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EXHIBIT 10.18
LOAN AND SECURITY AGREEMENT
This LOAN AND SECURITY AGREEMENT ("Agreement"), is dated as of July 18,
1997, by and between the following parties:
LENDER/SECURED PARTY: NTFC CAPITAL CORPORATION, a Delaware
corporation with offices at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and its assigns
("Lender")
BORROWER/DEBTOR: IXC CARRIER, INC., a Nevada corporation with
its principal place of business at 5000
Plaza on the Lake, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇ ("Borrower")
GUARANTOR: IXC COMMUNICATIONS, INC., a Delaware
corporation with its principal place of
business at 5000 Plaza on the Lake, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ("Guarantor")
This Loan and Security Agreement includes the general terms and conditions
contained herein and all the exhibits and schedules attached hereto, all of
which are incorporated herein. In the event of a conflict between the general
terms and conditions and any schedule, the additional terms and conditions
stated in the schedule shall control.
By executing this Loan and Security Agreement, Lender agrees to make loans to
Borrower, and Borrower agrees to borrow from Lender and to provide collateral to
secure such loans, all on the terms and conditions set forth herein.
IN WITNESS WHEREOF, the parties have executed this Loan and Security Agreement
by their duly authorized representatives:
LENDER: BORROWER:
NTFC CAPITAL CORPORATION IXC CARRIER, INC.
BY: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ BY: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------------------------- ----------------------------
TITLE: Secretary TITLE: Senior Vice President and
Chief Executive Officer
---------------------------- ----------------------------
DATE: 7/18/97 DATE: 7/18/97
----------------------------- -----------------------------
GUARANTOR:
IXC COMMUNICATIONS, INC.
BY: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
----------------------------
TITLE: Senior Vice President and
Chief Executive Officer
----------------------------
DATE: 7/18/97
-----------------------------
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TABLE OF CONTENTS
PAGE
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ARTICLE 1: DEFINITIONS..................................................................... 1
1.01. Certain Definitions......................................................... 1
1.02. Accounting Principles; Subsidiaries......................................... 8
1.03. UCC Terms................................................................... 8
1.04. General Construction; Captions.............................................. 8
1.05. References to Documents and Laws............................................ 8
1.06. Currency.................................................................... 8
ARTICLE 2: ADVANCES........................................................................ 9
2.01. Commitment.................................................................. 9
2.02. Note and Payment Terms...................................................... 9
2.03. Procedures for Borrowing.................................................... 10
2.04. Prepayments................................................................. 11
2.05. Computation of Interest..................................................... 12
2.06. Payments.................................................................... 12
2.07. Indemnity................................................................... 12
2.08. Use of Proceeds............................................................. 12
2.09. Fees........................................................................ 13
2.10. Lender's Expenses........................................................... 13
2.11. Guaranty.................................................................... 13
ARTICLE 3: COLLATERAL AND SECURITY AGREEMENT............................................... 13
3.01. Grant of Security Interest.................................................. 13
3.02. Priority of Security Interests.............................................. 14
3.03. Further Documentation; Pledge of Instruments................................ 14
3.04. Further Identification of Collateral........................................ 14
3.05. Remedies.................................................................... 14
3.06. Standard of Care............................................................ 15
3.07. Advances to Protect Collateral.............................................. 15
3.08. License to Use.............................................................. 15
ARTICLE 4: REPRESENTATIONS AND WARRANTIES.................................................. 15
4.01. Organization and Qualification.............................................. 15
4.02. Authority and Authorization................................................. 15
4.03. Execution and Binding Effect................................................ 15
4.04. Governmental Authorizations................................................. 16
4.05. Regulatory Authorizations................................................... 16
4.06. Material Agreement; Absence of Conflicts.................................... 16
4.07. No Restrictions............................................................. 16
4.08. Financial Statements........................................................ 16
4.09. Financial Accounting Practices.............................................. 17
4.10. Accurate and Complete Disclosure............................................ 17
4.11. No Event of Default; Compliance with Material Agreements.................... 17
4.12. Litigation.................................................................. 17
4.13. Rights to Property.......................................................... 17
4.14. Financial Condition......................................................... 17
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4.15. Taxes....................................................................... 18
4.16. No Material Adverse Change.................................................. 18
4.17. No Regulatory Event......................................................... 18
4.18. Trade Relations............................................................. 18
4.19. No Brokerage Fees........................................................... 18
4.20. Margin Stock; Regulation U.................................................. 18
4.21. Investment Company; Public Utility Holding Company.......................... 18
4.22. Personal Holding Company; Subchapter S...................................... 18
4.23. ERISA....................................................................... 18
4.24. Environmental Warranties.................................................... 19
4.25. Security Interests.......................................................... 19
4.26. Place of Business........................................................... 19
4.27. Location of Collateral...................................................... 19
4.28. Clear Title To Collateral................................................... 19
4.29. Assumed Names............................................................... 19
4.30. Transactions with Affiliates................................................ 19
4.31. NTI Supply Agreement........................................................ 19
ARTICLE 5: CONDITIONS OF CLOSING........................................................... 20
5.01. Closing Certificates........................................................ 20
5.02. Opinions of Counsel......................................................... 20
5.03. Closing Documents........................................................... 20
ARTICLE 6: CONDITIONS OF LENDING........................................................... 21
6.01. Conditions for Initial Advance.............................................. 21
6.02. Conditions for All Advances................................................. 21
6.03. Affirmation of Representations and Warranties............................... 23
6.04. Deadline for Funding Conditions............................................. 23
ARTICLE 7: AFFIRMATIVE COVENANTS........................................................... 23
7.01. Reporting and Information Requirements...................................... 23
7.02. Other Notices............................................................... 25
7.03. Notice of Pension-Related Events............................................ 25
7.04. Inspection Rights........................................................... 25
7.05. Preservation of Corporate Existence and Qualification....................... 26
7.06. Continuation of Business.................................................... 26
7.07. Insurance................................................................... 26
7.08. Payment of Taxes, Charges, Claims and Current Liabilities................... 27
7.09. Financial Accounting Practices.............................................. 28
7.10. Compliance with Laws........................................................ 28
7.11. Use of Proceeds............................................................. 28
7.12. Government Authorizations; Regulatory Authorizations........................ 28
7.13. Contracts and Franchises.................................................... 28
7.14. Consents.................................................................... 28
7.15. Financial Covenants......................................................... 28
7.16. Construction and Storage.................................................... 28
7.17. Upgrade Equipment........................................................... 29
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ARTICLE 8: NEGATIVE COVENANTS.............................................................. 29
8.01. Additional Indebtedness..................................................... 29
8.02. Restrictions on Liens and Sale of Collateral................................ 29
8.03. Prohibition of Mergers, Acquisitions, Name, Office or Business Changes, Etc. 29
8.04. Limitation on Equity Payments............................................... 30
8.05. Removal of Collateral....................................................... 30
8.06. Assumed Names............................................................... 30
ARTICLE 9: EVENTS OF DEFAULT............................................................... 30
9.01. Events of Default........................................................... 30
9.02. Consequences of an Event of Default......................................... 33
9.03. Exercise of Rights.......................................................... 33
9.04. Rights of Secured Party; Possession or Sale of Collateral................... 33
9.05. Notices, Etc. Waived........................................................ 34
9.06. Additional Remedies......................................................... 34
9.07. Application of Proceeds..................................................... 35
9.08. Discontinuance of Proceedings............................................... 35
9.09. Power of Attorney........................................................... 35
9.10. Regulatory Matters.......................................................... 36
ARTICLE 10: GENERAL CONDITIONS/MISCELLANEOUS............................................... 36
10.01. Modifications and Waivers................................................... 36
10.02. Advances Not Implied Waivers................................................ 36
10.03. Deviation from Covenants.................................................... 37
10.04. Holidays.................................................................... 37
10.05. Records..................................................................... 37
10.06. Notices..................................................................... 37
10.07. FCC and PUC Approval........................................................ 38
10.08. Lender Sole Beneficiary..................................................... 38
10.09. Lender's Review of Information.............................................. 38
10.10. No Joint Venture............................................................ 38
10.11. Severability................................................................ 38
10.12. Rights Cumulative........................................................... 38
10.13. Duration; Survival.......................................................... 39
10.14. Governing Law............................................................... 39
10.15. Counterparts .............................................................. 39
10.16. Successors and Assigns...................................................... 39
10.17. Participation............................................................... 40
10.18. Time of Essence............................................................. 40
10.19. Disclosures and Confidentiality............................................. 40
10.20. Jurisdiction and Venue...................................................... 41
10.21. Jury Waiver................................................................. 41
10.22. Limitation on Liability..................................................... 42
10.23. Borrower Waivers............................................................ 42
10.24. Schedules................................................................... 42
10.25. Agreement to Govern......................................................... 42
10.26. Entire Agreement............................................................ 42
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SCHEDULES TO LOAN AND SECURITY AGREEMENT
Schedule 1 Borrower Information and Defined Terms
Schedule 1.01 Landlord Consents
Schedule 2.01 Maximum Advance Amounts
Schedule 2.02 Payment Terms and Governing Law
Schedule 2.09 Fees
Schedule 4.04 Required Consents
Schedule 4.05 Regulatory Authorizations
Schedule 4.07 Restrictions on Indebtedness
Schedule 4.08 Financial Statements
Schedule 4.12 Pending Litigation
Schedule 4.16 No Material Adverse Change
Schedule 4.17 Regulatory Event
Schedule 4.25 UCC Filing Offices
Schedule 4.26 Principal Offices and Location of Collateral
Schedule 4.29 Assumed Names
Schedule 4.30 Transactions with Affiliates
Schedule 6.02 Post-Closing Items
Schedule 7.07 Insurance/Certificate
Schedule 7.15 Financial Covenants
EXHIBITS TO LOAN AND SECURITY AGREEMENT
Exhibit A Form of Note
Exhibit B Form of Borrowing Certificate
Exhibit C Form of Opinion of Counsel for Borrower and for Guarantor
Exhibit D Form of Landlord's Consent
Exhibit E Form of Environmental Certificate
Exhibit F Form of Assignment and Acceptance
Exhibit G Form of Certificate of Financial Condition
Exhibit H Form of Guaranty
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LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT ("Agreement") is dated as of July ____,
1997 by and between IXC CARRIER, INC., a Nevada corporation ("Borrower"), IXC
COMMUNICATIONS, INC., a Delaware corporation ("Guarantor") and NTFC CAPITAL
CORPORATION, a Delaware corporation ("Lender"), with offices at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
B A C K G R O U N D:
1 Borrower has entered into the NTI Supply Agreement, as defined in
Section 1.01 hereof, providing for Borrower's purchase of certain
telecommunications equipment and the license of associated software, all as
described therein, and has requested Lender to extend credit to Borrower to
finance such purchase and license.
2 Lender is willing to extend such credit to Borrower upon the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained and intending to be legally bound hereby, the parties
hereto agree as follows:
ARTICLE 1: DEFINITIONS
1.01. Certain Definitions. Certain terms are defined on Schedule 1
hereto. In addition to other words and terms defined in the preamble hereof or
elsewhere in this Agreement, or on the Schedules hereto, the following words and
terms shall have the following meanings unless the context otherwise clearly
requires:
"Advance(s)": any advance or loan of funds made by Lender to Borrower
pursuant to this Agreement.
"Affiliate": as applied to any Person, any second Person directly or
indirectly controlling, controlled by, or under common control with that Person,
or related to such Person by blood, marriage or adoption, except for the
Trustees of the General Electric Pension Trust, Grumman Hill Associates, Inc.
and Grumman Hill Investments, L.P. For purposes of this definition and the
definition of "Subsidiary", a Person shall be deemed to control another Person
if such first Person possesses, directly or indirectly, the power to direct, or
to cause the direction of, the management and policies of such other Person,
whether through ownership of voting securities, by contract or otherwise.
"Assignment": an Assignment and Acceptance in the form of Exhibit F
hereto.
"Basic Agreements": a collective reference to this Agreement, the Note,
and the Security Documents.
"Borrower": IXC Carrier, Inc., a Nevada corporation.
"Borrowing Certificate": a certificate substantially in the form of
Exhibit B hereto.
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"Borrowing Date": any Business Day on which an Advance is made to
Borrower hereunder.
"Business Day": a day other than a Saturday, Sunday or other day on
which commercial banks in Toronto, Canada or New York, New York are authorized
or required by law to close.
"Calendar Quarter": each three month period starting on each January 1,
April 1, July 1, and October 1, during the term of this Agreement.
"Cash": at any time, the cash, cash equivalents or marketable investment
grade securities held by Borrower free of any claims or encumbrances.
"Cash Flow": during any fiscal period of Guarantor, the sum of (i) net
income (or loss) (which may be a positive or negative number) for such period,
plus (ii) all non-cash items deducted in determining such net income (or loss),
minus (iii) all non-cash items added in determining such net income (or loss)
during such period, less (iv) any Equity Payments pursuant to Section 8.04
hereof.
"Certificate of Financial Condition": certificates substantially in the
form of Exhibit G hereto, one certificate to be executed by Borrower and one
certificate to be executed by Guarantor.
"Change in Control": means (a) any change in the direct or indirect
control of, or the ability or right to control, a majority of the voting shares
of common stock in the Borrower; or (b) a majority of the board of directors of
the Guarantor shall consist of directors other than (i) directors holding office
as of the Closing Date or (ii) directors whose election was recommended by such
directors or subsequent directors so recommended.
"Closing Date": July 18, 1997.
"Code": the Internal Revenue Code of 1986, as amended from time to time.
"Collateral": as defined in Section 3.01 hereof.
"Commitment": as defined in Section 2.01 hereof.
"Communications Law": any and all of (i) the Communications Act of 1934,
as amended, and any similar or successor federal statute, and the rules and
regulations of the FCC thereunder, (ii) any state law governing the provision of
telecommunications services, and the rules and regulations of the PUC, all as
the same may be in effect from time to time.
"Consent": a consent to a collateral assignment of the NTI Supply
Agreement or a Landlord Consent.
"Contingent Obligation": as to any Person, any obligation of such Person
guaranteeing, directly or indirectly, any Indebtedness, leases, dividends or
other obligations ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (a) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (b) to advance or supply funds (i) for the purchase
or payment of any such primary obligation or (ii) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary
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obligor, (c) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation or (d) otherwise
to assure or hold harmless the owner of such primary obligation against loss in
respect thereof.
"Conversion Date": as defined on Schedule 2.02 hereto.
"Debt Service": for any fiscal period of Guarantor, the sum of all
principal and interest payments that Guarantor is required to make during such
period on account of all of its Indebtedness including, without limitation, (a)
amounts due during such period on account of capitalized leases, (b) the then
current portion of any long-term Indebtedness, (c) amounts due on short-term
Indebtedness, and (d) amounts due under this Agreement and the Note.
"Debt Service Coverage Ratio": at the end of any fiscal period, the
ratio of Guarantor's Cash Flow for such fiscal period to Guarantor's Debt
Service for such fiscal period.
"Default": any of the conditions or occurrences specified in Section
9.01, whether or not any requirement for the giving of notice, the lapse of
time, or both, or any other condition has been satisfied.
"Default Rate": a rate of interest equal to the lesser of (i) three
percent (3%) over the Interest Rate, or (ii) the maximum permissible rate under
applicable law in effect at any time.
"ERISA": the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any successor statute.
"Environmental Law": any current or future federal, state and local law
(including common law), statute, regulation, ordinance, rulings, codes, judicial
order, administrative order or terms of licenses or permits applicable to
environmental conditions (including without limitation conditions relating to
ambient air, surface water, groundwater, land surface or subsurface strata),
including without limitation all such laws governing employment, the generation,
use, storage, disposal or transportation of toxic or hazardous substances or
wastes (including, without limitation, asbestos and petroleum products), the
Comprehensive Environmental Response, Compensation and Liability Act, the
Resource Conservation and Recovery Act, the Superfund Amendment and
Reauthorization Act of 1986, the Toxic Substances Control Act, the Clean Air
Act, the Water Pollution Control Act, the Hazardous Waste Management Act, the
Mineral Lands and Leasing Act, the Surface Mining Control and Reclamation Act,
U.S. Department of Transportation Regulations, and all similar state and local
laws, regulations, all as now or hereafter amended.
"Equipment": the equipment and licensed or sub-licensed software
manufactured or supplied by NTI to Borrower at any time pursuant to the NTI
Supply Agreement or any purchase order issued by Borrower to NTI which is
acquired by Borrower with proceeds of any Advance (or for which Borrower is
reimbursed from the proceeds of any Advance), including installation and
construction services provided by NTI pursuant thereto, and any and all
additions, substitutions, and replacements to or of any of the foregoing,
together with all attachments, components, parts, improvements, upgrades, and
accessions installed thereon or affixed thereto.
"Equity Payment": any distribution of earnings or capital by a Person to
any Owner of such Person, or any redemption of stock interests, either directly
or indirectly, whether in cash or property or in obligations of the Borrower or
Guarantor.
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"Event of Default": any of the events specified in Section 9.01 hereof,
provided that any requirement for the giving of notice, the lapse of time, or
both, or any other condition, under Section 9.01 or otherwise, has been
satisfied.
"Financing Termination Date": as defined on Schedule 2.02 hereto.
"FCC": the Federal Communications Commission of the United States of
America, and any successor, in whole or in part, to its jurisdiction.
"First Borrowing Date": the date of the first borrowing by Borrower
hereunder.
"GAAP": subject to Section 1.02 hereof, generally accepted accounting
principles in the United States of America (as such principles may change from
time to time) applied on a consistent basis (except for changes in application
in which Borrower's and Guarantor's independent certified public accountants
concur), applied both to classification of items and amounts.
"General Intangibles": as defined in Section 3.01 hereof.
"Governmental Actions": actions by any Governmental Authority.
"Governmental Authority": the federal government, any state or political
subdivision thereof, any city or municipal entity, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantor": IXC Communications, Inc., a Delaware corporation.
"Guaranty": the Unconditional Guaranty Agreement dated the Closing Date,
executed by Guarantor, pursuant to Section 2.11 hereof, substantially in the
form of Exhibit H hereto.
"Indebtedness": as to any Person, at a particular time, (a) indebtedness
for borrowed money or for the deferred purchase price of property or services in
respect of which such Person is liable, contingently or otherwise, as obligor,
guarantor or otherwise, or in respect of which such Person otherwise assures a
creditor against loss, (b) obligations under leases which shall have been or
should be, in accordance with GAAP, recorded as capital leases in respect of
which obligations such Person is liable, contingently or otherwise, as obligor,
guarantor or otherwise, or in respect of which obligations such Person assures a
creditor against loss, (c) obligations of such Person to purchase or repurchase
accounts receivable, chattel paper or other payment rights sold or assigned by
such Person, and (d) indebtedness or obligations of such Person under or with
respect to letters of credit, notes, bonds or other debt instruments.
"Indenture": the Indenture associated with the $285,000,000 in 12 1/2%
Senior Notes Due 2005 issued by Guarantor on October 5, 1995.
"Initial Payment Date": as defined on Schedule 2.02 hereto.
"Interest Only Period": as defined on Schedule 2.02 hereto.
"Interest Payment Date": as defined on Schedule 2.02 hereto.
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"Interest Rate": as defined on Schedule 2.02 hereto.
"Landlord Consent": a consent substantially in the form of Exhibit D
hereto or in other form acceptable to Lender, for the locations reasonably
requested by Lender as identified on Schedule 1.01 hereto, to be executed by the
owner/landlord, sublessor and/or licensor (including carriers) of real property
where the Collateral is or is to be located.
"Law": any law (including common law), constitution, statute,
regulation, rule, ordinance, order, injunction, writ, decree or award of any
governmental body or court of competent jurisdiction or of any arbitrator
(including but not limited to ERISA, the Code, the UCC, any applicable tax law,
product safety law, occupational safety or health law, Communications Law,
Environmental Law and/or securities laws).
"Lender": NTFC Capital Corporation and its successors and assigns.
"Lender's Expenses": as defined in Section 2.10 hereof.
"Lien": any mortgage, pledge, hypothecation, lien (statutory or other),
judgment lien, security interest, security agreement, charge or other
encumbrance, or other security arrangement of any nature whatsoever, including,
without limitation, any installment contract, conditional sale or other title
retention arrangement, any sale of accounts receivable or chattel paper, and any
assignment, deposit arrangement or lease intended as, or having the effect of,
security and the filing of any financing statement under the UCC or comparable
law of any jurisdiction.
"Loan Documents": a collective reference to this Agreement, the Note,
the Security Documents, the Closing Memorandum, any Assignment and all other
documents, instruments, agreements and certificates evidencing or securing any
advance hereunder or any obligation for the payment or performance thereof
and/or executed and delivered in connection with any of the foregoing.
"Material Adverse Effect" or "Material Adverse Change": a material
adverse effect on, or material adverse change in, (i) the business, operations
or financial condition of Borrower or Guarantor, (ii) the ability of Borrower or
Guarantor to perform its obligations under this Agreement, the Note, or the
other Loan Documents, or (iii) the Lender's ability to enforce the rights and
remedies granted under this Agreement or the other Loan Documents, in all cases
whether attributable to a single circumstance or event or an aggregation of
circumstances or events.
"Maturity Date": the date defined on Schedule 2.02 hereto.
"Note": collectively, one or more promissory notes issued by Borrower to
Lender pursuant to this Agreement, and all extensions, renewals, modifications,
replacements, amendments, restatements and refinancings thereof.
"NTI": Northern Telecom Inc., a Delaware corporation.
"NTI Supply Agreement": the Supply Agreement No. IXC9501N dated June 17,
1996, between Borrower and NTI, together with any amendments or supplements
thereto and all purchase orders and invoices issued pursuant thereto, all as
approved by Lender.
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"Obligations": all indebtedness, liabilities and obligations of Borrower
or Guarantor to Lender of any class or nature, whether arising under or in
connection with this Agreement and/or the other Loan Documents, whether now
existing or hereafter incurred, direct or indirect, absolute or contingent,
secured or unsecured, matured or unmatured, joint or several, whether for
principal, interest, premiums, fees, expenses, lease obligations, indemnities or
otherwise, including, without limitation, future advances of any sort, all
future advances made by Lender for taxes, levies, insurance and/or repairs to or
maintenance of the Collateral, the unpaid principal amount of, and accrued
interest on, the Note, and any expenses of collection or protection of Lender's
rights, including reasonable attorneys' fees.
"Organizational Documents": the articles or certificate of incorporation
and by-laws of a corporation and any other document governing the formation and
conduct of business by such entity.
"Owners": all presently existing and future shareholders of Borrower or
Guarantor and all other Persons with ownership interests in Borrower or
Guarantor.
"Payment Date": as defined on Schedule 2.02 hereto.
"PBGC": the Pension Benefit Guaranty Corporation established under Title
IV of ERISA or any other governmental agency, department or instrumentality
succeeding to its functions.
"Permits": all consents, licenses, notices, approvals, authorizations,
filings, orders, registrations, and permits required by any Governmental
Authority for the construction and operation of the Equipment (excluding
Regulatory Authorizations), issued or obtained as and when required in
accordance with all Requirements of Law.
"Permitted Encumbrances": the Liens permitted under Section 8.02 hereof.
"Person": an individual, corporation, limited liability company,
partnership, business or other trust, unincorporated association, joint venture,
joint-stock company, Governmental Authority or any other entity.
"Plan": any employee pension benefit plan to which Section 4021 of ERISA
applies and (i) which is maintained for employees of Borrower or Guarantor or
(ii) to which Borrower or Guarantor made, or was required to make, contributions
at any time within the preceding five (5) years.
"Proceeds": as defined in Section 3.01 hereof.
"PUC": the public utilities commission for the state or any other
jurisdiction in which the Borrower or Guarantor operates its telecommunications
business or any portion of the Equipment is located, or any successor agency,
and any successor, in whole or in part, to its functions or jurisdictions, and
any other Persons specified as such on Schedule 1 hereto.
"Regulatory Authorizations": all approvals, authorizations, licenses,
filings, notices, registrations, consents, permits, exemptions, registrations,
qualifications, designations, declarations, or other actions or undertakings now
or hereafter made by, to or in respect of any telecommunications governmental or
other regulatory authority, including, without limitation, any certificates of
public convenience and all grants, approvals, licenses, filings and
registrations from or to the FCC or PUC or under any Communications Law
necessary in order to enable the Borrower to own, construct, maintain and
operate
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the Equipment, and any authorizations specified on Schedule 4.05 hereto.
"Regulatory Event": any of the following events: (i) Lender becomes
subject to regulation as a "carrier," a "telephone company," a "common carrier,"
a "public utility" or otherwise under any applicable law or governmental
regulation, federal, state or local, solely as a result of the transactions
contemplated by this Agreement and the other Loan Documents, or (ii) Borrower or
Guarantor becomes subject to regulation by any Governmental Authority in any way
that is materially different from the regulation existing at the Closing Date
and that could materially adversely affect Borrower's or Guarantor's ability to
perform its material obligations under the Loan Documents or Lender's rights
thereunder, or (iii) the FCC or PUC issues an order revoking, denying or
refusing to renew, or recommending the revocation, denial or non-renewal of, any
Regulatory Authorization that could materially adversely affect Borrower's or
Guarantor's ability to perform its material obligations under the Loan Documents
or Lender's rights thereunder.
"Reportable Event": (i) a reportable event described in Section 4043 of
ERISA and regulations thereunder, (ii) a withdrawal by a substantial employer
from a Plan to which more than one employer contributes, as referred to in
Section 4063(b) of ERISA, or (iii) a cessation of operations at a facility
causing more than twenty percent (20%) of Plan participants to be separated from
employment, as referred to in Section 4062(f) of ERISA.
"Required Consents": the Governmental Authority approvals or consents of
other Persons required with respect to the Borrower's or Guarantor's execution,
delivery and performance of this Agreement and the other Loan Documents, as
described in Section 4.04 hereto.
"Requirement of Law": as to any Person, the Organizational Documents of
such Person, and any law, treaty, rule or regulation, or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its properties or transactions or to
which such Person or any of its property or transactions is subject, including
without limitation, all applicable common law and equitable principles, all
provisions of all applicable state and federal constitutions, statutes, rules,
regulations and orders of governmental bodies, all Permits or Regulatory
Authorizations issued to Borrower or Guarantor, all Communications Laws, and all
Environmental Laws.
"Responsible Officer": with respect to a corporation, its President or
any Vice President or Treasurer; with respect to a partnership, its general
partner (or the President, any Vice President or Treasurer of any corporate
general partner, as applicable); with respect to a limited liability company, a
member or manager (or the President, any Vice President or Treasurer of any
corporate member or manager), or the President or any Vice President of any
other Person.
"SEC": the Securities and Exchange Commission.
"Security Documents": this Agreement, the Landlord Consents, the
Consents, the Guaranty, all financing statements, and any other documents
granting, evidencing, or perfecting any security interest or Lien with respect
to or securing any of the Obligations.
"Site(s)": any of the sites where Equipment is or is to be located.
"Software" and "Software Licenses": any software now or hereafter owned
by, or licensed to, Borrower or with respect to which Borrower has or may have
license or use rights.
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"Subsidiary": as to any Person, any corporation or other entity that is
an Affiliate of such Person and of which shares of stock or equity interests
having ordinary voting power with respect to the election of one or more
directors or other managers of such corporation are at the time directly or
indirectly owned or controlled by such Person (regardless of any contingency
which does or may suspend or dilute the voting rights of such class).
"UCC": the Uniform Commercial Code as the same may from time to time be
in effect in the State of Tennessee, or the Uniform Commercial Code of another
jurisdiction, to the extent it may be required to apply to any item or items of
Collateral.
"Working Capital": unencumbered and unrestricted capital of Borrower or
Guarantor available for general operational purposes after provision for all
current liabilities.
1.02. Accounting Principles; Subsidiaries. Except as otherwise provided
in this Agreement, all computations and determinations as to accounting or
financial matters and all financial statements to be delivered pursuant to this
Agreement shall be made and prepared in accordance with GAAP (including
principles of consolidation where appropriate), consistently applied, and all
accounting or financial terms shall have the meanings ascribed to such terms by
GAAP. Any requirement to provide annual financial statements and quarterly
reports pursuant to this Agreement may be satisfied by providing copies of
reports filed with the SEC. All accounting and financial terms herein shall be
deemed to include references to consolidation principles, and covenants,
representations and agreements with respect to the Guarantor and its properties
and activities shall be deemed to refer to the Guarantor and its consolidated
Subsidiaries collectively.
1.03. UCC Terms. Except as otherwise provided or amplified (but not
limited) herein, terms used in this Agreement that are defined in the UCC shall
have the same meanings herein.
1.04. General Construction; Captions. All definitions and other terms
used in this Agreement shall be equally applicable to the singular and plural
forms thereof, and all references to any gender shall include all other genders.
The words "hereof", "herein" and "hereunder" and words of similar import when
used in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and Section, subsection, schedule and
exhibit references are to this Agreement unless otherwise specified. The
captions and table of contents in this Agreement and the other Loan Documents
are for convenience only, and in no way limit or amplify the provisions hereof.
1.05. References to Documents and Laws. All defined terms and references
in this Agreement or the other Loan Documents with respect to any agreements,
notes, instruments, certificates or other documents shall be deemed to refer to
such documents and to any amendments, modifications, renewals, extensions,
replacements, restatements, substitutions and supplements of and to such
documents. All references to statutes and related regulations shall include any
amendments thereof and any successor statutes and regulations.
1.06. Currency. All defined terms and references in this Agreement or
the other Loan Documents with respect to Advances, payments, prepayments,
specific dollar amounts, or any other currency transaction shall be deemed to be
made in lawful money of the United States of America.
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ARTICLE 2: ADVANCES
2.01. Commitment. Subject to the terms and conditions herein provided,
and so long as no Event of Default has occurred and is continuing hereunder,
Lender agrees to lend to Borrower from time to time before the Financing
Termination Date, an aggregate principal amount not to exceed the amount set
forth on Schedule 2.01 hereto as the maximum principal amount (the
"Commitment"). All amounts advanced hereunder shall be used solely for Equipment
and related services previously purchased from NTI, as identified on Schedule
2.01 hereto, or for the purchase of additional Equipment and related services
from NTI, as identified on the Borrowing Certificate for each Advance. Amounts
not exceeding the amount specified on Schedule 2.01 hereto may be used for legal
fees, charges, expenses and closing costs and other expenses incurred by
Borrower or incurred by Lender and payable by Borrower under Section 2.10
hereof.
2.02. Note and Payment Terms.
(a) Promissory Note. The Advances shall be evidenced by the Note
substantially in the form of Exhibit A hereto, with appropriate
insertions. The Note shall be executed by Borrower, payable to the order
of Lender, and shall evidence the obligation of Borrower to repay all
principal amounts advanced under or pursuant to this Agreement, together
with interest and all other amounts due thereunder. The Note shall be
dated the Closing Date, have a stated maturity that is the Maturity
Date, and bear interest at the Interest Rate from the First Borrowing
Date until the Note or any amount thereunder is paid in full (whether on
the Maturity Date, by acceleration or otherwise). All schedules attached
to the Note shall be deemed a part thereof. Any such schedule may be
amended by Lender from time to time to reflect changes in the amounts
includable thereon, but the failure to attach or amend any schedule
shall not diminish the obligation of Borrower to repay all amounts due
hereunder or on the Note.
(b) Interest Payments. Interest shall accrue on the principal
amount outstanding on the Note for each separate Advance at the
applicable Interest Rate for each Advance and shall be payable, in
arrears, on each Interest Payment Date. Interest only shall be payable
during the Interest Only Period, and thereafter all accrued interest
shall be payable, in arrears, with the principal payments described
below.
(c) Principal Payments. On the Conversion Date, the Note shall
automatically convert to a term certain of twenty (20) consecutive
quarters, and principal shall be paid in twenty (20) equal consecutive
quarterly installments, plus accrued interest, commencing on March 31,
1998 and on each Payment Date thereafter until the Maturity Date;
provided, however, that the principal payment amounts shall be
recalculated by Lender if any Advances are made hereunder after the
Conversion Date, based on the aggregate amount of all Advances made at
any time. The amount of each quarterly payment shall be calculated, at
the outset, by amortizing the amount of all principal amounts
outstanding on the Conversion Date. It is intended that the above
amortization schedule will fully amortize the principal amounts advanced
under the Note. The final payment shall be in an amount equal to all
outstanding principal, accrued and unpaid interest, premiums, expenses,
fees, penalties and all other unpaid charges due under the Note and this
Agreement.
(d) Late Payments and Default Rate. Notwithstanding the
foregoing, if Borrower shall fail to pay within ten (10) days after the
due date any principal amount or interest or other
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amount payable under this Agreement or under the Note, Borrower shall
pay to Lender, to defray the administrative costs of handling such late
payments, an amount equal to interest on the amount unpaid, to the
extent permitted under applicable law, at the Default Rate (instead of
the Interest Rate), from the due date until such overdue principal
amount, interest or other unpaid amount is paid in full (both before and
after judgment) whether or not any notice of default in the payment
thereof has been delivered under Section 9.01 hereof. In addition, but
without duplication, upon the occurrence and during the continuance of
an Event of Default, all outstanding amounts hereunder shall bear
interest at the Default Rate (instead of the Interest Rate) until such
amounts are paid in full or such Event of Default is waived in writing
by Lender.
(e) Excess Interest. Notwithstanding any provision of the Note,
this Agreement or any other Loan Document to the contrary, it is the
intent of Lender and Borrower that Lender or any subsequent holder of
the Note shall never be entitled to receive, collect, reserve or apply,
as interest, any amount in excess of the maximum rate of interest
permitted to be charged by applicable Law, as amended or enacted from
time to time. In the event Lender, or any subsequent holder of the Note,
ever receives, collects, reserves or applies, as interest, any such
excess, such amount which would be excessive interest shall be deemed a
partial prepayment of principal and treated as such, or, if the
principal indebtedness and all other amounts due are paid in full, any
remaining excess funds shall immediately be applied to any other
outstanding indebtedness of Borrower due to Lender, and if none is
outstanding, shall be paid to Borrower. In determining whether or not
the interest paid or payable, under any specific contingency, exceeds
the highest lawful rate, Borrower and Lender shall, to the maximum
extent permitted under applicable law, (a) exclude voluntary prepayments
and the effects thereof as it may relate to any fees charged by Lender,
and (b) amortize, prorate, allocate, and spread, in equal parts, the
total amount of interest throughout the entire term of the indebtedness;
provided that if the indebtedness is paid and performed in full prior to
the end of the full contemplated term hereof, and if the interest
received for the actual period of existence hereof exceeds the maximum
lawful rate, Lender or any subsequent holder of any Note shall refund to
Borrower the amount of such excess or credit the amount of such excess
against the principal portion of the indebtedness, as of the date it was
received, and, in such event, Lender shall not be subject to any
penalties provided by any laws for contracting for, charging, reserving
or receiving interest in excess of the maximum lawful rate.
2.03. Procedures for Borrowing.
(a) Timing of Advances. Advances shall not be made more than
once per month. Each Advance (other than the last Advance) shall be in
an aggregate principal amount of not less than $100,000. No amounts may
be borrowed hereunder on or after the Financing Termination Date. Lender
is hereby authorized to retain from each Advance all amounts of Lender's
Expenses accrued and unpaid by Borrower, for which invoices have been
sent to Borrower at least five (5) Business Days before such Advance. In
any event, all outstanding legal fees, charges and expenses not paid by
Borrower prior to any Borrowing Date shall be paid before any Advance is
made or concurrently with such Advance.
(b) Borrowing Certificates. To request an Advance hereunder,
Borrower shall send to Lender, at least ten (10) Business Days prior to
the requested Borrowing Date, a completed Borrowing Certificate, along
with invoices, a copy of the relevant Federal Reserve Statistical
Release H.15 report quoting the applicable five (5) year constant
maturity Treasury ▇▇▇▇ rate, and
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such other supporting documentation as Lender may reasonably request.
Lender is hereby authorized to add to any Borrowing Certificate all
amounts payable by Borrower to Lender in respect of legal fees, charges
and expenses arising or incurred by Lender, to the extent such fees,
charges and expenses have then been incurred or charged and may be paid
from Advances.
(c) Transmission of Advances. Advances shall be made by wire
transfer to the account(s) specified in the applicable Borrowing
Certificate, except that (i) proceeds of the Advances may be
transmitted, at Lender's option, directly to an NTI account for payment
of any unpaid NTI invoices, and (ii) Advances shall be made to Borrower
only to the extent that Borrower provides Lender with satisfactory
evidence that the amount of such Advance has been paid to NTI. No
further authorization shall be necessary for any such direct
disbursements, and each such Advance shall satisfy pro tanto the
obligations of the Lender under this Agreement.
(d) Borrowing Dates. Advances shall be made by Lender on the
Borrowing Date specified in the applicable Borrowing Certificate if all
conditions for such Advance have been satisfied, or on such later
Business Day as all conditions for such Advance shall have been
satisfied, as determined by Lender.
(e) Advances After Default. At its option, after the occurrence
and continuance of a Default, Lender may but shall not be obligated to
make direct payment of a portion or all of an Advance to any Person
(including without limitation NTI, suppliers, sub-contractors and
materialmen) to whom Lender in good faith determines payment is due with
respect to the Equipment, and any proceeds so disbursed by Lender shall
be deemed disbursed as of the date on which the Person to whom payment
is made receives the same. No further authorization from Borrower shall
be necessary to warrant such direct payments, and the execution of this
Loan Agreement by Borrower shall, and hereby does, constitute an
irrevocable authorization and power of attorney so to make such direct
payments hereunder. All such direct payments are Advances and shall
satisfy pro tanto the obligations of Lender hereunder and shall be
secured by the Security Documents as fully as if made directly to
Borrower.
2.04. Prepayments.
(a) Voluntary Prepayments. On or after the Conversion Date, the
Borrower may, at its option, at any time and from time to time, prepay
the Advances in whole or in part, upon at least four (4) Business Day's
prior written notice to the Lender specifying the date and amount of
prepayment, in a minimum amount of $250,000, plus the premium described
below, and all accrued but unpaid interest thereon. Such notice shall be
irrevocable and the principal amount specified in such notice shall be
due and payable on the date specified together with accrued interest on
the amount prepaid. Any such prepayment shall be subject to a prepayment
premium equal to a percentage of the amount prepaid as follows: zero
percent (0%) if prepayment is made on the Conversion Date, and with
respect to any prepayment occurring after the Conversion Date, a
prepayment premium equal to the excess, if any, of (a) the present
value, as of the date of such prepayment, of all loan payments that, but
for such prepayment, would have been payable after the date of the
prepayment over (b) the principal amount of the note being prepaid. The
present value calculated pursuant to clause (a) of the preceding
sentence shall be determined by discounting the amounts of such
installments from their respective payment dates to the date of the
prepayment at a rate equal to the weighted average yield to maturity of
the United States Treasury securities with a maturity equal to the then
remaining average life of the Note plus one
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half of one percent (1/2%).
Amounts prepaid may not be reborrowed and shall be applied as
provided in Section 2.04(c). Excess interest payments under Section
2.02(e) or prepayments made from insurance proceeds pursuant to Section
7.07(c) or with any condemnation proceeds shall not be subject to a
prepayment premium. No voluntary prepayments shall be permitted prior to
the Conversion Date.
(b) [intentionally deleted]
(c) Application of Prepayments. Any prepayments shall be applied
first to interest, then to premium, then to expenses, and then to the
installments of principal in reverse order of maturity. In addition,
principal installments shall be applied to each separate Advance with
the oldest Advance being prepaid first, until the remaining principal
outstanding on each such Advance is fully prepaid.
2.05. Computation of Interest. Interest shall be expressed as an annual
rate of interest, shall be compounded monthly, and shall be calculated daily on
the basis of a 360-day year for the actual days elapsed in the period during
which it accrues, at the applicable Interest Rate for each Advance.
2.06. Payments. All payments and prepayments to be made in respect of
principal, interest, prepayment premiums or other amounts due from Borrower
hereunder or under the Note shall be payable on or before 1:00 p.m., Nashville
time, on the day when due, without presentment, demand, protest or notice of any
kind, all of which are hereby expressly waived, and an action therefor shall
immediately accrue. Such payments shall be made to Lender at Lender's office at
▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or such other location
specified in writing by Lender, in immediately available funds, without setoff,
recoupment, counterclaims or any other deduction of any nature.
2.07. Indemnity. Borrower hereby indemnifies Lender against any losses,
claims, penalties, expenses, actions, suits, obligations, liabilities and Liens
(and all costs and expenses, including reasonable attorneys' fees incurred in
connection therewith), that Lender has sustained or incurred or may sustain or
incur in connection with any of the Collateral, or the enforcement, performance
or administration of the Loan Documents, or as a consequence of any default by
Borrower in the performance or observance of any covenant or condition contained
in this Agreement or the Loan Documents, including without limitation, the
breach of any representation or warranty, any failure of Borrower to pay when
due (by acceleration or otherwise) any principal, interest, fee or any other
amount due hereunder or under the Note, and any failure of Borrower to comply
with all applicable Requirements of Law (collectively, "Claims") except to the
extent of any Claims caused solely by Lender's gross negligence or willful
misconduct. Borrower's obligations under this Section 2.07 shall be part of the
Obligations and shall be secured by the Collateral. Borrower agrees that upon
written notice by Lender of the assertion of any Claims, Borrower shall, at
Lender's option, either assume full responsibility for, or reimburse Lender for
the reasonable costs and expenses of, the defense thereof. Lender shall have no
liability for consequential or incidental damages of any nature. The provisions
of this Section 2.07 shall survive the termination of this Agreement and payment
of the Obligations.
2.08. [Intentionally deleted].
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2.09. Fees. Borrower shall pay Lender the fees described on Schedule
2.09 hereto in connection with this Agreement.
2.10. Lender's Expenses. Borrower agrees (a) to pay or reimburse Lender
for all its reasonable costs, fees, charges and expenses incurred or arising in
connection with the negotiation, review, preparation and execution of this
Agreement, the Loan Documents, any commitment or proposal letter, or any
amendment, supplement, waiver, modification to, or restructuring of this
Agreement, the Obligations or the other Loan Documents, including, without
limitation, reasonable legal fees and disbursements, expenses, document charges
and other charges and expenses of Lender, (b) to pay or reimburse Lender for all
its reasonable costs, fees, charges and expenses incurred in connection with the
administration of the Advances or the enforcement, protection or preservation of
any rights under or in connection with this Agreement or any other Loan
Documents, including, without limitation, reasonable legal fees and
disbursements, audit fees and charges, and all out-of-pocket expenses, (c) to
pay, indemnify, and to hold Lender harmless from, any and all recording and
filing fees and taxes and any and all liabilities with respect to, or resulting
from any delay in paying, stamp, excise and other taxes (excluding income and
franchise taxes and taxes of similar nature), if any, which may be payable or
determined to be payable in connection with the execution and delivery or
recordation or filing of, or consummation of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement and the other Loan Documents.
All of the amounts described in this Section are referred to collectively as the
"Lender's Expenses", shall be payable upon Lender's demand, and shall accrue
interest at the Interest Rate in effect when such demand is made from five (5)
days after the date of demand until paid in full. All Lender's Expenses, and
interest thereon, shall be part of the Obligations and shall be secured by the
Collateral. The agreements in this Section 2.10 shall survive repayment of the
Obligations. All Lender's Expenses that are outstanding on any Borrowing Date
shall be paid before or with such advance. If Borrower has not paid to Lender
the amount of all Lender's Expenses billed to Borrower at least five (5)
Business Days before such Borrowing Date, Lender shall be authorized to retain
from any Advance on such Borrowing Date the amount of such Lender's Expenses
that remain unpaid. Borrower's obligation to pay Lender's Expenses shall not be
limited by any limitation on the amount of the Commitment that may be designated
as available for such purposes, and any amounts so designated shall be used to
pay Lender's Expenses accrued at the time of any Advance before any of
Borrower's legal fees or similar expenses.
2.11. Guaranty. The Guarantor shall unconditionally guarantee prompt and
full payment of all the Obligations pursuant to the Guaranty.
ARTICLE 3: COLLATERAL AND SECURITY AGREEMENT
3.01. Grant of Security Interest. Borrower (as debtor) hereby assigns to
Lender as collateral, and grants to Lender (as secured party) a continuing
security interest in and to, all of the Borrower's right, title and interest in
and to the following property, whether now owned or hereafter acquired or
arising, wherever located, together with all substitutions therefor and all
accessions, replacements and renewals thereof, and in all proceeds thereof
(collectively, the "Collateral"):
(a) All the Equipment and Borrower's rights under the NTI Supply
Agreement pertaining to such Equipment;
(b) All general intangibles and intangible property constituting
part of, or provided
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by or through NTI in connection with, the Equipment, or necessary for
the proper operation of the Equipment, including without limitation
insurance proceeds and amounts due under insurance policies, licenses,
license rights, rights in intellectual property, Software, Software
Licenses, computer programming (including source codes, object codes and
all other embodiments of computer programming or information), refunds,
warranties and indemnification rights, and all amounts owed at any time
to Borrower by Lender or NTI (collectively, "General Intangibles"); and
(c) All proceeds and products of any of the foregoing, including
without limitation (i) any and all proceeds of any insurance, indemnity,
warranty or guaranty payable to the Borrower from time to time with
respect to any of the Collateral, (ii) any and all payments (in any form
whatsoever) made or due and payable to the Borrower from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any Governmental
Authority (or any Person acting under color of governmental authority),
and (iii) any and all cash proceeds and non-cash proceeds in the form of
equipment, inventory, contracts, accounts, general intangibles, chattel
paper, documents, instruments, securities, or other proceeds in
connection with the collateral (collectively, "Proceeds").
3.02. Priority of Security Interests. The security interests granted by
Borrower to Lender are and shall be continuing and indefeasible first-priority
security interests in the Collateral, subject to no Liens except for Liens
permitted under Section 8.02 hereof.
3.03. Further Documentation; Pledge of Instruments. At any time and from
time to time, upon the written request of the Lender, and at the sole expense of
the Borrower, the Borrower shall promptly execute, deliver and record any
documents, instruments, agreements and amendments, and take all such further
action, as the Lender may reasonably deem desirable in obtaining the full
benefits of this Agreement and of the rights and powers herein granted,
including, without limitation, the filing of any financing statements or
amendments under the UCC. Financing Statements or amendments thereto describing
the Equipment being purchased with the proceeds of each Advance (or for which
reimbursement is being requested) will be completed and filed at the time of
such Advance. The Borrower also hereby authorizes the Lender to file any such
financing statement or amendment thereto, without the signature of the Borrower,
or with a copy or telecopy of the Borrower's signature, to the extent permitted
by applicable law, or to execute any financing statement or amendment thereof on
behalf of the Borrower as Borrower's attorney-in-fact. If any amount payable
under or in connection with any of the Collateral shall be or become evidenced
by any promissory note or other instrument or any certificated securities, such
note, instrument or certificate shall be immediately pledged and delivered to
the Lender hereunder, duly endorsed in a manner satisfactory to the Lender.
3.04. Further Identification of Collateral. Borrower shall furnish to
the Lender from time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as the Lender may reasonably request, all in reasonable detail.
Borrower shall identify Equipment to be purchased with proceeds of each Advance
on the Borrowing Certificate for such Advance.
3.05. Remedies. Lender shall have all the rights and remedies of a
secured party under the UCC, and shall be entitled to exercise any and all
remedies available under Article 9 hereof or otherwise available at law or in
equity upon the occurrence of an Event of Default.
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3.06. Standard of Care. Lender shall be deemed to have exercised
reasonable care in the custody and preservation of any of the Collateral in its
possession if it takes such action for that purpose as Borrower requests in
writing, but Lender's failure to comply with any such request shall not of
itself be deemed a failure to exercise reasonable care, and no failure of Lender
to preserve or protect any rights with respect to such Collateral against prior
parties, or to do any act with respect to the preservation of such Collateral
not so requested by Borrower, shall be deemed a failure to exercise reasonable
care in the custody or preservation of such Collateral.
3.07. Advances to Protect Collateral. All insurance expense and all
expenses of protecting, storing, warehousing, insuring, handling, maintaining
and shipping the Collateral (including, without limitation, all rent payable by
Borrower to any landlord of any premises where any of the Collateral may be
located), and, any and all taxes shall be borne and paid by Borrower. Lender may
(but shall not be obligated to) make advances to preserve, protect or obtain any
of the Collateral, including advances to pay taxes, insurance and the like, and
all such advances shall become part of the Obligations owing to Lender hereunder
and shall be payable to Lender on demand, with interest thereon from the date of
such advance until paid at the Default Rate in effect on the date of such
advance.
3.08. License to Use. Lender is hereby granted a license or other right
to use, without charge, Borrower's labels, patents, copyrights, rights of use of
any name, trade secrets, tradenames, trademarks and advertising matter, or any
tangible or intangible property or rights of a similar nature, as it pertains to
the Collateral, in advertising for sale and selling any Collateral, and
Borrower's rights under all licenses and franchise agreements with respect to
the Collateral shall inure to Lender's benefit.
ARTICLE 4: REPRESENTATIONS AND WARRANTIES
Borrower and Guarantor hereby represent and warrant to Lender as
follows:
4.01. Organization and Qualification. Each of the Borrower and the
Guarantor is duly organized, validly existing and in good standing as a
corporation under the laws of its state of organization. Each of the Borrower
and the Guarantor is duly qualified to do business and in good standing in each
jurisdiction in which the failure to receive or retain such qualification would
have a Material Adverse Effect.
4.02. Authority and Authorization. Each of the Borrower and the
Guarantor has all requisite corporate right, power, authority and legal right to
execute and deliver and perform its obligations under this Agreement, to make
the borrowings provided for herein, and to execute and deliver and to perform
its obligations under the Note. The Borrower's and the Guarantor's execution,
delivery and performance of the Basic Agreements have been duly and validly
authorized by all necessary corporate proceedings on the part of each of the
Borrower and the Guarantor.
4.03. Execution and Binding Effect. This Agreement, the Note and all
other Basic Agreements have been or will be duly and validly executed and
delivered by the Borrower and the Guarantor, and constitute or, when executed
and delivered will constitute, the legal, valid and binding obligations of
Borrower and Guarantor enforceable in accordance with their respective terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium or other laws affecting creditors'
rights generally.
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4.04. Governmental Authorizations. Except for the consents identified on
Schedule 4.04 hereto (the "Required Consents"), no authorization, consent,
approval, license, exemption or other action by, and no registration,
qualification, designation, declaration or filing with, any Governmental
Authority (other than the filing of financing statements and continuation
statements) is or will be necessary in connection with execution and delivery of
this Agreement, the Note or any other Loan Documents by Borrower or Guarantor,
consummation of the transactions herein or therein contemplated, performance of
or compliance by Borrower or Guarantor with the terms and conditions hereof or
thereof or the legality, validity and enforceability hereof or thereof.
4.05. Regulatory Authorizations. Borrower or Guarantor holds all
authorizations, permits and licenses required by the FCC or the PUC or any
Communications Law for the construction and operation of the Borrower's and
Guarantor's telecommunications system, and all such Regulatory Authorizations
are either: in full force and effect, are subject to no further administrative
or judicial review and are therefore final; or any Regulatory Authorizations
that are not in full force and effect will not have a material adverse affect on
the operations or financial condition of Borrower or Guarantor. Lender will not
by reason of the execution, delivery and performance (other than the enforcement
of remedies) of any of the Loan Documents, be subject to the regulation or
control of either the FCC or the PUC. The Regulatory Authorizations are
described on Schedule 4.05.
4.06. Material Agreement; Absence of Conflicts. The execution and
delivery of this Agreement, the Note and the other Loan Documents, the
consummation of the transactions herein or therein contemplated and the
performance of or compliance with the terms and conditions hereof or thereof by
Borrower and Guarantor will not (a) materially violate any applicable Law; (b)
conflict with or result in a material breach of or a default under the
Organizational Documents of the Borrower or the Guarantor or any agreement or
instrument to which Borrower or Guarantor is a party or by which Borrower or
Guarantor or its properties is bound; or (c) result in the creation or
imposition of any Lien upon any property (now owned or hereafter acquired) of
Borrower or Guarantor except as otherwise contemplated by this Agreement.
4.07. No Restrictions. Each of Borrower and Guarantor is not a party or
subject to any contract, agreement, or restriction in its Organizational
Documents that materially and adversely affects its business or the use or
ownership of any of its properties or operation of its business, except as set
forth on Schedule 4.07 hereto. Each of Borrower and Guarantor is not a party or
subject to any contract or agreement which restricts its right or ability to
incur Indebtedness, other than as set forth on Schedule 4.07, none of which
prohibit the Borrower's or Guarantor's execution of or compliance with this
Agreement. Neither Borrower nor Guarantor has agreed or consented to cause or
permit in the future (upon the happening of a contingency or otherwise) any of
the Collateral, whether now owned or hereafter acquired, to be subject to a Lien
that is not a Permitted Encumbrance.
4.08. Financial Statements. Guarantor has furnished to Lender the most
recent annual or quarterly financial statements of the Guarantor, certified by a
Responsible Officer of the Guarantor, including balance sheets and related
statements of income and retained earnings and changes in financial position, as
described on Schedule 4.08 hereof. Such financial statements (including the
notes thereto) present fairly the financial condition of Guarantor on a
consolidated basis as of the end of such fiscal period and the results of its
operations and the changes in its financial position for the fiscal period then
ended, all in conformity with GAAP (except that quarterly reports may omit
accompanying notes thereto and may be subject to year-end audit adjustments)
applied on a basis consistent with that of the preceding fiscal period. Any
projections and pro forma financial statements delivered by Guarantor to Lender
were
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prepared in good faith, based on reasonable assumptions, including without
limitation, the cost of capital.
4.09. Financial Accounting Practices. Each of Borrower and Guarantor has
made and kept books, records and accounts which, in reasonable detail,
accurately and fairly reflect its respective transactions and dispositions of
its assets, and shall maintain a system of internal accounting controls
sufficient to provide reasonable assurances that (a) transactions are executed
in accordance with management's general or specific authorization, (b)
transactions are recorded as necessary (i) to permit preparation of financial
statements in conformity with GAAP and (ii) to maintain accountability for
assets, (c) access to assets is permitted only in accordance with management's
general or specific authorization and (d) the recorded accountability for assets
is compared with the existing assets at reasonable intervals and appropriate
action is taken with respect to any differences.
4.10. Accurate and Complete Disclosure. No representation or warranty
made by Borrower or Guarantor under this Agreement is false or misleading in any
material respect (including by omission of material information necessary to
make such representation or warranty) and no statement made by Borrower or
Guarantor in any financial statement, certificate, report, exhibit or document
furnished by Borrower or Guarantor to Lender pursuant to or in connection with
this Agreement (including without limitation any filings with the Securities
Exchange Commission, the FCC or the PUC) was false or misleading as of the date
made in any material respect (including by omission of material information
necessary to make such representation, warranty or statement not misleading).
There are no facts that evidence or create a Material Adverse Effect, or, so far
as the Borrower and Guarantor can now foresee, will evidence or create a
Material Adverse Effect, which has not been set forth in the financial
statements referred to in Section 4.08 hereof or otherwise disclosed in writing
to the Lender prior to the First Borrowing Date.
4.11. No Event of Default; Compliance with Material Agreements. No event
has occurred and is continuing and no condition exists which constitutes a
Default or an Event of Default after giving effect to the Advance to be made on
the First Borrowing Date. As of the date hereof, each of Borrower or Guarantor
is not in violation of any term of its material agreements or instruments to
which it is a party or by which it or its properties is bound.
4.12. Litigation. Except as set forth in Schedule 4.12, there is no
pending action, suit or threatened proceeding by or before any Governmental
Authority against or affecting Borrower or Guarantor or any of their properties,
rights or licenses which if adversely decided would have a Material Adverse
Effect.
4.13. Rights to Property; Intellectual Property. Borrower has good and
marketable title, subject only to the Permitted Encumbrances, to the Collateral
and to all personal and real property purported to be owned by it as reflected
in the most recent balance sheet referred to in Section 4.08 hereof (except as
sold or otherwise disposed of in the ordinary course of business as no longer
used or useful in the conduct of the business). Borrower owns or possesses the
right to use all patents, trademarks, service marks, trade names, copyrights,
know-how, franchises, software and software licenses necessary for the operation
of its business, free from burdensome restrictions.
4.14. Financial Condition. Each of Borrower's and Guarantor's financial
condition is accurately described in the Certificate of Financial Condition
executed by Borrower and Guarantor pursuant hereto.
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4.15. Taxes. Each of Borrower's and Guarantor's federal tax
identification numbers is set forth on Schedule 1 hereto. All tax returns
required to be filed by Borrower or Guarantor have been properly prepared,
executed and filed, and all taxes, assessments, fees and other governmental
charges upon Borrower or Guarantor or upon any of its respective properties,
incomes, sales or franchises which are shown to be due and payable thereon have
been paid, other than taxes or assessments the validity or amount of which
Borrower or Guarantor is contesting in good faith. The reserves and provisions
for taxes on the books of Borrower and Guarantor are adequate for all open years
and for its current fiscal period.
4.16. No Material Adverse Change. Since the date of the financial
statements referenced in Section 4.08, there has been no Material Adverse Change
and there exists no present condition or state of facts or circumstances which
would have a Material Adverse Effect or prevent Borrower or Guarantor from
conducting its business after the consummation of the transaction contemplated
by this Agreement.
4.17. No Regulatory Event. No Regulatory Event has occurred and is
continuing, except as described on Schedule 4.17 hereto.
4.18. Trade Relations. There exists no actual or threatened termination,
cancellation or limitation of, or any modification or change in, the business
relationship between Borrower or Guarantor and any carrier, any labor
organizations, any customer or any group thereof whose agreements with Borrower
or Guarantor or use of the Borrower's or Guarantor's Equipment individually or
in the aggregate are material to the business of Borrower or Guarantor, or with
any material supplier.
4.19. No Brokerage Fees. No brokerage or other fee, commission or
compensation is to be paid by Borrower or Guarantor to any Person in connection
with the loans to be made hereunder. Each of Borrower and Guarantor hereby
indemnifies Lender against any claims brought against Lender for brokerage fees
or commissions of any Person based on an agreement with Borrower or Guarantor
and agrees to pay all expenses incurred by Lender in connection with the defense
of any action or proceeding brought to collect any such brokerage fees or
commissions.
4.20. Margin Stock; Regulation U. Neither Borrower nor Guarantor is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying margin stock. The
making of the Advances and the use of the proceeds thereof will not violate
Regulations G, U or X of the Board of Governors of the Federal Reserve System.
4.21. Investment Company; Public Utility Holding Company. Each of
Borrower and Guarantor is not an "investment company" or a "company controlled
by an investment company" within the meaning of the Investment Company Act of
1940, as amended, or a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
4.22. Personal Holding Company; Subchapter S. Each of Borrower and
Guarantor is not a "personal holding company" as defined in Section 542 of the
Code, and Borrower is not a "Subchapter S" corporation within the meaning of the
Code.
4.23. ERISA. (i) With respect to any Plan, there is no Reportable Event
currently under consideration by the PBGC which may reasonably result in any
material liability to the PBGC with respect to any Plan, (ii) no Plan has been
terminated, (iii) no trustee has been appointed by any United
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ to administer any Plan, (iv) the PBGC has not instituted
proceedings to terminate any Plan or to appoint a trustee to administer any such
Plan, (v) neither the Borrower nor the Guarantor has withdrawn, completely or
partially, from any Plan and (vi) neither the Borrower nor the Guarantor has
incurred secondary liability for withdrawal liability payments under any Plan.
4.24. Environmental Warranties. Neither the Borrower nor the Guarantor
is in violation of any Environmental Laws applicable to Borrower, Guarantor or
their business or to the real or personal property owned, leased or operated by
Borrower or Guarantor that will have a material adverse affect on the operations
or financial condition of Borrower or Guarantor Neither Borrower nor Guarantor
has received notice of, or is aware of, any violations or alleged violations, or
any liability or asserted liability, under any such Environmental Laws that will
have a material adverse affect on the operations or financial condition of
Borrower or Guarantor.
4.25. Security Interests. The provisions of Article 3 hereof are
effective to create in favor of Lender a legal, valid and enforceable Lien on or
security interest in all of the Collateral, and, when the recordings and filings
described on Schedule 4.25 hereto have been effected in the public offices
listed on said Schedule 4.25, this Agreement will create a perfected
first-priority security interest in all right, title, estate and interest of
Borrower in the Collateral, and subject to no other Liens except for Permitted
Encumbrances. All action necessary or desirable to protect and perfect such
security interest in each item of the Collateral will have been duly taken prior
to the First Borrowing Date. The recordings and filings shown on said Schedule
4.25 are all the actions necessary or advisable in order to establish, protect
and perfect the interest of Lender in the Collateral.
4.26. Place of Business. The chief executive offices of Borrower and
Guarantor are identified on Schedule 4.26 hereto. The Borrower's and Guarantor's
principal places of business in the state(s) where the Equipment is located are
identified on Schedule 4.26 hereto. The Borrower's records concerning the
Collateral are kept at one or both of these addresses.
4.27. Location of Collateral. The Collateral is and will be kept at the
locations identified on Schedule 4.26 hereto or such other locations as may be
permitted under Section 8.05.
4.28. Clear Title To Collateral. The Borrower is the sole owner of each
item of the Collateral, having good and marketable title thereto, free and clear
of any and all Liens, claims, or rights of others, except for the security
interest granted herein to the Lender and the other Permitted Encumbrances.
4.29. Assumed Names. Except as set forth on Schedule 4.29 hereto,
Borrower or Guarantor does not conduct business under any assumed names or trade
names, and has not conducted business under any other names, or any assumed
names or trade names, at any time prior to the date hereof.
4.30. Transactions with Affiliates. No Affiliate and no officer,
director or Owner of the Borrower or Guarantor or any individual related by
blood, marriage, adoption or otherwise to any such officer, director or Owner or
Guarantor, or any Person in which any such officer, director, Owner, Guarantor
or individual related thereto owns any beneficial interest, is a party to any
agreement, contract, commitment or transaction with the Borrower or Guarantor or
has any material interest in any material property used by the Borrower or
Guarantor, except as set forth on Schedule 4.30 hereto.
4.31. NTI Supply Agreement. The NTI Supply Agreement has been duly
executed and delivered by the Borrower and NTI, is in full force and effect, and
a true, correct and complete copy
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thereof (including all annexes, attachments and amendments thereto) has been
delivered to Lender, and there are no other side letters, waivers or other
agreements affecting the terms thereof.
ARTICLE 5: CONDITIONS OF CLOSING
On or before the Closing Date, the following conditions shall have been
satisfied:
5.01 Closing Certificates. A certificate of Borrower and a certificate
of Guarantor signed by a duly authorized Responsible Officer, certifying as to
(i) true copies of Organizational Documents of Borrower and Guarantor in effect
on such date; (ii) true copies of all corporate action taken by Borrower and
Guarantor and corporate action relative to this Agreement, the Note and the
other Loan Documents; (iii) the names, true signatures and incumbency of the
Responsible Officers of Borrower and Guarantor authorized to execute and deliver
this Agreement, the Note and the other Loan Documents; (iv) Certificates of Good
Standing (or equivalent certificate) for the Borrower and Guarantor, duly issued
by the Secretary of State of each state in which the Borrower and Guarantor do
business or intend to do business; and (v) such other matters as Lender shall
request.
5.02 Opinions of Counsel. Lender shall have received a written opinion
of counsel to Borrower, substantially in the form of Exhibit C hereto, dated as
of the Closing Date and in form and substance satisfactory to Lender.
5.03. Closing Documents. Lender shall have received the following
documents, all in form and substance satisfactory to Lender:
(a) Agreement. This Agreement, duly executed by Borrower and
Guarantor;
(b) Note. The Note, duly executed by Borrower;
(c) NTI Supply Agreement. A copy of the executed NTI Supply
Agreement;
(d) Insurance. Policies and certificates of insurance required
by Section 7.07, accompanied by evidence of the payment of the premiums
therefor;
(e) Financial Statements. The financial statements described in
Section 4.08 hereof;
(f) Balance Sheet. The most recent quarterly consolidated
balance sheet of the Guarantor filed with the SEC, certified by a
Responsible Officer as fairly presenting the financial condition of the
Guarantor.
(g) Certificate of Financial Condition. A Certificate of
Financial Condition duly executed by a Responsible Officer of the
Borrower and a Responsible Officer of the Guarantor.
(h) Guaranty. The Guaranty duly executed by Guarantor, together
with a legal opinion of Guarantor's counsel in the form and substance
satisfactory to Lender and such other supporting documentation as Lender
may reasonably require.
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(i) Map or Survey and Layout. A detailed map or survey
describing in detail the Equipment by location by address or lot and
block plat or mileage marker, the necessary physical spaces and
locations owned or leased for operation of Equipment.
(j) Environmental Matters. Duly executed Environmental
Certificates, satisfactory to Lender, with respect to the locations of
the Equipment, substantially in the form of Exhibit E hereto.
ARTICLE 6: CONDITIONS OF LENDING
6.01. Conditions for Initial Advance. On or before the First Borrowing
Date, the following conditions shall have been met to Lender's satisfaction:
(a) Financing Statements. Lender shall have received all UCC-1
financing statements necessary to perfect the Liens granted hereby in
form and substance satisfactory to Lender, each duly executed by
Borrower, and duly recorded in all the offices identified on Schedule
4.25 hereto.
(b) Pre-Funding Lien Searches. Lender shall have received
satisfactory results of Lien searches in all jurisdictions reasonably
determined by Lender to be appropriate reflecting the filing of
financing statements in favor of Lender pursuant hereto and no other
Liens other than Permitted Encumbrances on any of the Collateral.
(c) Required Consents. Lender shall have received satisfactory
evidence of the Borrower's or Guarantor's obtaining the Required
Consents.
(d) Fees. Lender shall have received the fee(s) described in
Section 2.09 hereof.
6.02. Conditions for All Advances. The obligation of Lender to make any
Advance hereunder is subject to the Borrower's and Guarantor's performance of
its obligations hereunder on or before the date of such Advance, and to the
satisfaction of the following further conditions on or before the Borrowing Date
for any Advance, including the first Advance:
(a) Filings, Registrations and Recordings. Any financing
statements or other recordings required hereunder shall have been
properly filed, registered or recorded in each office in each
jurisdiction required in order to create in favor of the Lender a
perfected first- priority Lien on the Collateral, subject to no other
Lien; the Lender shall have received acknowledgment copies of all such
filings, registrations and recordations stamped by the appropriate
filing officer; and Lender shall have received results of searches of
such filing offices, and satisfactory evidence that any other Liens
(other than Permitted Encumbrances) on the Collateral have been duly
released, that all necessary filing fees, recording fees, taxes and
other expenses related to such filings, registrations and recordings
have been paid in full.
(b) Borrowing Certificate. Lender shall have received a duly
executed Borrowing Certificate in the form of Exhibit B, including a
detailed itemization of all costs of goods and
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services to be paid with the proceeds of the Advance (or for which
reimbursement is being requested) and accompanied by supporting
documentation satisfactory to Lender, attached as Schedule 1 to the
Borrowing Certificate.
(c) Reporting Requirements. Borrower and Guarantor shall have
provided Lender with all relevant reports and information required under
Article 7 hereof.
(d) No Regulatory Event. No Regulatory Event (in either
Borrower's, Guarantor's or Lender's reasonable determination) shall have
occurred and be continuing or would exist upon the consummation of
transactions to occur on such Borrowing Date.
(e) No Default or Event of Default. No Default or Event of
Default shall have occurred and be continuing or would exist upon the
consummation of transactions to occur on such Borrowing Date.
(f) No Material Adverse Change. No Material Adverse Change shall
have occurred, or would occur after giving effect to such Advance, since
the date of the last financial statements delivered to Lender pursuant
to Section 4.08 or 7.01 hereof.
(g) Representations and Warranties. The representations and
warranties contained in Article 4 hereof shall be true on and as of the
date of each such Advance hereunder.
(h) Lender's Expenses. All closing costs, and other Lender's
Expenses shall have been paid in full, (or shall be paid first from such
Advance as provided in Section 2.03 hereof).
(i) Opinions. Lender shall have received from Borrower and
Guarantor such opinions of counsel for the Borrower and Guarantor as may
be reasonably acceptable to Lender in form and substance with respect to
the perfection and priority of the Liens created by the Security
Documents in each such jurisdictional location.
(j) Details, Proceedings and Documents. All legal details and
proceedings in connection with the transactions contemplated by this
Agreement shall be reasonably satisfactory to Lender and Lender shall
have received all such counterpart originals or certified or other
copies of such documents and proceedings in connection with such
transactions, in form and substance reasonably satisfactory to Lender,
as Lender may from time to time request.
(k) Consents. Lender shall have received all Consents duly
executed by all parties and in form satisfactory to Lender.
(l) Post-Closing Items. The post-closing items described on
Schedule 6.02 hereto, if any, shall have been completed in the time
permitted, and Borrower and Guarantor shall have provided Lender with
satisfactory evidence thereof.
(m) Financing Statements or Amendments. Lender shall have
received executed financing statements or amendments required by Section
3.03 hereof.
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6.03. Affirmation of Representations and Warranties. Any Borrowing
Certificate or other request for any Advance hereunder shall constitute a
representation and warranty that (a) the representations and warranties
contained in Article 4 hereof are true and correct on and as of the date of such
request with the same effect as though made on and as of the date of such
request and (b) on the date of such request no Default or Event of Default has
occurred and is continuing or exists or will occur or exist after giving effect
to such Advance (for this purpose such Advance being deemed to have been made on
the date of such request). Failure of Lender to receive notice from Borrower or
Guarantor to the contrary before such Advance is made shall constitute a further
representation and warranty by Borrower and Guarantor that (x) the
representations and warranties of Borrower and Guarantor contained in the first
sentence of this Section 6.03 are true and correct on and as of the date of such
Advance with the same effect as though made on and as of the date of such
Advance and (y) on the date of the Advance no Default or Event of Default has
occurred and is continuing or exists or will occur or exist after giving effect
to such Advance.
6.04. Deadline for Funding Conditions. Lender shall have no obligation
to make any Advances hereunder if all of the conditions set forth in Article 5
and in Sections 6.01 and 6.02 hereof have not been fully satisfied, and the
first Advance made hereunder, by the Financing Termination Date.
ARTICLE 7: AFFIRMATIVE COVENANTS
Each of Borrower and Guarantor hereby agrees that as long as the
commitment hereunder remains in effect, the Note remains outstanding or unpaid
or any other amount is owing to Lender hereunder or under any of the Loan
Documents, Borrower and Guarantor shall keep and perform fully each and all of
the following covenants:
7.01. Reporting and Information Requirements.
(a) Annual Audit Reports. After the close of each fiscal year of
Guarantor, at the time of filing annual reports with the Securities
Exchange Commission ("SEC"), Guarantor shall furnish or cause to be
furnished to Lender audited statements of income, statements of cash
flow and retained earnings for such fiscal year and the Guarantor's
balance sheet as of the close of such fiscal year, and notes to each,
all in reasonable detail, and beginning with Guarantor's second full
fiscal year setting forth in comparative form the corresponding figures
for the preceding fiscal year, with such statements and balance sheet to
be certified without qualification by independent certified public
accountants of recognized national standing selected by Guarantor and
reasonably satisfactory to Lender.
(b) Quarterly Reports. After the end of each fiscal quarter, at
the time of filing quarterly reports with the SEC, Guarantor shall
furnish to Lender (i) unaudited consolidated statements of income,
statements of cash flow and retained earnings for Guarantor for such
quarter and for the period from the beginning of Guarantor's then
current fiscal year to the end of such quarter, and an unaudited
consolidated balance sheet of Guarantor as of the end of such quarter,
all in reasonable detail and certified by a Responsible Officer of
Guarantor as presenting fairly the financial position of Guarantor as of
the end of such quarter and the results of its operations and the
changes in its financial position for such quarter, in conformity with
GAAP (except for accompanying notes thereto), subject to year-end audit
adjustments, and (ii) upon
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Lender's request, an aging of accounts payable and accounts receivable.
(c) SEC Reports. Guarantor shall furnish to Lender copies of all
other SEC filings at the time of filing such reports.
(d) Compliance Certificates. Within sixty (60) days after the
end of each Calendar Quarter, Borrower and Guarantor shall deliver to
Lender a certificate dated as of the end of such Calendar Quarter,
signed on behalf of Borrower and Guarantor by a Responsible Officer of
Borrower and Guarantor (i) stating that as of the date thereof no Event
of Default has occurred and is continuing or exists, or if an Event of
Default has occurred and is continuing or exists, specifying in detail
the nature and period of existence thereof and any action with respect
thereto taken or contemplated to be taken by Borrower or Guarantor; (ii)
stating that the signer has personally reviewed this Agreement and that
such certificate is based on an examination made by or under the
supervision of the signer sufficient to assure that such certificate is
accurate; and (iii) calculating and certifying Borrower's and
Guarantor's compliance with the financial covenants set forth in Section
7.15 hereof.
(e) Accountants' Certificate. Each set of year-end audited
consolidated statements and balance sheet delivered pursuant to Section
7.01(a) hereof shall be accompanied by a certificate or report dated the
date of such statement and balance sheet by the accountants who
certified such statements and balance sheet stating in substance that
they have reviewed this Agreement and that in making the examination
necessary for their certification of such statements and balance sheet
they did not become aware of any Default, or if they did become so
aware, such certificate or report shall state the nature and period of
existence thereof.
(f) Projections. If requested by Lender, Guarantor shall deliver
to Lender within thirty (30) days prior to the beginning of each
calendar year projections of its anticipated income, expenses, cash
flow, assets and liabilities for each month or quarter of such calendar
year, prepared in good faith and in a manner and format consistent with
other financial statements provided by Guarantor to Lender. Such
projections shall present fairly the anticipated financial condition of
the Guarantor and shall be certified by a Responsible Officer of the
Guarantor. Upon Lender's request, or following any material change in
the Guarantor's financial condition or business, such reports shall be
provided to Lender quarterly, within thirty (30) days prior to the
beginning of each Calendar Quarter.
(g) Amendments to Indenture. In the event that the Indenture is
amended or supplemented, the Guarantor shall deliver to Lender a copy of
the amendment or supplement to the Indenture within ten (10) days after
the execution of such amendment or supplement.
(h) Other Reports and Information. Promptly upon their becoming
available to Borrower or Guarantor, Borrower or Guarantor shall deliver
to Lender copies of (i) all regular or special reports or effective
registration statements which Borrower or Guarantor shall file with
Governmental Authorities, the FCC or the PUC (or any successor thereto)
or any securities exchange, (ii) financial statements, material reports,
and other information distributed by Borrower or Guarantor to its
creditors or the financial community in general, and (iii) all press
releases issued by or concerning Borrower or Guarantor or the Equipment.
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(i) Further Information. Borrower or Guarantor will promptly
furnish to Lender such other information (including any report by
independent auditors) in such form as Lender may reasonably request.
7.02 Other Notices. Promptly upon a Responsible Officer of Borrower or
Guarantor becoming aware of any of the following, Borrower or Guarantor shall
give Lender notice thereof, together with a written statement of a Responsible
Officer of Borrower or Guarantor setting forth the details thereof and any
action with respect thereto taken or contemplated to be taken by Borrower or
Guarantor:
(a) a Default or Event of Default;
(b) any Material Adverse Change;
(c) a material default or breach by Borrower or Guarantor under
any other contractual obligation to which it is a party or by which it
or its properties is bound, if the consequences of such breach of
default are material to the business, operations or financial condition
of Borrower or Guarantor;
(d) any event that the Borrower or Guarantor reasonably
determines would constitute a Regulatory Event;
(e) the commencement, existence or threat of any proceeding by
or before any Governmental Authority against Borrower or Guarantor
which, if adversely decided, would have a Material Adverse Effect;
(f) Borrower's or Guarantor's receipt of any notice of violation
of, or liability under, any Environmental Laws affecting Borrower or
Guarantor or any of their properties; or
(g) any Change in Control or any material change in the
management of Borrower or Guarantor.
7.03. Notice of Pension-Related Events. The Borrower or Guarantor shall
promptly furnish Lender with written notice upon the receipt by the Borrower or
Guarantor or the administrator of any Plan of any notice, correspondence or
other communication from the PBGC, the IRS, the Secretary of Treasury, the
Department of Labor, or any other Person, as the case may be, relating to (i)
any Reportable Event, (ii) any funding deficiency with respect to any Plan,
(iii) any liability, either primary or secondary, with respect to complete or
partial withdrawal from any Plan, (iv) proceedings to terminate any Plan or (v)
the appointment of a trustee for any Plan. Such notice shall be accompanied by
any pertinent documents including, but not limited to, the relevant notice,
correspondence or other communication and a statement of a Responsible Officer
of the Borrower or Guarantor describing the event or the action taken and the
reasons therefor.
7.04. Inspection Rights. Borrower shall upon reasonable notice permit
such persons as Lender may designate to visit and inspect the Collateral or any
other properties of Borrower, to examine its books and records and take copies
and extracts therefrom and discuss its respective affairs with its officers,
employees and independent engineers at such times and as often as Lender may
reasonably request. Borrower hereby authorizes such officers, employees, and
independent engineers to discuss with Lender the affairs of Borrower.
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7.05. Preservation of Corporate Existence and Qualification. Each of
Borrower and Guarantor shall maintain its existence, good standing and rights in
full force and effect in its jurisdiction of organization. Borrower and
Guarantor shall qualify to do business and remain qualified and in good standing
and shall obtain all necessary authorizations to do business in each
jurisdiction in which failure to receive or retain such would have a Material
Adverse Effect.
7.06. Continuation of Business. Borrower and Guarantor shall continue to
engage predominantly in the telecommunications service business, which may
include providing internet services, and shall acquire and maintain in full
force and effect all rights, privileges, franchises and licenses necessary for
the operation and maintenance of the Borrower's and Guarantor's
telecommunications system (including, without limitation any license or
authorization required by the FCC or any PUC).
7.07. Insurance.
(a) Borrower shall provide and maintain or cause to be
maintained at all times insurance in such forms and covering such risks
and hazards and in such amounts and with an insurance corporation with a
Best rating of "A" or above, licensed to do business in the states where
the Equipment and the Borrower are located, as may be satisfactory to
Lender, as shown on Schedule 7.07 hereto, and otherwise as may be
required by the Security Documents.
(b) Borrower shall cause (i) all liability insurance policies to
name Lender as an additional insured, (ii) all physical damage insurance
policies to contain a lender's or mortgagee's loss payable provision
acceptable to Lender with respect to the Collateral, (iii) all insurance
policies to provide that no assignment, cancellation, modification,
reduction in amount or adverse change in coverage thereof shall be
effective until at least thirty (30) days after receipt by Lender of
written notice thereof, (iv) all insurance policies to insure the
interests of Lender with respect to the Collateral regardless of any
breach of or violation by Borrower of any warranties, declarations or
conditions contained therein and (v) all insurance policies to provide
that Lender shall have no obligation or liability for premiums,
commissions, assessments or calls in connection with such insurance.
Lender shall be under no obligation to verify the adequacy or existence
of any insurance coverage. Borrower shall furnish Lender copies of, or
acceptable certificates with respect to, all such policies prior to the
Closing Date, and shall provide to Lender, at least thirty days prior to
each policy expiration date, evidence of the insurance being maintained
by Borrower in compliance with this Section 7.07(b). Certificates for
insurance required under subsection (i) above shall be in ▇▇▇▇▇ Form 27
(attached hereto at Schedule 7.07), and all certificates shall be
satisfactory in form and substance to Lender.
(c) If the Collateral is partially or totally damaged or
destroyed, Borrower shall give prompt notice to Lender, and all
insurance proceeds, less the costs of collection thereof, shall be paid
to or retained by Lender. Settlements, adjustments or compromises of any
claims for loss, damage or destruction to the Collateral shall be made
by Borrower as long as no Event of Default has occurred and is
continuing, and otherwise shall be made solely by Lender. Borrower
hereby authorizes and directs any affected insurance company to pay such
proceeds directly to Lender, and to rely on Lender's statement as to
whether an Event of Default has occurred. Borrower shall pay all costs
of collection of insurance proceeds payable on account of such damage or
destruction. If no Default or Event of Default has occurred and is
continuing on the date the Collateral is partially or totally damaged or
destroyed, Lender shall make available to Borrower the proceeds of any
physical damage insurance actually paid to Lender in respect of such
damage
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or destruction of the Collateral (after deducting therefrom any sums
retained by Lender in reimbursement for costs of collection) to pay the
cost of restoration, and Borrower shall proceed promptly with the work
of restoration of the Collateral and shall pursue the work of
restoration diligently to completion. If any Default or Event of Default
has occurred and is continuing either on the date of such damage or
destruction or on the date such insurance proceeds are paid, or if any
Default or Event of Default shall occur prior to completion of such work
of restoration, then Lender, at its option, may apply such insurance
proceeds in payment of any of the Obligations, in such order as Lender
may elect in its sole discretion. Any insurance proceeds remaining after
completion of work or restoration shall, at Lender's election, be
applied in accordance with Section 2.04(c) hereof (but without
prepayment premium), or paid over to Borrower. Upon completion of any
restoration, Borrower shall deliver to Lender a certificate stating that
the restoration has been duly completed and accounting for the use of
any insurance proceeds in such restoration.
7.08. Payment of Taxes, Charges and Claims. Borrower or Guarantor shall
pay or discharge:
(a) on or prior to the date on which penalties thereto accrue,
all taxes, assessments and other government charges or levies imposed
upon it or any of its properties or income (including such as may arise
under Section 4062, Section 4063 or Section 4064 of ERISA, or any
similar provision of law);
(b) on or prior to the date when due, all lawful claims of
materialmen, mechanics, carriers, warehousemen, and other like persons
which could result in creation of a Lien upon any such property; and
(c) on or prior to the date when due, all other lawful claims
which, if unpaid, might result in the creation of a Lien upon any such
property (other than Permitted Encumbrances) or which, if unpaid, might
give rise to a claim entitled to priority over general creditors of
Borrower or Guarantor in a case under Title 11 (Bankruptcy) of the
United States Code, as amended, or in any insolvency proceeding or
dissolution or winding-up involving Borrower or Guarantor.
Notwithstanding the foregoing, Borrower shall be entitled to contest or
appeal the requirements of any Law or Governmental Authority or the payment of
any tax, assessment, charge, levy or claim, or any judgment entered against the
Borrower or Guarantor, or the creation of any carrier's, warehousemen's,
mechanic's, materialmen's, repairmen's or other like Liens on the Collateral
arising in the ordinary course of business (collectively, in this Section 7.08,
the "requirements"), as long as (i) such requirements are being contested in
good faith by appropriate proceedings diligently conducted; (ii) Borrower or
Guarantor has given Lender written notice of such requirements and its intent to
contest them, with supporting reasons for such contest, before the addition of
any interest or penalties that may accrue on such requirements; (iii) Borrower
or Guarantor maintains adequate cash reserves and makes other appropriate
provisions as may be required by GAAP to provide for any liability arising from
such requirements; (iv) the contesting of, or failure to comply with, such
requirements does not in any way jeopardize the Borrower's or Guarantor's
ability or authority to operate all or any part of the Collateral or the
continuing priority of Lender's security interests in the Collateral; (vi) the
contesting of, or failure to comply with, such requirements does not have a
Material Adverse Effect; and (vii) any foreclosure, attachment, execution, sale
or similar proceeding against the Borrower or Guarantor or any of its properties
in connection with any such requirements is duly stayed by posting of a bond or
security deposit or by other action sufficient under applicable law to stay such
foreclosure, attachment, execution,
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sale or other proceedings.
7.09. Financial Accounting Practices. Borrower or Guarantor shall make
and keep books, records and accounts which, in reasonable detail, accurately and
fairly reflect its transactions and dispositions of its assets and maintain a
system of internal accounting controls sufficient to provide reasonable
assurances that (a) transactions are executed in accordance with management's
general or specific authorization, (b) transactions are recorded as necessary
(i) to permit preparation of financial statements in conformity with GAAP and
(ii) to maintain accountability for assets, (c) access to assets is permitted
only in accordance with management's general or specific authorization and (d)
the recorded accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
7.10. Compliance with Laws. Borrower and Guarantor shall comply in all
respects with all Laws applicable to Borrower and Guarantor, provided that
Borrower and Guarantor shall not be deemed to be in violation of this Section
7.10 as a result of any failure to comply which would not result in any
liability or exposure to Lender or any fines, penalties, injunctive relief or
other civil or criminal liabilities which, in the aggregate, would materially
affect the business, operations or financial condition of Borrower or Guarantor
or the ability of Borrower or Guarantor to perform its obligations under this
Agreement or the Note.
7.11. Use of Proceeds. Borrower shall use the proceeds of Advances
hereunder only as set forth in Section 2.01 hereof.
7.12. Government Authorizations; Regulatory Authorizations, Etc.
Borrower and Guarantor shall at all times obtain and maintain in force all
Regulatory Authorizations and all other authorizations, permits, consents,
approvals, licenses, exemptions and other actions by, and all registrations,
qualifications, designations, declarations and other filings with, any
Governmental Authority necessary in connection with execution and delivery of
this Agreement or the Note, consummation of the transactions herein or therein
contemplated, performance of or compliance with the terms and conditions hereof
or thereof or to ensure the legality, validity and enforceability hereof or
thereof.
7.13. Contracts and Franchises. Borrower and Guarantor shall comply with
all agreements or instruments to which it is a party or by which it or any of
its properties (now owned or hereafter acquired) may be subject or bound and
shall maintain any and all franchises it may have or hereafter acquire, provided
that Borrower and Guarantor shall not be deemed to be in violation of this
Section 7.13 as a result of any failure to comply with any agreement if such
failure would not have Material Adverse Effect.
7.14. Consents. Borrower or Guarantor shall obtain such Landlord's
Consents and other third party consents as Lender shall reasonably request to
protect its Liens and its access to the Collateral.
7.15. Financial Covenants. Guarantor shall comply with the financial
covenants set forth on Schedule 7.15 hereto.
7.16. Construction and Storage. The Collateral shall be installed and
equipped in full compliance with the Requirements of Law affecting the
Collateral except to the extent a failure to so comply would not have a Material
Adverse Effect on the construction or operation of the Collateral. All Equipment
financed with the proceeds of the Advances shall be safeguarded and stored until
installed in
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appropriate storage facilities owned or leased by Borrower. In the event of any
cessation of construction for more than fifteen (15) successive calendar days,
Borrower shall make adequate provision, reasonably acceptable to Lender, for the
protection of all materials stored on site against deterioration, loss or
damage.
7.17. Upgrade Equipment. Borrower shall maintain the Equipment in good
working order and shall upgrade its software in accordance with industry
practice.
ARTICLE 8: NEGATIVE COVENANTS
Each of Borrower and Guarantor hereby agrees that so long as the
Commitment hereunder remains in effect or the Note remains outstanding and
unpaid or any other amount is owing to Lender hereunder or under any of the Loan
Documents, Borrower and Guarantor shall not directly or indirectly without prior
written consent of Lender, do or permit to exist any of the following:
8.01. Additional Indebtedness. Create, incur, assume or suffer to exist
at any one time any Indebtedness secured by a lien on the Collateral.
8.02. Restrictions on Liens and Sale of Collateral. Create or suffer to
exist any Lien on the Collateral or any part thereof, whether superior or
subordinate to the Lien of the Security Documents, or assign, convey, sell or
otherwise dispose of or encumber its interest in the Collateral, or any part
thereof (including, without limitation, execution of any lease), nor permit any
such action to be taken, except for the following permitted dispositions and
encumbrances (the "Permitted Encumbrances"): (i) the Lien created hereby and any
purchase money Liens in favor of NTI created by the NTI Supply Agreement; (ii)
Liens for taxes not yet due, or which are being contested in good faith and by
appropriate proceedings in accordance with Section 7.08 hereof; (iii) carriers',
warehousemen's, mechanics', materialmen's, repairmen's or other like Liens
arising in the ordinary course of business which are overdue for a period not
longer than sixty (60) days or which are being contested in good faith and by
appropriate proceedings in accordance with Section 7.08 hereof; and (iv)
judgment liens with respect to which execution has been stayed within ten (10)
days by appropriate judicial proceedings and the posting of adequate security
which may not be any of the Collateral.
8.03. Prohibition of Mergers, Acquisitions, Name, Office or Business
Changes, Etc.
(a) Enter into or become the subject of, any transaction of
merger, acquisition or consolidation or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution), or convey, sell,
lease, transfer or otherwise dispose of, in one transaction or a series
of transactions, all or any substantial part of Borrower's or
Guarantor's business or assets, whether now owned or hereafter acquired,
unless the Guarantor is the surviving entity or the controlling
corporation of the surviving or resulting entity.
(b) Change its name or corporate structure without giving Lender
at least thirty (30) days advance written notice of such change, and
ensuring that any steps that Lender may deem necessary to continue the
perfection and priority of Lender's security interests in the Collateral
shall have been taken.
(c) Cease to engage predominantly in the telecommunications
service business (which may include providing internet services) or make
any material change in any of Borrower's or
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Guarantor's business objectives, purposes and operations.
8.04. Limitation on Equity Payments. Make any Equity Payment, except
that, as long as no Default or Event of Default has occurred and is continuing,
or would be caused thereby, and if no other provision contained herein will be
violated by the disbursement of such Equity Payment, Borrower or Guarantor may
make Equity Payments to the extent that such Equity Payments do not reduce
Guarantor's Debt Service Coverage Ratio below 1.25:1.00 or Guarantor's Cash
balance below $1,000,000.00, measured as of the day following such Equity
Payment, or violate the covenants of Section 4.07 or Section 4.09 in the
Indenture, as such sections may be amended from time to time, which are hereby
incorporated into this Agreement by reference until all of the Guarantor's
obligations under the Indenture are paid in full. In addition, Borrower may make
Equity Payments to Guarantor or to any other Restricted Subsidiary (as that term
is defined in the Indenture) at any time and such payments shall not be a
violation of this provision.
8.05. Removal of Collateral. Remove or permit the removal of any
material part of the Collateral (except for sales or leases of Inventory in the
ordinary course of business) from the locations identified on Schedule 4.25,
without giving Lender thirty (30) days prior written notice of such move and
ensuring that any steps the Lender may deem necessary to continue the perfection
and priority of Lender's security interest in the Collateral shall have been
taken.
8.06. Assumed Names. Transact or engage in business under any assumed
name, fictitious name, tradestyle or "d/b/a" except those identified on Schedule
4.29, without prior written notice to Lender.
ARTICLE 9: EVENTS OF DEFAULT AND REMEDIES
9.01. Events of Default. An Event of Default shall mean the occurrence
or existence of one or more of the following events or conditions (whatever the
reason for such Event of Default and whether voluntary, involuntary or effected
by operation of Law):
(a) Payment Default. If Borrower fails to pay any sum, whether
of principal or interest on the Note or any prepayment premiums, or any
other amount due hereunder or under the Note within ten (10) calendar
days after such amount becomes due; or
(b) False Statement. If any statement, representation or
warranty made by Borrower or Guarantor in any Loan Document or made in
any financial statement, certificate, report, exhibit or document
furnished to Lender pursuant to any Loan Document, proves to have been
untrue, incomplete, false or misleading in any material respect as of
the time when made (including by omission of material information
necessary to make such representation, warranty or statement not
misleading) and such untruth, falsity, misleading statement or omission
shall not have been corrected or remedied to the satisfaction of Lender
within twenty (20) calendar days after the earlier of Borrower's (or
Guarantor's) knowledge thereof or receipt of written notice thereof from
Lender; or
(c) Covenant Defaults. If Borrower or Guarantor defaults in the
performance or observance of any covenant or agreement in this
Agreement, and such default continues for a
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period of twenty (20) calendar days after the earlier of Borrower's or
Guarantor's knowledge thereof or receipt of written notice from Lender
thereof, except for specific Defaults listed elsewhere in this Section
9.01, as to which no notice or cure period shall apply unless specified;
or
(d) Failure of Conditions. If Borrower or Guarantor fails to
meet any condition of lending under Article 6 hereof, and such condition
is not waived by Lender;
(e) Undischarged Judgments. If one or more judgments for the
payment of money has been entered against Borrower or Guarantor in an
amount in excess of $100,000, and such judgment or judgments have
remained undischarged and unstayed for a period of thirty (30) calendar
days, unless the validity thereof is contested in compliance with
Section 7.08 hereof; or
(f) Attachments, etc. If a writ or warrant of attachment,
garnishment, execution, distraint or similar process has been issued
against Borrower or Guarantor or any of its properties which has
remained undischarged and unstayed for a period of thirty (30)
consecutive days and is not being contested in compliance with Section
7.08 hereof; or
(g) Default Under Third Party Agreements. If a default, or event
or condition which with notice or lapse of time or both would become a
default, occurs that gives the creditor the right to accelerate in
respect of any other obligation of Borrower or Guarantor for borrowed
money (including lease obligations)(in the present or in the future) in
the amount of $100,000 in the aggregate, or under any two or more such
other obligations of any amount; or
(h) Dissolution; Discontinuance of Business, Etc. If Borrower or
any Guarantor discontinues its usual business, dissolves, has its
Organizational Document revoked, winds up or liquidates itself or its
business; or
(i) Involuntary Bankruptcy or Receivership Proceedings. If a
receiver, custodian, liquidator, or trustee of Borrower or Guarantor or
of any of its property(s) is appointed by the order or decree of any
court or agency or supervisory authority having jurisdiction; or an
order is entered adjudicating Borrower or Guarantor as bankrupt or
insolvent; or any of the property of Borrower or Guarantor is
sequestered by court order; or a petition is filed against Borrower or
Guarantor under any state or federal bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution, liquidation,
or receivership law of any jurisdiction, whether now or hereafter in
effect, provided, however, that the above events shall not be an Event
of Default if Borrower or Guarantor successfully contests or appeals the
above proceedings and all proceedings are dismissed or otherwise
terminated within sixty (60) days; or
(j) Voluntary Bankruptcy. If Borrower takes affirmative steps to
prepare to file, or files, a petition in voluntary bankruptcy or to seek
relief under any provision of any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution, or
liquidation law of any jurisdiction, whether now or hereafter in effect,
or consents to the filing of any petition against it under any such law;
or
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(k) Assignments for Benefit of Creditors, Etc. If Borrower or
Guarantor makes an assignment for the benefit of creditors, or admits in
writing its inability to pay its debts generally as they become due, or
consents to the appointment of a receiver, trustee, or liquidator of
itself or of all or any part of its properties; or
(l) Non-compliance with Governmental Requirements. If Borrower
or Guarantor fails to comply with any requirement of any Governmental
Authority within twenty (20) calendar days after notice in writing of
such requirement shall have been given to Borrower or Guarantor by such
Governmental Authority, or such longer period of time permitted Borrower
or Guarantor by such Governmental Authority, if such failure to comply
will have a material adverse affect on the operations or financial
condition of the Borrower or the Guarantor; or
(m) Regulatory Authorizations. If any Regulatory Authorization
in connection with this Agreement or any other Loan Document or any such
Regulatory Authorization now or hereafter necessary or advisable to make
this Agreement or the other Loan Documents legal, valid, enforceable and
admissible in evidence or to permit Borrower or Guarantor to conduct its
business is not obtained or has ceased to be in full force and effect or
has been modified or amended or has been held to be illegal or invalid
or is revoked or terminated, and is not being contested by Borrower or
Guarantor in compliance with Section 7.08 hereof and Lender has
reasonably determined in good faith (which determination shall be
conclusive) that such event or occurrence may have a Material Adverse
Effect or a material adverse effect on Lender's rights under this
Agreement or any other Loan Documents; or
(n) Damage or Destruction. If the proceeds of any physical
damage insurance actually paid in respect of the partial or total damage
or destruction of the Collateral are insufficient to cover the cost of
the restoration thereof or if Lender determines that such damage or
destruction is so extensive that repair or restoration cannot be
expected within a time period short enough to prevent a Material Adverse
Effect;
(o) Consents. If Borrower or Guarantor fails to provide any
Consent required hereunder and Lender determines in its sole discretion
that such failure results in a material impairment of Lender's security
for the Advances; or
(p) Change in Control. If any Change in Control should occur
without Lender's prior written consent, which shall not be withheld
provided that the financial condition of the Borrower and Guarantor are
not materially adversely affected thereby and no other Default or Event
of Default occurs as a result thereof; or
(q) ERISA Defaults. If, with respect to any Plan, (i) there has
occurred a Reportable Event being considered by the PBGC which may
reasonably result in any material liability to the PBGC with respect to
any Plan, (ii) a Plan has been terminated, (iii) a trustee has been
appointed by a United States District Court to administer a Plan, (iv) a
PBGC or any other person has instituted proceedings to terminate a Plan
or to appoint a trustee to administer any such Plan, (v) either the
Borrower or the Guarantor has withdrawn, completely or partially, from
any Plan (vi) either the Borrower or the Guarantor has incurred
secondary liability for withdrawal liability payments under any Plan or
(vii) a Plan has failed to meet the minimum funding standards
established under the Code or ERISA; and, any such ERISA default will
have a material adverse
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affect on the operations or financial condition of the Borrower or the
Guarantor; or
(r) Defaults Under Other Loan Documents. If any default,
misrepresentation or breach should occur under any Security Document or
other Loan Document, including the Indenture, and is not cured or waived
within the time permitted therein, or any such Loan Documents should
cease to be in full force and effect, or any party thereto should assert
any unenforceability of, or deny liability on, or admit inability to
perform under, any such Loan Document.
(s) Bulk Sale of All of Borrower's Assets. If Guarantor sells
all or substantially all of the assets of the Borrower without Lender's
prior written consent, which may be withheld in Lender's sole and
absolute discretion.
9.02. Consequences of an Event of Default. If any Event of Default shall
occur and be continuing or shall exist, Lender shall be under no further
obligation to make Advances hereunder, any remaining commitment hereunder shall
immediately terminate, with no further notice, and Lender may, by notice to
Borrower, declare the unpaid principal amount of the Note, interest accrued
thereon and all other amounts owing by Borrower hereunder or under the Note to
be immediately due and payable without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived, and an action
therefor shall immediately accrue. Such consequences shall occur automatically
upon the occurrence of an Event of Default under Section 9.01 (h), (i), (j) or
(k), without any notice or demand. Upon the occurrence of an Event of Default,
Lender may, in its sole discretion, exercise any and all remedies available to
it under this Article 9 or under any of the Loan Documents or under applicable
law without further notice or period of grace or opportunity to cure.
9.03. Exercise of Rights. Subject to any requirements for FCC or other
governmental approval upon the occurrence of any Event of Default, the rights,
powers and privileges provided in this Section and all other remedies available
to Lender under this Agreement or by statute or by rule of law may be exercised
by Lender at any time from time to time whether or not the Obligations shall be
due and payable, and whether or not Lender shall have instituted any foreclosure
or other action for the enforcement of this Agreement or the Note. No failure to
exercise nor any delay in exercising on the part of Lender, any right, remedy,
power or privilege hereunder or under any of the other Loan Documents shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege hereunder or thereunder preclude any other or future
exercise thereof or the exercise of any other right, remedy, power or privilege.
9.04. Rights of Secured Party; Possession or Sale of Collateral. Without
limiting the generality of the foregoing, Lender shall have all the rights and
remedies of a secured party under the UCC, and Lender may, without demand and
without advertisement or notice, all of which Borrower and Guarantor waive, at
any time or times, sell and deliver any or all Collateral held by or for it at
public or private sale, for cash, upon credit or otherwise, at such prices and
upon such terms as Lender deems advisable, in its sole discretion, and/or
collect, or enforce the collection of, the Collateral. Lender may be the
purchaser at any such sale. Upon the occurrence of an Event of Default and upon
Lender's request, Borrower or Guarantor shall assemble, at its own expense, any
or all Equipment and other Collateral at a convenient place acceptable to Lender
and shall pay to Lender or reimburse Lender for, on demand, all costs of
collection of all amounts due, and enforcement of all rights hereunder,
including reasonable
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attorneys' fees and legal expenses, and expenses of any repairs to any realty or
other property to which any of such Collateral may be affixed. Upon an Event of
Default Lender may, to the fullest extent permitted by applicable law, without
notice, advertisement, hearing or process of law of any kind, enter upon any
premises where any of the Collateral may be located and take possession of and
remove such Collateral.
9.05. Notices, Etc. Waived. Except as expressly provided in this Article
9, Borrower and Guarantor hereby expressly waive, to the fullest extent
permitted by applicable law, presentment, demand, protest, any and all notices
of any kind, advertisements, hearing or process of law in connection with the
exercise by Lender of any of its rights and remedies upon the occurrence of an
Event of Default. If any notification of intended disposition of any of the
Collateral is required by law, such notification shall be deemed reasonably and
properly given if given in accordance with Section 10.06 hereto at least ten
(10) days before such disposition.
9.06. Additional Remedies. Lender's remedies upon the occurrence and
during the continuance of an Event of Default shall include, in addition to, and
not in lieu of, such remedies as are available at law or in equity or provided
for in any of the Loan Documents, the following:
(a) Foreclosure; Receivership. Lender shall be entitled to file
one or more suits at law or in equity to collect the Obligations and/or
to foreclose on Lender's Liens on and security interests created by this
Agreement or the Security Documents. Lender may apply or require
Borrower or Guarantor to apply for any necessary transfers, assignments,
orders, consents or licenses in connection with the operation or
abandonment of the Collateral or any part thereof, and the Lender shall
also be entitled as a matter of right and without notice and without
requiring bond (notice and bond being hereby waived), without regard to
the solvency or insolvency of the Borrower or Guarantor at the time of
application and without regard to the value of the Collateral at that
time, to have a receiver appointed by a court of competent jurisdiction
in order to manage, protect, and preserve the Collateral and to continue
the operation of the business of Borrower or Guarantor, and to collect
all revenues and profits thereof and apply the same to the payment of
all expenses and other charges of such receivership until the sale or
other final disposition of the Collateral. Borrower and Guarantor hereby
consent to the appointment of such receiver.
(b) Right to Cure. If Borrower or Guarantor fail in any material
respect to perform or comply with any of their agreements contained
herein or in any of the other Loan Documents, Lender may take whatever
actions it may deem appropriate to perform or comply or otherwise cause
performance or compliance with such agreement, all at the risk, cost and
expense of Borrower and Guarantor.
(c) Setoff. If the unpaid principal amount of the Note, interest
accrued thereon or any other amount owing by Borrower hereunder or under
the Note shall have become due and payable (by acceleration or
otherwise), Lender shall have the right, in addition to all other rights
and remedies available to it, without notice to Borrower, to setoff
against and to appropriate and apply to such due and payable amounts any
debt owing to, and any other funds held in any manner for the account
of, Borrower by Lender. Such right shall exist whether or not Lender
shall have given notice or made any demand hereunder or under the Note,
whether or not such debt owing to or funds held for the account of
Borrower is or are matured or unmatured, and regardless of the existence
or adequacy of any collateral, guaranty or any other security, right
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or remedy available to Lender. Borrower hereby consents to and confirms
the foregoing arrangements and confirms Lender's rights of setoff.
9.07. Application of Proceeds. Any proceeds of any of the Collateral,
received by Lender through sale or disposition of the Collateral or otherwise,
may be applied by Lender toward the payment of the Obligations, including
expenses in connection with the Collateral (including reasonable fees and legal
expenses) in such order of application as Lender may from time to time elect.
9.08. Discontinuance of Proceedings. If Lender should proceed to enforce
any right or remedy under this Agreement or any other Loan Document, and then
discontinue or abandon such proceeding for any reason, all rights, powers and
remedies of Lender hereunder shall continue as if no such proceeding had been
taken.
9.09. Power of Attorney. For the purpose of carrying out the provisions
and exercising the rights, powers and privileges granted by the Loan Documents,
including, without limitation, this Article 9, each of Borrower and Guarantor
hereby irrevocably constitutes and appoints Lender its true and lawful
attorney-in-fact to execute, acknowledge and deliver any instruments and do and
perform any acts such as are referred to in the Loan Documents, including,
without limitation, this Article 9, in the name and on behalf of Borrower or
Guarantor, from time to time in Lender's reasonable discretion after the
occurrence and during the continuance of an Event of Default, in accordance with
the Loan Documents and any statute or rule of law. This power of attorney is a
power coupled with an interest and cannot be revoked. Borrower and Guarantor
hereby ratify all that said attorney-in-fact shall lawfully do or cause to be
done by virtue and in accordance with the terms hereof.
Without limiting the generality of the foregoing, Lender may after the
occurrence and during the continuance of an Event of Default do the following
without notice to or assent by Borrower or Guarantor to accomplish the purposes
of this Agreement:
(a) upon failure of Borrower to timely pay or discharge taxes or Liens
levied or placed on or threatened against the Collateral, effect any
repairs or any insurance called for by the terms of this Agreement or
any other Loan Document, and pay all or any part of the premiums
therefor and the costs thereof;
(b) (i) direct any party liable for any payment on any Collateral to
make payment of any and all monies due and to become due thereunder
directly to Lender or as Lender shall direct; (ii) in the name of
Borrower or its own name or otherwise, take possession of and endorse
and collect any checks, drafts, notes, acceptances, or other instruments
for the payment of monies due under, or otherwise receive payment of and
receipt for any and all monies, claims and other amounts due and to
become due at any time in respect of or arising out of any Collateral;
(iii) sign and endorse any invoices, freight or express bills, bills of
lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with the
Collateral; (iv) commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction
to collect all or any of the Collateral and to enforce any other right
in respect of any Collateral; (v) defend any suit, action or proceeding
brought against Borrower with respect to any Collateral; (vi) settle,
compromise or adjust any suit, action or proceeding described above upon
commercially reasonable terms under the circumstances and, in connection
therewith, give such discharges or releases as Lender may reasonably
deem appropriate; and (vii) generally sell, use, operate, transfer,
pledge, make any agreement with
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respect to or otherwise deal with any of the Collateral as fully and
completely as though Lender were the absolute owner thereof for all
purposes, and, at Lender's option and Borrower's expense, at any time or
from time to time after the occurrence and during the continuance of an
Event of Default, all other acts and things that Lender reasonably deems
necessary to protect, preserve or realize upon the Collateral and
Lender's security interest therein, in order to effect the intent of
this Agreement and the other Loan Documents all as fully and effectively
as Borrower might do.
9.10. Regulatory Matters. Notwithstanding any provision to the contrary
contained herein, Lender will not exercise any right or remedy under this
Agreement that requires prior FCC or PUC approval without first obtaining such
approval. If counsel to Lender reasonably determines that the consent of the FCC
or PUC is required in connection with any of the actions that may be taken by
Lender in the exercise of its rights hereunder or under any of the other Loan
Documents, then Borrower or Guarantor, at their sole cost and expense, agree to
use their best efforts to secure such consent and to cooperate with Lender in
any action commenced by Lender to secure such consent. Upon the occurrence and
during the continuation of an Event of Default Borrower and Guarantor shall
promptly execute and/or cause the execution of all applications, certificates,
instruments and other documents and papers that may be required in order to
obtain any necessary governmental consent, approval or authorization, and if
Borrower or Guarantor fails or refuses to execute such documents, the clerk of
the court with jurisdiction may execute such documents on behalf of Borrower or
Guarantor.
ARTICLE 10: GENERAL CONDITIONS/MISCELLANEOUS
The following conditions shall be applicable throughout the term of this
Agreement:
10.01. Modifications and Waivers. This Agreement, the other Loan
Documents, or any provision thereof may not be changed, waived or terminated
orally, but only by an instrument in writing signed by the party against whom
enforcement of the change, waiver or termination is sought. No action or course
of dealing on the part of Lender, its officers, employees, consultants, or
agents, nor any failure or delay by Lender with respect to exercising any right,
power, or privilege of Lender under the Note, this Agreement, or any other Loan
Document shall operate as a waiver thereof, except as otherwise provided in this
Agreement. Any waiver shall be effective only to the extent and for the instance
specifically identified in such writing, and shall not be deemed to imply any
future waivers or other waivers. No amendment to the Loan Documents shall be
effective without written agreement signed by Borrower, Guarantor and Lender.
10.02. Advances Not Implied Waivers. No waiver of the requirements
contained in any Loan Document shall be effective unless in writing duly signed
by Lender. No Advance hereunder shall constitute a waiver of any of the
conditions of Lender's obligation to make further Advances nor, in the event
Borrower or Guarantor is unable to satisfy any such condition, shall any waiver
of such condition have the effect of precluding Lender from thereafter declaring
such inability to be an Event of Default as herein provided. Any Advance made by
Lender and any sums expended by Lender pursuant to the Loan Documents shall be
deemed to have been made pursuant to this Agreement, notwithstanding the
existence of an uncured Default or Event of Default. No Advance at a time when
an Event of Default exists shall constitute a waiver of any right or remedy of
Lender existing by reason of such Event of Default, including, without
limitation, the right to accelerate the maturity of the Indebtedness evidenced
by the Note or to foreclose the Lien on the Collateral or to refuse to make
further advances hereunder.
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10.03. Deviation from Covenants. The procedure to be followed by
Borrower or Guarantor to obtain the consent of Lender to any deviation from the
covenants contained in this Agreement or any other Loan Document shall be as
follows:
(a) Borrower or Guarantor shall send a written notice to Lender
setting forth (i) the covenant(s) relevant to the matter, (ii) the
requested deviation from the covenant(s) involved, and (iii) the reason
for the requested deviation from the covenant(s); and
(b) Lender, within a reasonable time, will send a written notice
to Borrower or Guarantor, permitting or refusing the request, but in no
event will any deviation from the covenants of this Agreement or any
other Loan Document be effective without the express prior written
consent of Lender. Lender's failure to provide such written notice shall
be deemed a refusal of such request.
10.04. Holidays. Except as otherwise provided herein, whenever any
payment or action to be made or taken hereunder or under the Note shall be
stated to be due on a day which is not a Business Day, such payment or action
shall be made or taken on the next following Business Day and such extension of
time shall be included in computing interest or fees, if any, in connection with
such payment or action.
10.05. Records. From time to time Lender may send Borrower statements of
the unpaid principal amount of the Note, the unpaid interest accrued thereon,
the Interest Rate or rates applicable to such unpaid principal amount, the
duration of such applicability, and the amount of Advances remaining available
under this Agreement, and each statement shall be deemed correct and
conclusively binding on Borrower (absent manifest error) unless Borrower
notifies Lender of an error in the statement in writing within thirty (30) days
of the date of any such statement is provided to Borrower.
10.06. Notices. All notices, requests, demands, directions and other
communications (collectively, "notices") required under the provisions of this
Agreement or any other Loan Document shall be in writing (including
communication by facsimile transmission) unless otherwise expressly permitted
hereunder and shall be sent by hand, by registered or certified mail return
receipt requested, by overnight courier service maintaining records of receipt,
or by facsimile transmission with confirmation in writing mailed first-class, in
all cases with charges prepaid, and any such properly given notice shall be
effective upon the earlier of receipt or (i) when delivered by hand, or (ii) the
third Business Day after being mailed, or (iii) the following Business Day if
sent by overnight courier service, or (iv) when sent by facsimile, answer back
received. All notices shall be addressed as follows:
If to Borrower or Guarantor, to the Notice Address set forth on
Schedule 1, with copies, if any, as set forth on Schedule 1.
If to Lender: NTFC Capital Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Legal Department
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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With a copy to: NTFC Capital Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Manager, Credit
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
All notices shall be sent to the applicable party at the address stated
above or in accordance with the last unrevoked written direction from such party
to the other party hereto, given in accordance with the terms hereof.
10.07. FCC and PUC Approval. The exercise of any rights or remedies
hereunder or under any other Loan Document by Lender that may require FCC or PUC
approval shall be subject to obtaining such approval. Pending the receipt of any
PUC or FCC approval, Borrower and Guarantor shall not do anything to delay,
hinder, interfere with or obstruct the exercise of Lender's rights or remedies
hereunder or the obtaining of such approvals.
10.08. Lender Sole Beneficiary. All conditions of the obligation of
Lender to make any Advances hereunder are imposed solely and exclusively for the
benefit of Lender and its assigns and no other Person shall have standing to
require satisfaction of such conditions in accordance with their terms or be
entitled to assume that Lender will refuse to make any Advances in the absence
of strict compliance with any or all such conditions, and no Person shall under
any circumstances be deemed to be a beneficiary of such conditions, any or all
of which may be freely waived in whole or in part by Lender at any time if in
its sole discretion it deems it advisable to do so. Inspections and approvals of
the Equipment, and the workmanship and materials used therein impose no
responsibility or liability of any nature whatsoever on Lender, and no Person
shall, under any circumstances, be entitled to rely upon such inspections and
approvals by Lender for any reason. Lender's sole obligation hereunder is to
make the Advances if and to the extent required by this Agreement or the Notes.
10.09. Lender's Review of Information. Each of Borrower and Guarantor
acknowledges and agrees that any review or analysis by Lender of financial
information, operating information, marketing data or other information provided
to Lender by or on behalf of Borrower and Guarantor at any time is and shall be
conducted solely for Lender's benefit and internal use and that Lender is under
no duty or obligation to make the results of such review or analysis available
to Borrower and Guarantor. Borrower and Guarantor are not relying, and will not
rely, on Lender for financial or business advice.
10.10. No Joint Venture. Nothing in any of the Loan Documents or in this
Agreement shall be deemed to constitute any kind of partnership, joint venture
or fiduciary relationship between the Lender and the Borrower or between the
Lender and the Guarantor or any Owners.
10.11. Severability. The provisions of this Agreement are intended to be
severable. If any provision of this Agreement or the other Loan Documents shall
be held invalid or unenforceable in whole or in part in any jurisdiction such
provision shall, as to such jurisdiction, be ineffective to the extent of such
invalidity or unenforceability without in any manner affecting the validity or
enforceability thereof in any other jurisdiction or the remaining provisions
hereof or thereof in any jurisdiction.
10.12. Rights Cumulative. All rights, powers and remedies herein given
to Lender are cumulative and not alternative, and are in addition to all
statutes or rules of law.
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10.13. Duration; Survival. All representations and warranties of
Borrower and Guarantor contained herein or made in connection herewith shall
survive the making of and shall not be waived by the execution and delivery of
this Agreement and the other Loan Documents, any investigation by Lender, or the
making of any Advances hereunder. All covenants and agreements of Borrower and
Guarantor contained herein shall continue in full force and effect from and
after the date hereof so long as it may borrow hereunder and until payment in
full of the Notes, interest thereon, all fees and all other Obligations of
Borrower and Guarantor. Without limitation, it is understood that all
obligations of Borrower and Guarantor to make payments to or indemnify Lender
shall survive the payment in full of the Notes and of all other Obligations.
10.14. Governing Law. This Agreement and the Notes and each of the other
Loan Documents shall be governed by and construed and enforced in accordance
with the internal laws of the State of Tennessee, except to the extent that the
laws of jurisdictions where the Collateral is located may be required to apply
to perfecting security interests in or exercising remedies with respect to the
Collateral.
10.15. Counterparts. This Agreement may be executed in any number of
counterparts (by facsimile transmission or otherwise) and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed an original, but all such counterparts shall constitute but one and
the same instrument.
10.16. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of Lender and Borrower and their respective successors and
assigns; provided, however, that Borrower may not assign or transfer any of its
rights or obligations hereunder or under the other Loan Documents (in whole or
in part) without the prior written consent of Lender. Lender may assign,
transfer or pledge any of its respective rights or obligations hereunder,
including, without limitation, its lending obligation under the Commitment, or
under the other Loan Documents pursuant to an Assignment to one or more
commercial banks or other financial institutions without notice to or the prior
written consent of Borrower. Upon receipt of written notice from Lender of such
assignment, Borrower shall promptly acknowledge receipt thereof in writing. If
Borrower is given written notice of any assignment, it shall perform its
obligations with respect to this Agreement for the ratable benefit of the
applicable assignee(s), and, if so directed, shall pay all amounts due or to
become due hereunder directly to the applicable assignee(s) or to any other
party designated by such assignee(s). Borrower shall not assert against any such
assignee any set-off, defense or counterclaim that Borrower may have against
Lender or any person other than such assignee. Borrower shall also execute and
deliver to Lender such documentation as any such assignee may reasonably
require, including but not limited to amended promissory notes and
acknowledgment of or consent to the assignment which may require Borrower to
make certain representations or reaffirmations as to some of the basic terms and
covenants contained herein. Lender shall not be relieved of its obligations
hereunder as a result of any such sale, assignment, transfer, grant or pledge,
unless such assignee specifically assumes all or part of Lender's future
obligations hereunder pursuant to an Assignment, a copy of which shall be
delivered to Borrower and Guarantor, in which event after the date of such
Assignment, Borrower's obligations to any such assignee shall be proportionately
as set forth herein with respect to Lender, and Borrower shall not look to
Lender to perform any of such assignee's obligations hereunder, including,
without limitation, the portion of the Commitment so assigned, which arise after
the date thereof. Any assignee shall be entitled to rely on Borrower's
agreements as stated herein, as applicable, and shall be considered a third
party beneficiary thereof. Except to the extent otherwise required by the
context of this Agreement, the word "Lender" where used in this Agreement shall
mean and include any holder of any Note originally issued to Lender hereunder,
and any holders of replacement Notes, and any such holder of any Note shall be
bound by
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and have the benefits of this Agreement the same as if such holder had been a
signatory hereto.
10.17. Participation. Lender shall have the right to enter into one or
more assignment agreements, participation agreements, syndication agreements or
similar agreements with one or more participating lenders or other parties
approved by Lender on such terms and conditions as Lender shall deem advisable.
Borrower and Guarantor shall furnish a sufficient number of copies of reports
and certificates to Lender so that Lender and each participating lender shall
receive a copy of each such document.
10.18. Time of Essence. Time is of the essence of this Agreement and the
Note and the other Loan Documents.
10.19. Disclosures and Confidentiality.
(a) Each of Borrower, Guarantor and Lender (the "party" or
"parties") agrees that it will obtain written consent before using or
generating any press release, advertisement, publicity materials or
other publication in which the name or logo of a party or any of its
Affiliates is used or may be reasonably inferred, and will not
distribute any such materials in the absence of such prior written
approval.
(b) Each of the parties agrees that it will not, directly or
indirectly, disclose to any third party the terms of this Agreement or
the other Loan Documents or prior or future correspondence relating
thereto, or the transactions contemplated hereby, or any other
information regarding the parties learned during the course of
negotiation thereof. The term "third party" shall exclude only the
Borrower, the Guarantor, the Lender, their Affiliates and their
respective attorney(s) and certified public accountant(s). This Section
10.19(b) shall not restrict the disclosure of information if such
disclosure is required by law, by order of any court or by the order,
rule or regulation of any administrative agency, including without
limitation any requirements of the FCC, any PUC, or any state or federal
securities commissions (the "Commissions"); provided, however, that,
except for disclosures required by the FCC, PUC or Commissions, each
party shall provide the other parties with advance notice of any such
required disclosure of information so that each party may seek an
appropriate protective order and/or waive compliance with this Section.
The parties shall not oppose any action taken to obtain an appropriate
protective order or other reliable assurance that the information will
be accorded confidential treatment. The obligations set forth in this
Section 10.19(b) shall survive the termination of this Agreement.
(c) The disclosure of information by the parties will not be
restricted under this Agreement if such information (i) has been or
becomes published or is now, or in the future, in the public domain
through (A) no fault of the parties, (B) disclosure other than
unauthorized disclosure by the party to whom the information is
disclosed, or (C) disclosure to third parties by the disclosing party
without similar restriction; (ii) is property (other than proposal
letters, commitment letters or other correspondence between the parties)
within the legitimate possession of the receiving party prior to
disclosure hereunder; (iii) subsequent to disclosure hereunder, is
lawfully received from a third party having rights therein without
restriction of the third party's or receiving party's rights to
disseminate the information and without notice of any restriction
against its further disclosure; (iv) is disclosed with the written
approval of the other party; (v) is or becomes publicly available free
of any obligation to keep it confidential.
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(d) Each of Borrower and Guarantor authorizes Lender to discuss
with and furnish to any Affiliate of the Lender, to any government or
self-regulatory agency with jurisdiction over the Lender, to any other
Governmental Authority or to any assignee, successor, participant,
successor, or prospective assignee, successor or participant, all
financial statements, audit reports and other information pertaining to
the Borrower, the Guarantor and/or its Subsidiaries whether such
information was provided by Borrower or Guarantor or prepared or
obtained by the Lender or third parties. Neither the Lender nor any of
its employees, officers, directors or agents makes any representation or
warranty to any existing or prospective assignee, successor or
participant regarding any audit reports or other analyses of Borrower or
Guarantor that the Lender may distribute, whether such information was
provided by Borrower or Guarantor or prepared or obtained by the Lender
or third parties, nor shall the Lender or any of its employees,
officers, directors or agents be liable to any Person receiving a copy
of such reports or analyses for any inaccuracy or omission contained in
such reports or analyses or relating thereto.
(e) Every reference in this Agreement to disclosures of the
parties to Lender (except the financial statements), to the extent that
such references refer or are intended to refer to disclosures at or
prior to the execution of this Agreement, shall be deemed strictly to
refer only to written disclosures delivered to the parties concurrently
with the execution of this Agreement and referred to specifically in the
Loan Documents. The parties intend that such disclosures are to be
limited to those presented in an orderly manner at the time of executing
this Agreement and are not to be deemed to include expressly or
impliedly any disclosures that previously may have been delivered from
time to time to the parties, except to the extent that such previous
disclosures are again presented to the parties in writing concurrently
with the execution of this Agreement.
10.20. Jurisdiction and Venue. EACH OF THE BORROWER AND GUARANTOR HEREBY
IRREVOCABLY CONSENTS TO THE JURISDICTION OF THE COURTS LOCATED IN DAVIDSON
COUNTY, TENNESSEE, INCLUDING WITHOUT LIMITATION FEDERAL COURTS SITTING IN THE
MIDDLE DISTRICT OF TENNESSEE AND THE CHANCERY COURT FOR DAVIDSON COUNTY,
TENNESSEE, FOR ANY SUIT BROUGHT OR ACTION COMMENCED IN CONNECTION WITH THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE OBLIGATIONS, AND AGREES NOT TO
CONTEST VENUE OR JURISDICTION IN ANY SUCH COURTS. In any such litigation, each
of Borrower and Guarantor waives personal service of any summons, complaint or
other process, and agree that the service thereof may be made by certified or
registered mail direct to Borrower and Guarantor at its address set forth in
Section 10.06 hereof. Within thirty (30) days after such mailing, Borrower and
Guarantor shall appear and answer to such summons, complaint or other process.
Should Borrower and Guarantor fail to appear or answer within the said 30-day
period, then such party shall be deemed in default and judgment may be entered
against Borrower and Guarantor for the amount or other relief as demanded in any
summons, complaint or other process so served. In the alternative, in its sole
discretion, Lender may effect service upon Borrower and Guarantor in any other
form or manner permitted by law. The choice of forum set forth herein shall not
be deemed to preclude the enforcement of any judgment obtained in such forum or
the taking of any action under this Agreement to enforce the same in any
appropriate jurisdiction.
10.21. Jury Waiver. BORROWER, GUARANTOR AND LENDER HEREBY KNOWINGLY AND
WILLINGLY WAIVE THEIR RIGHTS TO DEMAND A JURY TRIAL IN ANY ACTION OR PROCEEDING
INVOLVING THIS AGREEMENT, ANY OTHER LOAN DOCUMENT, THE OBLIGATIONS, OR ANY
RELATIONSHIP BETWEEN THE LENDER, GUARANTOR AND
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BORROWER. EACH OF THE BORROWER AND GUARANTOR WARRANTS AND REPRESENTS THAT IT HAS
REVIEWED THE FOREGOING WAIVERS WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY AND
VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.
10.22. Limitation on Liability. LENDER SHALL HAVE NO LIABILITY UNDER OR
IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS FOR
SPECIAL, EXEMPLARY, PUNITIVE, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES OF
ANY SORT IN ANY SUIT BROUGHT OR ACTION COMMENCED IN CONNECTION WITH THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE OBLIGATIONS, AND, EXCEPT TO THE
EXTENT PROHIBITED BY LAW, EACH PARTY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR
RECOVER IN ANY SUCH ACTION ANY SPECIAL, EXEMPLARY, PUNITIVE, INCIDENTAL,
INDIRECT OR CONSEQUENTIAL DAMAGES OF ANY SORT OTHER THAN ACTUAL DAMAGES.
10.23. Borrower Waivers. To the fullest extent permitted by law, the
Borrower hereby waives (i) presentment, demand and protest and notice of
presentment, protest, default, non payment, maturity, release, compromise,
settlement, extension or renewal of any or all commercial paper, accounts,
contract rights, documents, instruments, chattel paper and guaranties at any
time held by Lender on which the Borrower may in any way be liable and hereby
ratifies and confirms whatever Lender may do in this regard; (ii) notice prior
to taking possession or control of the Collateral or any bond or security which
might be required by any court prior to allowing Lender to exercise any of
Lender's remedies, including the issuance of an immediate writ of possession,
except as expressly required in any of the Loan Documents; (iii) any marshalling
of assets, or any right to compel Lender to resort first to any Collateral or
other Persons before pursuing the Borrower for payment of the Obligations and
any defenses based on suretyship or impairment of Collateral; (iv) the benefit
of all valuation, appraisement and exemption laws; (v) any right to require
Lender to terminate its security interest in the Collateral or in any other
property of the Borrower until termination of this Agreement and the execution
by the Borrower and by any person whose loans to the Borrower are used in whole
or in part to satisfy the Obligations, of an agreement indemnifying Lender from
any loss or damage Lender may incur as the result of dishonored or unsatisfied
items of any account debtor applied to the Obligations; and (vi) notice of
acceptance hereof. The Borrower acknowledges that the foregoing waivers are a
material inducement to Lender's entering into this Agreement and that Lender is
relying upon the foregoing waivers in its future dealings with the Borrower.
10.24. Schedules. The Schedules and Exhibits attached to this Agreement
are an integral part hereof, and are hereby made a part of this Agreement.
10.25. Agreement to Govern. In case of any conflict between the terms of
this Agreement and any of the other Loan Documents, the terms of this Agreement
shall govern.
10.26. Entire Agreement. This Agreement, the other Loan Documents and
other documents, agreements and certificates executed by the parties
contemporaneously herewith or subsequent hereto constitute the entire agreement
of the parties and supersede all prior understandings and agreements, written or
oral, between the parties hereto relating to the subject matter hereof. Neither
the Borrower nor
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the Guarantor is entering into this Agreement in reliance on statements or
representations made by any Person other than as set forth herein.
[END OF GENERAL TERMS AND CONDITIONS. NEXT PAGE IS SCHEDULE 1.]
[SIGNATURES ARE ON COVER PAGE.]
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SCHEDULE 1 TO
LOAN AND SECURITY AGREEMENT
BORROWER AND GUARANTOR INFORMATION AND DEFINED TERMS
BORROWER'S FEDERAL EMPLOYER/TAX IDENTIFICATION NUMBER: ▇▇-▇▇▇▇▇▇▇
BORROWER'S AND GUARANTOR'S CHIEF EXECUTIVE OFFICES (INCLUDING COUNTY):
5000 Plaza on the Lake, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
BORROWER'S NOTICE ADDRESS:
▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
WITH COPIES TO:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
GUARANTOR'S NOTICE ADDRESS:
▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
WITH COPIES TO:
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
"PUC": the term "PUC" shall include, without limitation, the Arizona
Corporations Commission and the Oklahoma Corporations Commission.
BORROWER'S INITIALS: _________
LENDER'S INITIALS: _________
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SCHEDULE 2.01 TO
LOAN AND SECURITY AGREEMENT
MAXIMUM ADVANCE AMOUNTS
Maximum principal amount of all Advances: Twenty-Eight Million Dollars ($28,000,000.00)
Maximum amount to be used for
closing costs and legal fees: Fifty Thousand Dollars ($50,000.00)
Equipment and Related Services Purchased from NTI:
Invoice Invoice Equipment and Related Invoice
Date Number Services Description Amount
---- ------ -------------------- ------
BORROWER'S INITIALS: _________
LENDER'S INITIALS: _________
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SCHEDULE 2.02 TO
LOAN AND SECURITY AGREEMENT
PAYMENT TERMS AND GOVERNING LAW
"Conversion Date": the Financing Termination Date.
"Financing Termination Date": December 31, 1997.
"Initial Payment Date": March 31, 1998.
"Interest Only Period": the period beginning on the First Borrowing Date
and continuing through the Conversion Date.
"Interest Payment Date": the last Business Day of each Calendar Quarter.
"Interest Rate": a fixed interest rate equal to the lesser of (i) the
five (5) year constant maturity Treasury ▇▇▇▇ rate as quoted in the Federal
Reserve Statistical Release H.15 report on the last business day of the week
ending two weeks prior to the week of the Borrowing Date plus 320 basis points
("Interest Rate") expressed as an annual rate of interest, compounded monthly,
and calculated on the basis of a 360-day year, or (ii) the maximum permissible
rate under applicable law in effect at any time.
So long as no event of default has occurred and is continuing, the
Interest Rate applying to each Advance shall be reduced (on a one-time basis) by
75 basis points when the Guarantor's public debt rating as of any Payment Date
equals or exceeds Standard and Poor's BBB- rating.
So long as no event of default has occurred and is continuing, the
Interest Rate applying to each Advance shall be reduced (on a one-time basis) by
an additional 25 basis points when the Guarantor's public debt rating as of any
Payment Date equals or exceeds Standard and Poor's BBB rating.
If, after the Guarantor attains a BBB rating, the Guarantor's debt
rating is subsequently downgraded from BBB (but not less than BBB-) as of any
Payment Date, then the Interest Rate applying to each Advance will be increased
by 25 basis points. If the Guarantor's debt rating is further downgraded as of
any Payment Date below BBB-, then the Interest Rate applying to each Advance
will be increased by an additional 75 basis points.
"Maturity Date": December 31, 2002, on which date all outstanding
principal, accrued and unpaid interest, premiums, expenses, fees, penalties and
all other unpaid charges due under the Note and this Agreement shall be finally
due and payable.
"Payment Date": the Initial Payment Date and the last Business Day of
each Calendar Quarter thereafter.
BORROWER'S INITIALS: _________
LENDER'S INITIALS: _________
47
52
SCHEDULE 2.09 TO
LOAN AND SECURITY AGREEMENT
FEES
Legal Fees. The fees and disbursements of counsel to Lender in
connection with this transaction.
BORROWER'S INITIALS: _________
LENDER'S INITIALS: _________
48
53
SCHEDULE 6.02 TO
LOAN AND SECURITY AGREEMENT
POST-CLOSING ITEMS
POST-CLOSING, PRE-FUNDING CONDITIONS
Without limiting the conditions set forth in this Agreement, Borrower must
provide the following:
1. Filing of UCC-1 Financial Statements with requisite filing offices.
2. Lender must have received satisfactory post-closing lien searches from
all applicable recording and filing offices reflecting the first
priority of all of Lender's Liens on Collateral.
3. Borrower must comply with all of the Conditions of Lending in Article 6
of this Agreement.
POST-CLOSING, POST-INITIAL FUNDING CONDITIONS
Without limiting the conditions set forth in the Agreement, Borrower must
provide the following Closing Documents that were not provided at closing:
None
BORROWER'S INITIALS: _________
LENDER'S INITIALS: _________
59
54
SCHEDULE 7.15 TO
LOAN AND SECURITY AGREEMENT
FINANCIAL COVENANTS
(a) Debt Service Coverage Ratio. Guarantor shall maintain at all
times a Debt Service Coverage Ratio of not less than 1.25 to 1.00.
(b) Minimum Cash Balance. Guarantor shall maintain at all times
a Cash balance or immediately available lines of credit acceptable to
Lender of not less than $1,000,000.00.
(c) Senior Notes. Guarantor shall comply at all times with the
covenants contained in Sections 4.07 and 4.09 in the Indenture, as
amended from time to time, and such covenants are hereby incorporated
into this Schedule and this Agreement by reference, until all of the
Guarantor's obligations under the Indenture are paid in full.
BORROWER'S INITIALS: _________
LENDER'S INITIALS: _________
61
55
EXHIBIT A
FORM OF
PROMISSORY NOTE
$28,000,000 (or such lesser amount as of _______, 1997
as may be advanced hereunder)
FOR VALUE RECEIVED, IXC CARRIER, Inc., a Nevada corporation ("Borrower")
promises and agrees to pay to the order of NTFC CAPITAL CORPORATION ("Lender"),
its successors, assigns or any subsequent holder of this Note at its offices
located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇, or at such other
place as may be designated in writing by Lender or its assigns, in lawful money
of the United States of America in immediately available funds, Twenty-Eight
Million Dollars ($28,000,000) or such lesser amounts advanced pursuant to
Section 2.02 of the Loan Agreement (defined below), as noted on Schedule A
hereto, together with interest thereon and other amounts due as provided below.
Notations on the Schedules attached hereto are for convenience only, and the
failure of the Lender to make any notation on any Schedule, or any incorrect
notation by the Lender on any Schedule, shall not diminish the obligations of
the Borrower under this Note. This Note shall mature on December 31, 2002 (the
"Maturity Date").
This Note is issued pursuant to that certain Loan and Security Agreement
dated as of , 1997 by and between Borrower, IXC Communications, Inc., and Lender
(as it may be modified, amended or restated from time to time, the "Loan
Agreement"). Any term not otherwise defined in this Note shall have the same
meaning as in the Loan Agreement. Reference is made to the Loan Agreement,
which, among other things, permits the acceleration of the maturity hereof upon
the occurrence of certain events and for prepayments in certain circumstances
and upon certain terms and conditions. This Note is secured by, among other
things, the Collateral described in the Loan Agreement and the Security
Documents.
Each Advance hereunder shall bear interest from the date of each such
Advance until such amount is due and payable (whether on any Payment Date, at
the Maturity Date, by acceleration, or otherwise), at a fixed interest rate
equal to the lesser of (i) the five (5) year constant maturity Treasury ▇▇▇▇
rate as quoted in the Federal Reserve Statistical Release H.15 Report (or the
equivalent of such Report) on the last business day of the week ending two weeks
prior to the week of the Borrowing Date plus 320 basis points ("Interest Rate")
expressed as an annual rate of interest, compounded monthly, and calculated on
the basis of a 360-day year, or (ii) the maximum permissible rate under
applicable law in effect at any time. So long as no event of default has
occurred and is continuing, the Interest Rate applying to each Advance shall be
reduced (on a one-time basis) by 75 basis points when the public debt rating of
IXC Communications, Inc. (the "Guarantor") as of any Payment Date equals or
exceeds Standard and Poor's BBB- rating. So long as no event of default has
occurred and is continuing, the Interest Rate applying to each Advance shall be
reduced (on a one-time basis) by an additional 25 basis points when the
Guarantor's public debt rating as of any Payment Date equals or exceeds Standard
and Poor's BBB rating. If, after the Guarantor attains a BBB rating, the
Guarantor's debt rating is subsequently downgraded from BBB (but not less than
BBB-) as of any Payment Date, then the Interest Rate applying to each Advance
will be increased by 25 basis points. If the Guarantor's debt rating is further
downgraded as of any Payment Date below BBB-, then the Interest Rate applying to
each Advance will be increased by an additional 75 basis points.
56
Interest shall accrue on all principal amounts outstanding hereunder for
each separate Advance at the applicable Interest Rate for each Advance and shall
compound monthly and be payable quarterly in arrears through December 31, 1997
(the "Interest Only Period").
Following the end of the Interest Only Period, principal amounts
outstanding hereunder and interest shall be paid as follows:
Principal shall be paid in twenty (20) equal consecutive quarterly
installments, plus accrued interest, commencing on March 31, 1998 (the
"Initial Payment Date") and on the last Business Day of each Calendar
Quarter thereafter (each, a "Payment Date") until the Maturity Date;
provided, however, that the principal payment amounts shall be
recalculated by Lender if any Advances are made hereunder after the
Conversion Date, based on the aggregate amount of all Advances made at
any time. The amount of each quarterly payment shall be calculated, at
the outset, by amortizing the amount of all principal amounts
outstanding on the last day of the Interest Only Period (the "Conversion
Date"). It is intended that the above amortization schedule will fully
amortize the principal amounts advanced under this Note. The final
payment shall be in an amount equal to all outstanding principal,
accrued and unpaid interest, premiums, expenses, fees, penalties and all
other unpaid charges due under this Note and the Loan Agreement.
This Note is subject to prepayment pursuant to Section 2.04 of the Loan
Agreement. Any prepayments shall be applied first to interest, then to premium,
then to expenses, and then to the installments of principal in reverse order of
maturity. In addition, principal installments shall be applied to each separate
Advance with the oldest Advance being prepaid first, until the remaining
principal outstanding on each such Advance is fully prepaid.
Notwithstanding the foregoing, if Borrower shall fail to pay within ten
(10) days after the due date any principal amount or interest or other amount
payable under this Note, upon written notice to Borrower in accordance with
Section 2.02(d) of the Loan Agreement, Borrower shall pay to Lender, to defray
the administrative costs of handling such late payments, an amount equal to
interest on the amount unpaid, to the extent permitted under applicable law, at
a rate equal to the lesser of three percent (3%) over the Interest Rate or the
maximum permissible interest rate under applicable law (the "Default Rate")
(instead of the Interest Rate), from the due date until such overdue principal
amount, interest or other unpaid amount is paid in full (both before and after
judgment). In addition, but without duplication, upon the occurrence and during
the continuance of an Event of Default, all outstanding amounts hereunder shall
bear interest at the Default Rate (instead of the Interest Rate) until such
amounts are paid in full or such Event of Default is waived in writing by
Lender.
Notwithstanding any provision of this Note or the Loan Agreement to the
contrary, it is the intent of the Lender and the Borrower that the Lender or any
subsequent holder of this Note shall never be entitled to receive, collect,
reserve or apply, as interest, any amount in excess of the maximum rate of
interest permitted to be charged by applicable Law, as amended or enacted, from
time to time. In the event Lender, or any subsequent holder of this Note, ever
receives, collects, reserves or applies, as interest, any such excess, such
amount which would be excessive interest shall be deemed a partial prepayment of
principal and treated as such, or, if the principal indebtedness and all other
amounts due are paid in full, any remaining excess funds shall immediately be
applied to any other outstanding indebtedness of Borrower due to Lender, and if
none is outstanding, shall be paid to Borrower. In determining whether or not
the interest paid or payable, under any specific contingency, exceeds the
highest lawful rate, the Borrower and the Lender shall, to the maximum extent
permitted under applicable
2
57
law, (a) exclude voluntary prepayments and the effects thereof as it may relate
to any fees charged by the Lender, and (b) amortize, prorate, allocate, and
spread, in equal parts, the total amount of interest throughout the entire term
of the indebtedness; provided that if the indebtedness is paid and performed in
full prior to the end of the full contemplated term hereof, and if the interest
received for the actual period of existence hereof exceeds the maximum lawful
rate, the Lender or any subsequent holder of the Note shall refund to the
Borrower the amount of such excess or credit the amount of such excess against
the principal portion of the indebtedness, as of the date it was received, and,
in such event, the Lender shall not be subject to any penalties provided by any
laws for contracting for, charging, reserving or receiving interest in excess of
the maximum lawful rate.
Provided that no Event of Default has occurred and is continuing, Lender
shall apply amounts received for payment under this Note first to interest, then
to premium, then to undisputed expenses due Lender after written advice thereof
to Borrower, then to principal in reverse chronological order. Upon the
occurrence and continuation of an Event of Default, all amounts received for
payment under this Note shall at the option of Lender be applied first to any
unpaid expenses due Lender under this Note or under any other documents
evidencing or securing the obligations of Borrower to Lender (upon written
advice thereof to Borrower), then to any unpaid late charges due under the Loan
Agreement, then to any unpaid interest accrued at the Default Rate (after the
expiration of any applicable cure period, but retroactive to the due date of any
uncured Event of Default under Section 9.01(a) of the Loan Agreement), then to
all other accrued but unpaid interest due under this Note and finally to the
reduction of outstanding principal due under this Note in reverse chronological
order.
Upon the occurrence of any one or more of the events specified in
Section 9.01 of the Loan Agreement (provided that any requirement for the lapse
of time, or any other condition, under Section 9.01 or otherwise, has been
satisfied), (each, an "Event of Default"), all amounts then remaining unpaid on
this Note shall be, or may be declared to be, immediately due and payable as
provided in the Loan Agreement, without further notice, at the option of the
Lender. Lender may waive any Event of Default before or after the same has been
declared and restore this Note to full force and effect without impairing any
rights hereunder, such right of waiver being a continuing one, but one waiver
shall not imply any additional or subsequent waiver. Time is of the essence of
this Note.
Demand, presentment, notice and protest are expressly waived, except for
notices to Borrower otherwise expressly required in the Loan Agreement or any
other Loan Document. Borrower jointly and severally waives presentment for
payment, protest, notice of protest, notice of nonpayment of this Note, demand
and all legal diligence in enforcing collection, and hereby expressly consents
to (i) any and all delays, extensions, renewals or other modifications of this
Note or any waivers of any term hereof, (ii) any release or discharge by Lender
of Borrower, (iii) any release, substitution or exchange of any security for the
payment hereof, (iv) any failure to act (except failure to advance funds to the
extent required under the Loan Agreement) on the part of Lender, and (vi) any
indulgence shown by Lender from time to time (without notice or further assent
from Borrower) and hereby agree that no such action, failure to act or failure
to exercise any right or remedy by Lender shall in any way affect or impair the
obligations of Borrower.
Borrower hereby irrevocably consents to the jurisdiction of the courts
located in Davidson County, Tennessee, including without limitation federal
courts sitting in the middle district of Tennessee and the Circuit or Chancery
courts for Davidson County, Tennessee, for any suit brought or action commenced
in connection with this note, any documents executed or delivered in connection
herewith,
3
58
including without limitation the loan agreement, or any relationship between
lender and borrower, and agrees not to contest or challenge jurisdiction or
venue in any such courts.
Borrower irrevocably consents to the service of process of any such
courts in any such action or proceeding by the mailing of copies thereof by
registered or certified mail, postage prepaid, return receipt requested, to
Borrower at the address opposite its signature below or to such other address as
Borrower may have furnished to Lender in writing, and agrees that such service
shall become effective thirty (30) days after such mailing. However, nothing
herein shall affect the right of Lender or Borrower to serve process in any
other manner permitted by law or to commence legal proceedings or otherwise
proceed against Lender or Borrower in any other jurisdiction.
Borrower hereby knowingly, willingly and irrevocably waives its rights
to demand a jury trial in any action or proceeding involving this note, any
documents executed or delivered in connection herewith including without
limitation the loan agreement or any relationship between borrower and lender.
Borrower agrees that lender may file an original counterpart or copy of this
paragraph with any court as written evidence of borrower's express waiver of its
right to trial by jury.
In any action to enforce this note, Borrower hereby irrevocably and
unconditionally waives, to the extent permitted by applicable law, any and all
rights under the laws of any state to claim or recover any special, exemplary,
punitive, consequential or other damages other than actual direct damages.
In the event this Note is placed in the hands of one or more attorneys
for collection or enforcement or protection of the holder's rights described
herein or in the Loan Agreement or the other Loan Documents, and a court of
competent jurisdiction does not render a judgement against Lender on this Note
or the collection issue in dispute, the Borrower agrees to pay all reasonable
attorneys' fees and all court and other out-of-pocket costs incurred by the
holder hereof (each of which shall be due on demand unless disputed and in any
event shall bear interest at the rate then payable hereunder from five (5) days
after such demand is made until paid).
This Note is governed by and shall be construed in accordance with the
internal laws of the State of Tennessee. If any provision of this Note should
for any reason be invalid or unenforceable, the remaining provisions hereof
shall remain in full force and effect.
This Note may not be changed, extended or terminated except in writing.
No waiver of any term or provision hereof shall be valid unless in writing
signed by Lender.
Executed as of _____________________, 1997.
IXC CARRIER, INC.
By:_________________________________
Title:______________________________
4
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SCHEDULE A TO NOTE
Initial Payment Date: March 31, 1998
Maturity Date: December 31, 2002
Amount Advanced Date Advanced Payment Amount Payment Date Interest
Rate
--------------- ------------- -------------- ------------ ---------
--------------- ------------- -------------- ------------ ---------
--------------- ------------- -------------- ------------ ---------
--------------- ------------- -------------- ------------ ---------
--------------- ------------- -------------- ------------ ---------
--------------- ------------- -------------- ------------ ---------
--------------- ------------- -------------- ------------ ---------
--------------- ------------- -------------- ------------ ---------
5
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EXHIBIT B
FORM OF
BORROWING CERTIFICATE
Pursuant to Section 2.03(b) of the Loan and Security Agreement dated as
of __________, 1997 between IXC CARRIER, INC., a Nevada corporation (the
"Borrower"), IXC COMMUNICATIONS, INC., a Delaware corporation, and NTFC CAPITAL
CORPORATION (the "Lender"), (as amended, modified or supplemented from time to
time, the "Loan Agreement"), the undersigned Responsible Officer of the Borrower
hereby certifies as set forth below. Capitalized terms used herein which are
defined in the Loan Agreement shall have their defined meanings when used herein
(unless otherwise indicated).
1. The Borrower hereby represents and warrants that its representations
and warranties contained in Article 4 of the Loan Agreement are true and correct
on and as of the date of this Certificate.
2. Immediately prior to and immediately after the making of the Advance
requested hereunder, no Default or Event of Default has or will have occurred
and will be continuing under the Loan Agreement.
3. All other applicable conditions of Article 6 of the Loan Agreement
have been satisfied; all applicable covenants contained in Article 7 of the Loan
Agreement have been met; and no violations of Article 8 have occurred and remain
uncured.
4. The Borrowing Date on which the Advance is requested is _____________
___, 199__.
5. The total amount of the Advance requested hereunder is
$_____________, to be disbursed and allocated as follows:
(a) $_____________, to be paid directly to NTI for the purchase
by the Borrower of Equipment provided in accordance with the NTI Supply
Agreement (evidenced by the copies of unpaid NTI invoices attached to
this Certificate); and
(b) $_____________, to be paid to the Borrower as reimbursement
for amounts paid to NTI under the NTI Supply Agreement by Borrower, as
evidenced by the attached invoices and copies of Borrower's cancelled
checks in payment thereof.
6. The amount of the Advance described in 5(a) above (if any) is equal
to the amount due and owing on the date hereof under the NTI Supply Agreement.
7. The Advance requested on the date hereof is for a proper purpose as
set forth in Section 2.01 of the Loan Agreement.
8. The Equipment being purchased with proceeds of the Advance (or for
which reimbursement is being requested) is described on Schedule 1 attached
hereto.
9. A copy of the Federal Reserve Statistical Release H.15 report quoting
the five (5) year constant maturity Treasury ▇▇▇▇ rate on the last business day
of the week ending two weeks prior to the week of the Borrowing Date is attached
hereto.
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10. Wire instructions for Advances to be disbursed to Borrower are as
follows:
Account Number: ____________________________
Account Name: ____________________________
Bank : ____________________________
ABA routing number: ____________________________
IN WITNESS WHEREOF, the undersigned has duly executed this Borrowing
Certificate in the name of the Borrower as of the ___ day of __________, 199__.
IXC CARRIER, INC.
By:_________________________________________
Title:______________________________________
62
EXHIBIT C
FORM OF
OPINION OF COUNSEL FOR CORPORATE BORROWER
AND CORPORATE GUARANTOR
[CLOSING DATE]
NTFC Capital Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Export Development Corporation
▇▇▇ ▇'▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Re: Equipment Loan and Security Agreement between NTFC Capital
Corporation, IXC Carrier, Inc. and IXC Communications, Inc.
Ladies and Gentlemen:
We have acted as counsel to IXC Carrier, Inc., a Nevada corporation
("Borrower"), and IXC Communications, Inc., a Delaware corporation ("Guarantor")
in connection with the preparation, execution and delivery of the Loan and
Security Agreement (the "Loan Agreement") dated as of June , 1997, between the
Borrower, the Guarantor and NTFC Capital Corporation ("Lender") and the
transactions contemplated by the Loan Agreement. This opinion is being furnished
to NTFC Capital Corporation pursuant to Section 5.02 of the Loan Agreement and
to Export Development Corporation in its capacity as an assignee pursuant to
that certain Assignment and Acceptance dated as of June ___, 1997. Capitalized
terms used herein without definition have the same meanings as in the Loan
Agreement.
In furnishing our opinion, we have examined such agreements,
certificates and other documents as we have deemed relevant and necessary as the
basis for our opinion, including the Certificates of Incorporation and the
By-laws of the Borrower and the Guarantor, each as amended to date. We have also
examined executed counterparts of the Loan Agreement, the Note, the Security
Documents, the NTI Purchase Agreement, the Guaranty, and all other Basic
Agreements and other Loan Documents (collectively, the "Agreements"). We have
relied as to factual matters on the representations and warranties of the
Borrower and the Guarantor set forth in the Loan Agreement and the Guaranty. We
have assumed the genuineness of all signatures (except those of the Borrower and
the Guarantor) and conformity to original documents of all documents furnished
to us as originals or photostatic copies.
We are licensed to practice in the State of [California] [Texas], and we
are familiar with the corporate laws of the State of Nevada, the Borrower's
state of incorporation, and the corporate laws of the State of Delaware, the
Guarantor's state of incorporation. Texas is the state in which (i) the Borrower
was formed, (ii) the Borrower's chief executive offices are located, and (iii)
the Equipment is or is to be located. We express no opinion as to any laws other
than the state laws of [California] [Texas], the corporate laws of the states of
Nevada and Delaware, and referenced federal law.
On the basis of the foregoing, and having regard to such legal
considerations as we have deemed relevant, we are of the opinion that:
1. The Borrower is a corporation duly organized, validly existing and in
good standing under the laws of the State of Nevada, with full corporate power
and authority to carry on its business, to own
63
or hold under lease its properties, and to enter into the Agreements to which it
is a party and to carry out the terms thereof. It is fully qualified to conduct
business and in good standing as a foreign corporation in the State of Texas and
in every other state where such qualification is necessary.
2. The Guarantor is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, with full corporate
power and authority to carry on its business, to own or hold under lease its
properties, and to enter into the Agreements to which it is a party and to carry
out the terms thereof. It is fully qualified to conduct business and in good
standing as a foreign corporation in every state where such qualification is
necessary.
3. Each of the Agreements to which it is a party has been duly
authorized, executed and delivered by the Borrower. Each of the Agreements to
which it is a party constitutes a legal, valid and binding obligation of the
Borrower enforceable in accordance with its respective terms except that such
enforceability is subject to the effect of bankruptcy, insolvency,
reorganization, moratorium, receivership or other similar laws relating to or
affecting creditors' rights generally and the application of equitable
principles (whether enforcement is sought in equity or at law), and except that
certain of the remedial provisions contained in the Loan Agreement may be
further limited or rendered unenforceable by other applicable laws (but we do
not believe that such other laws and equitable principles make the remedies or
procedures afforded by the Agreements inadequate for the practical realization
of the benefits intended to be provided thereby).
4. Each of the Agreements to which it is a party has been duly
authorized, executed and delivered by the Guarantor. Each of the Agreements to
which it is a party constitutes a legal, valid and binding obligation of the
Borrower enforceable in accordance with its respective terms except that such
enforceability is subject to the effect of bankruptcy, insolvency,
reorganization, moratorium, receivership or other similar laws relating to or
affecting creditors' rights generally and the application of equitable
principles (whether enforcement is sought in equity or at law), and except that
certain of the remedial provisions contained in the Loan Agreement and the
Guaranty may be further limited or rendered unenforceable by other applicable
laws (but we do not believe that such other laws and equitable principles make
the remedies or procedures afforded by the Agreements inadequate for the
practical realization of the benefits intended to be provided thereby).
5. All consents and authorizations of, filings with and other acts by or
in respect of, any federal or State Governmental Authority required for the due
execution, delivery and performance by the Borrower and the Guarantor of the
Agreements to which each is a party, or the legality, validity or enforceability
thereof or the formation or operation of the Borrower and the Guarantor and
their respective businesses have been obtained or performed and are in full
force and effect.
6. The execution, delivery and performance of the Agreements to which
Borrower or Guarantor are parties and the taking of actions contemplated thereby
(i) do not and will not result in any violation of, or conflict with or
constitute a default under, any term of the Borrower's or the Guarantor's
Certificate of Incorporation or By-laws, each as amended to date, (ii) to the
best of our knowledge, based on due inquiry, do not and will not conflict with
or constitute a default under any agreement, instrument, order, judgment or
decree to which the Borrower or the Guarantor or their respective properties are
parties or subject, or (iii) do not and will not, except as contemplated by the
Loan Documents, result in the creation of any lien, charge or encumbrance upon
any of the capital stock or assets of the Borrower or the Guarantor. The
Borrower's and the Guarantor's execution, delivery, performance of and
compliance with the terms of the Agreements to which they are parties do not
violate any provision of any applicable federal, state or local law, rule or
regulation.
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64
7. There is no action, suit, proceeding or arbitration (whether or not
purportedly on behalf of the Borrower) pending or, to our knowledge, threatened
against the Borrower, before any court, arbitrator or grand jury or any
governmental body, agency or official or at law of any jurisdiction in which
there is a reasonable possibility of an adverse decision which would materially
and adversely affect the business, financial condition or properties of the
Borrower taken as a whole, or the ability of the Borrower to perform its
obligations under the Agreements to which it is a party. To our knowledge after
due inquiry, the Borrower is not in default with respect to any judgment, order,
writ, injunction, decree, rule or regulation of any court or governmental agency
or instrumentality of any jurisdiction, a default under which would materially
and adversely affect the business, financial condition or properties of the
Borrower taken as a whole.
8. There is no action, suit, proceeding or arbitration (whether or not
purportedly on behalf of the Guarantor) pending or, to our knowledge, threatened
against the Guarantor, before any court, arbitrator or grand jury or any
governmental body, agency or official or at law of any jurisdiction in which
there is a reasonable possibility of an adverse decision which would materially
and adversely affect the business, financial condition or properties of the
Guarantor taken as a whole, or the ability of the Guarantor to perform its
obligations under the Agreements to which it is a party. To our knowledge after
due inquiry, the Guarantor is not in default with respect to any judgment,
order, writ, injunction, decree, rule or regulation of any court or governmental
agency or instrumentality of any jurisdiction, a default under which would
materially and adversely affect the business, financial condition or properties
of the Guarantor taken as a whole.
9. The Borrower is not an "investment company" or a company "controlled"
by an "investment company," within the meaning of the Investment Company Act of
1940, as amended, or a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
10. To the best of our knowledge based on due inquiry, the Borrower has
no Subsidiaries at the date hereof.
11. Courts in the State of Texas, applying Texas choice of law
principles should honor the choice of the parties to have the internal laws of
the State of Tennessee apply to this transaction, except to the extent the Texas
Uniform Commercial Code applies to this transaction.
12. If the laws of the State of Texas were applied, the Interest Rate,
Default Rate, fees, premiums and other amounts that the Borrower will be
required to pay under the terms of the Agreements do not violate any State of
Texas usury laws or laws limiting the lawfully chargeable amounts of such
interest, fees, premiums or other charges, either individually or in the
aggregate.*
13. The Loan Agreement is effective to create in favor of Lender a
legal, valid and enforceable security interest in all right, title and interest
of the Borrower in the Collateral in which a security interest may be created
under Article 9 of the Uniform Commercial Code as adopted in the State of Texas
(the "UCC"). The Borrower's Financing Statements, copies of which are attached
hereto as Exhibit A, are in appropriate form for filing pursuant to the UCC.
Upon the filing of the Financing Statements in the offices indicated in Exhibit
B hereto, the Loan Agreement will constitute a fully perfected lien on, and
security interest in, all rights, title and interest of the Borrower in all of
the Collateral described in the Loan Agreement in which a security interest may
be perfected under Article
--------
* These opinions may be rendered by separate Texas counsel.
3
65
9 of the UCC, subject to no other liens. No other filing is necessary in order
to perfect the priority of the Collateral described in the Loan Agreement over
subsequently recorded liens or security interests, including interests of owners
and encumbrancers of any real property where any of the Collateral may be
located.*
14. We have conducted a UCC-11 search dated __________, of the UCC
records in the Office of the Secretary of State of the State of Texas. Solely in
reliance on the results of that search, a copy of which is Exhibit C hereto, the
Lender will have a first priority security interest in the Collateral when the
Form UCC-1 Financing Statements in the form attached hereto are filed as
indicated in Paragraph 11 above. The first-priority security interest of the
Lender in and to the Collateral will not be affected or impaired by the terms of
any loan agreement or indenture or any other contract, agreement or instrument
to which the Borrower is a party, or under which it is bound.*
15. Under the laws of the State of Texas, there is no requirement that
Lender qualify to do business in that State, comply with the provisions of any
foreign lender statute or pay any state or local tax in that State in its
capacity as mortgagee or secured party in order to carry out the transactions
contemplated by, receive the benefits provided by, or enforce the provisions of,
the Security Documents. Except for nominal recording and filing fees, no
recording, filing, stamp, transfer, privilege, intangibles or other tax must be
paid in connection with the execution, delivery, filing, recordation or
enforcement of the Financing Statements, or the other Agreements.*
This opinion is rendered only for the benefit of NTFC Capital
Corporation and Export Development Corporation and their respective successors
and assigns, and may not be relied upon by other parties without our prior
written consent.
Very truly yours,
66
EXHIBIT A TO
OPINION OF COUNSEL FOR BORROWER
COPIES OF BORROWER'S FINANCING STATEMENTS
SEE ATTACHED.
5
67
FORM OF
LANDLORD'S CONSENT
THIS LANDLORD'S CONSENT ("Consent"), made and entered into this ___ day
of _________, 1997, by ____________, ("Landlord") in favor of NTFC CAPITAL
CORPORATION, a Delaware corporation ("Lender").
BACKGROUND:
A. Landlord is the owner of certain real property located in __________
County, ________, being more particularly described on Exhibit A attached hereto
(the "Premises").
B. The Premises have been leased to _____________ ("Lessee") by Lease
Agreement dated __________ (the "Lease") a memorandum of which is attached
hereto as Exhibit B and is of record at Book __________, Page __________, in the
Office of the [Recorder of Deeds] for __________ County, ___________.
C. Lender will be extending loans and other financial accommodations to
IXC Carrier, Inc. ("Borrower") for the purpose of financing Borrower's
acquisition of certain telecommunications equipment (the "Equipment"), part of
which may be located on the Premises.
D. As a condition to extending such loans and other financial
accommodations, Lender has required, among other things, that Borrower grant to
Lender security interests in the Equipment whether now owned or hereafter
acquired ("Collateral"), a portion of which Collateral is and may hereafter be
located on or about the Premises.
NOW, THEREFORE, in order to induce Lender to continue to extend
financial accommodations to Borrower, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Landlord hereby agrees with Lender as follows:
1. Landlord agrees that Lender's security interests and liens in the
Collateral shall be superior to any title or interest which the Landlord may at
any time have therein, and, during the term of this Agreement, Landlord will not
assert against any of the Collateral any title or any statutory, common law,
contractual or possessory lien, including, without limitation, rights of levy or
distraint for rent, all of which Landlord hereby subordinates in favor of
Lender.
2. Landlord hereby agrees that none of the Collateral is subject to the
Lease and hereby disclaims any and all right, title, interest or claim in or to
the Collateral and any cash or non-cash proceeds of the Collateral (except with
respect to the subordinated landlord lien referred to in Section 1 above). The
Collateral may be affixed to or used in conjunction with the Premises, but shall
remain the Lessee's personal property, subject to Lender's lien, at all times.
Landlord agrees not to impound or remove any of the Collateral from the Premises
as long as this Consent is in effect, except as set forth herein.
3. Landlord agrees that Lender may enter upon the Premises at any time
or times,
68
during normal business hours, with reasonable advance notice to Landlord, to
inspect or to remove the Collateral therefrom, without charge, except for
reimbursement for any physical damage to the Premises caused by such removal.
Landlord will not hinder Lender's actions in enforcing its liens and remedies
with respect to the Collateral. Landlord agrees that Lender may conduct public
or private sales of the Collateral at the Premises and that interested parties
will be permitted access to the Premises during normal business hours, with
reasonable advance notice to Landlord, for the purpose of inspecting the
Collateral prior to any such sale.
4. Landlord agrees that as long as Landlord receives in a timely fashion
all rental payments as and when due, and as long as the obligations of the
Lessee to maintain the Premises are being fulfilled (whether by Lessee or, at
Lender's option, by Lender or any designee of Lender), Landlord will not
terminate the Lease or take any action to impound or remove the Collateral or to
require Lessee, Lender or Lender's designee to surrender possession of the
Premises until termination of the Lease.
5. In the event that Lessee defaults in its obligations under the Lease,
Landlord hereby agrees to give Lender written notice of default under the Lease,
at the same time and in the same manner as such notice is given to Lessee and
further agrees to allow the Collateral to remain on the Premises for a
reasonable time not less than ninety (90) days, during which time Lender may, at
its discretion, remove, sell or otherwise dispose of such Lender's Collateral as
Lender may elect, as long as Landlord receives the rental payments due under the
Lease, and as long as Lessee's obligations to maintain the Premises are being
fulfilled.
6. Landlord states that the Lease is presently in full force and effect,
that all rentals have been paid up to date, and that the Lease is not in
default.
7. This Consent shall remain in full force and effect until all
obligations of Lessee to Lender have been paid and satisfied in full and Lender
has terminated its financing agreements with Lessee.
8. The provisions of this Consent may not be modified or terminated
orally, and shall be binding upon the successors and assigns of the Landlord,
and upon any successor owner or transferee of the Premises and shall inure to
the benefit of the Lender and its successors and assigns. Notwithstanding any
other provision of this Consent or the Lease to the contrary, all of Lender's
right, title and interest in and to the Lease and any obligations thereunder may
be assigned and transferred to an affiliate or successor of Lender without
notice to Landlord, and to other parties with notice to Landlord.
9. All notices shall be in writing and shall be mailed by first class
registered or certified mail, postage prepaid, as follows:
(a) If to Lender:
NTFC Capital Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Vice President, Marketing
2
69
(b) If to Landlord:
_________________________
_________________________
_________________________
Attention: ______________
10. This Landlord's Consent may be recorded in any appropriate
locations.
11. This document shall in all respects be governed by and construed in
accordance with the laws of the State in which the Premises are located.
IN WITNESS WHEREOF, Landlord has executed this Landlord's Waiver and
Consent on the date first above written.
LANDLORD:
________________________________________
By:_____________________________________
Title:__________________________________
3
70
[FORM OF NOTARY ACKNOWLEDGEMENT] [SAMPLE: VARIABLE BY STATE AND TYPE OF ENTITY]
[CORPORATION]
STATE OF ________________)
COUNTY OF _______________)
Before me, ____________ , a Notary Public of said County and State,
personally appeared ____________, with whom I am personally acquainted (or
proved to me on the basis of satisfactory evidence), and who, upon oath,
acknowledged himself/herself to be ____________ (or other officer authorized to
execute the instrument) of _________________, the within named bargainor, a
corporation, and that he/she as such _____________________executed the foregoing
instrument for the purposes therein contained, by signing the name of the
corporation by himself/herself as ___________________.
Witness my hand and seal, at Office in ____________________, this ______
day of ________________, 19______ .
----------------------------
Notary Public
My Commission Expires:____________
This Document Prepared By:
________________________________________
________________________________________
________________________________________
After Recording Return To:
________________________________________
________________________________________
________________________________________
4
71
EXHIBIT A TO LANDLORD'S
WAIVER AND CONSENT
Property Description
5
72
EXHIBIT E
FORM OF
ENVIRONMENTAL CERTIFICATE
In connection with the loans from NTFC Capital Corporation ("Lender")
to IXC Carrier, Inc. ("Borrower") pursuant to the Loan and Security Agreement
dated as of July __, 1997, between the Lender, the Borrower, and IXC
Communications, Inc. ("Guarantor") (the "Loan Agreement"), the Borrower and the
Guarantor hereby certify to, and agree with, the Lender as follows:
1. Neither the Borrower nor the Guarantor has actual knowledge of (a)
the presence of any hazardous Substances (as herein defined) on any of the real
property owned, leased or operated by the Borrower or Guarantor, or anticipated
to be necessary to be acquired by the Borrower or Guarantor, on which any
Equipment financed with proceeds of the Loan Agreement will be located (the
"Property"); (b) any spills, releases, discharges, or disposal of Hazardous
Substances that have occurred or are presently occurring on or onto the
Property; or (c) any spills or disposal of Hazardous Substances that have
occurred or are occurring off the Property as a result of any construction on or
operation and use of the Property.
2. To the best of the Borrower's and Guarantor's knowledge, the
Property and any previous or current operation concerning the Property are not
in violation of any applicable Environmental Law (as defined below), and neither
the Borrower nor the Guarantor has knowledge or has received any notice from any
governmental body, citizens' group, employee or other Person claiming that the
Property or operations or uses of the Property have or may result in any
violation of any Environmental Law or asserting that any Person has any
environmental liability with respect to the Property, or requiring or calling
attention to the need for, any work, repairs, construction, reclamation,
alterations or installation on or in connection with the Property in order to
comply with any Environmental Law with which the Borrower or Guarantor has not
complied (collectively, "Environmental Claims"). If there are any such notices
with which the Borrower or Guarantor has complied, the Borrower or Guarantor
shall provide the Lender with copies thereof. If the Borrower or Guarantor
receives any such notice or any other notice, it will immediately provide a copy
to the Lender.
3. To the best of the Borrower's and the Guarantor's knowledge, no
litigation, claim, action, investigation or administrative proceeding in respect
of any Environmental Law is pending or is proposed, threatened or anticipated
with respect to the Property or the use and operation thereof.
4. The Borrower and the Guarantor jointly and severally agree to
indemnify and hold the Lender harmless from and against any and all claims,
demands, damages, losses, liens, liabilities, interest, penalties, fines,
lawsuits, and other proceedings, costs and expenses (including, without
limitation, reasonable attorneys' fees and testing, assessment, investigation
and audit costs), arising directly or indirectly from or out of, or in any way
connected with (a) the presence or suspected presence of any Hazardous
Substances on the Property; (b) any violation or alleged violation of any
Environmental Law, whether attributable to events occurring before or after the
Borrower's or the Guarantor's acquisition of an interest in the Property, or (c)
any inaccuracy in the certifications contained herein. The Borrower and the
Guarantor agree that the Lender shall be entitled to require further information
and/or to request that the Borrower or Guarantor conduct environmental
assessments or audits (at the Borrower's or Guarantor's expense) if the Lender
has reason to suspect any environmental problems with the Property. In any such
event, the Borrower or Guarantor shall cooperate fully with the Lender and its
agents, and shall deliver to the Lender any environmental reports and
information relating to the Property that the Borrower or Guarantor may have.
All obligations of the Borrower or the Guarantor under this Certificate shall be
part of the "Obligations,"
1
73
as defined in the Loan Agreement and shall survive termination of the Loan
Agreement and payment of the rest of the Obligations.
5. This Certificate shall be binding upon the Borrower and the
Guarantor and their respective heirs, legal representatives, successors and
assigns, and shall inure to the benefit of and may be relied upon by the Lender,
its successors and assigns. All of the Lender's right, title and interest in
this Certificate may be assigned in accordance with the terms of the Loan
Agreement.
6. The term "Environmental Law" means any current or future federal,
state and local law (including common law), statute, regulation, ordinance,
rulings, codes, judicial order, administrative order or terms of licenses or
permits applicable to environmental conditions in, on, under or around the
Premises, including without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act, the Resource Conservation and Recovery
Act, the Superfund Amendment and Reauthorization Act of 1986, the Toxic
Substances Control Act, the Clean Air Act, the Clean Water Act, and the
Hazardous Waste Management Act, all as now or hereafter amended. The term
"release" means any spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, dumping or disposing into the
environment. The term "environment" means any surface or groundwater, drinking
water supply, land, surface or subsurface strata or the ambient air. The term
"Hazardous Substance" means any substance or material defined or designated as
hazardous or toxic waste, hazardous or toxic material, a hazardous or toxic
substance, or infectious material, substance or waste or other similar term by
any Environmental Law, including without limitation, asbestos in friable form,
petroleum products, mining wastes, fly ash and agricultural chemical products.
Further, the terms "release," "environment" and "hazardous substance" shall have
any additional meanings as defined by any such Environmental Laws. Finally, to
the extent that any applicable state laws establish a meaning for "release" or
"hazardous substance" which is broader than as defined above, such broader
meaning shall apply.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
this ___ day of July, 1997.
IXC COMMUNICATIONS, INC. IXC CARRIER, INC.
By: By:
--------------------------- ----------------------------
Title: Title:
------------------------ -------------------------
2
74
STATE OF _________________ )
COUNTY OF ________________ )
Before me, ____________________, a Notary Public of said County and
State, personally appeared ____________________, with whom I am personally
acquainted (or proved to me on the basis of satisfactory evidence), and who,
upon oath, acknowledged himself/herself to be _____________ (or other officer
authorized to execute the instrument) of _______________, the within named
bargainor, a corporation, and that he/she as such ________________ executed the
foregoing instrument for the purposes therein contained, by signing the name of
the corporation by himself/herself as __________________.
Witness my hand and seal, at Office in __________________________, this
___ day of ___________________, 19___.
___________________________________
My Commission Expires:________________ Notary Public
Before me, __________________, a Notary Public of said County and
State, personally appeared ____________________, with whom I am personally
acquainted (or proved to me on the basis of satisfactory evidence), and who,
upon oath, acknowledged himself/herself to be ___________________ (or other
officer authorized to execute the instrument) of ____________________, the
within named bargainor, a corporation, and that he/she as such
_______________________ executed the foregoing instrument for the purposes
therein contained, by signing the name of the corporation by himself/herself as
___________________.
Witness my hand and seal, at Office in __________________________, this
___ day of ___________________, 19___.
___________________________________
My Commission Expires:________________ Notary Public
3
75
EXHIBIT F
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Loan and Security Agreement dated as of July
18, 1997 (as in effect on the date hereof, the "Loan Agreement"), among IXC
Carrier, Inc. ("Borrower"), IXC Communications, Inc. ("Guarantor"), and NTFC
Capital Corporation. Terms defined in the Loan Agreement are used herein with
the same meanings unless otherwise defined.
NTFC Capital Corporation ("Assignor") hereby sells and assigns, without
recourse, to Export Development Corporation ("Assignee"), and Assignee hereby
purchases and assumes, without recourse, from Assignor, effective as of the
Assignment Date set forth on Schedule A hereto, the Proportionate Share of the
Commitment set forth on Schedule A hereto, together with the Proportionate Share
of the Assignor's rights and interests in, to and under the Loan Agreement and
the other Loan Documents represented (the "Assigned Interest"), all as set forth
herein. The Assigned Interest includes the Proportionate Share of principal
owing to the Assignor on the applicable Assignment Date as set forth on Schedule
A hereto, and the right to receive interest and other payments in respect of
such Proportionate Share of principal amounts as they come due, subject to the
Assignor's finder's fee referenced below. After the Assignment Date, Assignee
shall fund its Proportionate Share of the Advances made to the Borrower under
the Loan Agreement.
Assignor represents and warrants that it is the sole legal and
beneficial owner, free and clear of any claims, liens or encumbrances, of the
Assigned Interest, the Assignor has not created any adverse claim upon the
Assigned Interest, and the interest is free and clear of any adverse claim.
Assignor also represents and warrants that it has provided to Assignee a true
and correct copy of the Loan Agreement (including the Schedules and forms of
Exhibits attached thereto), and that all Conditions of Closing and applicable
Conditions of Lending (including the post-closing items, if any, on Schedule
6.02 of the Loan Agreement) have been satisfied or waived with the written
approval of Assignee. Assignor further represents and warrants to Assignee that
to Assignor's knowledge, no Event of Default or condition or event which with
the passage of time, the giving of notice or both would constitute an Event of
Default, exists and is continuing under the Loan Agreement or the other Loan
Documents.
From and after the applicable Assignment Date, the Assignee shall have
the right to receive all payments due upon the applicable Assigned Interest and
arising from the proceeds of the sale of any Collateral or otherwise upon the
exercise of remedies available to the Lender in accordance with the provisions
of the Loan Agreement and the other Loan Documents (the "Payments"), but without
recourse against the Assignor. Assignee shall pay Assignor a "finder's fee"
equal to twenty-five basis points (.25%) of Assignee's Proportionate Share of
each Advance. Such finder's fee shall be paid by Assignee within two (2)
Business Days following Assignee's receipt of the first interest payment made in
connection with such Advance.
76
Assignor shall require the Borrower to execute two replacement Notes,
evidencing the retained interest of the Assignor and the Assigned Interest,
respectively, and to deliver such replacement Notes upon the surrender to the
Borrower of the original Note.
The Assignor further represents and warrants that Assignee has no
obligation to fund advances or to make loans in excess of the Proportionate
Share of the Commitment set forth on Schedule A hereto.
From and after the Assignment Date, (i) the Assignee shall be a party
to and be bound by the provisions of the Loan Agreement, and to the extent of
the Assigned Interest, have the rights and obligations of a Lender thereunder
and under the other Loan Documents and (ii) the Assignor shall, to the extent of
the Assigned Interest, relinquish its rights and be released from its
obligations under the Loan Agreement, except as provided herein.
All demands, notices, requests, consents, and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered by courier services, messenger, or telecopy at, or if duly deposited
in the mails, by certified or registered mail, postage prepaid - return receipt
requested, to the following addresses, or such other addresses as may be
furnished hereafter by notice in writing, to the following parties:
(A) in the case of the Assignee:
Export Development Corporation
▇▇▇ ▇'▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(B) in the case of Assignor:
NTFC Capital Corporation NTFC Capital Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Suite 630
Attn: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇ Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
2
77
This Assignment and Acceptance may be executed in counterparts and
shall be governed by and construed in accordance with the laws of the State of
Tennessee. The terms set forth above are hereby agreed to as of the ___ day of
_________, ____.
NTFC CAPITAL CORPORATION, as Assignor
By:_____________________________________
Name:___________________________________
Title:__________________________________
EXPORT DEVELOPMENT CORPORATION, as Assignee
By:_____________________________________
Name:___________________________________
Title:__________________________________
3
78
SCHEDULE A TO
ASSIGNMENT AND ACCEPTANCE
Name of Assignor: NTFC Capital Corporation
Name and address of Assignee: Export Development Corporation
▇▇▇ ▇'▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Effective Date of Assignment: July 18, 1997
Assigned Interest
i) Principal Amount of Advances Assigned: USD -0-
ii) Percentage of Unfunded Commitments Assigned:
Assigned to Assignee: 71.428571%
Retained by Assignor: 28.571429%
Total: 100 %
-------
4
79
EXHIBIT G
FORM OF
CERTIFICATE OF FINANCIAL CONDITION
IXC Carrier, Inc. a Nevada corporation (the "Borrower"), acting by and
through its Senior Vice President and Chief Financial Officer, and IXC
Communications, Inc., a Delaware corporation (the "Guarantor"), acting by and
through its Senior Vice President and Chief Financial Officer, provide this
Certificate in connection with that certain Loan and Security Agreement of even
date herewith executed between NTFC Capital Corporation ("Lender"), Borrower and
Guarantor (the "Loan Agreement"), pursuant to which the Lender has agreed to
make loans to the Borrower in the maximum aggregate principal amount of
$28,000,000.00, as evidenced by certain promissory notes issued by Borrower to
the order of the Lender or its assigns. Borrower and Guarantor hereby certify to
Lender:
1. Capitalized terms used herein and not otherwise defined herein are
used as defined in the Loan Agreement.
2. The financial statements and all other documents relating to the
Guarantor's present or projected future financial condition provided to the
Lender in connection with the Loan Agreement have been prepared by or prepared
under the supervision of a Responsible Officer of the Guarantor, with due
diligence and in full awareness of the reliance of the Lender on the information
contained therein in reaching its decision to make the Advances. The financial
statements are the most recent annual or quarterly financial statements of the
Guarantor, and such financial statements are in conformity with GAAP (except
that quarterly reports may omit accompanying notes thereto and may be subject to
year-end audit adjustments).
3. The Borrower believes that, as a result of the Advances and any
obligations incurred in connection therewith and the other transactions
contemplated by the Loan Agreement, it has not incurred and will not incur debts
beyond its ability to satisfy them as they mature, and will have a positive cash
flow after paying all of its anticipated indebtedness when due, including the
obligations due to the Lender under the Loan Documents.
4. After giving effect to the Advances and the obligations incurred in
connection therewith and the other transactions contemplated by the Loan
Agreement, the Borrower anticipates that it will have sufficient proceeds from
its operating cash flow in the ordinary course of business, sufficient to pay
its interest expense and current maturities of long-term indebtedness when due.
The Borrower expects its cash flow to be sufficient to provide the cash needed
to repay existing long-term indebtedness as such matures.
5. Immediately after giving effect to the transactions contemplated by
the Loan Agreement and the other Loan Documents, the fair saleable value of the
assets of the Borrower will exceed the aggregate amount of all of the Borrower's
then outstanding indebtedness.
6. Based on the present and anticipated needs for capital of the
business conducted, or anticipated to be conducted in the future, by the
Borrower, and after giving effect to the Advances, the Borrower will not be left
with unreasonably small capital to finance the needs and anticipated needs of
such business.
80
IN WITNESS WHEREOF, the Borrower and the Guarantor have caused the
execution of this Certificate this ____ day of _____________, 1997.
IXC CARRIER, INC.
By:
--------------------------------,
Senior Vice President
IXC COMMUNICATIONS, INC.
By:
--------------------------------,
Senior Vice President
2
81
EXHIBIT H
FORM OF
UNCONDITIONAL GUARANTY AGREEMENT
THIS UNCONDITIONAL GUARANTY AGREEMENT (the "Guaranty"), dated as of
July __, 1997, made by IXC COMMUNICATIONS, INC., a Delaware corporation (the
"Guarantor"), in favor of NTFC CAPITAL CORPORATION, a Delaware corporation (the
"Lender"), and any assignee of the Lender.
RECITALS:
A. Guarantor desires to induce the Lender to enter that certain Loan
and Security Agreement dated as of July __, 1997 (the "Loan Agreement"), by and
between Lender, Guarantor, and IXC Carrier, Inc., a Nevada corporation
("Borrower") which is a wholly owned subsidiary of the Guarantor, to finance the
acquisition of Equipment, as hereinafter defined, pursuant to the terms of the
Loan Agreement. Such financings shall be referred to herein from time to time as
the "Loans".
B. The Lender is willing to enter into the Loan Agreement, and advance
the Loans, subject to the terms and conditions set forth in the Loan Agreement
and the other Loan Documents, as hereinafter defined, (as amended, modified,
supplemented or replaced from time to time) but only so long as Guarantor
unconditionally guarantees the timely performance and payment by Borrower of
each and every obligation under the Loan Documents, subject only to the
limitations stated herein.
C. Guarantor acknowledges that the Lender would not be willing to enter
into the Loan Documents without the guaranty by Guarantor under the terms of
this Guaranty.
D. Guarantor owns one hundred percent (100%) of the outstanding capital
stock of Borrower, and Guarantor expects to increase its business, and the
business of its other direct and indirect Affiliates, through the use of the
Equipment by Borrower and will receive direct and indirect benefit from the
Lender's extension of credit to Borrower.
NOW, THEREFORE, in order to induce the Lender to enter into the Loan
Documents with Borrower and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, Guarantor hereby agrees
as follows:
TERMS:
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or not
underscored) when used in this Guaranty, including its preamble and recitals,
shall have the following meanings (such definitions to be equally applicable to
the singular and plural forms thereof):
"Equipment" has the meaning assigned to that term in the Loan
Agreement.
"Guaranteed Obligations" has the meaning assigned to that term
in Section 2.1 hereof.
"Guarantor" has the meaning assigned to that term in the
preamble hereof, and its
82
successors and permitted assigns, and shall include without limitation:
(i) the Guarantor as debtor-in-possession or any trustee in any
bankruptcy proceeding; (ii) any trustee, receiver, custodian,
conservator, or other similar appointee over Guarantor or over any of
Guarantor's property pursuant to any court proceeding of any kind or
otherwise; and (iii) any successor person.
"Guaranty" means this Unconditional Guaranty Agreement, as the
same may be amended, supplemented, amended and restated or otherwise
modified from time to time.
"Borrower" has the meaning assigned to that term in the first
recital hereto, and its successors and assigns, and includes without
limitation: (i) the Borrower as debtor-in-possession or any trustee in
any bankruptcy proceeding; (ii) any trustee, receiver, custodian,
conservator, or other similar appointee over Borrower or over any of
Borrower's property pursuant to any court proceeding of any kind or
otherwise; and (iii) any successor person.
"Loan Agreement" has the meaning assigned to that term in the
first recital hereto.
"Loans" has the meaning assigned to that term in the first
recital hereto.
"Loan Documents" has the meaning assigned to that term in the
Loan Agreement.
SECTION 1.2. Loan Documents Definitions. Unless otherwise defined
herein or the context otherwise requires, terms used in this Guaranty, including
its preamble and recitals, have the meanings provided in the Loan Documents.
ARTICLE II
GUARANTY
SECTION 2.1. Guaranty. Guarantor hereby unconditionally and irrevocably
guarantees, subject to the limitations expressed herein, the full and prompt
payment when due, whether at stated maturity, by acceleration or otherwise
(including, without limitation, all amounts which would have become due but for
the operation of the automatic stay under Section 362(a) of the Federal
Bankruptcy Code, 11 U.S.C. 362(a)), of any and all indebtedness and obligations
of any kind and character whatsoever of Borrower to the Lender and any and all
extensions, renewals and replacements of such indebtedness, arising under any of
the Loan Documents including, but not limited to, the Loan Agreement, the Note,
or any other document executed by Borrower in connection therewith, or of
Guarantor hereunder, whether such indebtedness is:
(i) characterized as the payment of principal, interest,
premiums, fees, costs, expenses, lease obligations,
indemnities, or otherwise;
(ii) presently existing or hereafter incurred or arising;
(iii) from time to time reduced and thereafter increased or
entirely extinguished and thereafter reincurred;
(iv) foreseen or unforeseen, direct or indirect, absolute or
contingent, primary or secondary, secured or unsecured,
matured or unmatured, of the same class or type or of
different classes or types;
(v) created by or arising under contract, tort, guaranty,
overdraft, recovery of
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avoided payments or otherwise;
(vi) contracted for by Borrower alone or jointly and severally
with another or others;
(vii) incurred by Borrower prior to, during, or after any
filing by Borrower or against Borrower of any petition or
request for liquidation, reorganization, arrangement,
adjudication as a bankrupt, relief as a debtor, or other
relief under bankruptcy, insolvency, or similar laws now or
hereafter in affect in the United States of America or any
state or territory thereof or any foreign jurisdiction, and
notwithstanding Borrower's legal status as a debtor or a
debtor-in-possession or Borrower's discharge in any such
proceeding;
(viii) created or incurred with or without notice to
Guarantor; and/or
(ix) for future advances of any sort, including, without
limitation, future advances made by Lender for taxes, levies,
insurance and/or repairs to or maintenance of the Collateral
or for expenses of collection or protection of Lender's
rights, including reasonable attorney's fees.
The foregoing obligations are referred to herein collectively as the "Guaranteed
Obligations." This Guaranty constitutes a guaranty of payment when due and not
merely of collection, and Guarantor specifically agrees that it shall not be
necessary or required that the Lender or any holder of any Loan exercise any
right, assert any claim or demand or enforce any remedy whatsoever against the
Borrower before or as a condition to the Guaranteed Obligations of any Guarantor
hereunder.
SECTION 2.2. Acceleration of Guaranty. Guarantor agrees that, in the
event of the dissolution or insolvency of the Borrower or Guarantor, or the
inability or failure of the Borrower or Guarantor to pay debts as they become
due, or an assignment by the Borrower or Guarantor for the benefit of creditors,
or the commencement of any case or proceeding in respect of the Borrower or
Guarantor under any bankruptcy, insolvency or similar laws, and if such event
shall occur at a time when any of the Guaranteed Obligations of the Borrower may
not then be due and payable, Guarantor will pay to the Lender forthwith the full
amount which would be payable hereunder by Guarantor if all such Guaranteed
Obligations were then due and payable.
SECTION 2.3. Guaranty Absolute. This Guaranty shall be construed as a
continuing, absolute, unconditional and irrevocable guarantee of payment and
shall remain in full force and effect until all Guaranteed Obligations of the
Borrower have been paid in full, all obligations of Guarantor hereunder have
been paid in full and all Loan Documents shall have terminated. Guarantor
guarantees that the Guaranteed Obligations will be paid strictly in accordance
with the terms of the Loan Agreement, and that all other Guaranteed Obligations
shall be paid strictly in accordance with the terms of the Loan Documents,
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of the Lender with
respect thereto. The liability of Guarantor under this Guaranty shall be
absolute and unconditional irrespective of:
(a) any lack of validity, legality or enforceability of the
Loan Agreement, the Note, any other Loan Document or any other
agreement or instrument relating to any thereof;
(b) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Guaranteed Obligations, or any
compromise, renewal, extension, acceleration or release with respect
thereto, or any other amendment or waiver of or any consent to
departure from the Loan Agreement, any Schedule or any other Loan
Document;
(c) any addition, exchange, release or non-perfection of any
collateral, or any release
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or amendment or waiver of or consent to departure from any other
guaranty, for all or any of the Guaranteed Obligations;
(d) the failure of the Lender or any holder of a Loan
Document:
(i) to assert any claim or demand or to enforce any
right or remedy against the Borrower or any other person or
entity (including any other guarantor) under the provisions of
the Loan Agreement, any Schedule or any other Loan Document or
otherwise, or
(ii) to exercise any right or remedy against any
other guarantor of, or collateral securing, any Guaranteed
Obligations of the Borrower;
(e) any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any of the terms of
the Loan Agreement, any Schedule, or any other Loan Document;
(f) any defense, set-off or counter-claim which may at any
time be available to or be asserted by the Borrower against the Lender;
(g) any reduction, limitation, impairment or termination of
the Guaranteed Obligations of the Borrower for any reason, including
any claim of waiver, release, surrender, alteration or compromise, and
shall not be subject to (and Guarantor hereby waives any right to or
claim of) any defense or setoff, counterclaim, recoupment or
termination whatsoever by reason of the invalidity, illegality,
non-genuineness, irregularity, compromise, unenforceability of, or any
other event or occurrence affecting, the Guaranteed Obligations of the
Borrower or otherwise; or
(h) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, the
Borrower or Guarantor.
SECTION 2.4. Reinstatement, etc. Guarantor agrees that this Guaranty
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment (in whole or in part) of any of the Guaranteed Obligations is
rescinded or must otherwise be restored by any the Lender or any holder of any
Loan Document, upon the insolvency, bankruptcy or reorganization of the Borrower
or otherwise, all as though such payment had not been made.
SECTION 2.5. Waiver. Guarantor hereby waives promptness, diligence,
notice of acceptance and any other notice with respect to any of the Guaranteed
Obligations and this Guaranty and any requirement that the Lender protect,
secure, perfect or insure any security interest or lien or any property subject
thereto or exhaust any right or take any action against the Borrower or any
other person or entity (including any other guarantor) or any collateral.
SECTION 2.6. Waiver of Subrogation. Guarantor hereby irrevocably waives
any claim or other rights which it may now or hereafter acquire against the
Borrower that arise from the existence, payment, performance or enforcement of
Guarantor's obligations under this Guaranty or any other Loan Document,
including any right of subrogation, reimbursement, exoneration, or
indemnification, any right to participate in any claim or remedy of the Lender
against the Borrower or any collateral which the Lender now has or hereafter
acquires, whether or not such claim, remedy or right arises in equity, or under
contract, statute or common law, including the right to take or receive from the
Borrower, directly or indirectly, in cash or other property or by set-off or in
any manner, payment or security on account of such claim or other rights. If any
amount shall be paid to Guarantor in violation of the preceding sentence and the
Guaranteed Obligations shall not have been paid in cash in full and the Loan
Documents
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have not been terminated, such amount shall be deemed to have been paid to
Guarantor for the benefit of, and held in trust for, the Lender, and shall
forthwith be paid to the Lender to be credited and applied upon the Guaranteed
Obligations, whether matured or unmatured. Guarantor acknowledges that it will
receive direct and indirect benefits from the financing arrangements
contemplated by the Loan Agreement and the other Loan Documents and that the
waiver set forth in this Section is knowingly made in contemplation of such
benefits.
SECTION 2.7. Successors, Transferees and Assigns; Transfers of Loans,
etc. This Guaranty shall:
(a) be binding upon Guarantor, and its successors, transferees
and assigns; and
(b) inure to the benefit of and be enforceable by the Lender
and its successors, transferees and assigns.
Without limiting the generality of clause (b), to the extent the Lender assigns
or otherwise transfers (in whole or in part) any Loan or Loan Documents held by
it to any other person or entity, and such other person or entity shall
thereupon become vested with the corresponding rights and benefits granted to
the Lender under this Guaranty.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1. Representations and Warranties. Guarantor hereby
represents and warrants to the Lender as follows:
(a) Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of its state of
incorporation and has full corporate power and authority to enter into
this Guaranty and to carry out the transactions contemplated hereby and
thereby.
(b) The execution and delivery by Guarantor of this Guaranty
and the consummation by Guarantor of the transactions contemplated
hereby have been duly authorized by Guarantor. This Guaranty has been
duly executed and delivered by Guarantor and constitutes the legal,
valid and binding obligation of Guarantor enforceable against Guarantor
in accordance with its terms, subject, as to enforcement only, to
bankruptcy, insolvency, reorganization, moratorium or similar laws at
the time in effect affecting the enforceability of the rights of
creditors generally.
(c) The execution and delivery of this Guaranty and the
consummation by Guarantor of the transactions contemplated hereby have
not resulted, and will not (with or without the lapse of time or the
giving of notice or both) result, (i) in any breach of any of the terms
or provisions of, or constitute a default under, the charter or bylaws
of Guarantor, any agreement, license or other instrument, any law, rule
or regulation or any judgment, decree or order of any court to which
Guarantor is a party or by which its property may be bound, or (ii) in
the creation or imposition of any claim, lien charge or encumbrance of
any-nature whatsoever upon, or give to others any claim, interest or
right, with respect to any of the properties, assets, contracts or
licenses of Guarantor.
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ARTICLE IV
MISCELLANEOUS
SECTION 4.1. Loan Document. This Guaranty is a Loan Document executed
pursuant to the Loan Agreement and shall (unless otherwise expressly indicated
herein) constitute a Guaranteed Obligation.
SECTION 4.2. Binding on Successors, Transferees and Assigns;
Assignment. In addition to, and not in limitation of Section 2.7, this Guaranty
shall be binding upon Guarantor and its successors, permitted transferees and
permitted assigns and shall inure to the benefit of and be enforceable by the
Lender and its successors, transferees and assigns (to the full extent provided
pursuant to Section 2.7); provided, however, that Guarantor may not transfer or
assign any of its obligations hereunder without the prior written consent of the
Lender, unless the assignment is part of a transaction of merger, acquisition or
consolidation, and the Guarantor is either the surviving entity or the
controlling corporation of the surviving or resulting entity. In any event, no
assignment will operate to relieve Guarantor of its obligations hereunder.
SECTION 4.3. Amendments, Etc. No amendment or waiver of any provision
of this Guaranty nor consent to any departure by Guarantor therefrom shall in
any event be effective unless the same shall be in writing and signed by the
Lender and Guarantor, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
SECTION 4.4. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing or by facsimile
transmission and, if to Guarantor, mailed, given by facsimile transmission or
delivered to it, addressed to it at _____________________________ (facsimile
number (____) ___________), and if to the Lender, mailed, telexed, given by
facsimile transmission or delivered to it, addressed to it at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Legal Department (facsimile number (615)
734-5283), with a copy to the Lender Corporation, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Manager, Credit, (facsimile number (▇▇▇) ▇▇▇-▇▇▇▇),
or as to each party at such other address as shall be designated by such party
in a written notice to each other party complying as to delivery with the terms
of this Section. Any notice, if mailed and properly addressed with postage
prepaid, shall be deemed given when received; any notice,'if transmitted by
facsimile transmission or delivery, shall be deemed given when received.
SECTION 4.5. No Waiver; Remedies. No failure on the part of the Lender
to exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law or equity.
SECTION 4.6. Continuing Guaranty. This Guaranty is a continuing
guaranty and shall (a) remain in full force and effect until final payment in
full of the Guaranteed Obligations and all other amounts payable under this
Guaranty, subject to reinstatement in accordance with Section 2.4 hereof, (b) be
binding upon Guarantor, its successors and permitted assigns, and (c) inure to
the benefit of and be enforceable by the Lender for its benefit and the benefit
of the Lender and its successors, transferees and assigns.
SECTION 4.7. Severability. Any provision of this Guaranty which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of this Guaranty or affecting the validity
or enforceability of such provisions in any other jurisdiction.
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SECTION 4.8. Consent to Jurisdiction and Venue; Waivers.
(a) GUARANTOR HEREBY IRREVOCABLY CONSENTS TO THE JURISDICTION
OF THE FEDERAL COURTS SITTING IN THE MIDDLE DISTRICT OF TENNESSEE, AND
IF NO FEDERAL JURISDICTION EXISTS, TO THE JURISDICTION AND VENUE OF THE
STATE COURTS OF TENNESSEE FOR ANY SUIT BROUGHT OR ACTION COMMENCED IN
CONNECTION WITH THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE
OBLIGATIONS, AND AGREES NOT TO CONTEST VENUE OR JURISDICTION IN ANY
SUCH COURTS. IN ANY SUCH LITIGATION, GUARANTOR WAIVES PERSONAL SERVICE
OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, AND AGREES THAT THE SERVICE
THEREOF MAY BE MADE BY CERTIFIED OR REGISTERED MAIL DIRECT TO GUARANTOR
AT ITS ADDRESS SET FORTH IN SECTION 10.06 HEREOF. IN THE ALTERNATIVE,
IN ITS SOLE DISCRETION, LENDER MAY EFFECT SERVICE UPON GUARANTOR IN ANY
OTHER FORM OR MANNER PERMITTED BY LAW. THE CHOICE OF FORUM SET FORTH
HEREIN SHALL NOT BE DEEMED TO PRECLUDE THE ENFORCEMENT OF ANY JUDGMENT
OBTAINED IN SUCH FORUM OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT
TO ENFORCE THE SAME IN ANY APPROPRIATE JURISDICTION.
(b) GUARANTOR AND LENDER HEREBY KNOWINGLY AND WILLINGLY WAIVE
THEIR RESPECTIVE RIGHTS TO DEMAND A JURY TRIAL IN ANY ACTION OR
PROCEEDING INVOLVING THIS GUARANTY, ANY OTHER LOAN DOCUMENT, THE
GUARANTEED OBLIGATIONS, OR ANY RELATIONSHIP BETWEEN THE LENDER AND
GUARANTOR. GUARANTOR WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THE
FOREGOING WAIVERS WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY AND
VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH
LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED
AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
(c) THE LENDER SHALL HAVE NO LIABILITY UNDER OR IN CONNECTION
WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS FOR SPECIAL,
EXEMPLARY, PUNITIVE, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES OF
ANY SORT IN ANY SUIT BROUGHT OR ACTION COMMENCED IN CONNECTION WITH
THIS GUARANTY, THE OTHER LOAN DOCUMENTS, OR THE GUARANTIED OBLIGATIONS,
AND, EXCEPT TO THE EXTENT PROHIBITED BY LAW, EACH PARTY WAIVES ANY
RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH ACTION ANY SPECIAL,
EXEMPLARY, PUNITIVE, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES OF
ANY SORT OTHER THAN ACTUAL DAMAGES.
(d) TO THE EXTENT THAT GUARANTOR HAS OR HEREAFTER MAY ACQUIRE
ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION, EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR TO ITS PROPERTY, GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH
IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTY.
(e) BY EXECUTING THIS GUARANTY, GUARANTOR HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS GUARANTY BROUGHT
IN ANY OF THE AFORESAID COURTS, AND HEREBY FURTHER IRREVOCABLY AND
UNCONDITIONALLY WAIVES AND AGREES
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NOT TO PLEAD ANY CLAIM THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN
ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
SECTION 4.9. Governing Law. This Guaranty shall be governed by and
construed in accordance with the internal laws of the State of Tennessee.
IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written, and the Lender has accepted it by its duly authorized
officer.
IXC COMMUNICATIONS, INC.
By:___________________________________
Title:________________________________
NTFC CAPITAL CORPORATION
By:___________________________________
Title:________________________________
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