceed such Lender's LTC Working Capital
Commitment. Each Working Capital Borrowing (other than any Reimbursement
Refunding Borrowing) shall be in an aggregate amount of $100,000 or an integral
multiple of $10,000 in excess thereof. No more than three Working Capital
Borrowings (other than any Reimbursement Refunding Borrowing) shall be made
within any week beginning on Monday of such week and ending on the last
Business Day of such week. Within the foregoing limits, each Company may
borrow under this Section 3.01, prepay or repay Working Capital Loans as
required under Section 3.05(b) or to the extent permitted by Section 3.06, and
reborrow pursuant to this Section 3.01.
SECTION 3.02. Working Capital Notes. The Working Capital Loans of
each Lender to each Company shall be evidenced by a single Working Capital
Note, substantially in the form of Exhibit B (each such note, a "Working
Capital Note"), dated the Closing Date or LTC Closing Date, as the case may be,
in an aggregate principal amount equal to (a) in the case of any National
Cellular Working Capital Note or TWI Working Capital Note, the amount of such
Lender's National Cellular's/TWI Working Capital Commitment, and (b) in the
case of any LTC Working Capital Note, the amount of such Lender's LTC Working
Capital Commitment, in each case duly executed and delivered and payable to
such Lender. Each Lender shall record the date and amount of each Working
Capital Loan made by it to such Company and the date and amount of each payment
of principal made by such Company with respect thereto, and prior to any
transfer of its Working Capital Notes shall endorse on Schedule A thereto (or
any continuation thereof) forming a part thereof appropriate notations to
evidence the foregoing information with respect to each such Working Capital
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Loan then outstanding; provided that the failure of any Lender to make any such
recordation or endorsement shall not affect the obligations of each Company
hereunder or under the Working Capital Notes. Each Lender is hereby
irrevocably authorized by each Company so to endorse its Working Capital Note
of such Company and to attach to and make a part of its Working Capital Note of
such Company a continuation of any such schedule as and when required.
SECTION 3.03. Interest on Working Capital Loans. Interest on the
Working Capital Loans shall accrue on the aggregate outstanding principal
amount thereof at the rate set forth in the Working Capital Note with respect
thereto, and shall be payable monthly in arrears as set forth therein.
SECTION 3.04. Advancing Working Capital Loans. (a) Each Company
borrowing pursuant to this Article 3 shall give each Lender and NationsCredit
notice (a "Notice of Borrowing") not later than Noon (New York City time) on
the Business Day immediately preceding each Working Capital Borrowing, signed
by the chief financial officer or treasurer of such Company, specifying the
date (which shall be a Business Day) and aggregate principal amount of such
Working Capital Borrowing, and certifying as to the satisfaction of the
conditions set forth in clauses (b), (c) and (d) of Section 5.02.
(b) Not later than 1:00 P.M. (New York City time) on the date of
each borrowing specified in a Notice of Borrowing, each Lender shall make
available its ratable share of such Working Capital Borrowing, in Federal or
other immediately available funds, to the applicable Company Account.
SECTION 3.05. Mandatory Repayments and Prepayments. (a) The
Working Capital Commitment of each Lender shall terminate at the opening of
business on the earlier of (i) May 1, 2004 and (ii) the date on which the Term
Notes shall have been paid in full (the "Termination Date"), and there shall
become due and each Company shall pay on the Termination Date, the entire
outstanding principal amount of each Working Capital Loan made to such Company,
together with accrued and unpaid interest thereon to but excluding the
Termination Date.
(b) If at any time the aggregate Working Capital Outstandings exceed
the lesser of the Borrowing Base and the aggregate Working Capital Commitments
of the Lenders, then, on the next succeeding Business Day, the Companies shall
apply an amount equal to such excess to repay the Working Capital Loans or cash
collateralize Letter of Credit Liabilities, or both, as and to the extent
required by Section 3.07(b), and to the extent the Companies fail to make any
such payment, the Companies shall provide for the replacement or cancellation
of any outstanding Letters of Credit until the aggregate Working Capital
Outstandings do not exceed
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the lesser of the Borrowing Base and the aggregate Working Capital Commitments
of the Lenders.
SECTION 3.06. Optional Prepayments. Each Company may prepay the
Working Capital Loans made to such Company in whole or in part (except with
respect to any Reimbursement Refunding, in minimum principal amounts of
$100,000 or in any larger integral multiple of $50,000) upon at least one
Business Day's prior irrevocable written notice to the Lenders, in an amount
equal to 100% of the principal amount being prepaid. The aggregate principal
amount of the Working Capital Loans designated for prepayment in any notice of
optional prepayment given pursuant to this subsection shall become due and
payable on the date fixed for prepayment as specified above.
SECTION 3.07. Application of Payments (a) Each payment or
prepayment of less than all the outstanding aggregate principal amount of the
Working Capital Loans made to any Company shall be applied pro rata to all the
Working Capital Loans made to such Company according to their respective
outstanding principal amounts.
(b) Amounts to be applied pursuant to Section 3.05(b) shall be
applied first to ratably repay the principal amount of the Working Capital
Loans then outstanding until all such Working Capital Loans shall have been
repaid in full, and if any excess then remains such excess shall be deposited
in the LC Collateral Account to be held, applied or released for application as
provided in Section 5(F) of the Company Security Agreement.
SECTION 3.08. Obligation to Make Working Capital Loans. If any
Lender shall fail to perform its obligation to make a Working Capital loan
hereunder, the amount of the Working Capital Commitments of such Lender shall,
at the time of any such failure, be immediately assumed by NationsCredit so
that the aggregate amount of the Working Capital Commitments to make any
Working Capital Loans provided for herein shall not be reduced. No such
assumption shall relieve any Lender from its Working Capital Commitments, and
each such defaulting Lender agrees to repay on demand NationsCredit any Working
Capital Loans made by NationsCredit in respect of such assumed Working Capital
Commitments, together with interest thereon from the date of such Loan to but
excluding the date of repayment at the rate applicable to such Working Capital
Loans plus 1%.
SECTION 3.09. Letters of Credit. (a) Issuance and Increase of
Letters of Credit; Lender Reimbursement Agreement. (i) Subject to the terms
and conditions hereof and such additional terms and conditions as the LC Issuer
shall from time to time require, each Company may from time to time request
that the
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LC Issuer issue Letters of Credit for the account of such Company or increase
the stated amount of any existing Letter of Credit (each event, an "LC Credit
Event").
(ii) Upon receipt from the beneficiary of any
Letter of Credit of any notice of a drawing under such Letter of
Credit, the LC Issuer shall notify the Agent and the Agent shall
promptly notify the Company for whose account such Letter of
Credit was issued and each other Lender as to the amount to be
paid as a result of such demand or drawing and the payment date.
Each Company shall be irrevocably and unconditionally obligated
forthwith to reimburse the LC Issuer for any amounts paid by the
LC Issuer upon any drawing under any Letter of Credit issued for
the account of such Company, without presentment, demand,
protest or other formalities of any kind. All such amounts paid
by the LC Issuer and remaining unpaid by such Company shall bear
interest, payable on demand, for each day until paid at a rate
per annum equal to the sum of 2% plus the rate applicable to
Working Capital Loans for such day. In addition, each Lender
agrees for the benefit of the LC Issuer that in the event that
any Company fails to reimburse the LC Issuer for any drawing
under any Letter of Credit issued for the account of such
Company for the full amount of such drawing on the date of such
drawing, each Lender shall be obligated to pay to the LC Issuer,
for value on the second Business Day following such date to the
relevant account notified by the LC Issuer to the Lenders in the
notice referred to in the following sentence, an amount equal to
its pro rata share (determined by reference to the Working
Capital Commitments of each of the Lenders) of such unreimbursed
amount (after giving effect to any reimbursement thereof
theretofore paid by such Company to the LC Issuer in respect of
such drawing). The LC Issuer shall notify each Lender of any
such unreimbursed amount (together with the account to which
such Lender's share in respect thereof is to be paid) not later
than 11:00 A.M. (New York City time) on the Business Day
immediately preceding the date that payment by such Lender is
due.
(iii) In consideration of the foregoing, the
parties hereto agree (and the LC Issuer by accepting the
benefits conferred on it hereby shall be deemed to have agreed)
that upon each LC Credit Event, the LC Issuer shall be deemed,
without further action on the part of the LC Issuer or of any
party hereto, to have sold to each Lender and each Lender shall
be deemed, without further action by the LC Issuer or any party
hereto, to have purchased from the LC Issuer, a participation
(or an increased participation, in the case of any LC Credit
Event that is an increase in the stated amount of an existing
Letter of Credit) in such Letter of Credit and the related
Letter of Credit Liabilities, in the amount required so that the
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participations of the Lenders therein shall be in proportion to
their respective Working Capital Commitments.
(iv) The several obligations of the Lenders to the LC
Issuer under this Section 3.09(a) shall be absolute, irrevocable and
unconditional under any and all circumstances whatsoever and shall not
be affected by any circumstance, including, without limitation, (1) any
set-off, counterclaim, recoupment, defense or other right which any
such Lender or any other Person may have against the LC Issuer or any
other Person for any reason whatsoever; (2) the occurrence or
continuance of a Default or an Event of Default or the termination of
the Working Capital Commitments; (3) any adverse change in the
condition (financial or otherwise) of any Company or any other Person;
(4) any breach of any Financing Document by any party thereto; (5) the
fact that any condition precedent to the issuance of, or the making of
any payment under, any Letter of Credit was not in fact met; (6) any
violation or asserted violation of law by any Lender or any affiliate
thereof; or (7) to the extent permitted under applicable law, any other
circumstance, happening or event whatsoever, whether or not similar to
any of the foregoing. Each payment by each Lender to the LC Issuer for
its own account shall be made without any offset, abatement,
withholding or reduction whatsoever.
(v) Each Lender acknowledges and agrees that the
LC Issuer will rely upon the provisions of this Section 3.09(a) in
issuing or increasing the stated amount of Letters of Credit for the
account of any Company; provided that the LC Issuer shall not be
entitled to rely on the provisions of this Section 3.09 with respect to
any Letter of Credit issued or increased by it after a Stop-Issuance
Notice has been received by the LC Issuer and remains in effect and the
Lenders shall not be under any obligation to reimburse the LC Issuer
for any amounts drawn under any Letter of Credit so issued or increased
(if increased, only to the extent of such increase).
"Stop Issuance Notice" means a notice to the LC Issuer from the Agent
to the effect that either (i) the Working Capital Commitments of the Lenders
have terminated or (ii) the conditions to an LC Credit Event specified in
Section 3.09(e) are not satisfied (either generally as to all Letters of Credit
or specifically with respect to any proposed LC Credit Event requested in a
Notice of Issuance delivered hereunder). A Stop-Issuance Notice shall become
effective upon receipt by the LC Issuer and may only be canceled by delivery to
the LC Issuer of a written notice of cancellation signed by the Agent (with the
consent of the Required Lenders).
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(b) Reimbursement Obligations of the Companies. Each Company
agrees, as a separate obligation, independent from any obligation it may have
to reimburse the LC Issuer pursuant to Section 3.09(a), that if at any time any
Lender shall make a payment to the LC Issuer pursuant to Section 3.09(a)(ii) in
respect of a Letter of Credit issued for the account of such Company, such
Company shall be irrevocably and unconditionally obligated forthwith to
reimburse such Lender for the amount of such payment in like currency, without
presentment, demand, protest or other formalities of any kind. All amounts
paid by any Lender to the LC Issuer pursuant to Section 3.09(a)(ii) shall bear
interest, payable on demand, for each day until such Company reimburses such
Lender therefor, at a rate per annum equal to the sum of 2% plus the rate
applicable to Working Capital Loans for such day.
(c) Reimbursement and Other Payments by the Companies. The
obligations of each Company to reimburse the Issuing Bank and each Lender
pursuant to Section 3.09(a) and 3.09(b) shall be absolute, unconditional and
irrevocable, and shall be performed strictly in accordance with the terms of
this Agreement, under all circumstances whatsoever, including without
limitation the following circumstances:
(i) any lack of validity or enforceability of any
Letter of Credit or any related document;
(ii) any amendment or waiver of or any consent to
departure from any Letter of Credit or any related document;
(iii) the existence of any claim, set-off, defense
or other right which such Company may have at any time against
the beneficiary of any Letter of Credit (or any Person or entity
for whom such beneficiary may be acting), the Agent, the LC
Issuer or any Lender or any other Person or entity, whether in
connection with this Agreement, any other Financing Document or
any unrelated transaction, provided that nothing herein shall
prevent the assertion of any such claim by separate suit or
compulsory counterclaim;
(iv) any statement or any other document presented
under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect whatsoever;
(v) payment by the LC Issuer under any Letter of
Credit against presentation of a draft or document which does
not comply with the terms of such Letter of Credit;
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(vi) any affiliation between the LC Issuer and any
Lender; or
(vii) to the extent permitted under applicable law,
any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing.
(d) Notice of LC Credit Event. Any Company requesting the issuance
or increase of a Letter of Credit hereunder shall give the Agent notice (a
"Notice of LC Credit Event") at least two Business Days before the relevant
issuance or increase, specifying:
(i) the date of issuance or increase of such
Letter of Credit;
(ii) the expiry date of such Letter of Credit
(which shall comply with the requirements of Section
3.09(e)(ii));
(iii) the proposed terms of such Letter of Credit,
including the face amount and currency thereof (which shall
comply with the requirements of Section 3.09(e)(iii)); and
(iv) the transactions or additional transaction or
transactions that are to be supported or financed with such
Letter of Credit or increase thereof.
Upon the receipt of a Notice of LC Credit Event, the Agent shall
promptly notify each Lender of the contents thereof and of the amount of such
Lender's participation in such Letter of Credit.
(e) Conditions to LC Credit Event. No Company shall request or
permit to occur a LC Credit Event unless each of the following conditions shall
have been satisfied:
(i) the Agent shall have received a Notice of LC
Credit Event with respect to such Letter of Credit or increase
thereof in accordance with Section 3.09(d) and a Borrowing Base
Certificate in accordance with Section 7.01(l);
(ii) such Letter of Credit shall by its terms
expire no later than the earlier of (x) one year after its
issuance (but may by its terms be renewable by notice given to
the LC Issuer, subject in any event to clause (y)) and (y) five
Business Days prior to May 1, 2004;
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(iii) such Letter of Credit shall be in a face
amount (including after giving effect to any contemplated
increase thereof) of not more than the amount that would, after
giving effect to the issuance thereof and to the borrowing and
repayment of Working Capital Loans on the date of issuance
thereof, cause (x) the aggregate Letter of Credit Liabilities of
all Letters of Credit to exceed $250,000 or (y) the Working
Capital Outstandings of the Lenders to exceed the lesser of (A)
the Borrowing Base and (B) the aggregate amount of the Working
Capital Commitments;
(iv) the fact that, immediately before and
immediately after such LC Credit Event, no Default shall have
occurred and be continuing; and
(v) the fact that the representations and
warranties of each Company and its Subsidiaries and Holdings
contained in the Financing Documents shall be true on and as of
the date of such LC Credit Event.
Each Notice of LC Credit Event shall be deemed to be a
representation and warranty by the Company delivering such Notice of LC Credit
Event to the Lenders and the Agent as of the date of the issuance or increase
of the relevant Letter of Credit as to the facts specified in clauses (iii),
(iv) and (v) above.
(f) If on any date the Working Capital Commitments are
terminated pursuant to Section 2.04(c)(ii), the Companies on such date shall
deposit in the LC Collateral Account an amount equal to all Letter of Credit
Liabilities then outstanding, to be held, applied or released for application
as provided in Section 5(F) of the Company Security Agreement.
ARTICLE 4
GUARANTY
SECTION 4.01. The Guaranty. Each of the Companies and Holdings
hereby unconditionally guarantees the full and punctual payment (whether at
stated maturity, upon acceleration or otherwise) of the principal of and
interest (including any interest which accrues after the commencement of any
case, proceeding or other action relating to the bankruptcy, insolvency or
reorganization of any Company, whether or not allowed or allowable as a claim
in any such proceeding) on each Note issued by, in the case of such Company,
each other Company and, in the case of Holdings, any Company, pursuant to this
Agreement, and the full and punctual payment of all other amounts payable by,
in the case of such Company, each other Company and, in the case of Holdings,
any Company under this Agreement or any other Financing Document, including any
amounts payable with
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respect to Letter of Credit Liabilities. Upon failure by, in the case of such
Company, each other Company and, in the case of Holdings, any Company, to pay
punctually any such amount, such Company or Holdings, as the case may be, shall
forthwith on demand pay the amount not so paid at the place and in the manner
specified in this Agreement or the other Financing Documents.
SECTION 4.02. Guaranty Unconditional. The obligations of
each Guarantor under this Article 4 shall be unconditional and absolute and,
without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(i) any extension, renewal, settlement,
compromise, waiver or release in respect of any obligation of
the Companies under this Agreement, other than this Article 4,
or any other Financing Document, by operation of law or
otherwise;
(ii) any modification or amendment of or
supplement to this Agreement or any other Financing Document;
(iii) any release, impairment, non-perfection or
invalidity of any direct or indirect security for any obligation
of the Companies under this Agreement or any other Financing
Document;
(iv) any change in the corporate existence,
structure or ownership of the Companies, or any insolvency,
bankruptcy, reorganization or other similar proceeding affecting
the Companies or their assets or any resulting release or
discharge of any obligation of the Companies contained in this
Agreement or any Financing Document;
(v) the existence of any claim, set-off or other
rights which such Guarantor may have at any time against any
Company, the Agent, any Lender or any other corporation or
person, whether in connection herewith or any unrelated
transactions, provided that nothing herein shall prevent the
assertion of any such claim by separate suit or compulsory
counterclaim;
(vi) any invalidity or unenforceability relating
to or against any Company for any reason of this Agreement or
any Financing Document, or any provision of applicable law or
regulation purporting to prohibit the payment by such Company of
the principal of or interest on any Note or any other amount
payable by such Company under this Agreement or any other
Financing Document; or
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(vii) any other act or omission to act or delay of
any kind by any Company, the Agent, any Lender or any other
corporation or person or any other circumstance whatsoever which
might, but for the provisions of this paragraph, constitute a
legal or equitable discharge of or defense to such Guarantor's
obligations hereunder.
SECTION 4.03. Discharge Only upon Payment in Full; Reinstatement In
Certain Circumstances. Each Guarantor's obligations hereunder shall remain in
full force and effect until the earlier of the date on which the Commitments
shall have terminated and the principal of and interest on the Notes and all
other amounts payable by the Companies under this Agreement or any other
Financing Document shall have been paid in full. If at any time any payment of
the principal of or interest on any Note or any other amount payable by any
Company under this Agreement or any other Financing Document is rescinded or
must be otherwise restored or returned upon the insolvency, bankruptcy or
reorganization of such Company or otherwise, the Guarantor's obligations with
respect to such Company's obligations hereunder with respect to such payment
shall be reinstated as though such payment had been due but not made at such
time.
SECTION 4.04. Waiver by the Guarantors. Each Guarantor irrevocably
waives acceptance hereof, presentment, demand, protest and any notice not
provided for herein, as well as any requirement that at any time any action be
taken by any corporation or person against any Company or any other corporation
or person.
SECTION 4.05. Subrogation. Upon making any payment with respect to
any Company hereunder, the Guarantor shall be subrogated to the rights of the
payee against such Company with respect to such payment; provided that such
Guarantor shall not enforce or accept any payment by way of subrogation until
all amounts of principal of and interest on the Notes and all other amounts
payable by such Company under the Loan Documents have been paid in full.
SECTION 4.06. Stay of Acceleration. If acceleration of the time for
payment of any amount payable by any Company under this Agreement, the Notes or
any other Financing Document is stayed upon the insolvency, bankruptcy or
reorganization of such Company, all such amounts otherwise subject to
acceleration under the terms of this Agreement shall nonetheless be payable by
each Guarantor hereunder forthwith on demand by the Agent made at the request
of the requisite proportion of the Lenders specified in Article 9 of this
Agreement.
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ARTICLE 5
Conditions
SECTION 5.01. Conditions to Closing. This Agreement shall become
effective on the date (the "LTC Closing Date", which shall not in any event be
later than June 30, 1997) that each of the following conditions precedent shall
have been satisfied:
(a) receipt by the Agent of counterparts hereof signed by each of
the parties hereto (or, in the case of any party as to which an executed
counterpart shall not have been received, receipt by the Agent in form
satisfactory to it of telegraphic, telex or other written confirmation from
such party of execution of a counterpart hereof by such party);
(b) receipt by NationsCredit of a duly executed LTC Term Note and
LTC Working Capital Note for its account, each in the form provided for herein;
(c) receipt by the Agent of duly executed counterparts of each
Security Document required to be effective on the LTC Closing Date, together
with evidence satisfactory to it in its sole good faith discretion of the
effectiveness of the security contemplated thereby;
(d) receipt by NationsCredit of evidence satisfactory to it in its
sole good faith discretion of the satisfaction (without waiver) of all other
conditions to the closing of the LTC Merger on the LTC Closing Date, and that
all transactions contemplated by the Operative Documents to be consummated on
the closing date of the LTC Merger will take place prior to or simultaneously
with the transactions hereunder contemplated to take place on the LTC Closing
Date, and satisfaction of NationsCredit in its sole good faith discretion with
the terms and conditions of the LTC Merger Documents;
(e) receipt by NationsCredit of (i) evidence satisfactory to it in
its sole good faith discretion of the effectiveness of all other Operative
Documents to be executed in connection with the LTC Merger, each of which shall
be in form and substance satisfactory to NationsCredit in its sole good faith
discretion, and (ii) each opinion, report, and other document required to be
delivered pursuant to the LTC Merger Documents in connection with the LTC
Merger, with a letter from each Person delivering any such opinion, report and
other document authorizing reliance thereon by the Agent and the Lenders, all
in form and substance satisfactory to NationsCredit;
(f) receipt by NationsCredit of evidence satisfactory to it that (i)
the shares of common stock of each of National Cellular and TWI shall have been
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converted into shares of common stock of LTC, (ii) the shares of common stock
of Merger Sub 1 shall have been converted into shares of TWI and (iii) the
shares of common stock of Merger Sub 2 shall have been converted into shares of
National Cellular, in each case pursuant to the terms of the LTC Merger
Agreement;
(g) receipt by the Agent of an opinion of Xxxxxxxxx Xxxxxxx,
counsel for the Companies and Holdings substantially in the form of Exhibit H,
covering such additional matters relating to the transactions contemplated
hereby as NationsCredit may reasonably request (by its execution and delivery
of this Agreement, each of the Companies and Holdings authorizes and directs
each such counsel to deliver such opinions to the Agent);
(h) receipt by the Agent of an opinion of Xxxxx Xxxx & Xxxxxxxx,
special counsel for the Agent, substantially in the form of Exhibit I, covering
such additional matters relating to the transactions contemplated hereby as
NationsCredit may reasonably request;
(i) receipt by NationsCredit, including in its capacity as Agent, of
all fees and any other amounts due and payable hereunder (including fees and
expenses payable pursuant to Section 10.04) of which Holdings has received
notice;
(j) [intentionally omitted]
(k) receipt by NationsCredit of any information it may request
concerning the financial condition, results of operations, liabilities
(contingent and otherwise, including with respect to environmental liabilities
and employee and retiree benefits) and prospects of, and the financial
reporting and accounting systems and the management information systems of, the
Companies; and confirmation satisfactory to NationsCredit, after consultation
with management of the Companies, and any independent environmental consultant
or independent accountant retained by NationsCredit, of all such information;
and satisfaction of NationsCredit in its sole good faith discretion with all
such information;
(l) satisfaction of NationsCredit in its sole good faith discretion
as to the absence of any material adverse change in any aspect of the business,
operations, properties, prospects or condition (financial or otherwise) of
Holdings and its Subsidiaries, or any event or condition which is reasonably
likely to result in such a material adverse change;
(m) receipt by NationsCredit of a certificate signed by an officer
of each Company to the effect that, both before and immediately after the
making of the Loans and the consummation of the LTC Merger and the other
transactions contemplated to take place on the LTC Closing Date, (i) no Default
shall have
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occurred and be continuing and (ii) the representations and warranties of the
Companies made in or pursuant to the Operative Documents are true;
(n) receipt by NationsCredit of the certificates referred to in
Section 7.04(c);
(o) receipt by NationsCredit of evidence satisfactory to it in its
sole good faith discretion of the effectiveness of the employment agreements
for Xxxxx Xxxxxxxxx and Xxxxxxxx Xxxxxx in the forms attached as Exhibit 7.6 to
the LTC Merger Agreement;
(p) receipt by NationsCredit of (i) the financial statements and
pro forma balance sheet referred to in Sections 6.04(a), (b), (c) and (d), (ii)
a statement of sources and uses of funds covering all payments reasonably
expected to be made by each Company and Holdings in connection with the
transactions contemplated by the Operative Documents to be consummated on the
LTC Closing Date, including an itemized estimate of all fees, expenses and
other closing costs in an aggregate amount not to exceed $50,000 over the
aggregate amount provided for such fees, expenses and closing costs in the
commitment letter dated June 3, 1997 from NationsCredit to H.I.G. Capital
Management, Inc. and (iii) payment instructions with respect to each wire
transfer to be made by the Agent, Holdings or any Company on the LTC Closing
Date setting forth the amount of such transfer, the purpose of such transfer,
the name and number of the account to which such transfer is to be made, the
name and ABA number of the bank or other financial institution where such
account is located and the name and telephone number of an individual that can
be contacted to confirm receipt of such transfer;
(q) receipt by the Agent of an Officer's Certificate of Holdings and
each Company satisfactory to the Agent stating in substance that after giving
effect to the LTC Merger, including the transactions contemplated by this
Agreement, each Company will not (and in the case of each of Holdings and LTC,
each of Holdings and LTC will not on a consolidated basis) be insolvent or be
rendered insolvent thereby, be left with unreasonably small capital with which
to engage in its business or have incurred debts beyond its ability to pay such
debts as they mature, by a margin reasonably satisfactory to the Agent;
(r) receipt by the Agent of evidence satisfactory to it in its sole
good faith discretion that all outstanding obligations of LTC under the loan
agreements specified in Schedule 1.01 have been paid in full, all commitments
thereunder have been terminated and all Liens securing such obligations and all
guarantees thereof have been released; and
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(s) receipt by the Agent of all documents it may reasonably request
relating to the existence of Holdings and the Companies, the corporate
authority for and the validity of the Financing Documents and the other
Operative Documents, and any other matters relevant hereto, all in form and
substance satisfactory to the Agent in its sole good faith discretion.
The documents referred to in this Section shall be delivered to the
Agent no later than the LTC Closing Date. The certificates and opinions
referred to in this Section shall be dated the LTC Closing Date. On the LTC
Closing Date and without further action by any party hereto, the Original
Credit Agreement among the parties hereto shall be amended and restated to read
in full as set forth herein. All references to "this Agreement" shall refer to
this Agreement as amended and restated as set forth herein.
SECTION 5.02. Conditions to Each Loan. The obligation of any
Lender to make a Loan on the occasion of any borrowing thereof (including on
the LTC Closing Date) is subject to the satisfaction of the following
additional conditions:
(a) in the case of a Working Capital Borrowing, receipt by each
Lender of a Notice of Borrowing in accordance with Section 3.04 and a Borrowing
Base Certificate as of the close of business on the Business Day immediately
preceding the date of such borrowing and, in the case of the Borrowing Base
Certificate delivered in connection with the initial borrowing, on a pro forma
basis after giving effect to the LTC Merger;
(b) the fact that, immediately after such borrowing and after
application of the proceeds thereof, the aggregate Working Capital Outstandings
of the Lenders will not exceed the lesser of (i) the Borrowing Base and (ii)
the Working Capital Commitments;
(c) the fact that, immediately before and after such borrowing, no
Default shall have occurred and be continuing; and
(d) the fact that the representations and warranties of each Company
and Holdings contained in the Financing Documents shall be true on and as of
the date of such borrowing.
Each borrowing hereunder shall be deemed to be a representation and
warranty by each Company and Holdings on the date of such borrowing as to the
facts specified in clauses (b), (c) and (d) of this Section.
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ARTICLE 6
REPRESENTATIONS AND WARRANTIES
Each Company and Holdings, jointly and severally, represent and
warrant (including, in the case of any such representation and warranty made or
deemed made before the consummation of the LTC Merger, at the time such
representation and warranty is made or deemed made and immediately after giving
effect to the consummation of the LTC Merger) that:
SECTION 6.01. Legal Existence and Power. Each of Holdings and the
Companies is duly incorporated or organized, validly existing and in good
standing under the laws of the state of its formation or incorporation, as the
case may be. Each of Holdings, the Companies and their respective Subsidiaries
has all partnership or corporate powers, as the case may be, and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted and as will be conducted after the LTC Merger.
Each of Holdings, the Companies and their respective Subsidiaries is qualified
to do business as a foreign partnership or corporation, as the case may be, in
each jurisdiction in which Holdings or such Subsidiary is required to be so
qualified.
SECTION 6.02. Authorization; No Contravention. The execution,
delivery and performance by each of Holdings, each Company and each Subsidiary
of such Company of the Operative Documents to which it is a party are within
Holdings', such Company's or such Subsidiary's (as the case may be) partnership
or corporate powers, as the case may be, have been duly authorized by all
necessary partnership or corporate action, as the case may be, require no
action by or in respect of, or filing with, any governmental body, agency or
official other than the filing of certificates of merger with the Secretary of
State of the States of Delaware and Texas, the filing of UCC-1 financing
statements, all of which have been made and are in full force and effect) and
do not contravene, or constitute a default under, any provision of applicable
law or regulation or of the certificate of limited partnership of Holdings, the
Partnership Agreement, the certificate of incorporation or by-laws of any
Company or of any Company's Subsidiaries or of any agreement, judgment,
injunction, order, decree or other instrument binding upon Holdings, any
Company or any of their respective Subsidiaries or result in the creation or
imposition of any Lien (other than the Liens created by the Security Documents)
on any asset of Holdings, any Company or any of their respective Subsidiaries.
SECTION 6.03. Binding Effect; Liens of Security Documents. (a) Each
of the Operative Documents to which any Company is a party (other than the
Notes) constitutes a valid and binding agreement of such Company, and each of
the Notes of such Company, when executed and delivered in accordance with this
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Agreement, will constitute valid and binding obligations of such Company, in
each case enforceable in accordance with its respective terms.
(b) Each of the Operative Documents to which Holdings is a party
constitutes a valid and binding agreement of Holdings, in each case enforceable
in accordance with its respective terms. The issuance of the Lender Interest
has been duly and validly authorized and, when issued and sold in accordance
with this Agreement, the Lender Interest will be duly and validly issued, fully
paid and nonassessable and free of preemptive rights.
(c) The Security Documents create valid security interests in, and
first mortgage Liens on, the Collateral purported to be covered thereby, which
security interests and mortgage Liens are and will remain perfected security
interests and mortgage Liens, prior to all other Liens other than Permitted
Liens. Each of the representations and warranties made by Holdings, any
Company or any of their respective Subsidiaries in the Security Documents is
true and correct.
SECTION 6.04. Financial Information. (a) The combined unaudited
balance sheet of National Cellular and TWI as of April 30, 1997 and the related
combined statement of operations, shareholders' equity and cash flows for the
three months then ended, copies of which have been delivered to each of the
Lenders, fairly present, in conformity with GAAP, the combined financial
position of National Cellular and TWI as of such date and their results of
operations, shareholders' equity and cash flows for the three months then
ended.
(b) The consolidated balance sheet of LTC and its Consolidated
Subsidiaries as of July 31, 1996 and the related statement of operations,
shareholder's equity and cash flows for the Fiscal Year then ended, reported on
by Ernst & Young LLP, copies of which have been delivered to each of the
Lenders, fairly present, in conformity with GAAP, the consolidated financial
position of LTC and its Consolidated Subsidiaries as of such date and its
operations, shareholder's equity and cash flows for such period.
(c) The unaudited consolidated balance sheet of LTC and its
Consolidated Subsidiaries as of April 30, 1997 and the related statements of
operations, shareholders' equity and cash flows for the nine months then ended,
copies of which have been delivered to each of the Lenders, fairly present, in
conformity with GAAP, the consolidated financial position of LTC and its
Consolidated Subsidiaries as of such date and its consolidated operations,
shareholders' equity and cash flows for the nine months then ended.
(d) The pro forma balance sheet of LTC as of April 30, 1997, copies
of which have been delivered to each of the Lenders, fairly presents, in
conformity
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with GAAP, the consolidated and consolidating financial position of LTC and its
Subsidiaries as of such date, adjusted to give effect (as if such events had
occurred on such date) to (i) the transactions contemplated by the LTC Merger
Documents, (ii) the making of the Loans and (iii) the payment of all legal,
accounting and other fees related thereto to the extent known at the time of
the preparation of such balance sheet. As of the date of such balance sheet
and the date hereof, neither any Company nor any of their respective
Subsidiaries had and has any material liabilities, contingent or otherwise,
including liabilities for taxes, long-term leases or forward or long-term
commitments, which are not properly reflected on such balance sheet.
(e) The information contained in the most recently delivered
Borrowing Base Certificate is complete and correct and the amounts shown
therein as "Eligible Receivables" and "Eligible Inventories" have been
determined as provided in the Financing Documents.
(f) Since April 30, 1997, there has been no material adverse change
in the business, operations, properties, prospects or condition (financial or
otherwise) of each Company and its Consolidated Subsidiaries, taken as a whole.
SECTION 6.05. Litigation. There is no action, suit or proceeding
pending against, or to the knowledge of any Company or Holdings threatened
against or affecting, Holdings, any Company or any of their respective
Subsidiaries before any court or arbitrator or any governmental body, agency or
official in which there is a reasonable possibility of an adverse decision
which could materially adversely affect the business, consolidated financial
position or consolidated results of operations of such Company and its
Consolidated Subsidiaries or which in any manner draws into question the
validity of any of the Operative Documents. There is no action, suit or
proceeding pending against, or to the knowledge of any Company or Holdings
threatened against or affecting, any party to any of the Operative Documents
(other than Holdings, any Company or any of their respective Subsidiaries)
before any court or arbitrator or any governmental body, agency or official
which in any manner draws into question the validity of any of the Operative
Documents.
SECTION 6.06. Ownership of Property, Liens. On and as of the LTC
Closing Date, after giving effect to the LTC Merger, each of Holdings, the
Companies and their respective Subsidiaries is the lawful owner of, has good
and marketable title to and is in lawful possession of, or has valid leasehold
interests in, all properties and other assets (real or personal, tangible,
intangible or mixed) purported to be owned or leased (as the case may be) by
Holdings, such Company or such Subsidiary on the balance sheet referred to in
Section 6.04(a), and none of its properties and assets is subject to any Liens,
except Permitted Liens. Holdings,
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each Company and their respective Subsidiaries conduct their business without
infringement or claim of infringement of any material license, patent,
trademark, trade name, service xxxx, copyright, trade secret or other
intellectual property right of others and there is no infringement or claim of
infringement by others of any material license, patent, trademark, trade name,
service xxxx, copyright, trade secret or other intellectual property right of
Holdings, any Company or any of their respective Subsidiaries.
SECTION 6.07. No Default. No Default or Event of Default has
occurred and is continuing and neither Holdings, any Company nor any of their
respective Subsidiaries is in default under or with respect to any material
contract, agreement, lease or other instrument to which it is a party or by
which its property is bound or affected.
SECTION 6.08. No Burdensome Restrictions. No contract, lease,
agreement or other instrument to which Holdings, any Company
or any of their respective Subsidiaries is a party or by which any of its
property is bound or affected, no charge, corporate restriction, judgment,
decree or order and no provision of applicable law or governmental regulation
is reasonably likely to have a material adverse effect on the business,
operations, properties, prospects or condition (financial or otherwise) of each
Company and its Consolidated Subsidiaries, taken as a whole.
SECTION 6.09. Labor Matters. There are no strikes or other labor
disputes pending or, to the best knowledge of any Company, threatened, against
any Company or any of its Subsidiaries. Hours worked and payments made to the
employees of each Company and its Subsidiaries have not been in violation of
the Fair Labor Standards Act or any other applicable law dealing with such
matters. All payments due from any Company or any of its Subsidiaries, or for
which any claim may be made against any of them, on account of wages and
employee and retiree health and welfare insurance and other benefits have been
paid or accrued as a liability on their books, as the case may be. The
consummation of the transactions contemplated by the Financing Documents and
the other Operative Documents will not give rise to a right of termination or
right of renegotiation on the part of any union under any collective bargaining
agreement to which it is a party or by which it is bound.
SECTION 6.10. Subsidiaries; Other Equity Investments. None of
Holdings or any Company has any Subsidiaries on the date hereof other than, in
the case of Holdings, the Companies and, in the case of LTC, Merger Sub 1,
Merger Sub 2, Let's Talk Cellular of Bayside, Inc. and LTC Kiosk Management,
Inc. In the case of any additional corporate Subsidiaries formed by Holdings
or any Company after the LTC Closing Date, each of such corporate Subsidiaries
will
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be at each time that this representation is made or deemed to be made after the
LTC Closing Date, a wholly-owned Subsidiary of a Company that is a corporation
duly incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted. Neither Holdings, any Company nor any of
their respective Subsidiaries is engaged in any joint venture or partnership
with any other Person. The aggregate book value of the assets of all
Subsidiaries of LTC in which the Agent does not have, for the benefit of itself
and the Lenders, a valid and perfected first priority security interest does
not exceed $100,000.
SECTION 6.11. Investment Company Act. Neither Holdings, any Company
nor any of their respective Subsidiaries is an "investment company" as defined
in the Investment Company Act of 1940, as amended. The consummation of the
transactions contemplated by the Operative Documents do not and will not
violate any provision of such Act or any rule, regulation or order issued by
the Securities and Exchange Commission thereunder.
SECTION 6.12. Margin Regulations. None of the proceeds from the
Loans have been or will be used, directly or indirectly, for the purpose of
purchasing or carrying any Margin Stock, for the purpose of reducing or
retiring any indebtedness which was originally incurred to purchase or carry
any Margin Stock or for any other purpose which might cause any of the loans
under this Agreement to be considered a "purpose credit" within the meaning of
Regulation G, U or X of the Board of Governors of the Federal Reserve Board.
SECTION 6.13. Taxes All Federal, state and local tax returns,
reports and statements required to be filed by Holdings, any Company or any of
their respective Subsidiaries have been filed with the appropriate governmental
agencies in all jurisdictions in which such returns, reports and statements are
required to be filed, and all taxes (including real property taxes) and other
charges shown to be due and payable have been timely paid prior to the date on
which any fine, penalty, interest, late charge or loss may be added thereto for
nonpayment thereof. All state and local sales and use taxes required to be
paid by Holdings, any Company or any of their respective Subsidiaries have been
paid. All Federal and state returns have been filed by Holdings, the Companies
and their respective Subsidiaries for all periods for which returns were due
with respect to employee income tax withholding, social security and
unemployment taxes, and the amounts shown thereon to be due and payable have
been paid in full or adequate provisions therefor have been made. National
Cellular's federal tax identification number is 00-0000000, TWI's federal tax
identification number is 65- 0712485, LTC's federal tax identification number
is 00-0000000 and Holdings' federal tax identification number is 65- 0719982.
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SECTION 6.14. Compliance with ERISA. Each member of the ERISA Group
has fulfilled its obligations under the minimum funding standards of ERISA and
the Code with respect to each Plan and is in compliance in all material
respects with the presently applicable provisions of ERISA and the Code with
respect to each Plan. No member of the ERISA Group has (i) sought a waiver of
the minimum funding standard under Section 412 of the Code in respect of any
Plan, (ii) failed to make any contribution or payment to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement, or made any
amendment to any Plan or Benefit Arrangement, which has resulted or could
result in the imposition of a Lien or the posting of a bond or other security
under ERISA or the Code or (iii) incurred any liability under Title IV of
ERISA other than a liability to the PBGC for premiums under Section 4007 of
ERISA.
SECTION 6.15. Brokers. No broker, finder or other intermediary has
brought about the obtaining, making or closing of the transactions contemplated
by the Operative Documents, and none of Holdings, LTC, National Cellular or TWI
has or will have any obligation to any Person in respect of any finder's or
brokerage fees in connection herewith or therewith.
SECTION 6.16. Related Transactions. The closing of the LTC Merger
will occur simultaneously with the making of the LTC Term Loan and the LTC
Working Capital Loan hereunder and no party has waived, without the consent of
the Required Lenders, any condition precedent to their obligations to close as
set forth in the LTC Merger Documents. True and complete copies of all of the
LTC Merger Documents have been delivered to each of the Lenders, together with
a true and complete copy of each document to be delivered at the closing of the
LTC Merger.
SECTION 6.17. Employment, Shareholders and Subscription Agreements.
Except for the Operative Documents and the other agreements described in
Schedule 6.17, true and complete copies of which have been delivered to the
Lenders, there are no (i) employment agreements covering the management of
Holdings, the Companies and their respective Subsidiaries, (ii) collective
bargaining agreements or other labor agreements covering any employees of
Holdings, any Company or any of their respective Subsidiaries, (iii)
agreements for managerial, consulting or similar services to which Holdings,
any Company or any of their respective Subsidiaries is a party or by which it
is bound or (iv) agreements regarding Holdings, the Companies and their
respective Subsidiaries, its assets or operations or any investment therein to
which any of its stockholders is a party or by which it is bound, including
without limitation any stock option plan or stock appreciation right plan.
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SECTION 6.18. Full Disclosure. None of the information (financial
or otherwise) furnished by or on behalf of Holdings, any Company or any of
their respective Subsidiaries to the Agent or any Lender in connection with the
consummation of the transactions contemplated by any of the Operative Documents
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements contained herein or therein not
misleading in the light of the circumstances under which such statements were
made. All financial projections delivered to the Lenders have been prepared on
the basis of the assumptions stated therein. Such projections represent
Holdings' best estimate of the future financial performance of Holdings, the
Companies and their respective Subsidiaries and such assumptions are believed
by the Companies to be fair in light of current business conditions.
SECTION 6.1. Representations and Warranties from Other Operative
Documents. As of the LTC Closing Date, each of the representations and
warranties made in the Operative Documents by each of the parties thereto is
true and correct in all material respects, and such representations and
warranties are hereby incorporated herein by reference with the same effect as
though set forth in their entirety herein, as qualified therein.
SECTION 6.20. Private Offering. Neither Holdings, any Company nor
any Person acting on its or their behalf has offered the Notes or the Lender
Interest or any similar securities for sale to, or solicited any offer to buy
any of the same from, or otherwise approached or negotiated in respect thereof
with, any Person other than the Lenders and not more than ten other
institutional investors. Neither Holdings, any Company nor any Person acting
on its or their behalf has taken, or will take, any action which would subject
the issuance or sale of the Notes or the Lender Interest to Section 5 of the
Securities Act, other than as provided in the Equity Agreement.
SECTION 6.21. Compliance with Environmental Requirements; No
Hazardous Materials. After giving effect to the Acquisition and except for
liabilities of any Company and any Subsidiary resulting from the matters
described in Sections 6.21(a)-(e) of this Agreement that would not,
individually or in the aggregate, be reasonably likely to exceed $50,000:
(a) Other than generation in compliance with all applicable
Environmental Laws, no Hazardous Materials are located on any properties now or
previously owned, leased or operated by any Company or any of such Company's
Subsidiaries or have been released into the environment, or deposited,
discharged, placed or disposed of at, on, under or near any of such properties.
No portion of any such property is being used, or has been used at any previous
time, for the disposal, storage, treatment, processing or other handling of
Hazardous
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Materials (other than processing or handling incidental to the generation of
Hazardous Materials in compliance with all applicable Environmental Laws), nor
is any such property affected by any Hazardous Materials Contamination.
(b) No asbestos or asbestos-containing materials that would require
abatement or removal prior to demolition or renovation are present on any of
the properties now or previously owned, leased or operated by any Company or
any of such Company's Subsidiaries.
(c) No polychlorinated biphenyls are located on or in any properties
now or previously owned, leased or operated by any Company or any of such
Company's Subsidiaries, in the form of electrical transformers, fluorescent
light fixtures with ballasts, cooling oils or any other device or form.
(d) No underground storage tanks are located on any properties now
or previously owned, leased or operated by any Company or any of such Company's
Subsidiaries, or were located on any such property and subsequently removed or
filled.
(e) No notice, notification, demand, request for information,
complaint, citation, summons, investigation, administrative order, consent
order and agreement, litigation or settlement with respect to Hazardous
Materials or Hazardous Materials Contamination is in existence or, to any
Company's knowledge, threatened with respect to or in connection with the
operation of any properties now or previously owned, leased or operated by any
Company or any of such Company's Subsidiaries. All uses by any Company or any
of such Company's Subsidiaries of any now or previously owned, leased or
operated property comply and at all times have complied with applicable
Environmental Laws. The prior uses of all now or previously owned, leased or
operated properties have at all times complied with applicable Environmental
Laws. No property now or previously owned, leased or operated by any Company
or any of such Company's Subsidiaries, no property to which any materials
originating at or from any Company or any of such Company's Subsidiaries have
been sent, and no property to which any Company or any of such Company's
Subsidiaries has transported or arranged for the transportation of any material
is listed or, to any Company's knowledge, proposed for listing on the National
Priorities List promulgated pursuant to CERCLA, on CERCLIS (as defined in
CERCLA) or on any similar federal, state or foreign list of sites requiring
investigation or cleanup, nor, to the knowledge of any Company, is any such
property threatened to be placed on any such list.
(f) There has been no environmental investigation, study, audit,
test, review or other analysis conducted of which any Company has knowledge in
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relation to the current or prior business of any Company or any property or
facility now or previously owned, leased or operated by any Company or any of
its Subsidiaries which has not been delivered to the Lenders at least five days
prior to the date hereof.
(g) For purposes of this Section 6.21, the terms "Company" and
"Subsidiary" shall include any business or business entity (including a
corporation) which is, in whole or in part, a predecessor of any Company
(including the Seller) or any Subsidiary of any Company.
SECTION 6.22. Initial Capitalization. Set forth on Schedule 6.22 is
a schedule of the initial capitalization of Holdings, LTC and each of LTC's
Subsidiaries, after giving effect to the transactions contemplated to take
place on the LTC Closing Date, specifying each class of interest held and the
amount and holder thereof.
SECTION 6.23. Real Property Interests. Except for the ownership,
leasehold or other interests set forth on Schedule 6.23, LTC and its
Subsidiaries have, as of the LTC Closing Date, no ownership, leasehold or other
interest in real property.
ARTICLE 7
AFFIRMATIVE COVENANTS
Each Company (and in the cases of Sections 7.01, 7.02, 7.05, 7.08,
7.09, 7.11 and 7.12, Holdings) agrees that, so long as any Lender has any
Commitment hereunder, any amount payable under any Note or any Reimbursement
Obligation remains unpaid or any Letter of Credit remains outstanding:
SECTION 7.01. Financial Statements and Other Reports. Each of the
Companies and Holdings will maintain a system of accounting established and
administered in accordance with sound business practices to permit preparation
of financial statements in accordance with GAAP, and will deliver to each of
the Lenders:
(a) as soon as practicable and in any event within 45 days after the
end of each month, a consolidated and consolidating balance sheet of LTC and
its Consolidated Subsidiaries, as at the end of such month and the related
consolidated and consolidating statements of operations and cash flows for such
month, and for the portion of the Fiscal Year ended at the end of such month
setting forth in each case in comparative form the figures for the
corresponding
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periods of the previous Fiscal Year and the figures for such month and for such
portion of the Fiscal year ended at the end of such month set forth in the
annual operating and capital expenditure budgets and cash flow forecast
delivered pursuant to Section 7.01(k), all in reasonable detail and certified
by the chief financial officer of LTC as fairly presenting the financial
condition and results of operations of LTC and its Consolidated Subsidiaries,
and as having been prepared in accordance with GAAP applied on a basis
consistent with the audited financial statements of Holdings subject to changes
resulting from audit and normal year-end adjustments;
(b) (i) as soon as available and in any event within 120 days after
the end of each Fiscal Year, a consolidated and consolidating balance sheet of
LTC and its Consolidated Subsidiaries, as of the end of such Fiscal Year and
the related consolidated and consolidating statements of operations,
stockholders' equity and cash flows for such Fiscal Year, certified without
qualification by independent public accountants of nationally recognized
standing and setting forth in each case in comparative form the figures for the
previous Fiscal Year (other than for Fiscal Year 1995) and the figures for such
Fiscal Year set forth in the annual operating and capital expenditure budgets
and cash flow forecast delivered pursuant to Section 7.01(k) and (ii) as soon
as available and in any event by no later than September 30, 1997, a combined
balance sheet of NCI and TWI and their respective Consolidated Subsidiaries, as
of the end of the Fiscal Year ended December 31, 1996 and the related
consolidated and consolidating statements of operations, stockholders' equity
and cash flows for such Fiscal Year, certified without qualification by
independent public accountants of nationally recognized standing;
(c) (i) together with each delivery of financial statements pursuant to
(a) and (b) above, an Officers' Certificate of LTC stating that the officers
executing such certificate have reviewed the terms of this Agreement and have
made, or caused to be made under their supervision, a review in reasonable
detail of the transactions and condition of each Company and such Company's
Subsidiaries during the accounting period covered by such financial statements
and that such review has not disclosed the existence during or at the end of
such accounting period, and that such officers do not have knowledge of the
existence as at the date of such Officers' Certificate, of any Default, or, if
any such Default existed or exists, specifying the nature and period of
existence thereof and what action any Company has taken or is taking or
proposes to take with respect thereto; (ii) together with each delivery of
financial statements for each month, fiscal quarter and Fiscal Year, a
compliance certificate of the chief financial officer or treasurer of LTC (x)
providing details of all transactions between each Company or any of its
Subsidiaries and any Person referred to in Section 8.08, (y) demonstrating in
reasonable detail compliance during and at the end of such accounting period
with
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the restrictions contained in Sections 8.11 through 8.17 and (z) if not
specified in the financial statements delivered pursuant to (a) or (b) above,
as the case may be, specifying the aggregate amount of interest paid or accrued
by LTC and its Subsidiaries and the aggregate amount of depreciation and
amortization charged, during such accounting period; and (iii) together with
each delivery of financial statements pursuant to (b) above, a statement
setting forth in reasonable detail the computation of Excess Cash Flow, if any,
for such Fiscal Year, certified by the chief financial officer of Holdings as
having been prepared from such financial statements in accordance with this
Agreement;
(d) together with each delivery of financial statements pursuant to
(b) above, a written statement by the independent public accountants giving the
report thereon (i) stating that their audit examination has included a review
of the terms of this Agreement as it relates to accounting matters, (ii)
stating whether, in connection with their audit examination, any Default has
come to their attention, and if such a condition or event has come to their
attention, specifying the nature and period of existence thereof, and (iii)
stating that based on their annual audit examination nothing has come to their
attention which causes them to believe that the information contained in the
certificates delivered therewith pursuant to (c) above is not correct and that
the matters set forth in the compliance certificate delivered therewith
pursuant to clause (ii) of (c) above for the applicable Fiscal Year are not
stated in accordance with the terms of this Agreement;
(e) promptly upon receipt thereof, copies of all reports submitted
to any Company by independent public accountants in connection with each
annual, interim or special audit of the financial statements of any Company,
made by such accountants, including the comment letter submitted by such
accountants to management in connection with their annual audit;
(f) promptly upon their becoming available, copies of (i) all
financial statements, reports, notices and proxy statements sent or made
available generally by Holdings or any Company to its security holders, (ii)
all regular and periodic reports and all registration statements and
prospectuses filed by Holdings or any Company with any securities exchange or
with the Securities and Exchange Commission or any governmental authority
succeeding to any of its functions and (iii) all press releases and other
statements made available generally by Holdings or any Company to the public
concerning material developments in the business of Holdings or any Company;
(g) promptly upon any officer of Holdings or any Company obtaining
knowledge (i) of the existence of any Default, or becoming aware that the
holder of any Debt of Holdings, any Company or any of their respective
Subsidiaries has given any notice or taken any other action with respect to a
claimed default
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thereunder, (ii) of any change in LTC's certified accountant or any
resignation, or decision not to stand for re-election, by any member of LTC's
board of directors, (iii) that any Person has given any notice to Holdings or
any Company or taken any other action with respect to a claimed default under
any agreement or instrument (other than the Financing Documents) to which
Holdings, any Company or any of their respective Subsidiaries is a party or by
which any of their assets are bound or (iv) of the institution of any
litigation or arbitration involving an alleged liability of Holdings, any
Company or any of their respective Subsidiaries equal to or greater than
$250,000 or any adverse determination in any litigation or arbitration
involving a potential liability of Holdings, any Company or any of their
respective Subsidiaries equal to or greater than $100,000, an Officers'
Certificate of Holdings specifying the nature and period of existence of any
such condition or event, or specifying the notice given or action taken by such
holder or Person and the nature of such claimed default (including any
Default), event or condition, and what action Holdings or any Company has
taken, is taking or proposes to take with respect thereto;
(h) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as defined in
Section 4043 of ERISA) with respect to any Plan which might constitute grounds
for a termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice that any Multiemployer
Plan is in reorganization, is insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title IV of ERISA of an
intent to terminate, impose liability (other than for premiums under Section
4007 of ERISA) in respect of, or appoint a trustee to administer any Plan, a
copy of such notice; (iv) applies for a waiver of the minimum funding standard
under Section 412 of the Code, a copy of such application; (v) gives notice of
intent to terminate any Plan under Section 4041(c) of ERISA, a copy of such
notice and other information filed with the PBGC; (vi) gives notice of
withdrawal from any Plan pursuant to Section 4063 of ERISA, a copy of such
notice; or (vii) fails to make any payment or contribution to any Plan or
Multiemployer Plan or in respect of any Benefit Arrangement or makes any
amendment to any Plan or Benefit Arrangement which has resulted or could result
in the imposition of a Lien or the posting of a bond or other security, a
certificate of the chief financial officer or the chief accounting officer of
LTC setting forth details as to such occurrence and action, if any, which LTC
or applicable member of the ERISA Group is required or proposes to take;
(i) simultaneously with the financial statements referred to in (a)
above, operating plans and financial forecasts, including cash flow projections
covering
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proposed fundings, repayments, additional advances, investments and other cash
receipts and disbursements, as prepared from time to time by the management of
Holdings or any Company for internal use;
(j) copies of any reports or notices related to taxes and any other
material reports or notices received by Holdings or any Company from, or filed
by Holdings or any Company with, any Federal, state or local governmental
agency or body regulating the activities of Holdings or any Company, as the
case may be;
(k) within 30 days prior to the conclusion of each Fiscal Year,
LTC's annual operating and capital expenditure budgets and cash flow forecast
for the following Fiscal Year presented on a monthly basis, which shall be in a
format reasonably consistent with projections, budgets and forecasts
theretofore provided to the Lenders;
(l) together with each Notice of Borrowing and on the first Business
Day of each week (unless the Companies have delivered a Borrowing Base
Certificate as of a Business Day during the next preceding week), a Borrowing
Base Certificate as of the close of business of the next preceding Business
Day;
(m) within two Business Days after any request therefor, such
information in such detail concerning the amount, composition and manner of
calculation of the Borrowing Base as any Lender may reasonably request;
(n) within ten days after the end of each calendar month, a report,
in form and substance acceptable to the Required Lenders, as to all accounts
receivable of any Company outstanding as of the last day of such month (a
"Receivables Report"), which shall set forth in summary form an aging of such
receivables and a summary by account debtor of the warranty claims made by such
account debtor and the percentage that such warranty claims represent of all
receivables due from such account debtor, and which shall, if any Lender so
requests, include a detailed aged trial balance of all such receivables
specifying the names, addresses, face amount and dates of all invoices for each
account debtor obligated on a receivable so listed; upon the request of any
Lender and to the extent available, each Receivables Report shall be
accompanied by copies of customer statements, and all documents, including
repayment histories and present status reports, relating to the receivables so
scheduled and such other matters and information relating to the status of any
receivables as any Lender shall reasonably request;
(o) together with the next delivery of a Receivables Report after
any Company becomes aware thereof, notice of any dispute between any account
debtor and such Company with respect to any amounts due and owing in excess of
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$50,000, with an explanation in reasonable detail of the reason for the
dispute, all claims related thereto and the amount in controversy;
(p) within 10 days after the end of each calendar month, a
calculation of the daily average amount during the month then ended of (i) the
aggregate amount available for drawing under all outstanding Letters of Credit
(whether or not any conditions to drawing can then be met) and (ii) the
aggregate unreimbursed amount payable to the LC Issuer (either by any Company
or by the Lenders) in respect of previous drawings under all outstanding
Letters of Credit; and
(q) with reasonable promptness, such other information and data with
respect to Holdings, any Company or any of their respective Subsidiaries as
from time to time may be reasonably requested by any Lender.
SECTION 7.2. Payment of Obligations. Each of Holdings and the
Companies (i) shall pay and discharge, and each Company will cause each of its
Subsidiaries to pay and discharge, at or before maturity, all of its material
obligations and liabilities, including tax liabilities, except where the same
may be the subject of a Permitted Contest, (ii) shall maintain, and any
Company will cause each of its Subsidiaries to maintain, in accordance with
GAAP, appropriate reserves for the accrual of any of the same and (iii) shall
not breach, and each Company shall not permit any of its Subsidiaries to
breach, in any material respect, or permit to exist any material default under,
the terms of any lease, commitment, contract, instrument or obligation to which
it is a party, or by which its properties or assets are bound.
SECTION 7.03. Conduct of Business and Maintenance of Existence.
Each Company will continue, and will cause each of its Subsidiaries to
continue, to engage in business of the same general type as now conducted by
such Company and its Subsidiaries, and will preserve, renew and keep in full
force and effect, and will cause each of its Subsidiaries to preserve, renew
and keep in full force and effect their respective corporate existence and
their respective rights, privileges and franchises necessary or desirable in
the normal conduct of business.
SECTION 7.04. Maintenance of Property; Insurance(a). Each Company
and its Subsidiaries will keep all property useful and necessary in its
business in good working order and condition, ordinary wear and tear excepted.
(b) Each Company will maintain, and such Company will cause each of
its Subsidiaries to maintain, (i) physical damage insurance on all real and
personal property on an all risks basis (not including the perils of flood and
quake), covering the actual cash value of all such property and consequential
loss coverage for business interruption and extra expense, covering such risks,
for amounts not less than those, and with deductible amounts not greater than
those, set forth in Part I of Schedule 7.04, (ii) public liability insurance
(including products/ completed operations liability coverage) covering such
risks, for amounts not less
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than those, and with deductible amounts not greater than those, set forth in
Part II of Schedule 7.04 and (iii) such other insurance coverage in such
amounts and with respect to such risks as the Required Lenders may reasonably
request. All such insurance shall be provided by insurers having an A.M. Best
policyholders rating of not less than B+ or such other insurers as the Required
Lenders may approve in writing.
(c) On or prior to the LTC Closing Date, each Company shall cause
the Agent to be named as an additional insured and loss payee on each insurance
policy required to be maintained pursuant to this Section 7.04. LTC will
deliver to the Lenders on the LTC Closing Date, a certificate from its
insurance broker dated such date showing the amount of coverage as of such
date, and certifying that, in the opinion of such broker, such amounts are
reasonable and customary for companies of established repute engaged in the
same or a similar business, that such policies will include effective waivers
(whether under the terms of any such policy or otherwise) by the insurer of all
claims for insurance premiums against all loss payees and additional insureds
and all rights of subrogation against all loss payees and additional insureds,
and that if all or any part of such policy is canceled, terminated or expires,
the insurer will forthwith give notice thereof to each additional insured and
loss payee and that no cancellation, reduction in amount or material change in
coverage thereof shall be effective until at least 30 days after receipt by
each additional insured and loss payee of written notice thereof. Each Company
will deliver to the Lenders (i) upon the request of any Lender through the
Agent from time to time full information as to the insurance carried, (ii)
within five days of receipt of notice from any insurer, a copy of any notice of
cancellation, nonrenewal or material change in coverage from that existing on
the date of this Agreement and (iii) forthwith, notice of any cancellation or
nonrenewal of coverage by such Company.
(d) Any proceeds in excess of $200,000 from any Casualty Insurance
Policy which are payable to the insured in respect of any claim, or any
condemnation award or other compensation in respect of a condemnation (or any
transfer or disposition of property in lieu of condemnation) for which any
Company or any of its Subsidiaries receives a condemnation award or other
compensation in excess of $50,000, shall be paid to the Agent to be held,
applied or released for application in accordance with Section 5 of the Company
Security Agreement, and each Casualty Insurance Policy shall provide that all
insurance proceeds in excess of $50,000 per claim which are payable to the
insured shall be adjusted with and payable to the Agent or such Company, as the
case may be. Each Company hereby appoints the Agent as its attorney-in-fact to
make proof of loss, claim for insurance and adjustments with insurers, and to
execute or endorse
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all documents, checks or drafts in connection with payments under Casualty
Insurance Policies.
SECTION 7.05. Compliance with Laws. Each of Holdings and the
Companies will comply, and each Company will cause each of its Subsidiaries to
comply, in all material respects with all applicable laws, ordinances, rules,
regulations, and requirements of governmental authorities (including
Environmental Laws and ERISA and the rules and regulations thereunder).
SECTION 7.06. Inspection of Property, Books and Records. Each
Company and Holdings will keep, and each Company will cause each of its
Subsidiaries to keep, proper books of record and account in which full, true
and correct entries shall be made of all dealings and transactions in relation
to its business and activities; and each Company and Holdings will permit, and
each Company will cause each of its Subsidiaries to permit, representatives of
any Lender at such Lender's expense to visit and inspect any of its properties,
to examine and make abstracts or copies from any of its books and records, to
conduct a collateral audit and analysis of its inventories and accounts
receivable and to discuss its affairs, finances and accounts with its officers,
employees and independent public accountants, all at such reasonable times and
as often as may reasonably be desired.
SECTION 7.07. Use of Proceeds. LTC will use the proceeds of Loans
borrowed on the LTC Closing Date solely for (i) payment of amounts due under
the LTC Merger Documents and transaction fees incurred in connection with the
Operative Documents and (ii) repayment of outstanding obligations of LTC
pursuant to Section 5.01(r). Working Capital Loans borrowed after the LTC
Closing Date shall be used by each Company solely for (x) working capital needs
of such Company and its Subsidiaries and (y) for capital expenditures in
connection with the opening of new stores. None of such proceeds will be used
in violation of any applicable law or regulation.
SECTION 7.08. Further Assurances. Each of Holdings and the
Companies will, and each Company will cause each of its Subsidiaries to, at its
own cost and expense, cause to be promptly and duly taken, executed,
acknowledged and delivered all such further acts, documents and assurances (x)
as may from time to time be necessary or as the Required Lenders may from time
to time request in order to carry out the intent and purposes of the Financing
Documents and the transactions contemplated thereby, including all such actions
to establish, preserve, protect and perfect the estate, right, title and
interest of the Lenders to the Collateral (including Collateral acquired after
the date hereof), including first priority Liens thereon, subject only to
Permitted Liens and (y) as the Required Lenders may from time to time request,
to establish, preserve, protect
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and perfect first priority Liens in favor of the Lenders on any and all assets
of Holdings, the Companies and their respective Subsidiaries, now owned or
hereafter acquired, that are not Collateral on the date hereof. Each Company
shall promptly give notice to the Agent of the acquisition after the LTC
Closing Date by such Company or any of its Subsidiaries of any real property
(including leaseholds in respect of real property), trademark, copyright or
patent.
SECTION 7.09. Board Meetings. Each Company will notify the Lenders
of all meetings and actions by written consent of the board of directors of
each of Holdings and such Company and each committee thereof at the same time
and in the same manner as notice of any meetings of such board or committee is
required to be given to its directors who do not waive such notice (or, if such
action requires no notice or notice is waived by the Board, then two days
written notice thereof describing the matters upon which action is to be
taken). All meetings of the board of directors of each Company other than LTC
or each committee thereof shall be held on the same day and in the same
location as the analogous meeting of the board of directors of each of LTC or
relevant committee thereof, as the case may be. The Lenders shall have the
right at their cost to send two representatives selected by them to each such
meeting, who shall be permitted to attend such meeting and any adjournments
thereof (other than any portion of such meeting devoted to discussion of the
Lenders).
SECTION 7.10. Lenders' Meetings. Within 45 days after the end of
each fiscal quarter, each Company will conduct a meeting of the Lenders to
discuss such fiscal quarter's results and the financial condition of such
Company at which shall be present the chief executive officer and the chief
financial officer of each Company and such other officers of such Company as
such Company's chief executive officer shall designate. Such meetings shall be
held at a time and place convenient to the Lenders and such Company. Each of
the Lenders agrees that any Company's chief executive office on the LTC Closing
Date is convenient to the Lenders.
SECTION 7.11. Consummation of the Acquisition. Each of the
Companies and Holdings will cause the closing of the LTC Merger to occur
concurrently with the making of the Loans on the LTC Closing Date, and will not
without the prior written consent of the Required Lenders waive any condition
to its obligations to consummate the LTC Merger.
SECTION 7.12. Hazardous Materials; Remediation. Each Company will
(i) promptly give notice to the Lenders in writing of any complaint, order,
citation, notice or other written communication from any Person with respect
to, or if such Company becomes aware of, (x) the existence or alleged existence
of a violation of any applicable Environmental Law or the incurrence of any
liability, obligation,
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loss, damage, cost, expense, fine, penalty or sanction or the requirement to
commence any remedial action resulting from or in connection with any air
emission, water discharge, noise emission, Hazardous Material or any other
environmental, health or safety matter at, upon, under or within any of the
properties now or previously owned, leased or operated by such Company or any
of its Subsidiaries, or due to the operations or activities of such Company,
any Subsidiary of such Company or any other Person on or in connection with any
such property or any part thereof or (y) any release on any of such properties
of Hazardous Materials in a quantity that is reportable under any applicable
Environmental Law; (ii) promptly comply with any governmental requirements
requiring the removal, treatment or disposal of such Hazardous Materials or
Hazardous Materials Contamination and provide evidence satisfactory to the
Required Lenders of such compliance; and (iii) provide the Lenders, within 30
days after demand therefor by the Required Lenders, with a bond, letter of
credit or similar financial assurance evidencing to the satisfaction of the
Required Lenders that sufficient funds are available to pay the cost of
removing, treating and disposing of such Hazardous Materials or Hazardous
Materials Contamination and discharging any assessment which may be established
on any such property as a result thereof.
SECTION 7.13. Collateral Reports. Each Company shall keep accurate
and complete records of its accounts receivable in at least so much detail as
to enable such Company to provide the Receivables Reports and other information
described in Section 7.01.
SECTION 7.14. Collections; Right to Notify Account Debtors. At any
time following the occurrence of an Event of Default and during the continuance
thereof, in addition to the Lenders' rights under the Security Documents, each
Company hereby authorizes the Agent, at any time, to (i) notify any or all
account debtors that the accounts receivable of such Company and its
Subsidiaries have been assigned to the Agent and that the Agent has a security
interest therein and (ii) direct such account debtors to make all payments due
from them to such Company upon such accounts receivable directly to the Agent
or to a Lockbox designated by the Agent. The Agent shall promptly furnish such
Company with a copy of any such notice sent. Any such notice, in the Agent's
sole discretion, may be sent on such Company's stationery, in which event such
Company shall, if requested by the Agent, co-sign such notice with the Agent.
SECTION 7.15. Enforcement of Covenants Not to Compete. Each Company
shall preserve, protect and defend, to the extent permitted by applicable law
and commercially reasonable, all of its rights, if any, with respect to any
covenant not to compete contained in any of the material contracts of such
Company or contained in any employment agreement with any employee whose
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annual salary and other compensation payable by such Company and its
Subsidiaries is $100,000 or more.
SECTION 7.16. Landlord and Warehouseman Waivers. Each Company shall
use its best efforts to (i) deliver to the Agent waivers of contractual and
statutory landlord's, landlord's mortgagee's and warehouseman's Liens in form
and substance satisfactory to the Agent under each existing lease, warehouse
agreement or similar agreement (other than leases with respect to retail mall
locations) to which such Company or any of its Subsidiaries is a party and (ii)
incorporate such waivers when the existing lease, warehouse agreement or
similar agreement (other than leases with respect to retail mall locations) is
amended, renewed or extended; provided that such Company will obtain waivers of
both contractual and statutory landlord's, landlord's mortgagee's and
warehouseman's Liens in form and substance satisfactory to the Agent in
connection with each new lease, warehouse agreement or similar agreement (other
than leases with respect to retail mall locations) entered into by such Company
or any of its Subsidiaries. Without limiting the obligations of such Company
under this Section 7.17, it is understood and agreed that any Inventory that is
subject to a landlord's, landlord's mortgagee's or warehouseman's Lien or any
other Lien not created by the Security Documents shall not be included in
Eligible Inventories.
ARTICLE 8
NEGATIVE COVENANTS
Each Company (and, in the case of Sections 8.03, 8.05, 8.09, 8.10,
8.11, 8.12, 8.14, 8.15, 8.16 and 8.19, Holdings) agrees that, so long as any
Lender has any Commitment hereunder, any amount payable under any Note or any
Reimbursement Obligation remains unpaid or any Letter of Credit remains
outstanding:
SECTION 8.1. Debt. Each Company will not, and will not permit any
of its Subsidiaries to, directly or indirectly, create, incur, assume,
guarantee or otherwise become or remain directly or indirectly liable with
respect to, any Debt, except for:
(a) Debt of such Company outstanding on the date of this Agreement
as set forth in Schedule 8.01;
(b) Debt of such Company under the Financing Documents;
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(c) Debt of such Company or any of its Subsidiaries incurred or
assumed for the purpose of financing all or any part of the cost of acquiring
any asset (including through Capital Leases), in an aggregate principal amount
at any time outstanding not greater than $300,000;
(d) Debt of such Company or any of its Subsidiaries to a
wholly-owned Subsidiary of such Company, or of any Subsidiary of such Company
to such Company; and
(e) in the case of LTC, Debt of such Company consisting of Capital
Leases incurred for the purpose of financing the cost of leasing management
information systems, in an aggregate principal amount at any time outstanding
not greater than $650,000; and
(f) Debt of such Company under the Seller Subsidiary Guaranties.
SECTION 8.2. Negative Pledge. Each Company will not, and will not
permit any of its Subsidiaries to, create, assume or suffer to exist any Lien
on any asset now owned or hereafter acquired by it, except:
(a) any Lien on any asset securing Debt permitted under Section
8.01(c) incurred or assumed for the purpose of financing all or any part of the
cost of acquiring such asset, provided that such Lien attaches to such asset
concurrently with or within 90 days after the acquisition thereof;
(b) Liens existing on the date of this Agreement securing Debt or
other obligations outstanding on such date permitted by Section 8.01(a) in an
aggregate principal amount not exceeding $1,750,000;
(c) Liens in favor of vendors to any Company on Inventory securing
trade payables in an aggregate amount outstanding not to exceed $2,500,000 at
any time; provided that at no time on or after June 30, 1997 shall any such
Lien in favor of any vendor extend to any asset of any Company other than
Inventory supplied by such vendor;
(d) Liens arising in the ordinary course of its business which (i)
do not secure Debt, (ii) do not secure any obligation in an amount exceeding
$50,000 and (iii) do not in the aggregate materially detract from the value of
its assets or materially impair the use thereof in the operation of its
business; and
(e) Liens created by the Security Documents.
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SECTION 8.03. Capital Stock. Each Company will not, and will not
permit any of its Subsidiaries to, issue any shares of capital stock except (i)
shares of capital stock issued by any of its Subsidiaries to such Company and
shares of capital stock of such Company issued to Holdings or (ii) shares of
capital stock of LTC issued pursuant to the IPO; provided that LTC shall prepay
the Term Notes pursuant to Section 2.04(b). Holdings shall not issue any
equity security that under the Partnership Agreement is entitled to a
preference over the Partnership Interests as to payment of dividends or
distributions.
SECTION 8.04. Restricted Payments. Each Company will not, and will
not permit any of its Subsidiaries to, directly or indirectly, declare, order,
pay, make or set apart any sum for any Restricted Payment; provided that the
foregoing shall not restrict or prohibit dividends or distributions from such
Company to Holdings at such times and in such amounts as are necessary to
permit:
(i) purchases or redemptions of the Lender
Interest under the terms of the Equity Agreement;
(ii) payment of taxes and de minimis
administrative expenses payable by Holdings in the ordinary
course, so long as before and after giving effect to any such
dividend or distribution for such purpose, no Default shall have
occurred and be continuing;
(iii) distributions to partners of Holdings at the
timed and in the amounts necessary to enable them to pay their
respective federal, state and local tax liabilities in respect
of the taxable income of Holdings (but in no event at a rate
higher than the amounts payable by such partners assuming the
then-highest federal, state and local tax rates applicable to
corporations in the applicable jurisdiction); and
(iv) payments of interest and principal on the
Seller Note and the Employment Agreement to the extent permitted
by Section 8.18.
SECTION 8.05 ERISA. Holdings and each Company will not,
and each Company will not permit any of its Subsidiaries to:
(a) engage in any transaction in connection with which Holdings or
any of its Subsidiaries could be subject to any material liability arising from
either a civil penalty assessed pursuant to Section 502(i) of ERISA or a tax
imposed by Section 4975 of the Code;
(b) terminate any Plan in a manner, or take any other action, which
could result in any material liability of any member of the ERISA Group to the
PBGC;
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(c) fail to make full payment when due of all amounts which, under
the provisions of any Plan, it is required to pay as contributions thereto, or
permit to exist any accumulated funding deficiency, whether or not waived, with
respect to any Plan;
(d) permit the present value of all benefit liabilities under all
Plans to exceed the fair market value of the assets of such Plans; or
(e) fail to make any payments to any Multiemployer Plan that it may
be required to make under any agreement relating to such Multiemployer Plan or
any law pertaining thereto.
SECTION 8.06. Consolidations, Mergers and Sales of Assets. Each
Company will not, and will not permit any of its Subsidiaries to, (i)
consolidate or merge with or into any other Person or (ii) sell, lease or
otherwise transfer, directly or indirectly, any of its or their assets, other
than (a) sales of inventory in the ordinary course of their respective
businesses, (b) dispositions of Temporary Cash Investments, (c) exchanges of
equipment for replacement equipment in the ordinary course of business, and (d)
dispositions for cash and fair value of assets that the board of directors of
such Company determines in good faith are no longer used or useful in the
business of such Company and its Subsidiaries, provided that immediately after
any such disposition, the aggregate fair market value of all such assets
disposed of pursuant to this clause (d) during the Fiscal Year in which such
disposition is made does not exceed $250,000.
SECTION 8.07. Purchase of Assets, Investments. Each Company will
not, and will not permit any of its Subsidiaries to, acquire any assets other
than in the ordinary course of business. Each Company will not, and will not
permit any of its Subsidiaries to, make, acquire or own any Investment in any
Person other than (a) Temporary Cash Investments and (b) Investments in its
Subsidiaries made after the date hereof in an aggregate amount not exceeding
$100,000. Without limiting the generality of the foregoing, each Company will
not, and will not permit any of its Subsidiaries to, (i) acquire or create any
Subsidiary without (x) the consent of the Required Lenders and (y) arrangements
satisfactory to the Required Lenders for a pledge of the stock of such
Subsidiary to the Agent for the benefit of the Lenders and a guaranty by such
Subsidiary of the obligations of such Company hereunder or (ii) engage in any
joint venture or partnership with any other Person.
SECTION 8.08. Transactions with Affiliates. Each Company will not,
and will not permit any of its Subsidiaries to, directly or indirectly, enter
into or permit to exist any transaction (including the purchase, sale, lease or
exchange of any property or the rendering of any service) with any Affiliate of
such Company, any
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stockholder of Holdings or such Company or any affiliate of any such
stockholder on terms that are less favorable to such Company or such
Subsidiary, as the case may be, than those which might be obtained at the time
from a Person who is not an Affiliate of such Company, a stockholder of
Holdings or an affiliate of such stockholder, as the case may be; provided that
each Company shall be permitted to (i) to make payments to Holdings to the
extent permitted by Section 8.04 and (ii) pay fees to H.I.G. Capital
Management, Inc. to the extent permitted by Section 8.16.
SECTION 8.09. Amendments or Waivers. Without the prior written
consent of the Required Lenders, none of Holdings and the Companies will, nor
will any of them permit any Subsidiary of any Company to, agree to (i) any
amendment to or waiver of or in respect of any Operative Document or (ii) any
other material amendment to or waiver of any material contract constituting a
part of the Collateral.
SECTION 8.10. Fiscal Year. None of National Cellular, TWI, LTC or
Holdings shall change its fiscal year from a fiscal year ending July 31.
SECTION 8.11. Capital Expenditures. (a) The aggregate amount of
Consolidated Capital Expenditures of LTC for the period commencing on the LTC
Closing Date and ending on July 31, 1997 shall not exceed $1,400,000.
(b) The aggregate amount of Consolidated Capital Expenditures of LTC
for the Fiscal Year ending July 31, 1998 shall not exceed $4,000,000.
(c) The aggregate amount of Consolidated Capital Expenditures of LTC
for the Fiscal Year ending July 31, 1999 shall not exceed the lesser of (i)
$4,000,000 and (ii) an amount equal to the sum of (x) $2,000,000 plus (y) an
amount equal to 70% of the excess (if any) of EBITDA of LTC for the prior
Fiscal Year over the minimum EBITDA of LTC for such prior Fiscal Year as
required pursuant to Section 8.14(b)(iv).
(d) The aggregate amount of Consolidated Capital Expenditures of LTC
for the Fiscal Year ending July 31, 2000 and for each Fiscal Year thereafter
shall not exceed the lesser of (i) $4,000,000 and (ii) an amount equal to the
sum of (x) $1,700,000 plus (y) for any Fiscal Year, an amount equal to 70% of
the excess (if any) of EBITDA of LTC for the prior Fiscal Year over the minimum
EBITDA of LTC for such prior Fiscal Year as required pursuant to Section
8.14(b)(iv).
For purposes of this Section 8.11, (x) to the extent that the amount
of Consolidated Capital Expenditures of LTC in any Fiscal Year are less than
the amount set forth above, the amount of Consolidated Capital Expenditures of
LTC
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otherwise permitted to be made in the immediately succeeding Fiscal Year (the
"Current Amount") (but not for any other subsequent year) will be increased by
the amount of such shortfall (the "Capital Expenditure Carryforward Amount")
and (y) Consolidated Capital Expenditures of LTC expended, incurred or accrued
during any Fiscal Year shall be applied, first, against, the Current Amount and
second, against the Capital Expenditure Carryforward Amount for such Fiscal
Year.
SECTION 8.12. Total Debt Coverage Ratio. (a) The ratio of (x)
Consolidated Free Cash Flow of LTC to (y) Total Debt Service of LTC for each
period commencing on August 1, 1997 and ending on each of October 31, 1997,
January 31, 1998 and April 30, 1998 shall not be less than 1.1 to 1.0.
(b) The ratio of (x) Consolidated Free Cash Flow of LTC to (y) Total
Debt Service of LTC for the four consecutive fiscal quarters ending the last
date of each fiscal quarter of LTC, commencing with July 31, 1998, shall not be
less than 1.1 to 1.0.
SECTION 8.13. Lease Payments. Each Company will not, and will not
permit any of its Subsidiaries to, incur or assume (whether pursuant to a
Guarantee or otherwise) any liability for rental payments under a lease with a
lease term (as defined in Financial Accounting Standards Board Statement No.
13, as in effect on the date hereof) of one year or more if, after giving
effect thereto, the aggregate amount of minimum lease payments that such
Company and its Consolidated Subsidiaries have so incurred or assumed will
exceed, on a consolidated basis, (i) in the case of the Fiscal Year ending July
31, 1997, $7,000,000 for such Fiscal Year under all such leases (excluding
Capital Leases), (ii) in the case of the Fiscal Year ending July 31, 1998,
$3,750,000 for such Fiscal Year under all such leases that are New Leases
(excluding Capital Leases), and (iii) in the case of any Fiscal Year ending
after July 31, 1998, the Permitted Amount for such Fiscal Year under all such
leases that are New Leases (excluding Capital Leases).
For purposes of this Section:
(a) the amount of liability for rental payments under any New Lease
in any Fiscal Year consisting of, or consisting of a renewal of, an operating
lease existing prior to the first day of such Fiscal Year shall be the amount,
if any, by which the amount of liability for rental payments under such New
Lease for such Fiscal Year exceeds 110% of the amount of liability for rental
payments under such New Lease for the Fiscal Year of the Companies most
recently ended prior to the date on which such New Lease became a New Lease;
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(b) "Permitted Amount" means, (i) with respect to the Fiscal Year
ending July 31, 1999, an amount equal to the lesser of (x) $4,000,000 and (y)
the Available Excess Amount for such Fiscal Year, (ii) with respect to the
Fiscal Year ending July 31, 2000, an amount equal to the lesser of (x)
$4,250,000 and (y) the Available Excess Amount for such Fiscal Year, (iii) with
respect to the Fiscal Year ending July 31, 2001, an amount equal to the lesser
of (x) $4,500,000 and (y) the Available Excess Amount for such Fiscal Year,
(iv) with respect to the Fiscal Year ending July 31, 2002, an amount equal to
the lesser of (x) $4,750,000 and (y) the Available Excess Amount for such
Fiscal Year, and (v) with respect to the Fiscal Year ending July 31, 2003, an
amount equal to the lesser of (x) $5,000,000 and (y) the Available Excess
Amount for such Fiscal Year; and
(c) "Available Excess Amount" means, with respect to any Fiscal
Year, an amount equal to the sum of (A) the lesser of (1) $2,000,000 and (2) an
amount equal to the excess (if any) of EBITDA of LTC for the prior Fiscal Year
over the minimum EBITDA of LTC for such prior Fiscal Year required pursuant to
Section 8.14(b)(iv), plus (B) an amount equal to 200% of the excess (if any) of
EBITDA of LTC for the prior Fiscal Year over the sum of $2,000,000 plus the
minimum EBITDA of LTC for such prior Fiscal Year required pursuant to Section
8.14(b)(iv).
SECTION 8.14. Minimum EBITDA. (a) EBITDA for the period commencing
on the LTC Closing Date and ending on October 31, 1997 shall not be less than
$1,100,000.
(b) EBITDA for the period commencing on August 1, 1997 and ending
on January 31, 1998 shall not be less than $2,500,000.
(c) EBITDA for the period commencing on August 1, 1997 and ending
on April 30, 1998 shall not be less than $4,000,000.
(d) EBITDA for the four consecutive fiscal quarters ending on a
date set forth below shall not be less than the corresponding amount set forth
below opposite such date:
Period Amount
------ ------
07/31/1998 $5,200,000
10/31/1998 $5,350,000
01/31/1999 $5,500,000
04/30/1999 $5,650,000
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07/31/1999 $5,800,000
10/31/1999 $5,950,000
01/31/2000 $6,100,000
04/30/2000 $6,250,000
07/31/2000 $6,400,000
10/31/2000 $6,550,000
01/31/2001 and the last day of $6,700,000
each fiscal quarter thereafter
SECTION 8.15. Limitations on Activities by Holdings. Holdings
shall not, directly or indirectly, (i) enter into or permit to exist any
transaction or agreement (including any agreement for incurrence or assumption
of Debt, any purchase, sale, lease or exchange of any property or the rendering
of any service), between itself and any other Person, other than (x) the
Operative Documents to which it is a party (the "Holdings Documents"), or (y)
the incurrence of Debt to any Company to finance the redemption of the Lender
Interest in accordance with the terms of the Equity Agreement, (ii) engage in
any business or conduct any activity (including the making of any Investment or
payment) or transfer any of its assets, other than the making of the
Investments in the Companies and the performance of the Holdings Documents in
accordance with the terms thereof and performance of ministerial activities and
payment of taxes and administrative fees necessary for compliance with the next
succeeding sentence or (iii) consolidate or merge with or into any other
Person. Holdings shall preserve, renew and keep in full force and effect its
partnership existence and any rights, privileges and franchises necessary or
desirable in the conduct of its business, and shall comply in all material
respects with all material applicable laws, ordinances, rules, regulations, and
requirements of governmental authorities, provided that Holdings may terminate
any such right, privilege or franchise (other than its partnership existence)
if the board of directors of its general partner in good faith determines that
such termination is in the best interests of Holdings and not materially
disadvantageous to the Lenders.
SECTION 8.16. Investor Affiliate Fees. Each Company shall not and
shall not permit any of its Subsidiaries to, directly or indirectly, pay or
become obligated to pay any fees or other amounts to or for the account of
H.I.G. Capital Management, Inc. or any of its Affiliates except, so long as no
Default is then continuing or would result therefrom, pursuant to the
Consulting Agreement, which fees or amounts, so long as no Default is then
continuing or would result therefrom, may be increased by an aggregate amount
equal to $100,000 per year.
SECTION 8.17. Subordinated Obligations. Neither Holdings nor any
Company shall permit, nor shall such Company suffer any of its Subsidiaries to,
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purchase, redeem, retire, defease or otherwise acquire for value, deposit any
monies with any Person with respect to, or make any payment or prepayment of
the principal of or interest on, or any other amount owing in respect of, any
Debt outstanding under the Seller Note or any obligation owing to the Seller
pursuant to the Employment Agreement other than scheduled payments of principal
of or interest on such Debt or obligation, as the case may be, required
pursuant to the terms thereof; provided that (i) any such payment shall be
permitted only if no Default, in the case of payment under the Seller Note, and
no Default pursuant to Section 8.14, in the case of payment under the
Employment Agreement, shall have occurred and be continuing at the time of such
payment and (ii) no payment shall be made pursuant to Section 3(b) of the
Employment Agreement unless Adjusted EBIT (as defined in the Seller Note) for
the twelve months ended December 31, 1997 equals or exceeds $4,000,000.
ARTICLE 9
EVENTS OF DEFAULT
SECTION 9.1. Events of Default. If any one or more of the
following events (hereinafter called "Events of Default") shall occur and be
continuing for any reason whatsoever (whether voluntary or involuntary, by
operation of law or otherwise):
(a) any Company shall fail to pay any principal on any Note or any
Reimbursement Obligation when due, or shall fail to pay any interest or premium
on any Note, or any fees or any other amount payable hereunder within three
Business Days after the due date thereof;
(b) any Company shall fail to observe or perform any covenant
contained in Section 7.01(a), 7.01(b), 7.01(c) or 7.14, or Article 8 hereof, or
Section 5 or Sections 4(A), (E) or (I) of the Company Security Agreement, or
Holdings shall fail to perform any covenant contained in Article 8 hereof or
Section 3(B) of the Holdings Pledge Agreement, or HIG shall fail to perform any
covenant contained in Section 3(B) of the HIG Pledge Agreement;
(c) any Company or any of such Company's Subsidiaries or Holdings
shall fail to observe or perform any covenant or agreement contained in the
Financing Documents (other than those covered by clause (a) or (b) above) for
10 days after notice thereof has been given to LTC by the Agent;
(d) any representation, warranty, certification or statement made by
any Company or Holdings in any Financing Document or in any certificate,
financial
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statement or other document delivered pursuant to the Financing Documents shall
prove to have been incorrect in any respect (or in any material respect if such
representation, warranty, certification or statement is not by its terms
already qualified as to materiality) when made (or deemed made);
(e) any Company or any of such Company's Subsidiaries or Holdings
shall fail to make any payment in respect of any Material Debt;
(f) any event or condition shall occur which results in the
acceleration of the maturity of any Material Debt of any Company or any of its
Subsidiaries or Holdings, or enables (or, with the giving of notice or lapse of
time or both, would enable) the holder of such Debt or any Person acting on
such holder's behalf to accelerate the maturity thereof;
(g) commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator, custodian
or other similar official of it or any substantial part of its property, or
shall consent to any such relief or to the appointment of or taking possession
by any such official in an involuntary case or other proceeding commenced
against it, or shall make a general assignment for the benefit of creditors, or
shall fail generally to pay its debts as they become due, or shall take any
corporate action to authorize any of the foregoing;
(h) an involuntary case or other proceeding shall be commenced
against Holdings, any Company or any of such Company's Subsidiaries seeking
liquidation, reorganization or other relief with respect to it or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator, custodian
or other similar official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain undismissed and unstayed
for a period of 60 days; or an order for relief shall be entered against
Holdings, any Company or any of such Company's Subsidiaries under the federal
bankruptcy laws as now or hereafter in effect;
(i) any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $50,000 which it shall have become
liable to pay under Title IV of ERISA; or notice of intent to terminate a
Material Plan shall be filed under Title IV of ERISA by any member of the ERISA
Group, any plan administrator or any combination of the foregoing; or the PBGC
shall institute proceedings under Title IV of ERISA to terminate, to impose
liability (other than for premiums under Section 4007 of ERISA) in respect of,
or to cause a trustee to be appointed to administer any Material Plan; or a
condition shall exist
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by reason of which the PBGC would be entitled to obtain a decree adjudicating
that any Material Plan must be terminated; or there shall occur a complete or
partial withdrawal from, or a default, within the meaning of Section 4219(c)(5)
of ERISA, with respect to, one or more Multiemployer Plans which could cause
one or more members of the ERISA Group to incur a current payment obligation in
excess of $50,000;
(j) a judgment or order for the payment of money in excess of
$100,000 shall be rendered against Holdings, any Company or any of such
Company's Subsidiaries and such judgment or order shall continue unsatisfied
and unstayed for a period of 10 days;
(k) (i) except as the result of the IPO (provided that LTC shall prepay
the Term Notes pursuant to Section 2.04(b)(i)(B)) or any transfer made pursuant
to the Holdings Pledge Agreement or the HIG Pledge Agreement, Holdings and HIG
shall cease to be the record and beneficial owner of a majority of the issued
and outstanding capital stock of LTC; (ii) except as the result of any transfer
pursuant to the LTC Pledge Agreement, LTC shall cease to be the record and
beneficial owner of 100% of the issued and outstanding stock of each of TWI and
National Cellular; (iii) any person or group of persons (within the meaning of
Rule 13d-3 promulgated by the Securities and Exchanges Commission under the
Securities Exchange Act of 1934, as amended), other than the HIG Investor and
HIG shall have acquired beneficial ownership (within the meaning of such Rule
13d-3) of 50% or more of the issued and outstanding common stock of LTC; (iv)
Xxx Xxxxxxxx shall cease to be chief executive officer of National Cellular and
TWI and a successor shall not have been appointed by LTC and approved by the
Required Lenders within 90 days thereafter; (v) Xxxxxxxx Xxxxxx shall cease to
be chief executive officer of LTC and a successor shall not have been appointed
by LTC and approved by the Required Lenders within 90 days thereafter; (vi)
Xxxxx Xxxxxxxxx shall cease to be the president of LTC and a successor shall
not have been appointed by LTC and approved by the Required Lenders within 90
days thereafter; (vii) the HIG Investor shall cease to be the general partner
of Holdings; or (viii) representatives of the HIG Investor shall cease to
constitute a majority of the board of directors or functional equivalents of
Holdings;
(l) the auditor's report or reports on the audited statements
delivered pursuant to Section 7.01 shall include any material qualification
(including with respect to the scope of audit) or exception;
(m) the Lien created by any of the Security Documents shall at any
time fail to constitute a valid and perfected Lien on all of the Collateral
purported to be secured thereby, subject to no prior or equal Lien except
Permitted Liens, or Holdings or any Company shall so assert in writing;
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(n) any Company shall be prohibited or otherwise materially
restrained from conducting the business theretofore conducted by it by virtue
of any determination, ruling, decision, decree or order of any court or
regulatory authority of competent jurisdiction and such determination, ruling,
decision, decree or order remains unstayed and in effect for any period of 10
days beyond any period for which any business interruption insurance policy of
such Company shall provide full coverage to such Company of any losses and lost
profits; or
(o) any of the Operative Documents shall for any reason fail to
constitute the valid and binding agreement of any party thereto, or Holdings,
any Company or any of such Company's Subsidiaries shall so assert in writing;
then, and in every such event and at any time thereafter during the continuance
of such event, the Agent shall if requested by the Required Lenders, (i) by
notice to the Companies terminate the Commitments and they shall thereupon
terminate and/or (ii) by notice to the Companies declare the Notes (together
with accrued interest thereon) to be, and the Notes shall thereupon become,
immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by Holdings and the
Companies; provided that in the case of any of the Events of Default specified
in clause (g) or (h) above with respect to any Company, without any notice to
such Company or any other act by the Agent or the Lenders, the Commitments
shall thereupon terminate and all of the Notes (together with accrued interest
thereon) shall become immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by each
Company.
SECTION 9.2. Cash Collateral. If any Event of Default specified in
clause (g) or (h) of Section 9.01 with respect to any Company shall occur or
the Loans shall have otherwise been accelerated pursuant to Section 9.01, then
without any request or the taking of any other action by the Agent or any of
the Lenders, the Companies shall be obligated forthwith to deposit in the LC
Collateral Account an amount in immediately available funds equal to the then
aggregate amount available for drawings (regardless of whether any conditions
to any such drawing can then be met) under all Letters of Credit at the time
outstanding, to be held in the LC Collateral Account as provided in Section
5(F) of the Company Security Agreement.
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ARTICLE 10
FEES, EXPENSES AND INDEMNITIES; GENERAL PROVISIONS RELATING TO
PAYMENTS
SECTION 10.01. Fees. (a) Participation Fees. On the LTC Closing
Date, the Companies shall pay to each Lender a fee in an amount equal to 1.50%
of such Lender's aggregate Term Commitment and LTC Working Capital Commitment.
(b) Unused Commitment Fee. During the period from the LTC Closing
Date through the date on which Working Capital Commitments are terminated, the
Companies shall pay to each Lender a fee at the rate of 0.25% per annum on the
daily average amount by which the amount of such Lender's Working Capital
Commitment exceeds the aggregate amount of its Working Capital Outstandings.
Accrued fees under this Section shall be payable quarterly in arrears on each
Quarterly Date prior to the date on which the Working Capital Commitments are
terminated and on the date of such termination.
(c) Letter of Credit Fee. Each Company agrees to pay to the
Lenders, ratably in proportion to their respective Working Capital Commitments,
a letter of credit fee with respect to each Letter of Credit issued for the
account of such Company, computed for each day from and including the date of
issuance of such Letter of Credit to but excluding the date that is two
Business Days after the last day a drawing is available under such Letter of
Credit, at a rate of 1.5% per annum on the sum of (i) the aggregate amount of
such Letter of Credit that is undrawn but available for drawing from time to
time (whether or not any conditions to drawing can then be met) plus (ii) the
aggregate unreimbursed amount payable to the LC Issuer (either by such Company
or by the Lenders pursuant to Section 3.09(a)) in respect of previous drawings
thereunder; provided that to the extent such Letter of Credit is not drawn on
or before the last day a drawing is available under such Letter of Credit, such
letter of credit fee shall cease to accrue on the last such day. Such fee
shall be payable in arrears on each Quarterly Date prior to the date on which
the Working Capital Commitments are terminated and on the date of such
termination.
SECTION 10.02. Computation of Interest and Fees Commitment fees
pursuant to Section 10.01(b), letter of credit fees pursuant to Section
10.01(c) and all interest hereunder and under the Notes shall be calculated on
the basis of a 360-day year for the actual number of days elapsed.
SECTION 10.03. General Provisions Regarding Payments All payments
(including prepayments) to be made by any Company or Holdings under any
Financing Document, including payments of principal of and premium and interest
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on the Notes, Reimbursement Obligations, fees, expenses and indemnities, shall
be made without set-off or counterclaim and in immediately available funds. If
any payment hereunder becomes due and payable on a day other than a Business
Day, such payment shall be extended to the next succeeding Business Day and,
with respect to payments of principal, interest thereon shall be payable at the
then applicable rate during such extension. Each Company and Holdings shall
make all payments in immediately available funds to each Lender's Payment
Account before 11:00 A.M. (New York City time) on the date when due. Each
payment (including prepayments) by any Company on account of principal of and
interest on any Loans shall be made pro rata according to the respective
outstanding principal amounts of such Class of Loans made to such Company held
by each Lender. All amounts payable by any Company or Holdings hereunder or
under any other Financing Document not paid when due (other than payments of
principal and interest on the Notes, which shall bear interest as set forth
therein) shall bear interest, payable on demand, for each day until paid at a
rate per annum equal to 5% plus the rate announced by NationsBank, N.A. from
time to time as its prime rate (calculated on the basis of a 360-day year for
the actual number of days elapsed).
SECTION 10.04. Expenses. Whether or not the transactions
contemplated hereby shall be consummated, the Companies agree, jointly and
severally, to pay on demand (i) all costs and expenses of preparation of this
Agreement, the other Financing Documents and the other Operative Documents and
of each Company's performance of and compliance with all agreements and
conditions contained herein and therein, (ii) the fees, expenses and
disbursements of counsel (including the reasonable allocation of the
compensation, costs and expenses of in-house counsel, based upon time spent)
to, and independent appraisers and consultants retained by, the Lenders in
connection with the negotiation, preparation, execution and administration of
this Agreement, the other Financing Documents and the other Operative Documents
and any amendments hereto or thereto and waivers hereof and thereof, (iii) all
costs and expenses of creating, perfecting and maintaining Liens pursuant to
the Financing Documents, including filing and recording fees and expenses, the
costs of any bonds required to be posted in respect of future filing and
recording fees and expenses, title investigations and fees and expenses of such
local counsel as the Agent shall request, (iv) the fees, expenses and
disbursements of independent accountants or other experts retained by the Agent
in connection with not more than two accounting and collateral audits or
reviews of each Company and its affairs during any calendar year and (v) if an
Event of Default occurs, all out-of-pocket expenses incurred by the Agent and
each Lender, including fees and disbursements of counsel (including the
reasonable allocation of the compensation, costs and expenses of in-house
counsel, based upon time spent), in connection with such Event of Default and
collection, bankruptcy, insolvency and other enforcement proceedings resulting
therefrom.
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SECTION 10.05. Indemnity. Whether or not the transactions
contemplated hereby shall be consummated, each Company agrees to indemnify, pay
and hold harmless the Agent and each Lender and any subsequent holder of any of
the Notes, Letter of Credit Liabilities or Lender Interest and the officers,
directors, employees and agents of the Agent, each Lender and such holders
(collectively called the "Indemnitees") from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, claims, costs, expenses and disbursements of any kind or nature
whatsoever (including the fees and disbursements of counsel for such
Indemnitee) in connection with any investigative, administrative or judicial
proceeding, whether or not such Indemnitee shall be designated a party thereto
and including any such proceeding initiated by or on behalf of such Company or
any of its Subsidiaries or Holdings, and the expenses of investigation by
engineers, environmental consultants and similar technical personnel and any
commission, fee or compensation claimed by any broker (other than any broker
retained by NationsCredit) asserting any right to payment for the transactions
contemplated hereby, which may be imposed on, incurred by or asserted against
such Indemnitee as a result of or in connection with the transactions
contemplated hereby or by the other Operative Documents (including (i)(A) as a
direct or indirect result of the presence on or under, or escape, seepage,
leakage, spillage, discharge, emission or release from, any property now or
previously owned, leased or operated by such Company or any of its Subsidiaries
of any Hazardous Materials or any Hazardous Materials Contamination, (B)
arising out of or relating to the offsite disposal of any materials generated
or present on any such property or (C) arising out of or resulting from the
environmental condition of any such property or the applicability of any
governmental requirements relating to Hazardous Materials, whether or not
occasioned wholly or , accident or event caused by any act or omission of such
Company or any of its Subsidiaries, and (ii) proposed and actual extensions of
credit under this Agreement) and the use or intended use of the proceeds of the
Notes, the Letters of Credit and the Lender Interest, except that such Company
shall have no obligation hereunder to an Indemnitee with respect to any
liability resulting from the gross negligence or wilful misconduct of such
Indemnitee. To the extent that the undertaking set forth in the immediately
preceding sentence may be unenforceable, each Company shall contribute the
maximum portion which it is permitted to pay and satisfy under applicable law
to the payment and satisfaction of all such indemnified liabilities incurred by
the Indemnitees or any of them. Without limiting the generality of any
provision of this Section, to the fullest extent permitted by law, each Company
hereby waives all rights for contribution or any other rights of recovery with
respect to liabilities, losses, damages, costs and expenses arising under or
relating to Environmental Laws that it might have by statute or otherwise
against any Indemnitee.
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SECTION 10.06. Taxes. Each Company agrees to pay all governmental
assessments, charges or taxes (except income or other similar taxes imposed on
any Lender or any holder of a Note), including any interest or penalties
thereon, at any time payable or ruled to be payable in respect of the
existence, execution or delivery of this Agreement, the other Financing
Documents or the Lender Interest, or the issuance of the Notes, the Letters of
Credit or the Lender Interest, and to indemnify and hold each Lender and each
and every holder of the Notes, Letter of Credit Liabilities or the Lender
Interest harmless against liability in connection with any such assessments,
charges or taxes.
SECTION 10.07. Funding Losses. If any Company fails to borrow any
Working Capital Loans after notice has been given to any Lender in accordance
with Section 3.04 or make any payment when due by such Company (including
pursuant to a notice of optional prepayment), such Company shall reimburse each
Lender within 15 days after demand for any resulting loss or expense incurred
by it (or by an existing or prospective participant in the related Loan),
including any loss incurred in obtaining, liquidating or employing deposits
from third parties, but excluding loss of margin for the period after any such
payment or failure to borrow, provided that such Lender shall have delivered to
such Company a certificate as to the amount of such loss or expense, which
certificate shall be conclusive in the absence of manifest error.
SECTION 10.08. Maximum Interest. (a) In no event shall the
interest charged with respect to the Notes issued by any Company or any other
obligations of such Company under the Financing Documents exceed the maximum
amount permitted under the laws of the State of New York or of any other
applicable jurisdiction.
(b) Notwithstanding anything to the contrary herein or elsewhere, if
at any time the rate of interest payable by any Company for the account of any
Lender hereunder or under any Note or other Financing Document (the "Stated
Rate") would exceed the highest rate of interest permitted under any applicable
law to be charged by such Lender to such Company (the "Maximum Lawful Rate"),
then for so long as the Maximum Lawful Rate would be so exceeded, the rate of
interest payable by such Company for the account of such Lender shall be equal
to the Maximum Lawful Rate; provided, that if at any time thereafter the Stated
Rate is less than the Maximum Lawful Rate, such Company shall, to the extent
permitted by law, continue to pay interest for the account of such Lender at
the Maximum Lawful Rate until such time as the total interest received by such
Lender is equal to the total interest which such Lender would have received had
the Stated Rate been (but for the operation of this provision) the interest
rate payable. Thereafter, the interest rate payable for the account of such
Lender shall
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be the Stated Rate unless and until the Stated Rate again would exceed the
Maximum Lawful Rate, in which event this provision shall again apply.
(c) In no event shall the total interest received by any Lender from
any Company exceed the amount which such Lender could lawfully have received
from such Company had the interest been calculated for the full term hereof at
the Maximum Lawful Rate with respect to such Lender and such Company.
(d) In computing interest payable with reference to the Maximum
Lawful Rate applicable to any Lender, such interest shall be calculated at a
daily rate equal to the Maximum Lawful Rate divided by the number of days in
the year in which such calculation is made.
(e) If any Lender has received interest hereunder in excess of the
Maximum Lawful Rate with respect to such Lender and in respect of Loans made to
such Company, such excess amount shall be applied to the reduction of the
principal balance of its Loans or to other amounts (other than interest)
payable hereunder, and if no such principal or other amounts are then
outstanding, such excess or part thereof remaining shall be paid to such
Company.
ARTICLE 11
THE AGENT
SECTION 11.01. Appointment and Authorization. Each Lender
irrevocably appoints and authorizes the Agent to enter into each of the
Security Documents on its behalf and to take such action as agent on its behalf
and to exercise such powers under the Financing Documents as are delegated to
the Agent by the terms thereof, together with all such powers as are reasonably
incidental thereto.
SECTION 11.02. Agent and Affiliates. NationsCredit shall have the
same rights and powers under the Financing Documents as any other Lender and
may exercise or refrain from exercising the same as though it were not the
Agent, and NationsCredit and its affiliates may lend money to and generally
engage in any kind of business with Holdings, any Company or any of such
Company's Subsidiaries or affiliates as if it were not the Agent hereunder.
SECTION 11.03. Action by Agent. The obligations of the Agent
hereunder are only those expressly set forth herein and under the other
Financing Documents. Without limiting the generality of the foregoing, the
Agent shall not be required to
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take any action with respect to any Default, except as expressly provided in
Article 9.
SECTION 11.04. Consultation with Experts. The Agent may consult
with legal counsel (who may be counsel for any Company or Holdings),
independent public accountants and other experts selected by it and shall not
be liable for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts.
SECTION 11.05. Liability of Agent. Neither the Agent nor any of its
directors, officers, agents, or employees shall be liable for any action taken
or not taken by it in connection with the Financing Documents (i) with the
consent or at the request of the Required Lenders or (ii) in the absence of its
own gross negligence or willful misconduct. Neither the Agent nor any of its
directors, officers, agents or employees shall be responsible for or have any
duty to ascertain, inquire into or verify (i) any statement, warranty or
representation made in connection with any Financing Document or any borrowing
hereunder; (ii) the performance or observance of any of the covenants or
agreements of any Company or Holdings; (iii) the satisfaction of any condition
specified in Article 5, except receipt of items required to be delivered to the
Agent; or (iv) the validity, effectiveness, sufficiency or genuineness of any
Financing Document or any other instrument or writing furnished in connection
therewith. The Agent shall not incur any liability by acting in reliance upon
any notice, consent, certificate, statement, or other writing (which may be a
bank wire, telex, facsimile transmission or similar writing) believed by it to
be genuine or to be signed by the proper party or parties.
SECTION 11.06. Indemnification. Each Lender shall, ratably in
accordance with its Working Capital Commitment (whether or not the Working
Capital Commitments have been terminated), indemnify the Agent (to the extent
not reimbursed by any Company) against any cost, expense (including counsel
fees and disbursements), claim, demand, action, loss or liability (except such
as result from the Agent's gross negligence or willful misconduct) that the
Agent may suffer or incur in connection with the Financing Documents or any
action taken or omitted by the Agent hereunder or thereunder.
SECTION 11.07. Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon the Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender
also acknowledges that it will, independently and without reliance upon the
Agent or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking any action under the Financing Documents.
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SECTION 11.08. Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Lenders and the Companies. Upon any such
resignation, the Required Lenders shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 30 days after the
retiring Agent gives notice of resignation, then the retiring Agent may, on
behalf of the Lenders, appoint a successor Agent, which shall be an institution
organized or licensed under the laws of the United States of America or of any
State thereof. Upon the acceptance of its appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation hereunder as Agent, the provisions of this Article
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. Survival. All agreements, representations and
warranties made herein shall survive the execution and delivery of this
Agreement, the other Operative Documents and the execution, sale and delivery
of the Notes and the Lender Interest. The indemnities and agreements set forth
in Articles 10 and 11 shall survive the payment of the Notes, the exercise,
redemption or expiration of the Lender Interest and the termination of this
Agreement. 12.2No Waiver No failure or delay by the Agent or any Lender in
exercising any right, power or privilege under any Financing Document shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege. The rights and remedies herein and therein provided
shall be cumulative and not exclusive of any rights or remedies provided by
law.
SECTION 12.03. Notices. All notices, requests and other
communications to any party hereunder shall be in writing (including prepaid
overnight courier, telex, facsimile transmission or similar writing) and shall
be given to such party at its address or telecopy or telex number set forth on
the signature pages hereof (or, in the case of any such Lender who becomes a
Lender after the date hereof, in a notice delivered to each Company and the
Agent by the assignee Lender forthwith upon such assignment) or at such other
address or telecopy or telex number as such party may hereafter specify for the
purpose by notice to the Agent and the Companies. Each such notice, request or
other communication shall be effective
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(i) if given by telex or telecopy, when such telex or telecopy is transmitted
to the telex or telecopy number specified in this Section and the appropriate
answerback is received (in the case of telex) or telephonic confirmation of
receipt thereof is obtained (in the case of telecopy) or (ii) if given by mail,
prepaid overnight courier or any other means, when received at the address
specified in this Section or when delivery at such address is refused.
SECTION 12.04. Severability. In case any provision of or obligation
under this Agreement or the Notes or any other Financing Document shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 12.05. Amendments and Waivers. Any provision of this
Agreement or the Notes may be amended or waived if, but only if, such amendment
or waiver is in writing and is signed by Holdings, each Company, and the
Required Lenders (and, if the rights or duties of the Agent or the LC Issuer
are affected thereby, by the Agent or the LC Issuer, as the case may be);
provided that no such amendment or waiver shall, unless signed by all the
Lenders, (i) increase or decrease any Commitment of any Lender (except for a
ratable decrease in the Commitments of all Lenders) or subject any Lender to
any additional obligation, (ii) reduce the principal of or rate of interest on
any Loan, Reimbursement Obligation or fees hereunder, (iii) postpone the date
fixed for any payment of principal of any Loan pursuant to Section 2.04(a),
3.05(a), or any Reimbursement Obligation, or of interest on any Loan or any
Reimbursement Obligation or any fees hereunder or for any termination of any
Commitment, (iv) release any of the Collateral or any guaranty or (v) change
the percentage of the Commitments or of the aggregate unpaid principal amount
of the Notes which shall be required for the Lenders or any of them to take any
action under this Section or any other provision of this Agreement.
SECTION 12.06. Successors and Assigns; Registration. (a) The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns (including any
transferee of any Note or Lender Interest), except that (i) no Company may
assign or otherwise transfer any of its rights under this Agreement without the
prior written consent of all Lenders and (ii) no assignment or other transfer
by a Lender of its Working Capital Commitments or any portion thereof shall
release it from its obligations in favor of the LC Issuer under Section 3.09
with respect to any Letters of Credit outstanding at the time of such
assignment or other transfer unless such assignment or other transfer was with
the prior written consent of the LC Issuer.
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(b) The terms and provisions of this Agreement shall inure to the
benefit of any transferee or assignee of any Note or Lender Interest, except
that NationsCredit may not transfer its obligations pursuant to Section 3.08
without the consent of each Company, and, in the event of such transfer or
assignment, the rights and privileges herein conferred upon the assigning
Lender shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof. Any assignment shall
be for an equal percentage of each Class of such assignor Lender's Loans and
its Working Capital Commitments, and any such assignee Lender shall, upon its
registration in the Note Register referred to below, become a "Lender" for all
purposes hereunder. Upon any such assignment, the assignor Lender shall be
released from its Working Capital Commitments to the extent assigned to and
assumed by the assignee Lender.
(c) Upon any assignment of any Note(s) issued by any Company, the
assigning Lender shall surrender its Note(s) to such Company for exchange or
registration of transfer, and such Company will promptly execute and deliver in
exchange therefor a new Note or Note(s) of the same tenor and registered in the
name of the assignor Lender (if less than all of such Lender's Notes are
assigned) and the name of the assignee Lender.
(d) Each Company shall maintain a register (the "Note Register") of
the Lenders and all assignee Lenders that are the holders of all the Notes
issued pursuant to this Agreement. Each Company will allow any Lender to
inspect and copy such list at such Company's principal place of business during
normal business hours. Prior to the due presentment for registration of
transfer of any Note issued by any Company, such Company may deem and treat the
Person in whose name a Note is registered as the absolute owner of such Note
for the purpose of receiving payment of principal of and premium and interest
on such Note and for all other purposes whatsoever, and such Company shall not
be affected by notice to the contrary.
(e) Each Lender (including any assignee Lender at the time of such
assignment) represents that it (i) is acquiring its Notes and Lender Interest
solely for investment purposes and not with a view toward, or for sale in
connection with, any distribution thereof, (ii) has received and reviewed such
information as it deems necessary to evaluate the merits and risks of its
investment in the Notes and the Lender Interest, (iii) is an "accredited
investor" within the meaning of Rule 501(a) under the Securities Act and (iv)
has such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of its investment in the Notes and
the Lender Interest, including a complete loss of its investment.
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(f) Each Lender understands that the Notes and the Lender Interest
are being offered only in a transaction not involving any public offering
within the meaning of the Securities Act, and that, if in the future such
Lender decides to resell, pledge or otherwise transfer any of the Notes or the
Lender Interest, such Notes or Lender Interest, as the case may be, may be
resold, pledged or transferred only (i) to any Company, (ii) to a person who
such Lender reasonably believes is a qualified institutional buyer that
purchases for its own account or for the account of a qualified institutional
buyer to whom notice is given that such resale, pledge or transfer is being
made in reliance on Rule 144A under the Securities Act or (iii) pursuant to an
exemption from registration under the Securities Act.
(g) Each Lender understands that the Notes and the Lender Interest
will, unless otherwise agreed by each Company and the holder thereof, bear a
legend to the following effect:
THIS SECURITY IS NOT BEING REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF,
BY PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF THE
ISSUER THAT THIS SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (1) TO THE COMPANY, (2) TO A PERSON WHO THE
SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER
WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER THAT IS AWARE THAT THE RESALE, PLEDGE OR
OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A OR (3)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT.
(h) If any Note issued by any Company becomes mutilated and is
surrendered by the Lender with respect thereto to such Company, or if any
Lender claims that any of its Notes issued by such Company has been lost,
destroyed or wrongfully taken, such Company shall execute and deliver to such
Lender a replacement Note, upon the affidavit of such Lender attesting to such
loss, destruction or wrongful taking with respect to such Note together with,
in the case of any lost, destroyed or wrongfully taken Note, an indemnity if so
requested by such Company, and such lost, destroyed, mutilated, surrendered or
wrongfully taken Note shall be deemed to be canceled for all purposes hereof.
Such affidavit shall be accepted as satisfactory evidence of the loss, wrongful
taking or
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destruction thereof and no surety or bond shall be required as a condition of
the execution and delivery of a replacement Note. Any costs and expenses of
such Company in replacing any such Note shall be for the account of such
Lender.
SECTION 12.07. Collateral. Each of the Lenders represents to the
Agent and each of the other Lenders that it in good faith is not relying upon
any Margin Stock as collateral in the extension or maintenance of the credit
provided for in this Agreement.
SECTION 12.08. Headings. Headings and captions used in the
Financing Documents (including the Exhibits and Schedules hereto and thereto)
are included herein and therein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 12.09. GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS
AGREEMENT AND EACH NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK. EACH OF THE COMPANIES AND HOLDINGS HEREBY
SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING
IN NEW YORK CITY FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH OF
THE COMPANIES AND HOLDINGS HEREBY ACKNOWLEDGES AND AGREES THAT NATIONSCREDIT
DOES NOT SUBMIT TO THE JURISDICTION OF THE BANKRUPTCY COURT AND THAT THE
BANKRUPTCY COURT IS NOT THE APPROPRIATE FORUM FOR ANY LEGAL PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
EACH OF THE COMPANIES AND HOLDINGS IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY
CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. EACH OF THE PARTIES HERETO IRREVOCABLY CONSENTS TO SERVICE
OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 12.03. NOTHING IN
THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY TO THIS AGREEMENT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
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SECTION 12.10. Notice of Breach by Agent or Lender. Each of the
Companies and Holdings agrees to give the Agent and the Lenders notice of any
action or inaction by the Agent or any Lender or any agent or attorney of the
Agent or any Lender in connection with this Agreement or any other Financing
Document or the obligations of such Company or Holdings under this Agreement or
any other Financing Document that may be actionable against the Agent or any
Lender or any agent or attorney of the Agent or any Lender or a defense to
payment of any obligations of any Company or Holdings under this Agreement or
any other Financing Document for any reason, including commission of a tort or
violation of any contractual duty or duty implied by law. Each of the
Companies and Holdings agrees, to the fullest extent that it may lawfully do
so, that unless such notice is given promptly (and in any event within ten (10)
days after such Company or Holdings has knowledge, or with the exercise of
reasonable diligence could have had knowledge, of any such action or inaction),
such Company and Holdings shall not assert, and such Company and Holdings shall
be deemed to have waived, any claim or defense arising therefrom to the extent
that the Agent or any Lender could have mitigated such claim or defense after
receipt of such notice.
SECTION 12.11. WAIVER OF JURY TRIAL. EACH OF THE COMPANIES,
HOLDINGS, THE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT
TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THE
FINANCING DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY AND TO THE FULLEST
EXTENT PERMITTED BY LAW WAIVES ANY RIGHTS THAT IT MAY HAVE TO CLAIM OR RECEIVE
CONSEQUENTIAL OR SPECIAL DAMAGES IN CONNECTION WITH ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THE FINANCING DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED THEREBY.
SECTION 12.12. Counterparts; Integration. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement, the other Financing Documents, the Partnership
Agreement and the Equity Agreement constitute the entire agreement and
understanding among the parties hereto and supersede any and all prior
agreements and understandings, oral or written, relating to the subject matter
hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
TELEPHONE WAREHOUSE, INC.
By: /s/ Xxxxxxx Xxxxx
------------------------------
Title: Vice President
Address: 0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Account Designation:
-------------------
Bank One, Texas, N.A.
ABA No.: 000000000
Account No.: 0014933915
Account Name: Telephone Warehouse
NATIONAL CELLULAR,
INCORPORATED
By: /s/ Xxxxxxx Xxxxx
---------------------------------
Title: Vice President
Address: 0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Account Designation:
-------------------
Bank One, Texas, N.A.
ABA No.: 000000000
Account No.: 0014933899
Account Name: National Cellular
Incorporated
89
LET'S TALK CELLULAR & WIRELESS,
INC.
By: /s/ Xxxxx Xxxxxxxxx
----------------------------
Title: President
Address: 0000 XX 00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Account Designation:
-------------------
Bank Name: Republic National Bank
ABA No.: 000000000
Account No.: 001-129-2723
Account Name: Let's Talk Cellular
90
TEXAS CELLULAR PARTNERS, L.P.
By HIG Texas Cellular Company,
as Managing General Partner
By: /s/ Xxxxxxx Xxxxx
-------------------------------
Title: President
Address: 0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
NATIONSCREDIT COMMERCIAL
CORPORATION, as Lender and Agent
By: /s/ Xxxxxx Alt
--------------------------------
Title: Authorized Signatory
Address: Xxx Xxxxxxxxxx Xxxxx
X.X. Xxx 000000
Xxxxxxxx, XX 00000-0000
Telecopy: 000-000-0000
Payment Account Designation:
---------------------------
First Chicago National Bank
Chicago, Illinois
ABA No.: 000000000
Account No.: 52-56933
Account Name: NationsCredit Commercial
Corporation
