==============================================================================
CREDIT AGREEMENT
dated as of
October 21, 1998
among
WINSTAR NETWORK EXPANSION, LLC,
WINSTAR COMMUNICATIONS, INC.,
The Lenders Party Hereto,
STATE STREET BANK AND TRUST COMPANY,
as Collateral Agent,
and
LUCENT TECHNOLOGIES INC.,
as Administrative Agent
==============================================================================
[Reference No. 7725-042]
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
SECTION 1.01. Defined Terms......................................................... 1
SECTION 1.02. Classification of Loans and
Borrowings.......................................................... 33
SECTION 1.03. Terms Generally....................................................... 33
SECTION 1.04. Accounting Terms; GAAP................................................ 34
ARTICLE II
The Loans
SECTION 2.01. Commitments........................................................... 35
SECTION 2.02. Loans and Borrowings.................................................. 35
SECTION 2.03. Requests for Borrowings............................................... 35
SECTION 2.04. Funding of Borrowings................................................. 37
SECTION 2.05. Interest Elections.................................................... 38
SECTION 2.06. Termination and Reduction of
Commitments......................................................... 40
SECTION 2.07. Repayment of Loans; Evidence of Debt.................................. 40
SECTION 2.08. Amortization of Loans................................................. 41
SECTION 2.09. Prepayment of Loans................................................... 46
SECTION 2.10. Fees.................................................................. 49
SECTION 2.11. Interest.............................................................. 50
SECTION 2.12. Alternate Rate of Interest............................................ 51
SECTION 2.13. Increased Costs....................................................... 52
SECTION 2.14. Break Funding Payments; Prepayment
Fees................................................................ 53
SECTION 2.15. Taxes................................................................. 54
SECTION 2.16. Payments Generally; Pro Rata Treatment;
Sharing of Set-Offs................................................. 55
SECTION 2.17. Mitigation Obligations; Replacement of
Lenders............................................................. 57
ARTICLE III
Representations and Warranties
SECTION 3.01. Organization; Powers.................................................. 58
Page
SECTION 3.02. Authorization; Enforceability......................................... 58
SECTION 3.03. Governmental Approvals; No Conflicts.................................. 59
SECTION 3.04. Financial Condition; No Material
Adverse Change...................................................... 59
SECTION 3.05. Properties and Licenses............................................... 60
SECTION 3.06. Litigation and Environmental Matters.................................. 60
SECTION 3.07. Compliance with Laws and Agreements................................... 61
SECTION 3.08. Investment and Holding Company Status................................. 61
SECTION 3.09. Taxes................................................................. 61
SECTION 3.10. ERISA................................................................. 61
SECTION 3.11. Disclosure............................................................ 62
SECTION 3.12. Subsidiaries.......................................................... 62
SECTION 3.13. Insurance............................................................. 62
SECTION 3.14. Labor Matters......................................................... 62
SECTION 3.15. Supply Agreement...................................................... 63
SECTION 3.16. Security Agreement.................................................... 63
SECTION 3.17. Year 2000 Compliance.................................................. 63
ARTICLE IV
Conditions
SECTION 4.01. Effective Date........................................................ 63
SECTION 4.02. Each Borrowing........................................................ 66
ARTICLE V
Affirmative Covenants
SECTION 5.01. Financial Statements and Other
Information......................................................... 67
SECTION 5.02. Notices of Material Events............................................ 69
SECTION 5.03. Information Regarding Collateral...................................... 70
SECTION 5.04. Existence; Conduct of Business........................................ 71
SECTION 5.05. Payment of Obligations................................................ 71
SECTION 5.06. Maintenance of Properties............................................. 71
SECTION 5.07. Insurance............................................................. 71
SECTION 5.08. Books and Records; Inspection Rights.................................. 73
SECTION 5.09. Compliance with Laws and Agreements................................... 73
SECTION 5.10. Use of Proceeds....................................................... 73
SECTION 5.11. Further Assurances.................................................... 73
SECTION 5.12. Casualty and Condemnation............................................. 73
Page
SECTION 5.13. Interest Rate Protection.............................................. 74
SECTION 5.14. Additional Subsidiary Guarantors...................................... 74
ARTICLE VI
Negative Covenants
SECTION 6.01. Indebtedness.......................................................... 75
SECTION 6.02. Liens................................................................. 77
SECTION 6.03. Fundamental Changes................................................... 78
SECTION 6.04. Investments, Loans, Advances,
Guarantees and Acquisitions; Asset
Sales............................................................... 80
SECTION 6.05. Hedging Agreements.................................................... 82
SECTION 6.06. Restricted Payments................................................... 82
SECTION 6.07. Transactions with Affiliates.......................................... 83
SECTION 6.08. Restrictive Agreements................................................ 83
SECTION 6.09. Repayment of Indebtedness............................................. 83
SECTION 6.10. Limitation on Sale-Leaseback
Transactions........................................................ 83
SECTION 6.11. Secured Indebtedness to Total
Capitalization...................................................... 84
SECTION 6.12. Consolidated Indebtedness to Total
Capitalization...................................................... 84
SECTION 6.13. Consolidated Indebtedness to
Consolidated EBITDA................................................. 84
SECTION 6.14. Consolidated EBITDA to Consolidated
Debt Service........................................................ 84
SECTION 6.15. Consolidated EBITDA to Consolidated
Interest Expense.................................................... 85
SECTION 6.16. Minimum Revenues...................................................... 85
SECTION 6.17. Use of Collateral..................................................... 85
ARTICLE VII
Events of Default
Events of Default.......................................................................................86
Page
ARTICLE VIII
The Agents
The Agents..............................................................................................90
ARTICLE IX
Miscellaneous
SECTION 9.01. Notices............................................................... 92
SECTION 9.02. Waivers; Amendments................................................... 93
SECTION 9.03. Expenses; Indemnity; Damage Waiver.................................... 94
SECTION 9.04. Successors and Assigns................................................ 96
SECTION 9.05. Survival.............................................................. 99
SECTION 9.06. Counterparts; Integration;
Effectiveness....................................................... 99
SECTION 9.07. Severability.......................................................... 100
SECTION 9.08. Right of Setoff....................................................... 100
SECTION 9.09. Governing Law; Jurisdiction; Consent
to Service of Process............................................... 101
SECTION 9.10. WAIVER OF JURY TRIAL.................................................. 101
SECTION 9.11. Headings.............................................................. 102
SECTION 9.12. Confidentiality....................................................... 102
SECTION 9.13. Interest Rate Limitation.............................................. 103
SCHEDULES:
Schedule 2.01 -- Commitments
Schedule 3.06 -- Disclosed Matters
Schedule 3.12 -- Subsidiaries
Schedule 3.13 -- Insurance
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Permitted Liens
Schedule 6.04A -- Pending Acquisitions
Schedule 6.04B -- Existing Investments
Schedule 6.04C -- Permitted Asset Sales
Schedule 6.08 -- Existing Restrictions
Schedule 6.17 -- Customer Equipment
Page
EXHIBITS:
Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Guarantee Agreement
Exhibit C -- Form of Indemnity and Contribution Agreement
Exhibit D -- Form of Perfection Certificate
Exhibit E -- Form of Security Agreement
Exhibit F -- Form of Equipment User Agreement
CREDIT AGREEMENT dated as of October 21, 1998, among
WINSTAR NETWORK EXPANSION, LLC, a Delaware limited liability
company, WINSTAR COMMUNICATIONS, INC., a Delaware
corporation, the LENDERS party hereto, STATE STREET BANK AND
TRUST COMPANY, as Collateral Agent, and LUCENT TECHNOLOGIES
INC., as Administrative Agent.
The parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are
bearing interest at a rate determined by reference to the Alternate Base Rate.
"Acquisition Basket Amount" means, at any time, an amount
equal to the sum of (a) $___________, plus (b) ____% of the aggregate Net
Proceeds received by the Parent after the Effective Date and prior to such time
from the issuance of additional shares of capital stock (other than
Disqualified Stock) of the Parent (including options, warrants and other rights
to purchase shares of such capital stock) (excluding the amount of any (A)
Restricted Payments made pursuant to clause (b) of Section 6.06 and (B) Net
Proceeds used to pay the consideration for any investment made by the Parent or
a Restricted Subsidiary pursuant to clause (x) of Section 6.04(a)), plus (c)
40% of the aggregate Net Proceeds received by the Parent after the Effective
Date and prior to such time from the issuance of Subordinated Indebtedness or
Disqualified Stock, in each case satisfying the criteria set forth in clause
(viii) of Section 6.01(a), excluding any such Net Proceeds to the extent
applied to refinance other Indebtedness.
"Acquisition Indebtedness" means any Indebtedness (a) issued
as consideration in connection with any Permitted Acquisition or (b) incurred
or assumed in connection with or otherwise resulting from any Permitted
Acquisition.
2
"Additional Assets" means any capital assets used or useful
in the business of the Parent and the Restricted Subsidiaries.
"Adjusted LIBO Rate" means, with respect to any LIBOR
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means Lucent, in its capacity
as administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an
Administrative Questionnaire in a form supplied by the
Administrative Agent.
"Affiliate" means, with respect to a specified Person,
another Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the Person
specified.
"Affiliated Equipment User" means any Equipment User that is
an Affiliate of the Parent (including any Restricted Subsidiary) or with which
the Parent or a Restricted Subsidiary has entered into an agreement to provide
management or operating services.
"Agents" means the Administrative Agent and the
Collateral Agent.
"Alternate Base Rate" means, for any day, a rate per annum
equal to the greater of (a) the Prime Rate in effect on such day and (b) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change
in the Alternate Base Rate due to a change in the Prime Rate or the Federal
Funds Effective Rate shall be effective from and including the effective date
of such change in the Prime Rate or the Federal Funds Effective Rate,
respectively.
"Applicable Rate" means, for any day, with respect to any
Loan, the applicable rate per annum set forth below under the caption "ABR
Spread" or "Eurodollar Spread", as the
3
case may be, based on the Leverage Ratio as of the most recent
determination date:
Eurodollar
Leverage Ratio ABR Spread Spread
-------------- ---------- ------
Category 1 <4.0 to 1.0 ___% ___%
Category 2 >= 4.0 to 1.0 ___% ___%
< 5.0 to 1.0
Category 3 >= 5.0 to 1.0 ___% ___%
< 6.0 to 1.0
Category 4 >= 6.0 to 1.0 ___% ___%
< 7.0 to 1.0
Category 5 >= 7.0 to 1.0 ___% ___%
< 7.5 to 1.0
Category 6 >= 7.5 to 1.0 ___% ___%
For purposes of the foregoing, (i) the Leverage Ratio shall be determined as of
the end of each fiscal quarter of the Parent's fiscal year based upon the
Parent's consolidated financial statements delivered pursuant to Section
5.01(a) or (b), except that, prior to delivery of the first such financial
statements after the Effective Date, such determination shall be based upon the
financial statements for the fiscal quarter ended June 30, 1998, referred to in
Section 3.04, and (ii) each change in the Applicable Rate resulting from a
change in the Leverage Ratio shall be effective during the period commencing on
and including the date of delivery to the Administrative Agent of such
consolidated financial statements indicating such change and ending on the date
immediately preceding the effective date of the next such change; provided that
the Leverage Ratio shall be deemed to be in Category 6 (A) at any time that an
Event of Default has occurred and is continuing or (B) if the Parent fails to
deliver the consolidated financial statements required to be delivered by it
pursuant to Section 5.01(a) or (b) within 15 days after the end of the period
specified therein for delivery thereof, during the period from the expiration
of such 15-day period until such consolidated financial statements are
delivered; provided further that if the Parent fails to deliver the
consolidated financial statements required to be delivered by it pursuant to
Section 5.01(a) or (b) within the period specified therein for
4
delivery thereof and, when such financial statements are delivered, the
Applicable Rate resulting from the Leverage Ratio based upon such financial
statements is greater than the Applicable Rate in effect immediately prior to
the end of the period during which such financial statements were required to
be delivered, then (x) the Applicable Rate shall be retroactively increased
(for the period from the expiration of the period specified in Section 5.01(a)
or (b) for delivery of such consolidated financial statements until the earlier
of the date such consolidated financial statements are delivered or the date of
the expiration of the 15-day period referred to in clause (B) of the foregoing
proviso) and (y) if any payments of interest have been made with respect to
such period, the Borrower shall promptly make a supplemental payment of
interest to correct the underpayment.
"Asset Acquisition" means (i) an investment by the Parent or
any of the Restricted Subsidiaries in any other Person pursuant to which such
Person shall become a Restricted Subsidiary of the Parent or shall be merged
into or consolidated with the Parent or any of the Restricted Subsidiaries or
(ii) an acquisition by the Parent or any of the Restricted Subsidiaries of the
property and assets of any Person other than the Parent or any of the
Restricted Subsidiaries that constitute substantially all of a division or line
of business of such Person.
"Asset Sale" means any sale, transfer or other disposition
(including by way of merger, consolidation or sale-leaseback transactions) in
one transaction or a series of related transactions by the Parent or any of the
Restricted Subsidiaries to any Person other than the Parent or any of the
Restricted Subsidiaries of (i) all or any of the capital stock of any
Restricted Subsidiary, (ii) all or substantially all of the property and assets
of an operating unit or business of the Parent or any of the Restricted
Subsidiaries or (iii) any other property or assets of the Parent or any of the
Restricted Subsidiaries outside the ordinary course of business of the Parent
or such Restricted Subsidiary; provided, that the following shall not be
included within the meaning of "Asset Sale": (A) sales or other dispositions of
inventory, receivables and other current assets; (B) sales or other
dispositions of equipment that has become worn out, obsolete or damaged or
otherwise unsuitable for use in connection with the business of the Parent or
the Restricted Subsidiaries and (C) a substantially simultaneous exchange of,
or a sale or disposition (other than 85% or more for cash or
5
cash equivalents) by the Parent or any of the Restricted Subsidiaries of,
licenses issued by the FCC or applications or bids therefor; provided, however,
that the consideration received by the Parent or any such Restricted Subsidiary
in connection with such exchange, sale or disposition shall be equal to the
fair market value of licenses so exchanged, sold or disposed of, as determined
by the Board of Directors of the Parent.
"Assignment and Acceptance" means an assignment and
acceptance entered into by a Lender and an assignee (with the consent of the
Borrower and Administrative Agent if required by Section 9.04), and accepted by
the Administrative Agent, in the form of Exhibit A or any other form approved
by the Administrative Agent.
"Availability Period" means the Tranche 1 Availability Period,
Tranche 2 Availability Period, Tranche 3 Availability Period, Tranche 4
Availability Period or Tranche 5 Availability Period.
"Available Commitment" means, with respect to each Lender,
its Commitment; provided that the aggregate "Available Commitments" of the
Lucent Lenders shall not at any time exceed the excess, if any, of $500,000,000
over the aggregate principal amount of outstanding Loans and Deferred Interest
that are held by the Lucent Lenders at such time. At any time that there is
more than one Lucent Lender with a Commitment and the "Available Commitments"
of the Lucent Lenders are limited as a result of the foregoing proviso, the
aggregate "Available Commitments" of the Lucent Lenders may be allocated
between the Lucent Lenders as agreed between such Lucent Lenders.
"Board" means the Board of Governors of the Federal
Reserve System of the United States of America.
"Borrower" means WinStar Network Expansion, LLC, a Delaware
limited liability company.
"Borrowing" means a Loan or group of Loans of the same Class
and Type, made, converted or continued on the same date and, in the case of
LIBOR Loans, as to which a single Interest Period is in effect.
"Borrowing Request" means a request by the Borrower
for a Borrowing in accordance with Section 2.03.
6
"Business Day" means any day that is not a Saturday, Sunday
or other day on which commercial banks in New York City are authorized or
required by law to remain closed; provided that, when used in connection with a
LIBOR Loan, the term "Business Day" shall also exclude any day on which banks
are not open for dealings in dollar deposits in the London interbank market.
"Business Plan" means, for any fiscal year, the business plan
of the Parent and the Restricted Subsidiaries for such fiscal year.
"Capital Expenditures" means, for any period, (a) the
additions to property, plant and equipment and other capital expenditures of
the Parent and the Restricted Subsidiaries that are (or would be) set forth in
a consolidated statement of cash flows of the Parent for such period prepared
in accordance with GAAP and (b) Capital Lease Obligations incurred by the
Parent and the Restricted Subsidiaries during such period.
"Capital Lease Obligations" of any Person means the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Change in Control" means (a) the acquisition of beneficial
ownership, directly or indirectly, by any Person or group (within the meaning
of the Securities Exchange Act of 1934 and the rules of the Securities and
Exchange Commission thereunder as in effect on the date hereof), other than Xx.
Xxxxxxx X. Xxxxxxx, Xx., of shares representing more than 35% of the aggregate
ordinary voting power represented by the issued and outstanding capital stock
of the Parent; (b) occupation of a majority of the seats (other than vacant
seats) on the Board of Directors of the Parent by Persons who were neither (i)
nominated by the Board of Directors of the Parent nor (ii) appointed by
directors so nominated; or (c) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person other than the Parent or a
wholly-owned Restricted Subsidiary of any membership interest or other
ownership or equity interest in the Borrower.
7
"Change in Law" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender (or,
for purposes of Section 2.13(b), by any lending office of such Lender or by
such Lender's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
"Class", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are
Tranche 1 Loans, Tranche 2 Loans, Tranche 3 Loans, Tranche 4 Loans or Tranche 5
Loans.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Collateral" means any and all "Collateral", as
defined in the Security Agreement.
"Collateral Agent" means State Street Bank and Trust Company
in its capacity as collateral agent for the Secured Parties (as defined in the
Security Agreement) under the Security Agreement.
"Collateral Cost" means, with respect to any property or
asset, the portion of the Purchase Price attributable to such property or
asset, determined by reference to Lucent's invoice therefor, disregarding
amounts attributable to installation and related services, other intangibles
and sales taxes.
"Collateral Prepayment Amount" means, with respect to any
Collateral Trigger Event an amount equal to the product of (a) the sum of the
aggregate principal amount of the Loans outstanding at the time plus all
Deferred Interest thereon, multiplied by (b) a fraction, the numerator of which
shall be the total Collateral Cost of the properties or assets that are the
subject of the applicable Collateral Trigger Event, and the denominator of
which shall be the total Collateral Cost of all properties and assets
constituting Collateral immediately prior to such Collateral Trigger Event;
provided that if a Collateral Trigger Event described in clause (b) of the
definition of "Collateral Trigger Event" occurs and if the Borrower has
replaced the affected property or asset as
8
contemplated by the proviso to the definition of "Collateral Trigger Event",
but the replacement property or assets do not have a value equivalent to or
greater than the property or asset that was the subject of such Collateral
Trigger Event (determined immediately prior to giving effect to the applicable
event), then the "Collateral Prepayment Amount" in respect of such Collateral
Trigger Event shall be reduced by an amount equal to the Collateral Cost of the
replacement property or assets.
"Collateral Trigger Event" means:
(a) any direct or indirect sale, transfer or other
disposition (including pursuant to a sale and leaseback transaction)
of any property or asset constituting Collateral; or
(b) any casualty or other damage to, or any taking under
power of eminent domain or by condemnation or similar proceeding of,
any property or asset constituting Collateral;
and the aggregate Collateral Cost of all properties and assets affected by any
such events described in clause (a) or (b) above (other than those events as to
which a prepayment has been made pursuant to Section 2.09(c) or, in the case of
events described in clause (b) above, as to which the affected properties or
assets have been repaired, restored or replaced in accordance with the
requirements set forth below) exceeds the Collateral Trigger Threshhold at the
time; provided that an event referred to in clause (b) above shall not
constitute a "Collateral Trigger Event" if (i) the Borrower elects, by notice
to the Administrative Agent, to repair, restore or replace the affected
property or asset, as promptly as practicable, but in any event within 180 days
(or, if it is not reasonably practicable to do so within 180 days, then 360
days), after the Collateral Trigger Threshhold is reached in accordance with
the requirements of this proviso, (ii) all Net Proceeds from such event are
deposited with the Collateral Agent to be held as cash collateral pursuant to
the Security Agreement, subject to release to pay the costs of such repair,
restoration, replacement or purchase as and when due, (iii) the Borrower
promptly commences and diligently pursues such repair, restoration or
replacement and (iv) in the case of a replacement, each property or asset
acquired pursuant to such replacement (A) is acquired by the Borrower pursuant
to the Supply Agreement (if the Supply Agreement is in effect at
9
the time and the property or asset that was the subject of the applicable event
was Lucent Product), (B) has a value equivalent to or greater than the property
or asset that was the subject of the applicable event (determined immediately
prior to giving effect to the applicable event), (C) becomes Collateral
effective upon such replacement, free and clear of all Liens (other than the
Lien of the Security Agreement), and (D) is not financed with any Borrowings
hereunder (except to the extent the purchase price thereof exceeds the greater
of (i) the Collateral Cost of the property or asset subject to such event and
(ii) the Net Proceeds of such event); provided further that, if at the
expiration of the 180-day (or, if applicable, 360-day) period commencing on any
date that the Collateral Trigger Threshhold is reached the Borrower has not
substantially completed the repair, restoration or replacement of the affected
property or asset in accordance with all the requirements of the foregoing
proviso, then a "Collateral Trigger Event" shall be deemed to have occurred at
the expiration of such 180-day (or, if applicable 360-day) period.
"Collateral Trigger Threshhold" means, at any time, an amount
equal to the greater of $5,000,000 or 2.50% of the total Collateral Cost of all
properties and assets constituting Collateral at the time.
"Commitment" means, with respect to each Lender, the
commitment, if any, of such Lender to make Loans hereunder during any
Availability Period, expressed as an amount representing the maximum principal
amount of the Loans to be made by such Lender hereunder, as such commitment may
be (a) reduced from time to time pursuant to Section 2.06 and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04. The initial amount of each Lender's Commitment is set
forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to which
such Lender shall have assumed its Commitment, as applicable. The initial
aggregate amount of the Lenders' Commitments is $2,000,000,000.
"Consolidated Debt Service" means, for any period,
Consolidated Interest Expense for such period plus any scheduled payments of
principal of Indebtedness of the Parent and the Restricted Subsidiaries during
such period.
"Consolidated EBITDA" means, for any period, Consolidated Net
Income for such period (adjusted to exclude all extraordinary items and
Non-Recurring Items), plus,
10
without duplication and to the extent deducted from revenues in determining
Consolidated Net Income, the sum of (a) the aggregate amount of Consolidated
Interest Expense for such period, (b) the aggregate amount of income tax
expense for such period, (c) all amounts attributable to depreciation and
amortization for such period and (d) preferred stock dividends in respect of
any Disqualified Stock for such period, all as determined on a consolidated
basis with respect to the Parent and the Restricted Subsidiaries in accordance
with GAAP.
"Consolidated Indebtedness" means, as of any date of
determination, the aggregate principal amount of Indebtedness (including
Disqualified Stock) of the Parent and the Restricted Subsidiaries outstanding
as of such date determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, the
sum of (a) the interest expense, both expensed and capitalized (including the
interest component in respect of Capital Lease Obligations, but excluding any
such interest expense of any Person for any period that the income (or loss) of
such Person is excluded from the calculation of Consolidated Net Income by
reason of clause (c) of the definition of "Consolidated Net Income"), accrued
by the Parent and the Restricted Subsidiaries during such period plus (b)
preferred stock dividends in respect of Disqualified Stock for such period, in
each case determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, for any period, net income
or loss of the Parent and the Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP; provided that there
shall be excluded (a) the income of any Person in which any other Person (other
than the Parent or any Restricted Subsidiary or any director holding qualifying
shares in compliance with applicable law) has a joint interest, except to the
extent of the amount of dividends or other distributions (including
distributions made as a return of capital or repayment of principal of
advances) actually paid to the Parent or any Restricted Subsidiary by such
Person, (b) the income of any Unrestricted Subsidiary, except to the extent of
the amount of dividends or other distributions (including distributions made as
a return of capital or repayment of principal of advances) actually paid to the
Parent or any Restricted Subsidiary by such Unrestricted Subsidiary during such
period, and (c) the income (or loss) of any Person accrued prior to the date it
becomes
11
a Restricted Subsidiary or is merged into or consolidated with the Parent or
any Restricted Subsidiary or the date such Person's assets are acquired by the
Parent or any Restricted Subsidiary.
"Control" means the possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
"Default" means any event or condition which constitutes an
Event of Default or which upon notice, lapse of time or both would, unless
cured or waived, become an Event of Default.
"Deferred Interest" means any interest on any Loan, or any
interest on any Deferred Interest on such Loan, that is deferred rather than
paid when due as provided in clause (iv) of Section 2.11(d). Deferred Interest
on any Loan shall continue to constitute interest on (and not principal of)
such Loan for all purposes hereof.
"Designated Loan" means any Loan held by any Lender (other
than a Lucent Lender) that has been designated by Lucent as a "Designated Loan"
pursuant to the separate letter agreement among Lucent, the Borrower and the
Parent dated the date of this Agreement.
"Disclosed Matters" means the actions, suits and proceedings
and the environmental matters disclosed in Schedule 3.06.
"Disqualified Stock" means any capital stock of the Parent or
any Restricted Subsidiary which by its terms (or by the terms of any security
into which it is convertible or for which it is exchangeable or exercisable) or
upon the happening of any event (i) matures or is mandatorily redeemable
pursuant to a sinking fund obligation or otherwise, (ii) is convertible or
exchangeable for Indebtedness or Disqualified Stock, (iii) requires the payment
of dividends other than dividends payable solely in additional shares of
capital stock of the Parent (other than Disqualified Stock) or (iv) is
redeemable or subject to required repurchase at the option of the holder
thereof, in whole or in part.
12
"dollars" or "$" refers to lawful money of the United States
of America.
"Effective Date" means the date on which the conditions
specified in Section 4.01 are satisfied (or waived in accordance with Section
9.02).
"Environmental Laws" means all laws, rules, regulations,
codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Parent or any Subsidiary
directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials
into the environment or (e) any contract, agreement or other consensual
arrangement pursuant to which liability is assumed or imposed with respect to
any of the foregoing.
"Equipment User" has the meaning assigned to such term in
Section 6.17.
"Equipment User Agreement" means an agreement among the
Borrower, the Administrative Agent, the Collateral Agent and one or more
Equipment Users, substantially in the form of Exhibit F.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Parent, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
13
"ERISA Event" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b)
the existence with respect to any Plan of an "accumulated funding deficiency"
(as defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Parent or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Parent or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by the Parent or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Parent or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the Parent or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal
Liability or a determination that a Multiemployer Plan is, or is expected to
be, insolvent or in reorganization, within the meaning of Title IV of ERISA.
"Event of Default" has the meaning assigned to such term in
Article VII.
"Excess Cash Flow" means, for any fiscal year of the Parent,
the sum (without duplication) of the following (provided that Excess Cash Flow
shall be zero for any fiscal year that the sum of the following would otherwise
be less than zero):
(a) the Consolidated Net Income of the Parent and the
Restricted Subsidiaries for such fiscal year, adjusted to exclude any
gains or losses attributable to Prepayment Events or Collateral
Trigger Events; plus
(b) depreciation, amortization and other non-cash charges or
losses deducted in determining such Consolidated Net Income for such
fiscal year (including Deferred Interest and any other interest
expense accrued for such fiscal year that is not payable currently in
cash); plus
14
(c) the sum of (i) the amount, if any, by which Net Working
Capital decreased during such fiscal year plus (ii) the amount, if
any, by which the consolidated deferred revenues of the Parent and the
Restricted Subsidiaries increased during such fiscal year plus (iii)
the aggregate principal amount of Capital Lease Obligations and other
Indebtedness incurred by the Parent or any of the Restricted
Subsidiaries during such fiscal year to finance Capital Expenditures,
to the extent that principal payments in respect of such Indebtedness
would not be excluded from clause (f) below when made; minus
(d) the sum of (i) any non-cash gains included in determining
such Consolidated Net Income for such fiscal year plus (ii) the
amount, if any, by which Net Working Capital increased during such
fiscal year plus (iii) the amount, if any, by which the consolidated
deferred revenues of the Parent and its Restricted Subsidiaries
decreased during such fiscal year; minus
(e) Capital Expenditures for such fiscal year; minus
(f) the aggregate principal amount of Indebtedness, and the
aggregate amount of Deferred Interest, repaid or prepaid by the Parent
and the Restricted Subsidiaries during such fiscal year, excluding (i)
Loans and Deferred Interest prepaid pursuant to Section 2.09(b), (c)
or (d), (ii) repayments or prepayments of Indebtedness financed by
incurring other Indebtedness, to the extent that mandatory principal
payments in respect of such other Indebtedness would not be excluded
from this clause (f) when made and (iii) Indebtedness referred to in
clause (ii), (vii), (ix), (x) or (xi) of Section 6.01.
"Excluded Taxes" means, with respect to either Agent, any
Lender or any other recipient of any payment to be made by or on account of any
obligation of the Borrower hereunder, (a) income or franchise taxes imposed on
(or measured by) its net income by the United States of America, or by the
jurisdiction under the laws of which such recipient is organized or in which
its principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction in which the Borrower is located and (c) in the case of a Foreign
Lender (other than an assignee pursuant
15
to a request by the Borrower under Section 2.17(b)), any withholding tax that
is imposed on amounts payable to such Foreign Lender at the time such Foreign
Lender becomes a party to this Agreement (or designates a new lending office)
or is attributable to such Foreign Lender's failure to comply with Section
2.15(e), except to the extent that such Foreign Lender (or its assignor, if
any) was entitled, at the time of designation of a new lending office (or
assignment), to receive additional amounts from the Borrower with respect to
such withholding tax pursuant to Section 2.15(a).
"FCC" means the United States Federal Communications
Commission (and any successor thereto).
"Federal Funds Effective Rate" means, for any day, the
weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for
such day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"Financial Officer" means, with respect to any Person, the
chief financial officer, principal accounting officer, treasurer or controller
of such Person.
"Foreign Lender" means any Lender that is organized under the
laws of a jurisdiction other than the United States of America, any State
thereof or the District of Columbia.
"Foreign Telecommunications Subsidiary" has the meaning
assigned to such term in the definition of "Unrestricted Subsidiary".
"Four Quarter Period" has the meaning assigned to such term
in the definition of "Unrestricted Subsidiary".
"GAAP" means, subject to Section 1.04(b), generally accepted
accounting principles in the United States of America.
16
"Governmental Authority" means the government of the United
States of America, any other nation or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having
the economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided, that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.
"Guarantee Agreement" means the Guarantee and Subordination
Agreement among the Parent, the Guarantor Subsidiaries and the Administrative
Agent, substantially in the form of Exhibit B.
"Guarantor Subsidiaries" means all Restricted Subsidiaries
other than the Borrower, Special Purpose Equipment Subsidiaries, Special Purpose
License Subsidiaries, Special Purpose Financing Subsidiaries and Non-Material
Subsidiaries.
"Hazardous Materials" means all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or asbestos
containing materials, polychlorinated biphenyls, radon gas, infectious or
17
medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.
"Hedging Agreement" means any interest rate protection
agreement, foreign currency exchange agreement, commodity price protection
agreement or other interest or currency exchange rate or commodity price
hedging arrangement.
"Indebtedness" of any Person means, without duplication, (a)
all obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person upon which interest charges are customarily paid,
(d) all obligations of such Person under conditional sale or other title
retention agreements relating to property acquired by such Person, (e) all
obligations of such Person in respect of the deferred purchase price of
property or services (excluding accounts payable incurred in the ordinary
course of business that are not overdue by more than 60 days), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty, (j) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances and
(k) all Disqualified Stock of such Person. The Indebtedness of any Person shall
include the Indebtedness of any other entity (including any partnership in
which such Person is a general partner) to the extent such Person is liable
therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor. The amount
outstanding at any time of any Indebtedness issued with original issue discount
is the face amount of such Indebtedness less the remaining unamortized portion
of the original issue discount of such Indebtedness at such time as determined
in conformity with GAAP.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
18
"Indemnity and Contribution Agreement" means the Indemnity,
Subrogation and Contribution Agreement among the Loan Parties and the
Administrative Agent, substantially in the form of Exhibit C.
"Interest Election Request" means a request by the Borrower
to convert or continue a Borrowing in accordance with Section 2.05.
"Interest Payment Date" means (a) with respect to any ABR
Loan (or Deferred Interest thereon), the last day of each March, June,
September and December and (b) with respect to any LIBOR Loan (or Deferred
Interest thereon), the last day of the Interest Period applicable to the
Borrowing of which such Loan is a part and, in the case of a LIBOR Borrowing
with an Interest Period of more than three months' duration, each day prior to
the last day of such Interest Period that occurs at intervals of three months'
duration after the first day of such Interest Period.
"Interest Period" means, with respect to any LIBOR Borrowing,
the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as the Borrower may elect; provided, that (a) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day and (b) any
Interest Period that commences on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.
"Lenders" means the Persons listed on Schedule 2.01 and any
other Person that shall have become a party hereto pursuant to an Assignment
and Acceptance, other than any such Person that ceases to be a party hereto
pursuant to an Assignment and Acceptance.
19
"Leverage Ratio" means, on any date, the ratio of (a)
Consolidated Indebtedness as of such date to (b) 400% of Consolidated EBITDA
for the fiscal quarter of the Parent ended on such date or, if such date is not
the last day of a fiscal quarter, ended on the last day of the fiscal quarter
of the Parent most recently ended prior to such date.
"LIBOR", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are
bearing interest at a rate determined by reference to the Adjusted LIBO Rate.
"LIBO Rate" means, with respect to any LIBOR Borrowing for
any Interest Period, the rate appearing on Page 3750 of the Dow Xxxxx Markets
Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period, as the rate for dollar
deposits with a maturity comparable to such Interest Period. In the event that
such rate is not available at such time for any reason, then the "LIBO Rate"
with respect to such LIBOR Borrowing for such Interest Period shall be the rate
at which dollar deposits of $5,000,000 and for a maturity comparable to such
Interest Period are offered by the principal London office of the Administrative
Agent (or, if the Administrative Agent at the time is not a commercial bank, any
commercial bank based in New York City selected by the Administrative Agent for
the purpose of quoting such rate, provided that such commercial bank has a
combined capital and surplus and undivided profits of not less than
$500,000,000) in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset, (b) the interest of a vendor or a lessor
under any conditional sale agreement, capital lease or title retention
agreement (or any financing lease having substantially the same economic effect
as any of the foregoing) relating to such asset and (c) in the case of
securities, any purchase option,
20
call or similar right of a third party with respect to such securities.
"Loan Documents" means this Agreement, the Guarantee
Agreement, the Security Agreement and the Indemnity and Contribution Agreement.
"Loan Parties" means the Parent, the Borrower and the
Guarantor Subsidiaries.
"Loans" means the loans made or deemed made to the Borrower
pursuant to this Agreement.
"Lucent" means Lucent Technologies Inc.
"Lucent Lender" means any Lender that is Lucent or an
Affiliate of Lucent.
"Lucent Product" has the meaning assigned to such term in the
Supply Agreement.
"Material Adverse Effect" means a material adverse effect on
(a) the business, condition (financial or otherwise), operations, performance
or properties of the Parent and the Restricted Subsidiaries taken as a whole,
(b) the ability of the Parent or the Borrower to perform any of its material
obligations under any Loan Document or (c) the rights of or benefits available
to the Lenders under any Loan Document.
"Material Indebtedness" means Indebtedness (other than the
Loans), or obligations in respect of one or more Hedging Agreements, of any one
or more of the Loan Parties in an aggregate principal amount exceeding
$10,000,000. For purposes of determining Material Indebtedness, the "principal
amount" of the obligations of a Loan Party in respect of any Hedging Agreement
at any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that such Loan Party would be required to pay if such Hedging
Agreement were terminated at such time.
"Maturity Date" means (a) in respect of the Tranche 1 Loans,
the Tranche 1 Maturity Date, (b) in respect of the Tranche 2 Loans, the Tranche
2 Maturity Date, (c) in respect of the Tranche 3 Loans, the Tranche 3 Maturity
Date, (d) in respect of the Tranche 4 Loans, the Tranche 4 Maturity
21
Date and (e) in respect of the Tranche 5 Loans, the Tranche 5 Maturity Date.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"Net Proceeds" means, with respect to any event (a) the cash
proceeds received in respect of such event including (i) any cash received in
respect of any non-cash proceeds, but only as and when received, (ii) in the
case of a casualty, insurance proceeds, and (iii) in the case of a condemnation
or similar event, condemnation awards and similar payments, net of (b) the sum
of (i) all reasonable fees and out-of-pocket expenses paid by the Parent and
the Restricted Subsidiaries to third parties (other than Affiliates) in
connection with such event, (ii) in the case of a sale or other disposition of
an asset (including pursuant to a casualty or condemnation), the amount of all
payments required to be made by the Parent and the Restricted Subsidiaries as a
result of such event to repay Indebtedness (other than Loans) secured by such
asset or otherwise subject to mandatory prepayment as a result of such event,
and (iii) the amount of all taxes paid (or reasonably estimated to be payable)
by the Parent and the Restricted Subsidiaries, and the amount of any reserves
established by the Parent and the Restricted Subsidiaries to fund contingent
liabilities reasonably estimated to be payable, in each case that are directly
attributable to such event (as determined reasonably and in good faith by the
chief financial officer of the Parent).
"Net Working Capital" means, at any date, (a) the consolidated
current assets of the Parent and the Restricted Subsidiaries as of such date
(excluding cash and Permitted Investments) minus (b) the consolidated current
liabilities of the Parent and the Restricted Subsidiaries as of such date
(excluding current liabilities in respect of Indebtedness), determined on a
consolidated basis in accordance with GAAP. Net Working Capital at any date may
be a positive or negative number. Net Working Capital increases when it becomes
more positive or less negative and decreases when it becomes less positive or
more negative.
"Non-Material Subsidiaries" means, at any time, any Restricted
Subsidiary that has been designated by the Parent as identified on Schedule 3.12
or by written notice to the
22
Administrative Agent as a "Non-Material Subsidiary" and as to which such
designation has not been withdrawn by the Parent by written notice thereof to
the Administrative Agent; provided that (a) the total combined assets of all
Non-Material Subsidiaries and their Restricted Subsidiaries (determined on a
consolidated basis in accordance with GAAP) shall not at any time exceed 5% of
the total assets of the Parent and the Restricted Subsidiaries, (b) the total
combined revenues of all Non-Material Subsidiaries (determined on a
consolidated basis in accordance with GAAP) shall not, for any fiscal quarter,
exceed 5% of the total revenues of the Parent and the Restricted Subsidiaries
for such fiscal quarter and (c) a Non- Material Subsidiary shall not Guarantee
any Indebtedness or other obligations of any other Person. If any of the
criteria set forth in the foregoing proviso are not satisfied, the Parent shall
immediately withdraw its designation with respect to such Non-Material
Subsidiaries as shall be necessary in order for such criteria to be satisfied.
"Non-Recurring Items" means, for any period, (a) all
non-recurring items that do not involve any payment of cash by the Parent or
any Restricted Subsidiary during such period or any future period and (b)
non-recurring items set forth on the Parent's consolidated statement of
operations for such period below the operating income line in respect of (i)
gains or losses on sales or dispositions of assets outside the ordinary course
of business, (ii) discontinued operations, (iii) the effects of changes in
accounting principles or methods, (iv) write-downs on any investments of the
Parent or any Restricted Subsidiary in any Person (other than the Parent or a
Restricted Subsidiary) and (v) any restructuring charges, including the amount
of any such restructuring charge to cover cash payouts to laid-off employees of
the Parent or a Restricted Subsidiary.
"Obligations" has the meaning assigned to such term
in the Security Agreement.
"Other Service Licenses" means Service Licenses
other than Special Service Licenses.
"Other Taxes" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.
23
"Parent" means WinStar Communications, Inc., a
Delaware corporation.
"PBGC" means the Pension Benefit Guaranty Corporation
referred to and defined in ERISA and any successor entity performing similar
functions.
"Perfection Certificate" means a certificate in the form of
Exhibit D or any other form approved by the Collateral Agent.
"Permitted Acquisition" means any acquisition (other than an
acquisition described on Schedule 6.04A) of a Special Service License or all or
substantially all the assets of, or a majority of the shares or other equity
interests in, a Person or a division or line of business of a Person if,
immediately after giving effect thereto, (a) no Default has occurred and is
continuing or would result therefrom, (b) all transactions related thereto have
been consummated in all material respects in accordance with applicable laws,
(c) in the case of an acquisition of shares or other equity interests in a
Person, such acquisition results in such Person being merged with and into a
Restricted Subsidiary or becoming a Restricted Subsidiary of the Parent and (i)
in the case of an acquisition of shares or other equity interests in a Person
that is organized under the laws of any jurisdiction in the United States of
America or a substantial portion of the assets of which are located in the
United States of America, at least 80% of all shares or other equity interests
in all Restricted Subsidiaries resulting from such acquisition are owned,
directly or indirectly, by the Parent, or (ii) in the case of any other such
acquisition, at least a majority of all shares or other equity interests in all
Restricted Subsidiaries resulting from such acquisition are owned, directly or
indirectly, by the Parent, (d) the Parent and the Restricted Subsidiaries are
in compliance, on a pro forma basis after giving effect to such acquisition,
with the covenants contained in Sections 6.11, 6.12, 6.13, 6.14, 6.15 and 6.16
recomputed as of the last day of the most recently ended fiscal quarter of the
Parent for which financial statements are available as if such acquisition had
occurred on the first day of each relevant period for testing such compliance,
(e) the consideration for such acquisition shall have consisted solely of
common stock or Permitted Preferred Stock of the Parent (including options,
warrants or other rights to purchase shares of such common stock or Permitted
Preferred Stock), cash, Indebtedness of the Parent or a
24
Restricted Subsidiary, or a combination of the foregoing, (f) after giving
effect to such acquisition, the aggregate amount of cash consideration paid in
connection with all acquisitions constituting "Permitted Acquisitions"
(disregarding amounts paid or received pursuant to customary purchase price
adjustments and indemnification provisions, and net of all Net Proceeds
previously received from sales of assets acquired pursuant to Permitted
Acquisitions in accordance with clause (viii) of Section 6.04(b)), plus the
aggregate principal amount of all Acquisition Indebtedness issued as
consideration in connection with or incurred or assumed in connection with or
otherwise resulting from such acquisitions (on a cumulative basis, including
Acquisition Indebtedness previously repaid or prepaid), shall not exceed the
Acquisition Basket Amount at the time (provided that the aggregate principal
amount of all such Acquisition Indebtedness shall not exceed 33 1/3% of the
Acquisition Basket Amount), and (g) the Parent has delivered to the
Administrative Agent, not less than five Business Days prior to such
acquisition, an officer's certificate to the effect set forth in clauses (a)
through (f) above, together with all relevant financial information for the
business or entity being acquired.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes, assessments, governmental
charges or similar claims that are not yet due or are being contested
in compliance with Section 5.05;
(b) statutory or common law Liens of landlords and carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen and other
similar Liens, arising in the ordinary course of business and securing
obligations that are not yet delinquent or are being contested in
compliance with Section 5.05;
(c) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security;
(d) Liens incurred or deposits made to secure the performance
of tenders, bids, leases, statutory or regulatory obligations, surety
and appeal bonds, government contracts, performance and
return-of-money
25
bonds and other obligations of a like nature, in each case in the
ordinary course of business, and a bank's unexercised right of set-off
with respect to deposits made in the ordinary course;
(e) judgment liens in respect of judgments that do not
constitute an Event of Default under clause (k) of Article VII;
(f) easements, municipal and zoning ordinances, rights-of-way
and similar encumbrances on or defects or other irregularities of
title to real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do
not materially detract from the value of the affected property or
interfere with the ordinary conduct of business of the Parent or any
Restricted Subsidiary;
(g) interests of lessees under leases or subleases granted by
the Parent or a Restricted Subsidiary as lessor that do not materially
interfere with the ordinary course of business of the Parent and the
Restricted Subsidiaries, taken as a whole;
(h) Liens encumbering property or assets under construction
arising from progress or partial payments made by a customer of the
Parent or a Restricted Subsidiary relating to such property or assets;
(i) any interest or title of a lessor in any property subject
to any lease otherwise permitted by the Loan Documents; and
(j) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection
with the importation of goods;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of
and interest on which are unconditionally guaranteed by, the United
States of America (or by any agency thereof to the extent such
obligations are backed
26
by the full faith and credit of the United States of America), in each
case maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days
from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P or from
Xxxxx'x;
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 days from the date
of acquisition thereof issued or guaranteed by or placed with, and
money market deposit accounts issued or offered by, any domestic
office of any commercial bank organized under the laws of the United
States of America or any State thereof which has a combined capital
and surplus and undivided profits of not less than $500,000,000; and
(d) fully collateralized repurchase agreements with a term of
not more than 30 days for securities described in clause (a) above and
entered into with a financial institution satisfying the criteria
described in clause (c) above.
"Permitted Preferred Stock" means capital stock of the Parent
(other than Disqualified Stock) of any class or classes (however designated)
that is preferred as to the payment of dividends, or as to the distribution of
assets upon any voluntary or involuntary liquidation or dissolution of the
Parent, over shares of capital stock of any other class of the Parent.
"Permitted Receivables Financing" means an arrangement for
financing accounts receivable of one or more Restricted Subsidiaries pursuant
to which such accounts receivable are sold, without recourse (except as
customary in accounts receivable financing arrangements), to a Special Purpose
Financing Subsidiary or to banks or other financial institutions pursuant to a
"true sale" transaction and, in the case of a sale to a Special Purpose
Financing Subsidiary, such Subsidiary either resells such accounts receivable
to banks or other financial institutions or borrows under a credit facility
provided to it by banks or other financial institutions and secured by such
accounts receivable.
27
"Permitted Receivables Indebtedness" means Indebtedness of
one or more Restricted Subsidiaries for borrowed money under one or more
revolving credit facilities; provided that (a) such Indebtedness is for working
capital purposes and is secured by accounts receivable of one or more
Restricted Subsidiaries and (b) the aggregate principal amount of all such
Indebtedness outstanding at any time does not exceed 80% of such accounts
receivable net of reserves and allowances for doubtful accounts, determined in
accordance with GAAP.
"Person" means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
Governmental Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower
or any ERISA Affiliate is (or, if such plan were terminated, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA.
"Prepayment Event" means:
(a) any direct or indirect sale, transfer or other
disposition after the Effective Date (including pursuant to a sale and
leaseback transaction) of any property or asset (other than
Collateral) of the Parent or any Restricted Subsidiary (other than
dispositions described in clauses (i), (ii), (iii), (v), (vi), (viii),
(x), (xii) and (to the extent such sales are made in the ordinary
course of business) (ix) of Section 6.04(b)); or
(b) any casualty or other insured damage to, or any taking
under power of eminent domain or by condemnation or similar proceeding
of, any property or asset (other than Collateral) of the Parent or any
Restricted Subsidiary after the Effective Date;
provided that (i) such events shall not constitute "Prepayment Events" to the
extent that the aggregate Net Proceeds from all such events are less than
$15,000,000 (or on and after January 1, 2002, $30,000,000) during any fiscal
year of the Parent, (ii) any such event referred to in clause (a) above shall
not constitute a "Prepayment Event" if the Parent elects (by notice to the
Administrative Agent within five Business
28
Days after receipt of the Net Proceeds of such event) to reinvest the Net
Proceeds of such event in Additional Assets as promptly as practicable, but in
any event within 180 days, after the receipt of the Net Proceeds of such event
and (iii) any such event referred to in clause (b) above shall not constitute a
"Prepayment Event" if the Parent elects (by notice to the Administrative Agent
within five Business Days after receipt of the Net Proceeds of such event) to
apply the Net Proceeds of such event to repair, restore or replace the affected
property or asset or to reinvest such Net Proceeds in Additional Assets as
promptly as practicable, but in any event within 180 days, after the receipt of
the Net Proceeds of such event; provided further that, if at the expiration of
the 180-day period referred to in clause (ii) or (iii) above less than all the
Net Proceeds of such event have been reinvested or applied as provided therein,
then a "Prepayment Event" shall be deemed to have occurred at the expiration of
such 180-day period with Net Proceeds equal to the Net Proceeds that have not
been so reinvested or applied. Notwithstanding the foregoing, any Asset Sale or
similar event that would not otherwise constitute a Prepayment Event hereunder
but, under the terms of any indenture or other agreement governing any Material
Indebtedness, would require any prepayment or redemption of, or offer to prepay
or redeem, any such Indebtedness to the extent that the Net Proceeds therefrom
are not reinvested within a specified period of time, shall constitute a
Prepayment Event to the extent that the Net Proceeds therefrom are not
reinvested in accordance with clause (ii) above.
"Prime Rate" means the rate of interest per annum published
from time to time in the "Money Rates" column (or any successor column) of The
Wall Street Journal as the prime rate or, if such rate shall cease to be so
published or is not available for any reason, the rate of interest publicly
announced from time to time by any commercial bank based in New York City
selected by the Administrative Agent for the purpose of quoting such rate,
provided such commercial bank has a combined capital and surplus and undivided
profits of not less than $500,000,000. Each change in the Prime Rate shall be
effective from and including the date such change is published.
"Purchase Money Debt Limit" means (a) during the period prior
to January 1, 2003, $________ and (b) during the period on and after January 1,
2003, and prior to January 1, 2004, $_________; provided that the Purchase
Money Debt Limit
29
in effect at any time shall be increased upon any termination or reduction of
the Commitments pursuant to Section 2.06(d) by an amount equal to the
Commitments so terminated or the amount by which the Commitments are so
reduced, as the case may be.
"Purchase Price" means amounts paid or payable for Products
(as defined in the Supply Agreement) pursuant to invoices delivered pursuant to
the Supply Agreement.
"Register" has the meaning set forth in Section 9.04.
"Related Parties" means, with respect to any specified
Person, such Person's Affiliates and the respective directors, officers,
employees, agents and advisors of such Person and such Person's Affiliates.
"Repayment" means, in respect of any Indebtedness, the direct
or indirect repayment, prepayment, redemption, purchase, acquisition,
defeasance, retirement or other satisfaction of the principal of such
Indebtedness, in whole or in part, whether optional or mandatory. "Repay" has a
meaning correlative thereto.
"Required Lenders" means, at any time, Lenders having
outstanding Loans, Deferred Interest and Commitments representing more than 50%
of the sum of the total outstanding Loans, Deferred Interest and Commitments at
such time; provided that at any time (on or after the first date on which
Lenders (other than Lucent Lenders) hold Commitments, Loans and Deferred
Interest aggregating $100,000,000 or more) that Lucent Lenders have outstanding
Loans, Deferred Interest and Commitments representing more than 50% of the sum
of all outstanding Loans, Deferred Interest and Commitments at such time,
"Required Lenders" means each of (i) the Lucent Lenders at such time and (ii)
other Lenders holding more than 50% of the outstanding Loans, Deferred Interest
and Commitments (excluding those held by Lucent Lenders) at such time.
"Restricted Payment" means (a) any dividend or other
distribution (whether in cash, securities or other property) with respect to
any shares of any class of capital stock of the Parent or any Restricted
Subsidiary, (b) any Repayment of any Subordinated Indebtedness or (c) any
payment (whether in cash, securities or other property), including any sinking
fund or similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancelation or
30
termination of any shares of any class of capital stock of the Parent or any
Restricted Subsidiary or any option, warrant or other right to acquire any such
shares of capital stock of the Parent or any Restricted Subsidiary.
"Restricted Subsidiary" means any Subsidiary that is
not an Unrestricted Subsidiary.
"S&P" means Standard & Poor's.
"Secured Indebtedness" means any Indebtedness of the Parent
or any Restricted Subsidiary that is secured by a Lien on any asset of the
Parent or any Subsidiary.
"Security Agreement" means the Security Agreement between the
Borrower and the Collateral Agent, substantially in the form of Exhibit E.
"Service Licenses" means licenses, permits, certifications
and other authorizations issued or granted by the FCC or state or other
regulatory authorities permitting or authorizing utilization of radio waves,
air waves or portions of the air wave or radio wave spectrum for purposes of
transmitting sound, data, video or other forms of communication, including
authorizations to provide personal communications service, cellular service or
local multipoint distribution service or to be a common carrier or to provide
local, intralata or interlata communications service.
"Special Purpose Equipment Subsidiary" means any Restricted
Subsidiary that is established to own equipment (other than assets constituting
Collateral or other assets the removal or loss of which would adversely affect
the value of assets constituting Collateral) and to finance the acquisition of
such equipment by incurring Indebtedness prior to or within 90 days after the
acquisition of such equipment; provided that (a) the only Indebtedness of such
Restricted Subsidiary is Indebtedness incurred to finance the acquisition of
such equipment and such Indebtedness is otherwise permitted by this Agreement,
(b) such Indebtedness does not exceed the cost of such equipment (plus the
amount of any cash proceeds of such Indebtedness held by such Restricted
Subsidiary pending purchase of equipment to be purchased with such proceeds)
and finances not less than 80% of the cost thereof, (c) such Restricted
Subsidiary does not own any assets other than the equipment so financed, other
immaterial assets incidental to the ownership of such equipment, cash proceeds
of such
31
Indebtedness (and Permitted Investments made with such proceeds) pending the
purchase of such equipment with such proceeds and rights as lessor under any
leases of such equipment and (d) such Restricted Subsidiary does not engage in
any other activity (other than activities incidental to the ownership,
financing, sale and leasing of such equipment); provided further that any such
Restricted Subsidiary shall cease to constitute a "Special Purpose Equipment
Subsidiary" when all such Indebtedness of such Restricted Subsidiary has been
repaid. Each of WEC and WEC II shall constitute a Special Purpose Equipment
Subsidiary so long as it shall satisfy the foregoing criteria.
"Special Purpose Financing Subsidiary" means any Restricted
Subsidiary that is established in connection with a Permitted Receivables
Financing; provided that (a) the activities of such Restricted Subsidiary are
limited to the purchase of accounts receivable without recourse to the Parent
or any other Restricted Subsidiary, the resale or financing thereof pursuant to
such Permitted Receivables Financing and activities incidental thereto and (b)
such Restricted Subsidiary does not have any Indebtedness other than
Indebtedness incurred to finance accounts receivable purchased by it.
"Special Purpose License Subsidiary" means any Restricted
Subsidiary that is established to own or hold one or more Service Licenses for
the telecommunications business conducted by one or more other Restricted
Subsidiaries; provided that such Restricted Subsidiary (a) does not own any
other assets (other than immaterial assets incidental to the ownership of such
Service Licenses), (b) does not engage in any other activity (other than
activities incidental to the ownership of such Service Licenses) and (c) does
not have any Indebtedness.
"Special Service Licenses" means Service Licenses that are
limited in number for a specified area, territory or market, including Service
Licenses for personal communications service, cellular service or other mobile
wireless service. Special Service Licenses do not include Service Licenses for
the 38GHz radio spectrum, fixed local multipoint distribution service or for
other fixed wireless services.
"Statutory Reserve Rate" means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate
32
of the maximum reserve percentages (including any marginal, special, emergency
or supplemental reserves) expressed as a decimal established by the Board to
which any commercial banks subject to regulation by the Board are subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D. LIBOR
Loans shall be deemed to constitute eurocurrency funding and to be subject to
such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve
Rate shall be adjusted automatically on and as of the effective date of any
change in any reserve percentage.
"Subordinated Indebtedness" means any Indebtedness of the
Parent or any Restricted Subsidiary (other than Indebtedness owing to the
Parent or a Restricted Subsidiary) that is, by its terms, subordinated in right
of payment to the payment of any of the Obligations.
"subsidiary" means, with respect to any Person (the "parent")
at any date, any corporation, limited liability company, partnership,
association or other entity of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary
voting power or, in the case of a partnership, more than 50% of the general
partnership interests are, as of such date, owned, controlled or held by the
parent or one or more subsidiaries of the parent or by the parent and one or
more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Parent.
"Supply Agreement" means the Supply Agreement dated as of
October 21, 1998 between Lucent and the Parent.
"Taxes" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any
Governmental Authority.
"Telecommunications Assets" means any (i) entity or business
substantially all the revenues of which are derived from (a) providing
transmission of sound, data or video; (b) the sale or provision of phone cards,
"800" services, voice mail, switching, enhanced telecommunications services,
33
telephone directory or telephone number information services or
telecommunications network intelligence; or (c) any business ancillary or
directly related to the businesses referred to in clause (a) or (b) above and
(ii) any assets used primarily to effect such transmission or provide the
products or services referred to in clause (a) or (b) above and any directly
related or ancillary assets, including licenses and applications, bids and
agreements to acquire licenses, or other authority to provide transmission
services previously granted, or to be granted, by the FCC or state or other
regulatory authorities.
"Telecommunications Subsidiary" means (i) WinStar Gateway
Network, Inc., WinStar Wireless, Inc., WinStar Milliwave, Inc., WinStar Locate,
Inc., and WinStar Wireless Fiber Corp. and, in each case, its successors and
(ii) any other Restricted Subsidiary that holds more than a de minimis
amount of Telecommunications Assets.
"Total Capitalization" means, as of any date of
determination, the sum of (a) Consolidated Indebtedness as of such date plus
(b) the amount of paid in capital of the Parent on such date determined on a
consolidated basis in accordance with GAAP plus (c), if positive, the retained
earnings of the Parent on such date determined on a consolidated basis in
accordance with GAAP.
"Tranche 1 Availability Period" means the period from and
including the Effective Date to but excluding the earlier of the Tranche 1
Availability Termination Date and the date of termination of the Commitments.
"Tranche 1 Availability Termination Date" means the earlier
of (i) the first anniversary of the Effective Date and (ii) the date the
Commitments are fully drawn.
"Tranche 1 Loans" means Loans made or deemed made pursuant to
this Agreement during the Tranche 1 Availability Period.
"Tranche 1 Maturity Date" means the date that is the
sixteenth scheduled Tranche 1 Payment Date.
"Tranche 1 Payment Date" means each March 31, June 30,
September 30 and December 31, commencing on and including the first such date
that occurs after the fourth
34
anniversary of the Effective Date, and ending on and including
the Tranche 1 Maturity Date.
"Tranche 2 Availability Period" means the period from and
including the Tranche 1 Availability Termination Date to but excluding the
earlier of the Tranche 2 Availability Termination Date and the date of
termination of the Commitments.
"Tranche 2 Availability Termination Date" means the earlier
of (i) the second anniversary of the Effective Date and (ii) the date the
Commitments are fully drawn.
"Tranche 2 Loans" means Loans made or deemed made pursuant to
this Agreement during the Tranche 2 Availability Period.
"Tranche 2 Maturity Date" means the date that is the
sixteenth scheduled Tranche 2 Payment Date.
"Tranche 2 Payment Date" means each March 31, June 30,
September 30 and December 31, commencing on and including the first such date
that occurs after the fourth anniversary of the first day of the Tranche 2
Availability Period, and ending on and including the Tranche 2 Maturity Date.
"Tranche 3 Availability Period" means the period from and
including the Tranche 2 Availability Termination Date to but excluding the
earlier of the Tranche 3 Availability Termination Date and the date of
termination of the Commitments.
"Tranche 3 Availability Termination Date" means the earlier
of (i) the third anniversary of the Effective Date and (ii) the date the
Commitments are fully drawn.
"Tranche 3 Loans" means Loans made or deemed made pursuant to
this Agreement during the Tranche 3 Availability Period.
"Tranche 3 Maturity Date" means the date that is the
sixteenth scheduled Tranche 3 Payment Date.
"Tranche 3 Payment Date" means each March 31, June 30,
September 30 and December 31, commencing on and including the first such date
that occurs after the fourth
35
anniversary of the first day of the Tranche 3 Availability Period, and ending
on and including the Tranche 3 Maturity Date.
"Tranche 4 Availability Period" means the period from and
including the Tranche 3 Availability Termination Date to but excluding the
earlier of the Tranche 4 Availability Termination Date and the date of
termination of the Commitments.
"Tranche 4 Availability Termination Date" means the earlier
of (i) the fourth anniversary of the Effective Date and (ii) the date the
Commitments are fully drawn.
"Tranche 4 Loans" means Loans made or deemed made pursuant to
this Agreement during the Tranche 4 Availability Period.
"Tranche 4 Maturity Date" means the date that is the
sixteenth scheduled Tranche 4 Payment Date.
"Tranche 4 Payment Date" means each March 31, June 30,
September 30 and December 31, commencing on and including the first such date
that occurs after the fourth anniversary of the first day of the Tranche 4
Availability Period, and ending on and including the Tranche 4 Maturity Date.
"Tranche 5 Availability Period" means the period from and
including the Tranche 4 Availability Termination Date to but excluding the
earlier of the Tranche 5 Availability Termination Date and the date of
termination of the Commitments.
"Tranche 5 Availability Termination Date" means the earlier
of (i) the fifth anniversary of the Effective Date and (ii) the date the
Commitments are fully drawn.
"Tranche 5 Loans" means Loans made or deemed made pursuant to
this Agreement during the Tranche 5 Availability Period.
"Tranche 5 Maturity Date" means the date that is the
sixteenth scheduled Tranche 5 Payment Date.
"Tranche 5 Payment Date" means each March 31, June 30,
September 30 and December 31, commencing on and
36
including the first such date that occurs after the fourth anniversary of the
first day of the Tranche 5 Availability Period, and ending on and including the
Tranche 5 Maturity Date.
"Transactions" means the execution, delivery and performance
by each Loan Party of the Loan Documents to which it is to be a party, the
borrowing of Loans and the use of the proceeds thereof.
"Type", when used in reference to any Loan or Borrowing,
refers to whether the rate of interest on such Loan, or on the Loans comprising
such Borrowing, is determined by reference to the Adjusted LIBO Rate or the
Alternate Base Rate.
"Unrestricted Subsidiary" means (i) any Subsidiary that at
the time of determination shall be designated an Unrestricted Subsidiary by the
Board of Directors of the Parent in the manner provided below and (ii) any
Subsidiary of an Unrestricted Subsidiary. The Board of Directors of the Parent
may designate any Restricted Subsidiary (including any newly acquired or newly
formed Subsidiary), other than the Borrower, a Guarantor Subsidiary, a Special
Purpose Equipment Subsidiary or a Special Purpose License Subsidiary, to be an
Unrestricted Subsidiary unless such Subsidiary owns any capital stock of, or
owns or holds any Lien on any property of, the Parent or any Restricted
Subsidiary; provided, that neither the Parent nor the Restricted Subsidiaries
has any Guarantee of any Indebtedness of such Subsidiary outstanding at the
time of such designation and either (A) the Subsidiary to be so designated has
total assets of $1,000 or less or (B) if such Subsidiary has assets greater
than $1,000, that such designation would be permitted under the provisions of
Section 6.04. Notwithstanding the foregoing, WinStar New Media Company, Inc.,
WinStar Credit Corp., WinStar Multichannel Corp., WinStar LHC2, LLC and WinStar
Global Products, Inc. and their direct and indirect subsidiaries are
Unrestricted Subsidiaries. The Board of Directors of the Parent may designate
any Unrestricted Subsidiary to be a Restricted Subsidiary; provided, that
immediately after giving effect to such designation (x) except with respect to
such designation of a Foreign Telecommunications Subsidiary, the Leverage Ratio
is greater than zero and less than 5.0 to 1.0 and (y) no Default shall have
occurred and be continuing. Any such designation by the Board of Directors of
the Parent shall be evidenced to the Administrative Agent by filing with the
37
Administrative Agent a certified copy of the resolution of the Board of
Directors of the Parent giving effect to such designation and a certificate of
a Financial Officer of the Parent certifying that such designation complied
with the foregoing conditions. Anything to the contrary contained in this
Agreement notwithstanding, no Telecommunications Subsidiary may be designated
an Unrestricted Subsidiary unless (a) such Telecommunications Subsidiary is
organized in a jurisdiction outside the United States of America and
substantially all of its assets and operations are located and conducted
outside the United States of America or (b) such Telecommunications Subsidiary
is a holding company and substantially all its assets consist of investments in
Telecommunications Subsidiaries described in clause (a) above (each such
Subsidiary described in clause (a) and (b) above, a "Foreign Telecommunication
Subsidiary"). For purposes of this definition, the Leverage Ratio shall be
computed at the end of the most recent fiscal quarter for which financial
statements were furnished to the Administrative Agent pursuant to Section
5.01(a) or (b). For purposes of this definition, in calculating the Leverage
Ratio (x) pro forma effect shall be given to any Indebtedness incurred from the
beginning of the period of four consecutive quarters of the Parent ended on the
date of such computation, or if such date is not the last day of a fiscal
quarter, ended on the last day of the fiscal quarter of the Parent most
recently ended prior to such date (any such four full fiscal quarter period
being referred to herein as a "Four Quarter Period") through the date of such
designation (including any Indebtedness incurred on the date of such
designation), to the extent outstanding on the date of such designation, (y) if
during the period commencing on the first day of such Four Quarter Period
through the date of such designation (the "Reference Period"), the Parent or
any of the Restricted Subsidiaries shall have engaged in any Asset Sale,
Consolidated EBITDA for such period shall be reduced by an amount equal to
Consolidated EBITDA (if positive), or increased by an amount equal to
Consolidated EBITDA (if negative), directly attributable to the assets which
are the subject of such Asset Sale and any related retirement of Indebtedness
as if such Asset Sale and related retirement of Indebtedness has occurred on
the first day of such Reference Period or (z) if during such Reference Period,
the Parent or any of the Restricted Subsidiaries shall have made any such Asset
Acquisition, Consolidated EBITDA shall be calculated on a pro forma basis as if
such Asset Acquisition and any incurrence of Indebtedness to finance such Asset
Acquisition had taken place on the first day of such Reference Period.
38
"WEC" means WinStar Equipment Corp., a Delaware
corporation.
"WEC II" means WinStar Equipment II Corp., a
Delaware corporation.
"Withdrawal Liability" means liability to a Multiemployer
Plan as a result of a complete or partial withdrawal from such Multiemployer
Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For
purposes of this Agreement, Loans may be classified and referred to by Class
(e.g., a "Tranche 1 Loan") or by Type (e.g., a "LIBOR Loan") or by Class and
Type (e.g., a "Tranche 1 LIBOR Loan"). Borrowings also may be classified and
referred to by Class (e.g., a "Tranche 1 Borrowing") or by Type (e.g., a "LIBOR
Borrowing") or by Class and Type (e.g., a "Tranche 1 LIBOR Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms
herein shall apply equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase
"without limitation". The word "will" shall be construed to have the same
meaning and effect as the word "shall". Unless the context requires otherwise
(a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument
or other document as from time to time amended, supplemented or otherwise
modified (subject to any restrictions on such amendments, supplements or
modifications set forth herein), (b) any reference herein to any Person shall
be construed to include such Person's successors and assigns, (c) the words
"herein", "hereof" and "hereunder", and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (d) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement and (e) the words "asset" and "property" shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts, contract rights, licenses and intellectual property.
39
SECTION 1.04. Accounting Terms; GAAP. (a) Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time; provided
that, if the Parent notifies the Administrative Agent that the Parent requests
an amendment to any provision hereof to eliminate the effect of any change
occurring after the date hereof in GAAP or in the application thereof on the
operation of such provision (or if the Administrative Agent notifies the Parent
that the Required Lenders request an amendment to any provision hereof for such
purpose), regardless of whether any such notice is given before or after such
change in GAAP or in the application thereof, then such provision shall be
interpreted on the basis of GAAP as in effect and applied immediately before
such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
(b) Each reference herein to any financial term, definition
or computation that is to be calculated for or with respect to the Parent and
the Restricted Subsidiaries on a consolidated basis in accordance with GAAP
shall be calculated excluding and without giving effect to any consolidated
subsidiary of the Parent that is not a Restricted Subsidiary (including
Unrestricted Subsidiaries) or any investment therein or earnings thereon,
except to the extent otherwise expressly provided herein.
ARTICLE II
The Loans
SECTION 2.01. Commitments. Subject to the terms and
conditions set forth herein, each Lender with an Available Commitment agrees to
make Loans to the Borrower at any time and from time to time during each
Availability Period in an aggregate principal amount not exceeding its
remaining Available Commitment at the time. Amounts repaid in respect of Loans
may not be reborrowed.
SECTION 2.02. Loans and Borrowings. (a) Each Loan
shall be made as part of a Borrowing consisting of Loans of
the same Class and Type made by the Lenders ratably in
accordance with their respective Available Commitments. The
failure of any Lender to make any Loan required to be made by
it shall not relieve any other Lender of its obligations
40
hereunder; provided that the Commitments of the Lenders are several and no
Lender shall be responsible for any other Lender's failure to make Loans as
required.
(b) Subject to Section 2.12, each Borrowing shall be
comprised entirely of LIBOR Loans or ABR Loans as the Borrower may request in
accordance herewith. Each Lender at its option may make any LIBOR Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of the Borrower to repay such Loan in accordance with the terms of this
Agreement.
(c) At the commencement of each Interest Period for any LIBOR
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $100,000 and not less than $5,000,000. Borrowings of more than one
Type and Class may be outstanding at the same time; provided that there shall
not be more than 12 LIBOR Borrowings of the same Class outstanding at the same
time.
(d) Notwithstanding any other provision of this Agreement,
the Borrower shall not be entitled to request, or to elect to convert or
continue, any Borrowing as a LIBOR Borrowing if the Interest Period requested
with respect thereto would end after the Maturity Date for the Loans included
in such Borrowing.
SECTION 2.03. Requests for Borrowings. To request a
Borrowing, the Borrower shall notify the Administrative Agent of such request
by telephone (a) in the case of a LIBOR Borrowing, not later than 11:00 a.m.,
New York City time, three Business Days before the date of the proposed
Borrowing or (b) in the case of an ABR Borrowing, not later than 11:00 a.m.,
New York City time, one Business Day before the date of the proposed Borrowing;
provided that (i) the Borrower may make only one request for a Borrowing in any
single calendar month (it being understood that all Borrowings made by the
Borrower on the same date shall be treated as a single request for a Borrowing
for purposes of this limitation) and (ii) if any Lucent Lender has an Available
Commitment at the time of such Borrowing and any portion of the proceeds of
such Borrowing to be funded by such Lucent Lender would be required to be
funded by such Lucent Lender other than as a credit against amounts owing to
Lucent or an Affiliate of Lucent as provided in Section 2.04, then the
applicable Borrowing Request shall be made not later than five Business Days
before
41
the date of the proposed Borrowing (in the case of a LIBOR Borrowing) or three
Business Days before the date of the proposed Borrowing (in the case of an ABR
Borrowing). Each such telephonic Borrowing Request shall be irrevocable and
shall be confirmed promptly by hand delivery or telecopy to the Administrative
Agent of a written Borrowing Request in a form approved by the Administrative
Agent and signed by the Borrower. Each such telephonic and written Borrowing
Request shall specify the following information in compliance with Section
2.02:
(i) the aggregate amount of such Borrowing and a reasonably
detailed description of the use of the proceeds therefrom (and each
written Borrowing Request shall attach copies of all invoices to be
paid with such proceeds) and indicating the portion, if any, of such
Borrowing that is financing the Purchase Price of any Third Party
Products (as defined in the Supply Agreement);
(ii) the date of such Borrowing, which shall be a Business
Day;
(iii) whether such Borrowing is to be a LIBOR Borrowing or an
ABR Borrowing;
(iv) in the case of a LIBOR Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated
by the definition of the term "Interest Period"; and
(v) the location and number of the account or accounts to
which funds (if any) are to be disbursed, which shall comply with the
requirements of Section 2.04.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested LIBOR Borrowing, then the Borrower shall be deemed to
have selected an Interest Period of one month's duration. Promptly following
receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender with an Available Commitment of
the details thereof and of the amount of such Lender's Loan to be made as part
of the requested Borrowing.
42
SECTION 2.04. Funding of Borrowings. (a) Each Lender with an
Available Commitment shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds by 12:00
noon, New York City time, to the account of the Administrative Agent most
recently designated by it for such purpose by notice to the Lenders. The
Administrative Agent will make such Loans available to the Borrower by promptly
crediting the amounts so received, in like funds, to an account of the Borrower
maintained with the Administrative Agent in New York City and designated by the
Borrower in the applicable Borrowing Request. Notwithstanding the foregoing, if
the proceeds of any Borrowing are to be used to make any payment to or for the
account of Lucent or any Affiliate thereof (i) if any Lucent Lender has an
Available Commitment, then such Lucent Lender may make its Loan by crediting
the amount thereof against the payment obligations to Lucent or any such
Affiliate and shall be deemed to have made a Loan in the amount of such credit
and (ii) the Administrative Agent will make the Loans of the other Lenders
available to the Borrower by promptly crediting the amounts so received from
such other Lenders, in immediately available funds, to an account of Lucent
maintained with the Administrative Agent for such purpose, to the extent of the
proceeds of such Loans designated to be used to make payments to Lucent or any
of its Affiliates (after giving effect to any credits pursuant to clause (i)
above) and the balance, if any, of such proceeds shall be made available to the
Borrower as provided in the preceding sentence.
(b) Unless the Administrative Agent shall have received
notice from a Lender prior to the proposed date of any Borrowing that such
Lender will not make available to the Administrative Agent such Lender's share
of such Borrowing, the Administrative Agent may assume that such Lender has
made such share available on such date in accordance with paragraph (a) of this
Section and may, in reliance upon such assumption, make available to the
Borrower a corresponding amount. In such event, if a Lender has not in fact
made its share of the applicable Borrowing available to the Administrative
Agent, then the applicable Lender and the Borrower severally agree to pay to
the Administrative Agent forthwith on demand such corresponding amount with
interest thereon, for each day from and including the date such amount is made
available to the Borrower to but excluding the date of payment to the
Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with
43
banking industry rules on interbank compensation or (ii) in the case of the
Borrower, the interest rate applicable to ABR Loans of the same Class. If such
Lender pays such amount to the Administrative Agent, then such amount shall
constitute such Lender's Loan included in such Borrowing.
SECTION 2.05. Interest Elections. (a) Each Borrowing
initially shall be of the Type specified in the applicable Borrowing Request
and, in the case of a LIBOR Borrowing, shall have an initial Interest Period as
specified in such Borrowing Request. Thereafter, the Borrower may elect to
convert such Borrowing to a different Type or to continue such Borrowing and,
in the case of a LIBOR Borrowing, may elect Interest Periods therefor, all as
provided in this Section. The Borrower may elect different options with respect
to different portions of the affected Borrowing, in which case each such
portion shall be allocated ratably among the Lenders holding the Loans
comprising such Borrowing, and the Loans comprising each such portion shall be
considered a separate Borrowing.
(b) To make an election pursuant to this Section, the
Borrower shall notify the Administrative Agent of such election by telephone by
the time that a Borrowing Request would be required under Section 2.03 if the
Borrower were requesting a Borrowing of the Type resulting from such election
to be made on the effective date of such election. Each such telephonic
Interest Election Request shall be irrevocable and shall be confirmed promptly
by hand delivery or telecopy to the Administrative Agent of a written Interest
Election Request in a form approved by the Administrative Agent and signed by
the Borrower.
(c) Each telephonic and written Interest Election Request
shall specify the following information in compliance with Section 2.02 and
paragraph (f) of this Section:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to
each resulting Borrowing (in which case the information to be
specified pursuant to clauses (iii) and (iv) below shall be specified
for each resulting Borrowing);
44
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be a LIBOR
Borrowing or an ABR Borrowing; and
(iv) if the resulting Borrowing is a LIBOR Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of
the term "Interest Period".
If any such Interest Election Request requests a LIBOR Borrowing but does not
specify an Interest Period, then the Borrower shall be deemed to have selected
an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election
Request, the Administrative Agent shall advise each Lender of the details
thereof and of such Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest
Election Request with respect to a LIBOR Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof,
if an Event of Default has occurred and is continuing, then, so long as an
Event of Default is continuing (i) no outstanding Borrowing may be converted to
or continued as a LIBOR Borrowing and (ii) unless repaid, each LIBOR Borrowing
shall be converted to an ABR Borrowing at the end of the Interest Period
applicable thereto.
(f) A Borrowing of any Class may not be converted to or
continued as a LIBOR Borrowing if after giving effect thereto (i) the Interest
Period therefor would commence before and end after a date on which any
principal of the Loans of such Class is scheduled to be repaid and (ii) the sum
of the aggregate principal amount of outstanding LIBOR Borrowings of such Class
with Interest Periods ending on or prior to such scheduled repayment date plus
the aggregate principal amount of outstanding ABR Borrowings of such Class
would be less than the aggregate principal amount of Loans of such Class
required to be repaid on such scheduled repayment date.
45
SECTION 2.06. Termination and Reduction of
Commitments. (a) Unless previously terminated, the
Commitments shall terminate on the Tranche 5 Availability
Termination Date.
(b) On the date of each Loan made by any Lender such Lender's
Commitment shall be reduced by an amount equal to such Loan. On each date that
interest on a Loan of any Lender is deferred pursuant to clause (iv) of Section
2.11(d), such Lender's Commitment shall be reduced by the amount of such
Deferred Interest.
(c) In the event that a prepayment would be required pursuant
to paragraph (b), (c), (d) or (e) of Section 2.09, all Commitments then in
effect shall be reduced ratably by an aggregate amount equal to the excess, if
any, of the amount of the required prepayment over the aggregate principal
amount of Loans and Deferred Interest outstanding immediately prior to giving
effect to such prepayment.
(d) The Borrower may at any time terminate, or from time to
time reduce, the Commitments; provided that each reduction of the Commitments
pursuant to this paragraph (d) shall be in an amount that is an integral
multiple of $1,000,000 and not less than $5,000,000.
(e) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Commitments under paragraph (d) of this
Section at least one Business Day prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any such notice, the Administrative
Agent shall advise the Lenders of the contents thereof. Each notice delivered
by the Borrower pursuant to this Section shall be irrevocable. Any termination
or reduction of the Commitments shall be permanent. Each reduction of the
Commitments pursuant to paragraph (d) of this Section shall be made ratably
among the Lenders in accordance with their respective Commitments; provided
that the Borrower may, in its discretion, reduce the Commitments of Lucent
Lenders in excess of their Available Commitments pursuant to such paragraph (d)
without reducing the Commitments of other Lenders.
SECTION 2.07. Repayment of Loans; Evidence of Debt.
(a) The Borrower hereby unconditionally promises to pay to
the Administrative Agent for the account of each Lender the
46
then unpaid principal amount of each Loan of such Lender and any Deferred
Interest thereon as provided in Section 2.08.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest (including Deferred Interest) payable and paid to
such Lender from time to time hereunder.
(c) The Administrative Agent shall maintain accounts in which
it shall record (i) the amount of each Loan made hereunder, the Class and Type
thereof and the Interest Period applicable thereto, (ii) the amount of any
principal or interest (including Deferred Interest) due and payable or to
become due and payable from the Borrower to each Lender hereunder and (iii) the
amount of any sum received by the Administrative Agent hereunder for the
account of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrower
to repay the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans of any Class made by it
be evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender such a promissory note payable to the order
of such Lender (or, if requested by such Lender, to such Lender and its
registered assigns) and in a form approved by the Administrative Agent.
Thereafter, the Loans evidenced by such promissory note and interest thereon
(including Deferred Interest) shall at all times (including after assignment
pursuant to Section 9.04) be represented by one or more promissory notes in
such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered
assigns).
SECTION 2.08. Amortization of Loans. (a) Subject
to adjustment pursuant to paragraph (g) of this Section, the
Borrower shall repay Tranche 1 Borrowings and Deferred
Interest thereon on each Tranche 1 Payment Date in an
47
aggregate amount equal to 6.250% of the sum of all Tranche 1 Loans made or
deemed made hereunder and all Deferred Interest thereon (including amounts
previously repaid or prepaid).
(b) Subject to adjustment pursuant to paragraph (g) of this
Section, the Borrower shall repay Tranche 2 Borrowings and Deferred Interest
thereon on each Tranche 2 Payment Date in an aggregate amount equal to 6.250%
of the sum of all Tranche 2 Loans made or deemed made hereunder and all
Deferred Interest thereon (including amounts previously repaid or prepaid).
(c) Subject to adjustment pursuant to paragraph (g) of this
Section, the Borrower shall repay Tranche 3 Borrowings and Deferred Interest
thereon on each Tranche 3 Payment Date in an aggregate amount equal to 6.250%
of the sum of all Tranche 3 Loans made or deemed made hereunder and all
Deferred Interest thereon (including amounts previously repaid or prepaid)
(d) Subject to adjustment pursuant to paragraph (g) of this
Section, the Borrower shall repay Tranche 4 Borrowings and Deferred Interest
thereon on each Tranche 4 Payment Date in an aggregate amount equal to 6.250%
of the sum of all Tranche 4 Loans made or deemed made hereunder and all
Deferred Interest thereon (including amounts previously repaid or prepaid).
(e) Subject to adjustment pursuant to paragraph (g) of this
Section, the Borrower shall repay Tranche 5 Borrowings and Deferred Interest
thereon on each Tranche 5 Payment Date in an aggregate amount equal to 6.250%
of the sum of all Tranche 5 Loans made or deemed made hereunder and all
Deferred Interest thereon (including amounts previously repaid or prepaid).
(f) To the extent not previously paid, all Loans of each
Class and Deferred Interest thereon shall be due and payable on the Maturity
Date with respect to Loans of such Class.
(g) Any prepayment of a Borrowing (and Deferred Interest
thereon, if applicable) of any Class shall be applied to reduce ratably the
subsequent scheduled repayments of the Borrowings and Deferred Interest thereon
of such Class to be made pursuant to this Section; provided that any prepayment
of a Borrowing and Deferred Interest thereon of any Class that is
48
made pursuant to Section 2.09(a) shall be applied to reduce the subsequent
scheduled repayments of the Borrowings of such Class to be made pursuant to
this Section in reverse chronological order.
(h) Prior to any repayment of any Borrowings of any Class
hereunder, the Borrower shall select the Borrowing or Borrowings of the
applicable Class to be repaid and shall notify the Administrative Agent by
telephone (confirmed by telecopy) of such selection not later than 11:00 a.m.,
New York City time, three Business Days before the scheduled date of such
repayment; provided that each repayment of Borrowings of any Class shall be
applied to repay any outstanding ABR Borrowings of such Class before any other
Borrowings of such Class. If the Borrower fails to make a timely selection of
the Borrowing or Borrowings to be repaid, such repayment shall be applied,
first, to repay any outstanding ABR Borrowings of the applicable Class and,
second, to other Borrowings of the applicable Class in the order of the
remaining duration of their respective Interest Periods (the Borrowing with the
shortest remaining Interest Period to be repaid first). Each repayment of a
Borrowing or Deferred Interest thereon shall be applied, first, ratably to
Deferred Interest on the Loans included in the repaid Borrowing and, second,
ratably to the Loans included in the repaid Borrowing. Repayments of Borrowings
or Deferred Interest thereon shall be accompanied by the payment of accrued
interest (other than Deferred Interest) on the amount thereof.
SECTION 2.09. Prepayment of Loans. (a) The
Borrower shall have the right at any time and from time to
time to prepay any Borrowing or Deferred Interest thereon in
whole or in part subject to the requirements of this Section.
(b) In the event and on each occasion that any Net Proceeds
are received by or on behalf of the Parent or any Restricted Subsidiary in
respect of any Prepayment Event, the Borrower shall, within six Business Days
after such Net Proceeds are received, prepay Borrowings and Deferred Interest
in an aggregate amount equal to such Net Proceeds.
(c) In the event and on each occasion that any Collateral
Trigger Event occurs, the Borrower shall, within three Business Days after the
date that such Collateral Trigger Event occurs, prepay Borrowings and Deferred
Interest in an aggregate amount equal to the Collateral Prepayment Amount with
respect to such Collateral Trigger Event.
49
(d) Following the end of each fiscal year of the Parent,
commencing with the first fiscal year ending after the date of this Agreement
for which there is any Excess Cash Flow, the Borrower shall prepay Borrowings
and Deferred Interest in an aggregate amount equal to 50% of Excess Cash Flow
for such fiscal year. Each prepayment pursuant to this paragraph shall be made
on or before the date on which financial statements are delivered pursuant to
Section 5.01 with respect to the fiscal year for which Excess Cash Flow is
being calculated (and in any event within 90 days after the end of such fiscal
year).
(e) In the event and on each occasion that the Parent or any
Restricted Subsidiary Repays any Indebtedness of the Parent or any Restricted
Subsidiary or Indebtedness for borrowed money which the Parent or any
Restricted Subsidiary has Guaranteed, then the Borrower shall, within three
Business Days after the date of such Repayment, prepay Borrowings and Deferred
Interest in an aggregate amount equal to the product of (x) the sum of the
aggregate principal amount of the Loans outstanding at the time plus Deferred
Interest thereon, multiplied by (y) a fraction, the numerator of which is the
aggregate principal amount of such Repayment, and the denominator of which is
the amount of Consolidated Indebtedness immediately prior to such Repayment
(excluding Indebtedness in respect of the Loans and Deferred Interest and
Indebtedness outstanding under revolving credit facilities); provided that
prepayments of Borrowings and Deferred Interest shall not be required pursuant
to this paragraph in respect of (i) any Repayment of the Loans, (ii) any
scheduled repayment or mandatory prepayment of Indebtedness, (iii) any
Repayment of Indebtedness to the extent such Repayment is refinanced by
incurring other Indebtedness that (A) has a scheduled maturity date that is on
or after the scheduled maturity date of the Indebtedness being refinanced, (B)
has a weighted average life to maturity that is equal to or longer than the
remaining weighted average life to maturity of the Indebtedness being
refinanced, determined immediately prior to giving effect to such Repayment,
(C) does not include any provisions that may require mandatory Repayment
thereof prior to scheduled maturity, other than scheduled repayments taken into
consideration in determining compliance with clause (B) above and other
provisions that are not materially more burdensome than any such provisions
included in the Indebtedness being refinanced, (D) is issued or incurred by the
same Person that issued or incurred the Indebtedness being refinanced and is
not Guaranteed or secured by any Lien unless the Indebtedness
50
being refinanced was Guaranteed or secured (in which case such Indebtedness
shall not be Guaranteed by any Person that did not Guarantee the Indebtedness
being refinanced and shall not be secured by a Lien on any asset that did not
secure the Indebtedness being refinanced) and (E) is subordinated to the
Obligations on terms no less favorable than the terms on which the Indebtedness
being refinanced was so subordinated, if such refinanced Indebtedness is
Subordinated Indebtedness, (iv) any Repayment of Indebtedness outstanding under
a revolving credit facility to the extent that (A) the commitments of the
lenders to make loans thereunder remain in effect after giving effect to such
Repayment and (B) the borrower thereunder does not voluntarily reduce the
principal amount available under such revolving credit facility within six
months of any such prepayment, or (v) any Repayment of any Permitted
Receivables Financing or Permitted Receivables Indebtedness.
(f) Prior to any optional or mandatory prepayment of
Borrowings or Deferred Interest hereunder, the Borrower shall select the
Borrowing or Borrowings (and Deferred Interest thereon) to be prepaid and shall
specify such selection in the notice of such prepayment pursuant to paragraph
(g) of this Section; provided that each prepayment of Borrowings of any Class
shall be applied to prepay ABR Borrowings of such Class before any other
Borrowings of such Class. In the event of any optional or mandatory prepayment
of Borrowings made at a time when Borrowings or Deferred Interest of more than
one Class are outstanding, the Borrower shall select Borrowings to be prepaid
so that the aggregate amount of such prepayment is allocated among the Classes
pro rata based on the aggregate principal amount of outstanding Borrowings
(plus the aggregate amount of Deferred Interest thereon at the time) of each
such Class.
(g) The Borrower shall notify the Administrative Agent by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case
of prepayment of a LIBOR Borrowing, not later than 1:00 p.m., New York City
time, three Business Days before the date of prepayment or (ii) in the case of
prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time,
one Business Day before the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date, the principal amount of each
Borrowing (and Deferred Interest thereon) or portion thereof to be prepaid and,
in the case of a mandatory prepayment, a reasonably detailed calculation of the
amount of such prepayment. Promptly following receipt of any such notice,
51
the Administrative Agent shall advise the Lenders of the contents thereof. Each
partial prepayment of any Borrowing (and Deferred Interest thereon) shall be in
an amount that is an integral multiple of $100,000 and not less than
$5,000,000, except as necessary to apply fully the required amount of a
mandatory prepayment. Each prepayment of a Borrowing or Deferred Interest shall
be applied, first, ratably to Deferred Interest on the Loans included in the
prepaid Borrowing and, second, ratably to the Loans included in the prepaid
Borrowing. Prepayments of Borrowings or Deferred Interest thereon shall be
accompanied by the payment of accrued interest(other than Deferred Interest) on
the amount prepaid.
(h) Notwithstanding the foregoing, any Lender who holds a
Designated Loan may, by notice to the Administrative Agent by telephone
(confirmed by telecopy) at least one Business Day prior to the applicable
prepayment date, decline all or any portion of any prepayment of such
Designated Loan pursuant to this Section (other than an optional prepayment
pursuant to paragraph (a) of this Section, which may not be declined), in which
case the aggregate amount of the prepayment that would have been applied to
prepay such Designated Loan but was so declined shall be applied to prepay
other Loans (other than Designated Loans) in accordance with paragraph (f) of
this Section. Any Lender holding a Designated Loan who is entitled to, but does
not, decline any such prepayment shall not be entitled to receive any
prepayment fee pursuant to paragraph (b) of Section 2.14 with respect to such
prepayment.
SECTION 2.10. Fees. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee, which
shall accrue (at the rate per annum separately agreed) on the average daily
amount of the Available Commitment of such Lender during the period from and
including the Effective Date to but excluding the date on which the Commitments
terminate. Accrued commitment fees shall be payable in arrears on the last day
of March, June, September and December of each year and on the date on which
the Commitments terminate, commencing on the first such date to occur after the
Effective Date. All commitment fees shall be computed on the basis of a year of
360 days and shall be payable for the actual number of days elapsed (including
the first day but excluding the last day).
52
(b) The Borrower agrees to pay to Lucent, for its own
account, fees in the amounts and at the times separately agreed.
(c) The Borrower agrees to pay to the Administrative Agent
(if other than Lucent) and the Collateral Agent, for its own account, fees in
the amounts and at the times separately agreed.
(d) All fees payable hereunder shall be paid on the dates
due, in immediately available funds, (i) to the applicable Agent, (ii) to
Lucent, in the case of fees payable to it, or (iii) to the Administrative
Agent, in the case of commitment fees, for distribution to the Lenders entitled
thereto. Fees paid shall not be refundable under any circumstances.
SECTION 2.11. Interest. (a) The Loans comprising
each ABR Borrowing (and Deferred Interest thereon) shall bear
interest at the Alternate Base Rate plus the Applicable Rate.
(b) The Loans comprising each LIBOR Borrowing (and Deferred
Interest thereon) shall bear interest at the Adjusted LIBO Rate for the
Interest Period in effect for such Borrowing plus the Applicable Rate.
(c) Notwithstanding the foregoing if any principal of or
interest on any Loan or any fee or other amount payable by the Borrower
hereunder is not paid when due, whether at stated maturity, upon acceleration
or otherwise, such overdue amount shall bear interest, after as well as before
judgment, at a rate per annum equal to 2% plus the rate applicable to ABR Loans
as provided in paragraph (a) of this Section.
(d) All accrued interest (other than Deferred Interest) on
each Loan and all accrued interest on the Deferred Interest on such Loan (other
than Deferred Interest) shall be payable in arrears on each Interest Payment
Date for such Loan; provided that (i) interest accrued pursuant to paragraph
(c) of this Section shall be payable on demand, (ii) in the event of any
repayment or prepayment of any Loan (or Deferred Interest thereon), accrued
interest on the principal amount of such Loan (or on such Deferred Interest, as
the case may be) repaid or prepaid shall be payable on the date of such
repayment or prepayment, (iii) in the event of any conversion of any Loan prior
to the end of the current Interest Period therefor, accrued interest on such
Loan (including accrued
53
interest on any Deferred Interest thereon) shall be payable on the effective
date of such conversion and (iv) the Borrower may, at its option, elect to
defer payment of any interest payable on any Loan (including interest payable
on Deferred Interest thereon, but excluding Deferred Interest that becomes due
pursuant to the terms of this Agreement) of any Class until the earlier of (A)
the date on which such Loan and Deferred Interest thereon are repaid or prepaid
and (B) the end of the Availability Period for Loans of such Class; provided
further that (1) any Deferred Interest on any Loan (including Deferred Interest
on Deferred Interest) shall accrue interest from and including the date on
which such Deferred Interest was initially due at the same rate as the
principal amount of such Loan, (2) to the extent that the amount of any
interest to be deferred with respect to any Loan of any Lender pursuant to
clause (iv) above would, when aggregated with any Loan to be made by such
Lender on the applicable Interest Payment Date, exceed the amount of such
Lender's Available Commitment on such Interest Payment Date, such interest
shall not be deferred on such date and shall be payable as provided herein, and
(3) interest shall not be deferred (and shall be payable as provided herein)
with respect to the portion of the outstanding Loans of any Class incurred to
finance the Purchase Price of any Third Party Products (as defined in the
Supply Agreement).
(e) All interest hereunder shall be computed on the basis of
a year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate
shall be computed on the basis of a year of 365 days (or 366 days in a leap
year), and in each case shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). The applicable Alternate
Base Rate or Adjusted LIBO Rate shall be determined in accordance with this
Agreement by the Administrative Agent, and such determination shall be
conclusive absent manifest error.
SECTION 2.12. Alternate Rate of Interest. If prior
to the commencement of any Interest Period for a LIBOR
Borrowing:
(a) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and
reasonable means do not exist for ascertaining the Adjusted LIBO Rate
for such Interest Period; or
54
(b) the Administrative Agent is advised by a majority in
interest of the Lenders participating in such Borrowing that the
Adjusted LIBO Rate for such Interest Period will not adequately and
fairly reflect the cost to such Lenders of making or maintaining their
Loans included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a LIBOR Borrowing shall be ineffective and
(ii) if any Borrowing Request requests a LIBOR Borrowing, such Borrowing shall
be made as an ABR Borrowing.
SECTION 2.13. Increased Costs. (a) If any Change
in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate); or
(ii) impose on any Lender or the London interbank market any
other condition affecting this Agreement or LIBOR Loans made by such
Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any LIBOR Loan (or of maintaining its
obligation to make any such Loan) or to reduce the amount of any sum received
or receivable by such Lender hereunder (whether of principal, interest or
otherwise), then the Borrower will pay to such Lender such additional amount or
amounts as will compensate such Lender for such additional costs incurred or
reduction suffered.
(b) If any Lender determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of
return on such Lender's capital or on the capital of such Lender's holding
company, if any, as a consequence of this Agreement or the Loans made by such
Lender to a level below that which such Lender or such Lender's holding company
could have achieved but for such Change in Law
55
(taking into consideration such Lender's policies and the policies of such
Lender's holding company with respect to capital adequacy), then from time to
time the Borrower will pay to such Lender such additional amount or amounts as
will compensate such Lender or such Lender's holding company for any such
reduction suffered.
(c) A certificate of a Lender setting forth the amount or
amounts necessary to compensate such Lender or its holding company, as the case
may be, as specified in paragraph (a) or (b) of this Section and the basis
therefor shall be delivered to the Borrower by the applicable Lender (with a
copy to the Administrative Agent) and shall be conclusive absent manifest
error. The Borrower shall pay such Lender the amount shown as due on any such
certificate within 30 days after receipt thereof.
(d) Failure or delay on the part of any Lender to demand
compensation pursuant to this Section shall not constitute a waiver of such
Lender's right to demand such compensation; provided that the Borrower shall
not be required to compensate a Lender pursuant to this Section for any
increased costs or reductions incurred more than 270 days prior to the date
that such Lender notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender's intention to claim
compensation therefor; provided further that, if the Change in Law giving rise
to such increased costs or reductions is retroactive, then the 270-day period
referred to above shall be extended to include the period of retroactive effect
thereof.
SECTION 2.14. Break Funding Payments; Prepayment Fees. (a) In
the event of (i) the payment of any principal of any LIBOR Loan other than on
the last day of an Interest Period applicable thereto (including as a result of
an Event of Default), (ii) the conversion of any LIBOR Loan other than on the
last day of the Interest Period applicable thereto, (iii) the failure to
borrow, convert, continue or prepay any Loan on the date specified in any
notice delivered pursuant hereto, or (iv) the assignment of any LIBOR Loan
other than on the last day of the Interest Period applicable thereto as a
result of a request by the Borrower pursuant to Section 2.17, then, in any such
event, the Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a LIBOR Loan, such loss, cost or
expense to any Lender shall be deemed to include an amount
56
determined by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Loan had such
event not occurred, at the Adjusted LIBO Rate that would have been applicable
to such Loan, for the period from the date of such event to the last day of the
then current Interest Period therefor (or, in the case of a failure to borrow,
convert or continue, for the period that would have been the Interest Period
for such Loan), over (ii) the amount of interest which would accrue on such
principal amount for such period at the interest rate which such Lender would
bid were it to bid, at the commencement of such period, for dollar deposits of
a comparable amount and period from other banks in the eurodollar market. A
certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this paragraph shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
such Lender the amount shown as due on any such certificate within 10 days
after receipt thereof.
(b) Subject to Section 2.09(h), in the event of the payment
of any principal of any Designated Loan of any Class of any Lender (other than
in the amounts and on the dates scheduled to be paid in accordance with Section
2.08), the Borrower shall pay to the Administrative Agent, for the account of
such Lender, at the time of such payment (in addition to any other amounts
payable hereunder, including any amounts payable under paragraph (a) of this
Section) a prepayment fee in the amount separately agreed.
SECTION 2.15. Taxes. (a) Any and all payments by or on
account of any obligation of the Borrower hereunder or under any other Loan
Document shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided that if the Borrower shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments,
then (i) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section) the Administrative Agent or Lender receives an
amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall
pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.
57
(b) In addition, the Borrower shall pay any Other Taxes to
the relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent and
each Lender, within 10 days after written demand therefor, for the full amount
of any Indemnified Taxes or Other Taxes paid by the Administrative Agent or
such Lender on or with respect to any payment by or on account of any
obligation of the Borrower hereunder or under any other Loan Document
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment delivered to the Borrower by a Lender, or by the Administrative
Agent on its own behalf or on behalf of a Lender, shall be conclusive absent
manifest error.
(d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower
shall deliver to the Administrative Agent the original or a certified copy of a
receipt issued by such Governmental Authority evidencing such payment, a copy
of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.
(e) Each Foreign Lender shall deliver to the Borrower (with a
copy to the Administrative Agent) two copies of either United States Internal
Revenue Service Form 1001 or Form 4224, or, in the case of a Foreign Lender
claiming exemption from U.S. Federal withholding tax under Section 871(h) or
881(c) of the Code with respect to payments of "portfolio interest", a Form
W-8, or any subsequent versions thereof or successors thereto (and, if such
Foreign Lender delivers a Form W-8, a certificate representing that such
Foreign Lender is not a bank for purposes of Section 881(c) of the Code, is not
a 10-percent shareholder of the Borrower (within the meaning of Section
871(h)(3)(B) of the Code) and is not a controlled foreign corporation related
to the Borrower (within the meaning of Section 864(d)(4) of the Code)),
properly completed and duly executed by such Foreign Lender claiming complete
exemption from, or reduced rate of, U.S. Federal withholding tax on payments by
the
58
Borrower under this Agreement or any other Loan Document. Such forms shall be
delivered by each Foreign Lender on or before the date it becomes a party to
this Agreement or designates a new lending office. In addition, each Foreign
Lender shall deliver such forms promptly upon the obsolescence, expiration or
invalidity of any form previously delivered by such Foreign Lender.
Notwithstanding any other provision of this Section 2.15, a Foreign Lender
shall not be required to deliver any form pursuant to this Section 2.15 that
such Foreign Lender is not legally able to deliver.
(f) If the Administrative Agent or a Lender determines, in
its sole discretion, that it has received a refund of any Taxes as to which it
has been indemnified by the Borrower pursuant to this Section 2.15, it shall
pay over such refund to the Borrower (but only to the extent of indemnity
payments made by the Borrower under this Section 2.15 with respect to the Taxes
giving rise to such refund), net of all reasonable out-of-pocket expenses of
the Administrative Agent or such Lender and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such
refund); provided, however, that the Borrower, upon the request of the
Administrative Agent or such Lender, agrees to repay the amount paid over to
the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. Nothing contained in this Section 2.15
shall require the Administrative Agent or any Lender to make available its tax
returns (or any other information relating to its Taxes which it deems
confidential) to the Borrower or any other Person.
SECTION 2.16. Payments Generally; Pro Rata Treatment; Sharing
of Set-offs. (a) The Borrower shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest or
fees, or of amounts payable under Section 2.13, 2.14 or 2.15, or otherwise)
prior to 12:00 noon, New York City time, on the date when due, in immediately
available funds, without set-off or counterclaim. Any amounts received after
such time on any date may, in the discretion of the Administrative Agent, be
deemed to have been received on the next succeeding Business Day for purposes
of calculating interest thereon. All such payments shall be made to the
Administrative Agent at The Chase Manhattan Bank, New York, New York, ABA no.
_____________, account no. ______________, phone no. (000) 000-0000 (or such
59
other account as the Administrative Agent shall from time to time specify by
notice), except that payments pursuant to Sections 2.10(b), 2.10(c), 2.13,
2.14, 2.15 and 9.03 shall be made directly to the Persons entitled thereto and
payments pursuant to other Loan Documents shall be made to the Persons
specified therein. The Administrative Agent shall distribute any such payments
received by it for the account of any other Person to the appropriate recipient
promptly following receipt thereof. If any payment under any Loan Document
shall be due on a day that is not a Business Day, the date for payment shall be
extended to the next succeeding Business Day, and, in the case of any payment
accruing interest, interest thereon shall be payable for the period of such
extension. All payments under each Loan Document shall be made in dollars.
(b) If at any time insufficient funds are received by and
available to the Administrative Agent to pay fully all amounts of principal,
interest and fees then due hereunder, such funds shall be applied (i) first,
towards payment of interest and fees then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of interest and fees
then due to such parties, and (ii) second, towards payment of principal then
due hereunder, ratably among the parties entitled thereto in accordance with
the amounts of principal then due to such parties.
(c) If any Lender shall, by exercising any right of set-off
or counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Loans and accrued interest
thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Loans of other Lenders to the extent necessary so that
the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans; provided that (i) if any such participations are
purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment
made by the Borrower pursuant to and in accordance with the express terms of
this Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans
60
to any assignee or participant, other than to the Borrower or any Subsidiary or
Affiliate thereof (as to which the provisions of this paragraph shall apply).
The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Borrower in the amount
of such participation.
(d) Unless the Administrative Agent shall have received
notice from the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders hereunder that the Borrower
will not make such payment, the Administrative Agent may assume that the
Borrower has made such payment on such date in accordance herewith and may, in
reliance upon such assumption, distribute to the Lenders the amount due. In
such event, if the Borrower has not in fact made such payment, then each of the
Lenders severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender with interest thereon, for each
day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of
the Federal Funds Effective Rate and a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation.
(e) Without limiting the generality of paragraph (a) above,
the Borrower's obligations to make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest,
fees or otherwise) shall be absolute and unconditional and shall not be subject
to any delay, reduction, set-off, counterclaim, defense or recoupment for any
reason, including any failure of any equipment or other assets acquired
pursuant to the Supply Agreement or any part thereof, or any dispute with,
breach of representation or warranty by or claim against any supplier,
manufacturer, installer, vendor or distributer, including Lucent. The
provisions of this paragraph shall not be construed as a waiver by the Parent
or the Borrower of any rights they may have under the Supply Agreement.
SECTION 2.17. Mitigation Obligations; Replacement
of Lenders. (a) If any Lender requests compensation under
Section 2.13, or if the Borrower is required to pay any
61
additional amount to any Lender or any Governmental Authority for the account
of any Lender pursuant to Section 2.15, then, if requested by the Borrower,
such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the reasonable judgment of such Lender, such designation or assignment (i)
would eliminate or reduce amounts payable pursuant to Section 2.13 or 2.15, as
the case may be, in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment
made at the Borrower's request.
(b) If any Lender requests compensation under Section 2.13,
or if the Borrower is required to pay any additional amount to any Lender or
any Governmental Authority for the account of any Lender pursuant to Section
2.15, then the Borrower may, at its sole expense and effort, upon notice to
such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in Section 9.04), all its interests, rights and obligations under
this Agreement to an assignee that shall assume such obligations (which
assignee may be another Lender, if a Lender accepts such assignment); provided
that (i) the Borrower shall have received the prior written consent of the
Administrative Agent, which consent shall not unreasonably be withheld, (ii)
such Lender shall have received payment of an amount equal to the outstanding
principal of its Loans, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder, from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrower (in the
case of all other amounts) and (iii) such assignment will result in a reduction
in such compensation or payments. A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrower to require
such assignment and delegation cease to apply.
62
ARTICLE III
Representations and Warranties
Each of the Parent and the Borrower represents and warrants
to the Lenders that:
SECTION 3.01. Organization; Powers. Each of the Parent and
the Restricted Subsidiaries is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, has all
requisite company or corporate, as the case may be, power and authority to
carry on its business as now conducted and, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect, is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required.
SECTION 3.02. Authorization; Enforceability. The
Transactions to be entered into by each Loan Party are within
such Loan Party's corporate or company, as the case may be,
powers and have been duly authorized by all necessary
corporate or company, as the case may be, and, if required,
stockholder or member, as the case may be, action. This
Agreement has been duly executed and delivered by each of the
Parent and the Borrower and constitutes, and each other Loan
Document to which any Loan Party is to be a party, when
executed and delivered by such Loan Party, will constitute, a
legal, valid and binding obligation of the Parent, the
Borrower or such Loan Party (as the case may be), enforceable
in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other
laws affecting creditors' rights generally and subject to
general principles of equity, regardless of whether considered
in a proceeding in equity or at law.
SECTION 3.03. Governmental Approvals; No Conflicts. The
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority, except such as
have been obtained or made and are in full force and effect and except filings
necessary to perfect Liens created under the Security Agreement, (b) will not
violate any applicable law or regulation or the charter, by-laws or other
organizational documents of any Loan Party or any order of any Governmental
Authority, (c) will not violate or result in a default under any indenture,
agreement or other instrument evidencing or
63
governing any Material Indebtedness or any other material indenture, agreement
or other instrument binding upon any Loan Party or its assets, or give rise to
a right thereunder to require any payment to be made by any Loan Party, and (d)
will not result in the creation or imposition of any Lien on any asset of any
Loan Party, except Liens created under the Security Agreement.
SECTION 3.04. Financial Condition; No Material Adverse
Change. (a) The Parent has heretofore furnished to the Lenders its consolidated
balance sheet and statements of income, stockholders equity and cash flows (i)
as of and for the fiscal year ended December 31, 1997, reported on by Xxxxx
Xxxxxxxx LLP, independent public accountants, and (ii) as of and for the fiscal
quarter and the portion of the fiscal year ended June 30, 1998, certified by
its chief financial officer. Such financial statements present fairly, in all
material respects, the financial position and results of operations and cash
flows of the Parent and its consolidated subsidiaries as of such dates and for
such periods in accordance with GAAP, subject to year-end audit adjustments in
the case of the statements referred to in clause (ii) above.
(b) Since June 30, 1998, there has been no material adverse
change in the business, condition (financial or otherwise), operations,
performance or properties of the Parent and the Restricted Subsidiaries, taken
as a whole.
SECTION 3.05. Properties and Licenses. (a) Each of the Loan
Parties has good title to, or valid leasehold interests in, all the real and
personal property material to its business, except for minor defects in title
that do not interfere with its ability to conduct its business as currently
conducted or to utilize such properties for their intended purposes.
(b) Each of the Loan Parties owns, or is licensed to use, all
trademarks, tradenames, copyrights, patents and other intellectual property
material to its business, and the use thereof by the Loan Parties does not
infringe upon the rights of any other Person, except for any such infringements
that, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.
(c) The Parent and the Restricted Subsidiaries have all
licenses and permits that are material to the business of the Parent and the
Restricted Subsidiaries. Each license or
64
permit that is material to the business of the Parent and the Restricted
Subsidiaries, is valid and in full force and effect, and the Parent and the
Restricted Subsidiaries are in compliance in all material respects with the
terms and conditions thereof.
SECTION 3.06. Litigation and Environmental Matters. (a) There
are no actions, suits or proceedings by or before any arbitrator or
Governmental Authority pending against or, to the knowledge of the Parent or
the Borrower, threatened against or affecting the Parent or any of its
Subsidiaries (i) as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect (other
than the Disclosed Matters) or (ii) that involve any of the Loan Documents or
the Transactions.
(b) Except for the Disclosed Matters and except with respect
to any other matters that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, none of the
Parent or any of its Subsidiaries (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) has become subject to
any Environmental Liability, (iii) has received notice of any claim with
respect to any Environmental Liability or (iv) knows of any basis for any
Environmental Liability.
(c) Since the date of this Agreement, there has been no
change in the status of the Disclosed Matters that, individually or in the
aggregate, has resulted in, or materially increased the likelihood of, a
Material Adverse Effect.
SECTION 3.07. Compliance with Laws and Agreements. Each of
the Parent and its Subsidiaries is in compliance with all laws, regulations and
orders of any Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default has
occurred and is continuing.
65
SECTION 3.08. Investment and Holding Company Status. None of
the Loan Parties is (a) an "investment company" as defined in, or subject to
regulation under, the Investment Company Act of 1940 or (b) a "holding company"
as defined in, or subject to regulation under, the Public Utility Holding
Company Act of 1935.
SECTION 3.09. Taxes. Each of the Loan Parties has timely
filed or caused to be filed all Tax returns and reports required to have been
filed and has paid or caused to be paid all Taxes required to have been paid by
it, except (a) Taxes that are being contested in good faith by appropriate
proceedings and for which the applicable Loan Party has set aside on its books
adequate reserves or (b) the filing of local Tax returns and reports to the
extent that the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other such
ERISA Events for which liability is reasonably expected to occur, could
reasonably be expected to result in a Material Adverse Effect. The present
value of all accumulated benefit obligations under each such Plan (based on the
assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed by more than $5,000,000 the fair market value
of the assets of such Plan, and the present value of all accumulated benefit
obligations of all underfunded Plans (based on the assumptions used for
purposes of Statement of Financial Accounting Standards No.87) did not, as of
the date of the most recent financial statements reflecting such amounts,
exceed by more than $5,000,000 the fair market value of the assets of all such
underfunded Plans.
SECTION 3.11. Disclosure. The Parent and the Borrower have
disclosed to the Lenders all agreements, instruments and corporate or other
restrictions to which any of the Loan Parties is subject that, individually or
in the aggregate, could reasonably be expected to result in a Material Adverse
Effect. None of the reports, financial statements, certificates or other
information furnished by or on behalf of any Loan Party to the Administrative
Agent or any Lender in connection with the negotiation of this Agreement or any
other Loan Document or delivered hereunder or thereunder (as modified or
supplemented by other information so
66
furnished, including the Parent's publicly available filings with the
Securities and Exchange Commission) contains any material misstatement of fact
or omits to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
provided that, with respect to projected financial information, the Parent and
the Borrower represent only that such information was prepared in good faith
based upon assumptions believed to be reasonable at the time.
SECTION 3.12. Subsidiaries. Schedule 3.12 sets forth as of
the date of this Agreement the name of, and the ownership interest of the
Parent in, each Subsidiary of the Parent and identifies each such Subsidiary
(other than the Borrower) as either an Unrestricted Subsidiary, a Special
Purpose Equipment Subsidiary, a Special Purpose License Subsidiary, a Special
Purpose Financing Subsidiary, a Non- Material Subsidiary or a Guarantor
Subsidiary.
SECTION 3.13. Insurance. Schedule 3.13 sets forth a
description of all insurance maintained by or on behalf of the Parent and its
Restricted Subsidiaries as of the date of this Agreement. As of the date of
this Agreement, all premiums in respect of such insurance have been paid.
SECTION 3.14. Labor Matters. As of the date hereof, there are
no strikes, lockouts or slowdowns against any Loan Party pending or, to the
knowledge of the Parent or the Borrower, threatened. The hours worked by and
payments made to employees of the Loan Parties have not been in violation of
the Fair Labor Standards Act or any other applicable Federal, state, local or
foreign law dealing with such matters. All payments due from any Loan Party, or
for which any claim may be made against any Loan Party, on account of wages and
employee health and welfare insurance and other benefits, have been paid or
accrued as a liability on the books of the applicable Loan Party. The
consummation of the Transactions will not give rise to any right of termination
or right of renegotiation on the part of any union under any collective
bargaining agreement to which any Loan Party is bound.
SECTION 3.15. Supply Agreement. The Supply
Agreement is in full force and effect. The Borrower (i) is in
compliance in all material respects with the terms and
conditions of the Supply Agreement and (ii) has not
terminated, nor taken any action which could result in the
67
termination of, the Supply Agreement (except during the Disengagement Period,
as defined in the Supply Agreement).
SECTION 3.16. Security Agreement. The
representations and warranties in the Security Agreement are
true and correct.
SECTION 3.17. Year 2000 Compliance. Any reprogramming
required to permit the proper functioning, in and following the year 2000, of
(a) the computer systems of the Parent and the Subsidiaries and (b) equipment
containing embedded microchips and the testing of all such systems and
equipment, as so reprogrammed, will be completed by November 30, 1999, except
to the extent that failure to do so would not have a Material Adverse Effect.
The cost to the Parent and the Subsidiaries of such reprogramming and testing
and of the reasonably foreseeable consequences of year 2000 to the Parent and
the Subsidiaries (including reprogramming errors and the failure of others'
systems or equipment) could not reasonably be expected to have a Material
Adverse Effect.
ARTICLE IV
Conditions
SECTION 4.01. Effective Date. The obligations of the Lenders
to make the initial Loans hereunder shall not become effective until the date
on which each of the following conditions is satisfied (or waived in accordance
with Section 9.02):
(a) The Administrative Agent (or its counsel) shall have
received from each party hereto either (i) a counterpart of this
Agreement signed on behalf of such party or (ii) written evidence
satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page of this Agreement) that such
party has signed a counterpart of this Agreement.
(b) The Administrative Agent shall have received a favorable
written opinion (addressed to the Agents and the Lenders, dated the
Effective Date and addressing such matters relating to the Loan
Parties, the Loan Documents and the Transactions as the Administrative
Agent shall reasonably request, in each case in form and substance
68
reasonably satisfactory to the Administrative Agent) of each of (i)
Xxxxxxxx Mollen & Xxxxxx, counsel for the Parent and the Borrower,
(ii) Xxxxxxx Xxxx & Xxxxxxxxx, special FCC counsel for Parent and the
Borrower, and (iii) Cravath, Swaine & Xxxxx, counsel for Lucent. The
Parent and the Borrower hereby request their counsel referred to in
clauses (i) and (ii) of this paragraph to deliver such opinions.
(c) The Administrative Agent shall have received such
documents and certificates as the Administrative Agent or its counsel
may reasonably request relating to the organization, existence and
good standing of the Loan Parties, the authorization of the
Transactions and any other legal matters relating to the Loan Parties,
the Loan Documents or the Transactions, all in form and substance
satisfactory to the Administrative Agent and its counsel.
(d) The Administrative Agent shall have received a
certificate, dated the Effective Date and signed by the President, a
Vice President or a Financial Officer of each of the Parent and the
Borrower, confirming compliance with the conditions set forth in
paragraphs (a), (b) and (c) of Section 4.02.
(e) The Agents and Lucent shall be satisfied that all fees
and other amounts due and payable to them hereunder on or prior to the
Effective Date, including, to the extent invoiced, reimbursement or
payment of all expenses required to be reimbursed or paid by the
Borrower hereunder or under any other Loan Document, have been paid or
will be paid from the proceeds of a Borrowing to be made on the
Effective Date.
(f) The Lenders shall be reasonably satisfied with the
corporate and legal structure and capitalization of the Parent and the
Restricted Subsidiaries, including the charter and by-laws of the
Parent and each Restricted Subsidiary and each agreement or instrument
evidencing Indebtedness.
(g) The Administrative Agent shall have received (i)
counterparts of the Guarantee Agreement signed on behalf of the Parent
and each Guarantor Subsidiary and (ii) counterparts of the Indemnity
and Contribution Agreement signed on behalf of each Loan Party.
69
(h) The Collateral Agent shall have received (i) counterparts
of the Security Agreement signed on behalf of the Borrower, (ii)
counterparts of an Equipment User Agreement or other document
contemplated by Section 6.17, in either case signed on behalf of the
initial Equipment User or Users and (iii) evidence satisfactory to it
that all documents and instruments, including Uniform Commercial Code
financing statements, required by law or reasonably requested by the
Collateral Agent to be filed, registered or recorded to create or
perfect the Liens intended to be created under the Security Agreement,
and to protect the Borrower's ownership interest in (and the Lien of
the Security Agreement on) all Collateral that will be leased to or
otherwise possessed by any initial Affiliated Equipment User, have
been so filed, registered or recorded.
(i) The Collateral Agent shall have received a completed
Perfection Certificate dated the Effective Date and signed by a
Financial Officer of the Borrower, together with all attachments
contemplated thereby, including (i) the results of a search of the
Uniform Commercial Code (or equivalent) filings made with respect to
the Borrower in the jurisdictions contemplated by the Perfection
Certificate and (ii) copies of the financing statements (or similar
documents) disclosed by such search and evidence reasonably
satisfactory to the Collateral Agent that the Liens indicated by such
financing statements (or similar documents) are permitted by Section
6.02 or have been released.
(j) The Administrative Agent shall have received evidence
satisfactory to it that the insurance required by Section 5.07 is in
effect and that the Collateral Agent has been named as an additional
insured and loss payee under all insurance policies to be maintained
with respect to the properties of the Borrower constituting the
Collateral.
(k) The Lenders shall have received the most recent Business
Plan, including financial projections, and there shall have been no
material adverse changes in the Business Plan compared to the
information disclosed to Lucent prior to the date of execution of this
Agreement.
(l) The Lenders (i) shall have been given access to
the management, records, books of account, contracts and
70
properties of the Loan Parties and shall have received such financial,
business and other information regarding the Loan Parties as the
Lenders shall have reasonably requested and (ii) shall have completed
their due diligence review of the Loan Parties and shall be reasonably
satisfied with the results of such review.
(m) The Administrative Agent shall have received evidence
reasonably satisfactory to it that the Restricted Subsidiaries hold
all material Service Licenses and material governmental approvals, and
have entered into all interconnection agreements with the incumbent
local exchange providers, reasonably necessary to conduct business as
a local exchange provider in each of their local markets in which they
are providing local exchange service.
The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the obligations of the Lenders to make Loans
hereunder shall not become effective unless each of the foregoing conditions is
satisfied (or waived pursuant to Section 9.02) at or prior to 3:00 p.m., New
York City time, on December 31, 1998 (and, in the event such conditions are not
so satisfied or waived, the Commitments shall terminate at such time).
SECTION 4.02. Each Borrowing. The obligation of
each Lender to make a Loan on the occasion of any Borrowing is
subject to the satisfaction of the following conditions:
(a) At the time of and immediately after giving effect to
such Borrowing, the representations and warranties of the Loan Parties
set forth in the Loan Documents shall be true and correct (or, in the
case of any representation or warranty that is not qualified as to
materiality, true and correct in all material respects) on and as of
the date of such Borrowing (or, in the case of any representation and
warranty that expressly relates to an earlier date, on and as of such
earlier date).
(b) At the time of and immediately after giving effect to
such Borrowing no Default shall have occurred and be continuing.
71
(c) At the time of and immediately after giving effect to
such Borrowing, the Supply Agreement shall be in full force and effect
and the Borrower shall be in compliance therewith in all material
respects.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date thereof as to the matters specified in paragraphs (a),
(b) and (c) of this Section.
ARTICLE V
Affirmative Covenants
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall
have been paid in full, each of the Parent and the Borrower covenants and
agrees with the Lenders that:
SECTION 5.01. Financial Statements and Other
Information. The Parent and the Borrower will furnish to the
Administrative Agent:
(a) within 90 days after the end of each fiscal year of the
Parent, the audited consolidated balance sheet of the Parent and
related statements of operations, stockholders' equity and cash flows
as of the end of and for such year, setting forth in each case in
comparative form the figures for the previous fiscal year, all
reported on by Xxxxx Xxxxxxxx LLP or other independent public
accountants of recognized national standing (without a "going concern"
or like qualification or exception and without any qualification or
exception as to the scope of such audit) to the effect that such
consolidated financial statements present fairly in all material
respects the financial condition and results of operations of the
Parent and its consolidated subsidiaries on a consolidated basis in
accordance with GAAP consistently applied;
(b) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year of the Parent, the consolidated
balance sheet of the Parent and related statements of operations and
cash flows as of the end of and for such fiscal quarter and the then
elapsed
72
portion of the fiscal year, setting forth in each case in comparative
form the figures for the corresponding period or periods of (or, in
the case of the balance sheet, as of the end of) the previous fiscal
year, all certified by one of its Financial Officers as presenting
fairly in all material respects the financial condition and results of
operations of the Parent and its consolidated subsidiaries on a
consolidated basis in accordance with GAAP consistently applied,
subject to normal year-end audit adjustments and the absence of
footnotes;
(c) concurrently with any delivery of the Parent's financial
statements under clause (a) or (b) above, a certificate of a Financial
Officer of each of the Parent and the Borrower (i) certifying as to
whether a Default has occurred and, if a Default has occurred,
specifying the details thereof and any action taken or proposed to be
taken with respect thereto, (ii) setting forth the Leverage Ratio as
of the end of the period covered by such financial statements, (iii)
setting forth reasonably detailed calculations demonstrating
compliance with Sections 6.11, 6.12, 6.13, 6.14, 6.15 and 6.16, (iv)
stating whether any change in GAAP or in the application thereof that
materially affects the Parent's financial statements accompanying such
certificate (it being understood that any change that would affect
compliance with any covenant set forth herein or the Applicable Rate
shall be considered material) has occurred since the date of the
Parent's audited financial statements referred to in Section 3.04 and,
if any such change has occurred, specifying the effect of such change
on the financial statements accompanying such certificate, and (v) if
the financial statements accompanying such certificate include
consolidated financial information for any Unrestricted Subsidiary,
setting forth on a schedule attached to such certificate a reasonably
detailed calculation of all adjustments to such financial statements
necessary in order to reflect the financial condition and results of
operations of the Parent and the Restricted Subsidiaries on a
consolidated basis in accordance with GAAP;
(d) concurrently with any delivery of financial statements
under clause (a) above, a certificate of the accounting firm that
reported on such financial statements stating whether they obtained
knowledge during the course of their examination of such financial
73
statements of any Default (which certificate may be
limited to the extent required by accounting rules or
guidelines);
(e) promptly after the same become available but in any event
within 105 days after the end of each fiscal year of the Parent, the
Business Plan for the current fiscal year and updated financial
projections through the earlier of (i) the eighth fiscal year
thereafter and (ii) the fiscal year during which the latest Maturity
Date occurs;
(f) promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other
materials filed by the Parent or any Subsidiary with the Securities
and Exchange Commission, or any Governmental Authority succeeding to
any or all of the functions of said Commission, or with any national
securities exchange, or distributed by the Parent to its shareholders
generally, as the case may be; and
(g) promptly following any request therefor, such other
information regarding the operations, business affairs and financial
condition of the Parent or any Subsidiary, or compliance with the
terms of any Loan Document, as either Agent or any Lender may
reasonably request (including, if requested by any Lender, unaudited
balance sheets and statements of operations for the Borrower).
SECTION 5.02. Notices of Material Events. (a) The
Parent or the Borrower will furnish to the Administrative
Agent, the Collateral Agent and each Lender written notice of
the following promptly upon obtaining knowledge thereof:
(i) the occurrence of any Default;
(ii) the filing or commencement of any action, suit or
proceeding by or before any arbitrator or Governmental Authority
against or affecting the Parent or any Affiliate thereof that, if
adversely determined, could reasonably be expected to result in a
Material Adverse Effect; and
74
(iii) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
(b) The Parent or the Borrower will furnish to the
Administrative Agent and the Collateral Agent written notice of the occurrence
of any Collateral Trigger Event or Prepayment Event promptly after the
occurrence of such event.
(c) Each notice delivered under this Section shall be
accompanied by a statement of a Financial Officer or other executive officer of
the Parent or the Borrower setting forth the details of the event or
development requiring such notice and any action taken or proposed to be taken
with respect thereto.
SECTION 5.03. Information Regarding Collateral. (a) The
Borrower will furnish to the Collateral Agent prompt written notice of any
change (i) in the Borrower's or any Affiliated Equipment User's corporate name
or in any trade name used to identify it in the conduct of its business or in
the ownership of its properties, (ii) in the location of the Borrower's or any
Affiliated Equipment User's chief executive office, its principal place of
business or any asset constituting Collateral (other than the installation of
any asset constituting Collateral in a jurisdiction in which all Uniform
Commercial Code financing statements (including fixture filings, if applicable)
and other appropriate filings, recordings or registrations, containing a
description of the Collateral have been filed of record in each governmental,
municipal or other appropriate office in such jurisdiction to the extent
necessary to perfect the security interests under the Security Agreement
(including, if applicable, the Borrower's ownership interest in any Collateral
leased to or otherwise possessed by any Affiliated Equipment User), (iii) in
the Borrower's or any Affiliated Equipment User's identity or corporate
structure or (iv) in the Borrower's or any Affiliated Equipment User's Federal
Taxpayer Identification Number. The Borrower agrees not to effect or permit any
change referred to in the preceding sentence unless all filings have been made
under the Uniform Commercial Code or otherwise that are required in order for
the Collateral Agent to continue at all times following such change to have a
valid, legal and perfected security interest in all the Collateral.
75
(b) Each year, at the time of delivery of annual financial
statements for the Parent with respect to the preceding fiscal year pursuant to
clause (a) of Section 5.01, the Borrower shall deliver to the Collateral Agent
a certificate of a Financial Officer of the Parent or the Borrower (i) setting
forth the information required pursuant to Sections 1 and 2 of the Perfection
Certificate or confirming that there has been no change in such information
since the date of the Perfection Certificate delivered on the Effective Date or
the date of the most recent certificate delivered pursuant to this Section and
(ii) certifying that all Uniform Commercial Code financing statements
(including fixture filings, as applicable) or other appropriate filings,
recordings or registrations, including all refilings, rerecordings and
reregistrations, containing a description of the Collateral have been filed of
record in each governmental, municipal or other appropriate office in each
jurisdiction identified pursuant to clause (i) above to the extent necessary to
protect and perfect the security interests under the Security Agreement
(including the Borrower's ownership interest in any Collateral leased to or
otherwise possessed by any Affiliated Equipment User) for a period of not less
than 18 months after the date of such certificate (except as noted therein with
respect to any continuation statements to be filed within such period).
SECTION 5.04. Existence; Conduct of Business. The Parent
will, and will cause each of the Restricted Subsidiaries to, do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence and the rights, licenses, permits, privileges and franchises
material to the conduct of the business of the Parent and the Restricted
Subsidiaries, taken as a whole; provided that the foregoing shall not prohibit
any merger, consolidation, liquidation or dissolution permitted under Section
6.03.
SECTION 5.05. Payment of Obligations. The Parent will, and
will cause each of the Restricted Subsidiaries to, pay its Indebtedness and
other obligations, including Tax liabilities, before the same shall become
delinquent or in default, except where (a) the validity or amount thereof is
being contested in good faith by appropriate proceedings, (b) the Parent or
such Restricted Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP, (c) such contest effectively suspends
collection of the contested obligation and the enforcement of any Lien
76
securing such obligation and (d) the failure to make payment pending the
resolution of such contest could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 5.06. Maintenance of Properties. The Parent will, and
will cause each of the Restricted Subsidiaries to, keep and maintain all
Collateral, and all other property material to the conduct of the business of
the Parent and the Restricted Subsidiaries, taken as a whole, in good working
order and condition, ordinary wear and tear excepted.
SECTION 5.07. Insurance. (a) The Parent will, and will cause
each of the Restricted Subsidiaries to, maintain, with financially sound and
reputable insurance companies with AM Best's rating of A minus (A-) or better,
All-Risk property insurance for the full replacement value of all property and
other insurance, including public liability insurance against claims for
personal injury, death or property damage occurring upon, about or in
connection with the use of any properties owned, occupied or controlled by it
as well as such other insurance as may be required by law.
(b) All policies of All-Risk property insurance maintained by
or for the benefit of the Borrower with respect to the Collateral shall be (i)
maintained in an amount not less than the full replacement value of all
property thereof, with deductibles or self insured retention not exceeding
$100,000, and (ii) endorsed or otherwise amended to include a "standard" or
"New York" lender's loss payable endorsement, in favor of and satisfactory to
the Collateral Agent, which endorsement shall provide that the insurance
carrier shall pay all proceeds otherwise payable to any Loan Party under such
policies directly to the Collateral Agent. All such policies also shall provide
that none of the Borrower, the Administrative Agent, the Collateral Agent nor
any other party shall be a coinsurer thereunder and shall contain a
"Replacement Cost Endorsement", without any deduction for depreciation,
"mortgagee's interest"/"breach of warranty coverage" and such other provisions
as the Administrative Agent or the Collateral Agent may reasonably require from
time to time to protect the interests of the Lenders. Each such policy also
shall provide that it shall not be canceled (i) by reason of nonpayment of
premium except upon not less than 10 days' prior written notice thereof by the
insurer to the Administrative Agent and the Collateral Agent (giving the
Administrative Agent and the Collateral Agent the right to
77
cure defaults in the payment of premiums) or (ii) for any other reason except
upon not less than 30 days' prior written notice thereof by the insurer to the
Administrative Agent and the Collateral Agent. The Borrower shall deliver to
the Administrative Agent and the Collateral Agent, upon not less than 30 days'
prior written notice to the cancelation, modification or nonrenewal of any such
policy of insurance, a copy of a renewal or replacement policy (or other
evidence of renewal of a policy previously delivered to the Administrative
Agent and the Collateral Agent) together with evidence satisfactory to the
Administrative Agent and the Collateral Agent of payment of the premium
therefor.
(c) The Borrower shall notify the Administrative Agent and
the Collateral Agent immediately whenever any separate insurance concurrent in
form or contributing in the event of loss with that required to be maintained
under this Section is taken out by any Loan Party, and shall promptly deliver
to the Administrative Agent and the Collateral Agent a duplicate original copy
of such policy or policies.
SECTION 5.08. Books and Records; Inspection Rights. The
Parent will, and will cause each of its Subsidiaries to, keep proper books of
record and account in which full, true and correct entries are made of all
material dealings and transactions in relation to its business and activities.
The Parent will, and will cause each of its Subsidiaries to, permit any
representatives designated by either Agent or any Lender, upon reasonable prior
notice, to visit and inspect its properties, to examine and make extracts from
its books and records, and to discuss its affairs, finances and condition with
its officers and independent accountants, all at such reasonable times and as
often as reasonably requested.
SECTION 5.09. Compliance with Laws and Agreements. The Parent
will, and will cause each of its Subsidiaries to, comply with all laws, rules,
regulations and orders of any Governmental Authority (including ERISA and all
Environmental Laws) applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 5.10. Use of Proceeds. The proceeds of the
Loans will be used solely to make payments of the Purchase
78
Price and to pay fees and expenses incurred in connection with the
Transactions.
SECTION 5.11. Further Assurances. The Parent and the Borrower
will, and the Parent will cause each other Loan Party to, execute any and all
further documents, financing statements, agreements and instruments, and take
all such further actions (including the filing and recording of financing
statements, fixture filings and other documents), which may be required under
any applicable law, or which either Agent or the Required Lenders may
reasonably request, to effectuate the transactions contemplated by the Loan
Documents or to grant, preserve, protect or perfect the Liens created or
intended to be created by the Security Agreement or the validity or priority of
any such Lien, all at the expense of the Borrower. The Borrower also agrees to
provide to either Agent, upon request, evidence reasonably satisfactory to such
Agent as to the perfection and priority of the Liens created or intended to be
created by the Security Agreement.
SECTION 5.12. Casualty and Condemnation. (a) The Borrower
will furnish to the Agents and the Lenders prompt written notice of any
casualty or other damage to any material portion of any Collateral or the
commencement of any action or proceeding for the taking of any Collateral or
any part thereof or interest therein under power of eminent domain or by
condemnation or similar proceeding.
(b) If any event described in paragraph (a) of this Section
results in Net Proceeds (whether in the form of insurance proceeds,
condemnation award or otherwise), the Collateral Agent is authorized to collect
such Net Proceeds and, if received by the Parent, the Borrower or any other
Subsidiary, such Net Proceeds shall be paid over to the Collateral Agent. All
such Net Proceeds retained by or paid over to the Collateral Agent shall be
held by the Collateral Agent and released from time to time to pay the costs of
repairing, restoring or replacing the affected property in accordance with the
terms of this Agreement and the applicable provisions of the Security
Agreement, subject to the provisions of the Security Agreement regarding
application of such Net Proceeds during a Default.
(c) If any Net Proceeds retained by or paid over to the
Collateral Agent as provided above continue to be held by the Collateral Agent
on the date that any prepayment is due pursuant to Section 2.09(c) in respect
of the event resulting
79
in such Net Proceeds, then such Net Proceeds shall be applied to prepay
Borrowings as provided in Section 2.09(c).
SECTION 5.13. Interest Rate Protection. The Parent will from
time to time enter into and maintain in effect one or more Hedging Agreements
reasonably satisfactory to the Required Lenders, the effect of which shall be
to fix or limit the interest cost to the Parent and the Restricted Subsidiaries
with respect to such portion of the Loans and Deferred Interest as shall be
necessary in order that, at all times, at least 50% of Consolidated
Indebtedness shall be comprised of a combination of (a) Indebtedness bearing
interest at a fixed rate and (b) the portion of the Loans and Deferred Interest
covered by such Hedging Agreements.
SECTION 5.14. Additional Subsidiary Guarantors. If any
additional Guarantor Subsidiary is formed or acquired (or results from a
Subsidiary that was not previously a Guarantor Subsidiary becoming a Guarantor
Subsidiary) after the Effective Date, the Parent will notify the Administrative
Agent and the Lenders thereof and will cause such Subsidiary to become a party
to the Guarantee Agreement and the Indemnity and Contribution Agreement
promptly, and in any event within five Business Days, thereafter.
ARTICLE VI
Negative Covenants
Until the Commitments have expired or terminated and the
principal of and interest on each Loan and all fees payable hereunder have been
paid in full, each of the Parent and the Borrower covenants and agrees with the
Lenders that:
SECTION 6.01. Indebtedness. (a) The Parent will not, nor
will it permit any Restricted Subsidiary to, create, incur, assume or permit
to exist any Indebtedness, except:
(i) Indebtedness created under the Loan Documents;
(ii) subject to Section 6.04, Indebtedness of the Parent to
any Restricted Subsidiary and of any Restricted Subsidiary to the Parent or any
other Restricted Subsidiary;
(iii) subject to Section 6.04, Guarantees by the Parent of
Indebtedness of any Restricted Subsidiary and
80
Guarantees by any Guarantor Subsidiary of Indebtedness of any Special Purpose
Equipment Subsidiary;
(iv) Indebtedness of the Parent or any Restricted Subsidiary
incurred after the date of this Agreement to finance the acquisition of any
equipment or inventory, or the acquisition, improvement or construction of any
real property, by the Parent or such Restricted Subsidiary (other than assets
constituting Collateral or other assets the removal or loss of which would
adversely affect the value of any assets constituting Collateral), including
Capital Lease Obligations and any Indebtedness assumed in connection with the
acquisition of any such assets or secured by a Lien on any such assets prior to
the acquisition thereof; provided that (A) such Indebtedness is incurred prior
to or within 90 days after such acquisition or the completion of such
improvement or construction, as the case may be, and (B) any such Indebtedness
incurred in connection with any particular acquisition, improvement or
construction shall not exceed the cost of such acquisition, improvement or
construction; provided further that the aggregate principal amount of all
outstanding Indebtedness incurred in reliance upon this clause (iv) (including
Indebtedness incurred pursuant to clause (vi) below to refinance Indebtedness
originally incurred pursuant to this clause (iv), and successive refinancings
thereof) shall not at any time prior to January 1, 2004, exceed the Purchase
Money Debt Limit at such time;
(v) Indebtedness outstanding on the Effective Date and set
forth on Schedule 6.01;
(vi) Indebtedness of the Parent incurred to refinance any
Indebtedness referred to in clause (iv) or (v) above and Indebtedness of any
Restricted Subsidiary incurred to refinance any Indebtedness of such Restricted
Subsidiary referred to in clause (iv) or (v) above; provided that (A) the
principal amount of any such Indebtedness does not exceed the principal amount
of, plus accrued interest and any prepayment premiums applicable to, the
Indebtedness refinanced thereby, (B) any such Indebtedness has a scheduled
maturity date that is on or after the scheduled maturity date of the
Indebtedness refinanced thereby, (C) any such Indebtedness has a weighted
average life to maturity that is equal to or longer than the remaining weighted
average life to maturity of the Indebtedness refinanced thereby (determined
immediately prior to giving effect to such refinancing), (D) any such
Indebtedness does not include any provisions that may require
81
mandatory Repayment thereof prior to scheduled maturity, other than scheduled
repayments taken into account in determining compliance with clause (C) above
and other provisions that are not materially more burdensome than any such
provisions included in the Indebtedness refinanced thereby, (E) any such
Indebtedness shall not be secured by any Lien other than Liens on assets
securing the Indebtedness being refinanced thereby and shall not be Guaranteed
by any Restricted Subsidiary other than any Restricted Subsidiary that
Guaranteed the Indebtedness being refinanced thereby and (F) if the
Indebtedness being refinanced is Subordinated Indebtedness, then any
Indebtedness incurred to refinance such Subordinated Indebtedness shall be
subordinated to the Obligations on terms no less favorable to the Lenders than
the terms of the Subordinated Indebtedness being refinanced;
(vii) Permitted Receivables Indebtedness and Permitted
Receivables Financings;
(viii) Subordinated Indebtedness and Disqualified Stock, in
each case issued by the Parent after the date of this Agreement; provided that
(A) such Subordinated Indebtedness is subordinated to the Obligations of the
Parent under the Guarantee Agreement on terms no less favorable to the Lenders
than the terms of subordination of the Subordinated Indebtedness of the Parent
outstanding on the date of this Agreement, (B) such Subordinated Indebtedness
is unsecured and is not Guaranteed by any Restricted Subsidiary or any other
Affiliate of the Parent, (C) such Indebtedness matures on or after, and does
not require any scheduled payments of principal prior to, the date that is ten
years after the date of issuance of such Indebtedness and (D) in the case of
any such Disqualified Stock (x) any obligations in respect thereof would not
rank any greater than those in respect of Subordinated Indebtedness issued in
compliance with this clause, (y) any obligations in respect thereof are
unsecured and are not Guaranteed by any Restricted Subsidiary or any other
Affiliate of the Parent and (z) there is not any obligation to make any
mandatory payment (other than payments contingent upon an "asset sale" or
"change of control" comparable to those applicable to the Parent's existing
Disqualified Stock) in respect thereof (or right to convert or exchange such
Disqualified Stock into or for any security other than Subordinated
Indebtedness that would qualify for issuance under this clause (viii) or common
stock or Permitted Preferred Stock of the Parent) prior to the date that is ten
years after the date of issuance thereof;
82
(ix) Indebtedness of the Parent as an account party in
respect of letters of credit or surety bonds issued to support obligations
incurred in the ordinary course of business; provided that (A) any Indebtedness
resulting from a drawing under any such letter of credit or payment under any
such surety bond shall be repaid within three Business Days and (B) the sum of
the aggregate face amount of all such letters of credit and the aggregate
amount payable under all surety bonds outstanding at any time, plus any
unreimbursed drawings or payments thereunder, shall not exceed $25,000,000 at
any time prior to the end of the fiscal year ended December 31, 1999, or, in
the case of any fiscal year ending thereafter, the maximum amount permitted
hereunder during the immediately preceding fiscal year plus $5,000,000;
(x) Acquisition Indebtedness, subject to the limitations set
forth in the definition of "Permitted Acquisitions"; and
(xi) other unsecured Indebtedness of the Parent in an
aggregate principal amount not exceeding $___________ (or, on and after January
1, 2003, $____________) at any time outstanding.
(b) The Borrower will not create, incur, assume or permit to
exist any Indebtedness other than the Loans, regardless of whether such
Indebtedness would be permitted under paragraph (a) of this Section.
SECTION 6.02. Liens. (a) The Parent will not, nor will it
permit any Restricted Subsidiary to, create, incur, assume or permit to exist
any Lien on any property or asset now owned or hereafter acquired by it, or
assign or sell any income or revenues (including accounts receivable) or rights
in respect of any thereof, except:
(i) Liens created under the Security Agreement;
(ii) Permitted Encumbrances;
(iii) any Lien on any property or asset of the Parent or any
Restricted Subsidiary existing on the date hereof and set forth in
Schedule 6.02; provided that (A) such Lien shall not apply to any
other property or asset of the Parent or any Restricted Subsidiary and
(B) such Lien shall secure only those obligations which it secures on
83
the date hereof and refinancings thereof that satisfy the criteria set
forth in clause (vi) of Section 6.01(a);
(iv) any Lien existing on any property or asset prior to the
date that such property or asset was first acquired by the Parent or
any Subsidiary or any Affiliate thereof or existing on any property or
asset of any Person that becomes a Subsidiary after the date hereof
prior to the time such Person becomes a Subsidiary; provided that (A)
such Lien is not created in contemplation of or in connection with
such acquisition or such Person becoming a Subsidiary, (B) such Lien
shall not apply to any other property or assets of the Parent or any
Subsidiary and (C) such Lien shall secure only those obligations which
it secures on the date of such acquisition or the date such Person
becomes a Subsidiary, as the case may be, and refinancings thereof
that satisfy the criteria set forth in clause (vi) of Section 6.01(a);
(v) Liens on equipment, inventory or real property (other
than assets constituting Collateral or other assets that become
accessions to assets constituting Collateral or the removal or loss of
which would adversely affect the value of any assets constituting
Collateral) acquired, constructed or improved by the Parent or a
Restricted Subsidiary; provided that (A) such Liens secure only
Indebtedness permitted by clause (iv) of Section 6.01(a) or a
refinancing thereof permitted by clause (vi) of Section 6.01(a), (B)
such Liens and the Indebtedness secured thereby are incurred prior to
or within 90 days after such acquisition, construction or improvement
of such equipment, inventory or real property, (C) the Indebtedness
secured thereby does not exceed ___% of the cost of acquiring such
equipment or inventory or acquiring, constructing or improving such
real property and (D) such Liens shall not apply to any other property
or assets of the Parent or any Restricted Subsidiary;
(vi) sales of accounts receivable pursuant to Permitted
Receivables Financings and Liens on accounts receivable securing
Permitted Receivables Indebtedness; and
(vii) Liens securing reimbursement obligations in respect of
letters of credit; provided that such Liens
84
apply only to documents and other property relating to such letters of
credit and products and proceeds thereof.
(b) Notwithstanding the foregoing, the Borrower will not
create, incur, assume or permit to exist any Lien on any Collateral except (i)
Liens created under the Security Agreement, (ii) Liens described in clause (a)
or (b) of the definition of "Permitted Encumbrances" and (iii) rights of
Equipment Users under leases or similar arrangements, subject to Equipment User
Agreements.
SECTION 6.03. Fundamental Changes. (a) The Parent will not,
nor will it permit any Restricted Subsidiary to, merge into or consolidate with
any other Person, or permit any other Person to merge into or consolidate with
it, or sell, transfer, lease or otherwise dispose of (in one transaction or in
a series of transactions) all or substantially all of its assets, or all or
substantially all of the stock of any of its Restricted Subsidiaries (in each
case, whether now owned or hereafter acquired), or liquidate or dissolve,
except that, if at the time thereof and immediately after giving effect thereto
no Default shall have occurred and be continuing (i) any Person may merge with
or into a Restricted Subsidiary (other than the Borrower, a Special Purpose
Equipment Subsidiary, a Special Purpose Financing Subsidiary or a Special
Purpose License Subsidiary) pursuant to a transaction that constitutes a
Permitted Acquisition, provided that the survivor of such merger is a
Restricted Subsidiary, (ii) any Restricted Subsidiary (other than the Borrower,
a Special Purpose Equipment Subsidiary or a Special Purpose Financing
Subsidiary) may merge with or into any other Restricted Subsidiary (other than
the Borrower, a Special Purpose Equipment Subsidiary or a Special Purpose
Financing Subsidiary) in a transaction in which (A) the surviving entity is a
Restricted Subsidiary and (B) if either such Restricted Subsidiary is a
Guarantor Subsidiary, the surviving entity is a Guarantor Subsidiary, (iii) any
Restricted Subsidiary (other than the Borrower, a Special Purpose Equipment
Subsidiary or a Special Purpose Financing Subsidiary) may merge into the Parent
in a transaction in which the Parent is the surviving entity, (iv) any Special
Purpose Equipment Subsidiary may merge with or into any Guarantor Subsidiary if
the survivor is a Guarantor Subsidiary, (v) any Restricted Subsidiary may sell,
transfer, lease or otherwise dispose of its assets to the Parent or to another
Restricted Subsidiary (other than the Borrower, a Special Purpose Equipment
Subsidiary, a Special
85
Purpose Financing Subsidiary or a Special Purpose License Subsidiary) or (vi)
any Restricted Subsidiary (other than the Borrower) may liquidate or dissolve
if the Parent determines in good faith that such liquidation or dissolution is
in its best interests and is not disadvantageous to the Lenders; provided that
any such merger involving the Person that is not a wholly owned Restricted
Subsidiary immediately prior to such merger shall not be permitted unless also
permitted by Section 6.04.
(b) The Parent will not, nor will it permit any of its
Restricted Subsidiaries to, engage to any material extent in any business other
than communications, data transport and networking businesses (including
Internet related businesses), production and distribution of content and
information services, any businesses in which Parent or its Subsidiaries are
currently engaged and any businesses incidental, related or ancillary to, or
which are entered into as a means of facilitating or enhancing, any of the
foregoing.
(c) The Borrower will not engage in any business or activity
other than the acquisition of assets comprising Collateral, the financing
thereof pursuant to this Agreement, the leasing and disposition thereof to
Equipment Users as contemplated hereby and activities incidental to the
foregoing.
SECTION 6.04. Investments, Loans, Advances, Guarantees and
Acquisitions; Asset Sales. (a) The Parent will not, nor will it permit any of
its Restricted Subsidiaries to, purchase, hold or acquire (including pursuant
to any merger with any Person that was not a wholly owned Restricted Subsidiary
prior to such merger) any capital stock, evidences of indebtedness or other
securities (including any option, warrant or other right to acquire any of the
foregoing) of, make or permit to exist any loans or advances to, Guarantee any
obligations of, or make or permit to exist any investment or any other interest
in, any other Person, or purchase or otherwise acquire (in one transaction or a
series of transactions) any Special Service License or any assets of any other
Person constituting a business unit, except:
(i) Permitted Investments;
(ii) investments by the Parent and its Restricted
Subsidiaries in the capital stock of their respective Restricted
Subsidiaries; provided that the sum of the
86
aggregate amount of outstanding investments made by the Parent and its
Restricted Subsidiaries that are Loan Parties in, and loans and
advances made by the Parent and its Restricted Subsidiaries that are
Loan Parties to, Restricted Subsidiaries that are not Loan Parties,
plus the aggregate amount of obligations of Restricted Subsidiaries
that are not Loan Parties that is Guaranteed by the Parent, shall not
at any time exceed $__________; provided further that (A) investments
described in clause (xi) below and (B) Guarantees by Loan Parties of
Indebtedness of Special Purpose Equipment Subsidiaries and payment by
the Parent of principal of and interest on such Indebtedness and
related expenses shall be permitted without regard to the limitation
set forth in the foregoing proviso;
(iii) loans or advances made by the Parent to any Restricted
Subsidiary and made by any Restricted Subsidiary to the Parent or any
other Restricted Subsidiary; provided that the aggregate amount of
such loans and advances made by the Parent and its Restricted
Subsidiaries that are Loan Parties to Restricted Subsidiaries that are
not Loan Parties shall be subject to the limitation set forth in the
proviso to clause (ii) above;
(iv) Guarantees by the Parent of obligations of the
Restricted Subsidiaries, Guarantees by Guarantor Subsidiaries of
Indebtedness of any Special Purpose Equipment Subsidiary and
Guarantees by WinStar Wireless, Inc. of obligations (other than
Indebtedness) of any other Guarantor Subsidiary; provided that the
aggregate amount of outstanding obligations Guaranteed by the Parent
of Restricted Subsidiaries that are not Loan Parties shall be subject
to the limitation set forth in the proviso to clause (ii) above;
(v) Permitted Acquisitions and the acquisitions described in
Schedule 6.04A that are made substantially on the terms described on
such Schedule;
(vi) promissory notes received by the Parent or any
Restricted Subsidiary in connection with sales of assets (other than
assets constituting Collateral) permitted by paragraph (b) below;
87
(vii) investments received in connection with the bankruptcy
or reorganization of, or settlement of delinquent accounts and
disputes with, customers and suppliers, in each case in the ordinary
course of business;
(viii) (A) promissory notes of directors, officers or
employees of the Parent or any Restricted Subsidiary issued to the
Parent in exchange for common stock of the Parent, (B) payroll, travel
and similar advances made in the ordinary course of business that are
expected at the time such advances are made ultimately to be treated
as expenses in accordance with GAAP and (C) other loans and advances
by the Parent or any Restricted Subsidiary to their respective
directors, officers or employees in an aggregate principal amount not
exceeding $____________ at any one time outstanding;
(ix) investments existing on the Effective Date and set forth
on Schedule 6.04B;
(x) to the extent that the consideration therefor consists
solely of common stock or Permitted Preferred Stock of the Parent or
is paid for in cash out of the Net Proceeds of a substantially
concurrent issuance of common stock or Permitted Preferred Stock of
the Parent (or options, warrants and other rights to purchase shares
of such common stock or Permitted Preferred Stock) (other than common
stock or Permitted Preferred Stock of the Parent (or options, warrants
and other rights to purchase shares of such commen stock or Permitted
Preferred Stock) issued to and paid for by a Subsidiary), investments
in Unrestricted Subsidiaries, joint ventures and minority interests in
Persons engaged in any business or activity in which the Parent and
the Restricted Subsidiaries are permitted to engage;
(xi) investments by the Parent in Subsidiaries resulting from
the allocation by the Parent of corporate overhead expenses paid by
the Parent among the Subsidiaries pursuant to book entries made in
accordance with past practices;
(xii) investments owned by a Person at the time such Person
is acquired pursuant to an acquisition permitted by clause (v) above;
provided that such investment is not
88
made in connection with, or in contemplation of, such acquisition;
(xiii) the acquisition of the shares or other equity
interests in a Person that becomes a Restricted Subsidiary upon
consummation of such acquisition; provided that (A) substantially all
of the assets of such Person consist of Other Service Licenses, (B)
such Person has no outstanding Indebtedness (other than Indebtedness
that is repaid upon consummation of such acquisition) and (C)(x) in
the case of an acquisition of shares or other equity interests in a
Person that is organized under the laws of any jurisdiction in the
United States of America or a substantial portion of the Other Service
Licenses of which relate to markets in the United States of America,
at least 80% of all shares or other equity interests in all Restricted
Subsidiaries resulting from such acquisition are owned, directly or
indirectly, by the Parent, or (y) in the case of any other such
acquisition, at least a majority of all shares or other equity
interests in all Restricted Subsidiaries resulting from such
acquisition are owned, directly or indirectly, by the Parent; and
(xiv) other investments, loans, advances and Guarantees by
the Parent or any of the Restricted Subsidiaries (including (x)
investments in Unrestricted Subsidiaries and (y) investments in any
Restricted Subsidiary existing at the time such Subsidiary is
designated as an Unrestricted Subsidiary) in an aggregate amount not
exceeding $__________ (or, on and after January 1, 2004, $__________).
(b) The Parent will not, nor will it permit any of its
Restricted Subsidiaries to, sell, transfer, lease or otherwise dispose of any
asset, including any capital stock of or ownership interest in any other Person
owned by it, nor will the Parent permit any Restricted Subsidiary to issue
(other than to the Parent or a wholly owned Restricted Subsidiary) any
additional shares of its capital stock or other ownership interest in such
Restricted Subsidiary, except:
(i) sales of (A) inventory, (B) obsolete, uneconomic or
surplus assets not exceeding, in the aggregate, $__________ during any
fiscal year of the Parent and
89
(C) Permitted Investments, in each case in the ordinary
course of business;
(ii) transfers constituting investments permitted by
paragraph (a) of this Section or Restricted Payments permitted by
Section 6.06;
(iii) sales, transfers and dispositions to the Parent or a
Restricted Subsidiary;
(iv) other sales, transfers and dispositions of
obsolete, uneconomic or surplus assets made when no
Default has occurred and is continuing;
(v) sales of assets described on Schedule 6.04C; provided
that at least 85% of the consideration received for each such sale
consists of cash;
(vi) sales of securities held for investment purposes (which
shall not be construed to include capital stock of or other
investments in Restricted Subsidiaries);
(vii) sales of investments in Unrestricted
Subsidiaries;
(viii) sales of non-core assets acquired pursuant to a
Permitted Acquisition; provided that (A) such sales are made within 18
months after the date of consummation of such Permitted Acquisition
and (B) the sales price of the assets so sold do not exceed 25% of the
total purchase price of the assets acquired (including any Acquisition
Indebtedness) pursuant to such Permitted Acquisition;
(ix) sales of Other Service Licenses in respect of markets
other than those in any of the 50 most populated Metropolitan
Statistical Areas (determined based upon the most recent Xxxx-XxXxxxx
publication containing such information);
(x) bulk capacity arrangements for the use of transmission
capacity on the telecommunications network of the Restricted
Subsidiaries in accordance with practices customary in the
telecommunications industry;
(xi) during any fiscal year of the Parent, sales of other
assets not exceeding, in the aggregate during any such fiscal year,
$____________ (or, in the case of any
90
fiscal year ending on or after December 31, 2000, the maximum amount
permitted under this clause (xi) for the immediately preceding fiscal
year plus $____________); provided at least __% of the consideration
received for each such sale consists of cash;
(xii) sales of accounts receivable pursuant to Permitted
Receivables Financings;
(xiii) leases by the Borrower of assets constituting
Collateral in accordance with Section 6.17; and
(xiv) leases entered into by a Restricted Subsidiary
(other than the Borrower), as lessor, in the ordinary
course of business;
provided that all sales, transfers, leases and other dispositions permitted
hereby (other than pursuant to clause (iii) or (xiii) above) shall be made for
fair value and, if such asset constitutes Collateral, solely for cash
consideration.
SECTION 6.05. Hedging Agreements. The Parent will not, nor
will it permit any of its Restricted Subsidiaries to, enter into any Hedging
Agreement, other than Hedging Agreements required by Section 5.13 and other
Hedging Agreements entered into in the ordinary course of business to hedge or
mitigate risks to which the Parent or any Restricted Subsidiary is exposed in
the conduct of its business or the management of its liabilities.
SECTION 6.06. Restricted Payments. The Parent will not, nor
will it permit any Restricted Subsidiary to, declare or make, or agree to pay
or make, directly or indirectly, any Restricted Payment, except (a) the Parent
may make Restricted Payments payable solely in additional shares of its common
stock or Permitted Preferred Stock (including options, warrants and other
rights to purchase shares of such common stock or Permitted Preferred Stock),
(b) the Parent may make Restricted Payments in cash out of the Net Proceeds of
a substantially concurrent issuance of its common stock or Permitted Preferred
Stock (or options, warrants and other rights to purchase shares of such common
stock or Permitted Preferred Stock) (other than common stock or Permitted
Preferred Stock (or options, warrants and other rights to purchase shares of
such common stock or Permitted Preferred Stock) issued to and paid for by a
Subsidiary), (c) Restricted
91
Subsidiaries may declare and pay dividends and distributions ratably with
respect to their common stock, (d) the Parent and the Restricted Subsidiaries
may make regularly scheduled payments of principal of and interest on
Subordinated Indebtedness as and when due, subject to the subordination
provisions thereof, and may refinance Subordinated Indebtedness in accordance
with clause (vi) of Section 6.01(a), (e) payments made in respect of
dissenters' rights in respect of shares of capital stock of a Person acquired
pursuant to a Permitted Acquisition, provided that such payments are treated as
cash consideration for such Permitted Acquisition, and (f) payments made in
lieu of issuance of fractional shares of common stock of the Parent upon the
conversion of any Indebtedness or Permitted Preferred Stock into shares of
common stock of the Parent, in any such case in accordance with the terms of
such Indebtedness or Permitted Preferred Stock.
SECTION 6.07. Transactions with Affiliates. The Parent will
not, nor will it permit any Restricted Subsidiary to, sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire any
property or assets from, or otherwise engage in any other transactions with, any
of its Unrestricted Subsidiaries or other Affiliates, except (a) transactions
that are at prices and on terms and conditions not less favorable to the Parent
or such Restricted Subsidiary than could be obtained on an arm's-length basis
from unrelated third parties, (b) transactions between or among the Loan Parties
not involving any other Affiliate and (c) transactions between any Loan Party
and any Restricted Subsidiary that is not a Loan Party that are at prices and on
terms and conditions not less favorable to such Loan Party than could be
obtained on an arm's length basis from unrelated third parties.
SECTION 6.08. Restrictive Agreements. The Parent will not,
and will not permit any Restricted Subsidiary to, directly or indirectly, enter
into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon the ability of any
Restricted Subsidiary to pay dividends or other distributions with respect to
any shares of its capital stock or to make or repay loans or advances to the
Parent or to Guarantee Indebtedness of the Borrower; provided that (a) the
foregoing shall not apply to restrictions and conditions imposed by law or by
any Loan Document and (b) the foregoing shall not apply to restrictions and
conditions existing on the date hereof
92
identified on Schedule 6.08 (but shall apply to any extension or renewal of, or
any amendment or modification expanding the scope of, any such restriction or
condition).
SECTION 6.09. Repayment of Indebtedness. The Parent will not,
nor will it permit any Restricted Subsidiary to, make any Repayment in respect
of, or make any payment in violation of any subordination terms of, any
Indebtedness of the Parent or any Restricted Subsidiary except (a) any
Repayment of Indebtedness resulting in a prepayment of Loans and Deferred
Interest pursuant to Section 2.09(e) and (b) Repayments described in any of the
clauses of the proviso to Section 2.09(e).
SECTION 6.10. Limitation on Sale-Leaseback Transactions. The
Parent will not, nor will it permit any Restricted Subsidiary to, enter into
any arrangement, directly or indirectly, whereby it shall sell or transfer any
property, real or personal, used or useful in its business, whether now owned
or hereafter acquired, and thereafter rent or lease such property or other
property that it intends to use for substantially the same purpose or purposes
as the property sold or transferred, except for any such sale of any fixed or
capital asset that is made for cash consideration in an amount not less than
the cost of such fixed or capital asset and is consummated within 90 days after
the Parent or such Restricted Subsidiary acquires or completes the construction
of such fixed or capital asset.
SECTION 6.11. Secured Indebtedness to Total Capitalization.
The Parent will not permit the ratio of Secured Indebtedness to Total
Capitalization at any time during any period set forth below to be greater than
the ratio set forth below opposite such period:
Period Ratio
------ -----
On or after the Effective Date,
but prior to April 1, 1999
On or after April 1, 1999,
but prior to July 1, 1999
On or after July 1, 1999,
but prior to October 1, 1999
On or after October 1, 1999,
but prior to January 1, 2000
93
On or after January 1, 2000,
but prior to April 1, 2000
On or after April 1, 2000,
but prior to July 1, 2000
On or after July 1, 2000,
but prior to October 1, 2000
On or after October 1, 2000,
but prior to January 1, 2001
On or after January 1, 2001,
but prior to April 1, 2001
On or after April 1, 2001,
but prior to July 1, 2001
On or after July 1, 2001,
but prior to October 1, 2001
On or after October 1, 2001,
but prior to January 1, 2002
On or after January 1, 2002,
but prior to April 1, 2002
On or after April 1, 2002,
but prior to July 1, 2002
On or after July 1, 2002,
but prior to October 1, 2002
On or after October 1, 2002,
but prior to January 1, 2003
On or after January 1, 2003,
but prior to April 1, 2004
On or after April 1, 2004,
but prior to July 1, 2004
On or after July 1, 2004,
but prior to October 1, 2004
On or after October 1, 2004,
but prior to January 1, 2005
On or after January 1, 2005,
but prior to April 1, 2005
94
On or after April 1, 2005,
but prior to July 1, 2005
On or after July 1, 2005,
but prior to January 1, 2006
On or after January 1, 2006,
but prior to April 1, 2006
On or after April 1, 2006,
but prior to July 1, 2006
On or after July 1, 2006,
but prior to October 1, 2006
On or after October 1, 2006
SECTION 6.12. Consolidated Indebtedness to Total
Capitalization. The Parent will not permit the ratio of Consolidated
Indebtedness to Total Capitalization at any time during any period set forth
below to be greater than the ratio set forth below opposite such period:
Period Ratio
------ -----
On or after January 1, 1999,
but prior to October 1, 1999
On or after October 1, 1999,
but prior to April 1, 2000
On or after April 1, 2000,
but prior to January 1, 2001
On or after January 1, 2001,
but prior to January 1, 2002
On or after January 1, 2002,
but prior to January 1, 2004
On or after January 1, 2004,
but prior to April 1, 2004
On or after April 1, 2004,
but prior to July 1, 2004
On or after July 1, 2004,
but prior to October 1, 2004
95
On or after October 1, 2004,
but prior to January 1, 2005
On or after January 1, 2005,
but prior to April 1, 2005
On or after April 1, 2005,
but prior to July 1, 2005
On or after July 1, 2005,
but prior to October 1, 2005
On or after October 1, 2005,
but prior to January 1, 2006
On or after January 1, 2006,
but prior to April 1, 2006
On or after April 1, 2006,
but prior to July 1, 2006
On or after July 1, 2006,
but prior to October 1, 2006
On or after October 1, 2006
SECTION 6.13. Consolidated Indebtedness to Consolidated
EBITDA. The Parent will not permit the ratio of (a) Consolidated Indebtedness
as of any day during any period set forth below to (b) 400% of Consolidated
EBITDA for the fiscal quarter of the Parent ending on such day (or, if such day
is not the last day of a fiscal quarter, ending on the last day of the most
recently ended fiscal quarter) to be greater than the ratio set forth below
opposite such period:
Period Ratio
------ -----
On or after January 1, 2002,
but prior to January 1, 2003
On or after January 1, 2003,
but prior to January 1, 2004
On or after January 1, 2004,
but prior to January 1, 2005
On or after January 1, 2005,
but prior to January 1, 2006
On or after January 1, 2006
96
SECTION 6.14. Consolidated EBITDA to Consolidated Debt
Service. The Parent will not permit the ratio of (a) 400% of Consolidated
EBITDA for any fiscal quarter of the Parent ending on any date on or after July
1, 2002, to (b) Consolidated Debt Service for the period of four consecutive
fiscal quarters of the Parent ending on such date to be less than 1.0 to 1.0.
SECTION 6.15. Consolidated EBITDA to Consolidated Interest
Expense. The Parent will not permit the ratio of (a) Consolidated EBITDA for
any fiscal quarter of the Parent ending on any date during any period set forth
below to (b) Consolidated Interest Expense for such period to be less than the
ratio set forth below opposite such period:
Period Ratio
------ -----
On or after January 1, 2002,
but prior to January 1, 2004
On or after January 1, 2004
SECTION 6.16. Minimum Revenues. The Parent will not permit
the consolidated revenue of the Parent and the Restricted Subsidiaries for any
fiscal year ending on any date set forth below to be less than the amount
listed opposite such fiscal year:
Fiscal Year Ending Amount
------------------ ------
December 31, 1999
December 31, 2000
December 31, 2001
December 31, 2002
December 31, 2003
December 31, 2004
December 31, 2005
After December 31, 2005
SECTION 6.17. Use of Collateral. The Parent and the Borrower
will not permit any asset constituting Collateral to be outside the Borrower's
possession or located on any
97
property not owned by the Borrower, except that the Borrower may lease any such
assets to, or otherwise allow any such assets to be in the possession of, any
other Restricted Subsidiary or any Affiliate of the Parent (or other Person
with which the Parent or a Restricted Subsidiary has entered into an agreement
to provide management and operating services) that is in the business of
operating assets of the type leased to or possessed by it or any customer of
any such Restricted Subsidiary or Affiliate (any such Restricted Subsidiary,
Affiliate (or other Person) or customer, an "Equipment User") if (a) in the
case of any such Affiliated Equipment User (i) such Affiliated Equipment User
has entered into an Equipment User Agreement and (ii) all documents and
instruments, including Uniform Commercial Code financing statements, required
by law or reasonably requested by either Agent to be filed, registered or
recorded to perfect (or maintain the perfection of) the Liens created under the
Security Agreement with respect to such assets, and to protect the Borrower's
ownership interests therein, shall be so filed, registered or recorded or (b)
in the case of any such customer (i) such customer has entered into a written
lease agreement for (or other written agreement granting such customer the
right to possess or use) such assets and such lease (or other agreement) shall
have a term not exceeding three years (subject to renewal rights requiring the
consent of the lessor) and otherwise be on terms and conditions no less
favorable to the lessor than those customary for leases of similar assets
between unaffiliated parties, (ii) the assets leased to (or otherwise possessed
or used by) such customer shall be of the type described on Schedule 6.17 and
(iii) such customer shall have entered into an Equipment User Agreement or the
lease agreement (or other agreement) with such customer shall include
provisions substantially the same as those that would be included in an
Equipment User Agreement; provided that any lease or transfer of possession of
any Collateral contemplated hereby shall not relieve the Parent or the Borrower
of any of their respective obligations under any Loan Document. The foregoing
shall not be construed to prohibit (A) the return of any asset constituting
Collateral to the vendor thereof for repairs, services, modifications or other
similar purposes or (B) the storage of any asset constituting Collateral in any
warehouse or similar facility; provided that in the case of any such warehouse
or similar facility that is not owned by the Borrower or the applicable
Equipment User, the owner and operator of such warehouse or similar facility
shall have entered into a written agreement waiving any Liens on such assets.
It is understood that the Parent and the
98
Borrower intend that a portion of the Collateral will be located and used
outside the United States of America; provided that neither the Parent nor the
Borrower will permit any asset constituting Collateral to be located outside
the United States of America (or to be transferred between jurisdictions
outside the United States of America) unless (a) the Parent or the Borrower
shall have notified the Lenders thereof reasonably in advance of any such
assets being transferred outside the United States of America (or between such
jurisdictions) and (b) the Required Lenders shall be reasonably satisfied that
(i) the laws of the jurisdiction in which such assets are to be located
adequately protect the interests of the Lenders in such Collateral, (ii) the
security interests in such Collateral granted under the Security Agreement will
continue to be adequately protected and perfected, (iii) there are not any
material risks relating to the political or economic stability of the
jurisdiction in which such Collateral is to be located or the Person that will
possess such Collateral in such jurisdiction, (iv) the portion of the
Collateral located in such jurisdiction, and in all jurisdictions outside the
United States of America, is within acceptable limits, and (v) the location of
such Collateral in such jurisdiction is not otherwise materially
disadvantageous to the Lenders. The Borrower shall deliver to the Lenders, with
a copy to the Agents, such legal opinions and other documentation as either
Agent or the Required Lenders shall reasonably request in connection with their
consideration or approval of any proposed transfer of Collateral outside the
United States of America or between jurisdictions outside the United States of
America.
ARTICLE VII
Events of Default
If any of the following events ("Events of Default") shall
occur:
(a) the Borrower shall fail to pay any principal of or
Deferred Interest on any Loan when and as the same shall become due
and payable, whether at the due date thereof or at a date fixed for
prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest (other than
Deferred Interest) on any Loan or any fee or
99
any other amount (other than an amount referred to in clause (a) of
this Article) payable under this Agreement, when and as the same shall
become due and payable, and such failure shall continue unremedied for
a period of five days (in the case of interest or fees) or five days
after notice thereof from the Administrative Agent or any Lender (in
the case of any such other amount);
(c) any representation or warranty made or deemed made by or
on behalf of any Loan Party in or in connection with any Loan Document
or any amendment or modification thereof or waiver thereunder, or in
any report, certificate, financial statement or other document
furnished pursuant to or in connection with any Loan Document or any
amendment or modification thereof or waiver thereunder, shall prove to
have been incorrect in any respect (or, in the case of any
representation or warranty that is not qualified as to materiality, in
any material respect) when made or deemed made;
(d) the Parent or the Borrower shall fail to observe or
perform any covenant, condition or agreement contained in Section
5.02, 5.04 (with respect to the existence of the Parent or the
Borrower) or 5.10 or in Article VI;
(e) any Loan Party shall fail to observe or perform any
covenant, condition or agreement contained in any Loan Document (other
than those specified in clause (a), (b) or (d) of this Article), and
such failure shall continue unremedied for a period of 30 days after
notice thereof from the Administrative Agent to the Borrower (which
notice will be given at the request of any Lender);
(f) any Loan Party shall fail to make any payment (whether of
principal or interest and regardless of amount) in respect of any
Material Indebtedness, when and as the same shall become due and
payable (after giving effect to any period of grace expressly
applicable thereto);
(g) any event or condition occurs that results in any
Material Indebtedness becoming due prior to its scheduled maturity or
that enables or permits (with or without the giving of notice, the
lapse of time or both) the holder or holders of any Material
Indebtedness or any trustee or agent on its or their behalf to cause
any
100
Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled
maturity; provided that this clause (g) shall not apply to secured
Indebtedness that becomes due as a result of the voluntary sale or
transfer of the property or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of the Parent or any
Restricted Subsidiary or its debts, or of a substantial part of its
assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Parent or any Restricted
Subsidiary or for a substantial part of its assets, and, in any such
case, such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing
shall be entered;
(i) the Parent or any Restricted Subsidiary shall (i)
voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state
or foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition
described in clause (h) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Parent or any Restricted
Subsidiary or for a substantial part of its assets, (iv) file an
answer admitting the material allegations of a petition filed against
it in any such proceeding, (v) make a general assignment for the
benefit of creditors or (vi) take any action for the purpose of
effecting any of the foregoing;
(j) the Parent or any Restricted Subsidiary shall become
unable, admit in writing its inability or fail generally to pay its
debts as they become due;
(k) one or more judgments for the payment of money in an
aggregate amount in excess of $____________ shall be rendered against
the Parent or any Restricted Subsidiary
101
or any combination thereof and the same shall remain undischarged for
a period of 30 consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment
creditor to attach or levy upon any assets of the Parent or any
Restricted Subsidiary to enforce any such judgment;
(l) any Lien on any material portion of the Collateral
purported to be created under the Security Agreement shall cease to
be, or shall be asserted by the Borrower not to be, a valid and
perfected Lien on any Collateral, with the priority required by the
Security Agreement, except as a result of the sale or other
disposition of the applicable Collateral in a transaction permitted
under the Loan Documents;
(m) a Change in Control shall occur;
(n) the loss, revocation, suspension or material impairment
of any license or agreement (or combination of licenses and
agreements) of the Parent and the Restricted Subsidiaries shall occur
that, in the opinion of the Required Lenders, results in or could
reasonably be expected to result in a Material Adverse Effect; or
(o) an ERISA Event shall have occurred that, in the opinion
of the Required Lenders, when taken together with all other ERISA
Events that have occurred, could reasonably be expected to result in a
Material Adverse Effect;
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either
or both of the following actions, at the same or different times: (i) terminate
the Commitments, and thereupon the Commitments shall terminate immediately, and
(ii) declare the Loans then outstanding to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
(including Deferred Interest) thereon and all fees and other obligations of the
Borrower accrued hereunder, shall become due and payable immediately, without
presentment, demand, protest or
102
other notice of any kind, all of which are hereby waived by the Borrower; and
in case of any event with respect to the Borrower described in clause (h) or
(i) of this Article, the Commitments shall automatically terminate and the
principal of the Loans then outstanding, together with accrued interest
(including Deferred Interest) thereon and all fees and other obligations of the
Borrower accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.
ARTICLE VIII
The Agents
Each of the Lenders hereby irrevocably appoints each Agent as
its agent and authorizes each Agent to take such actions on its behalf and to
exercise such powers as are delegated to such Agent by the terms of the Loan
Documents, together with such actions and powers as are reasonably incidental
thereto.
Any Person serving as an Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not an Agent, and such Person and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Parent or any Subsidiary or other Affiliate thereof
as if it were not an Agent hereunder.
Neither Agent shall have any duties or obligations except
those expressly set forth in the Loan Documents. Without limiting the
generality of the foregoing, (a) neither Agent shall be subject to any
fiduciary or other implied duties, regardless of whether a Default has occurred
and is continuing, (b) neither Agent shall have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated by the Loan Documents that such Agent
is required to exercise in writing by the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 9.02), and (c) except as expressly set
forth in the Loan Documents, neither Agent shall have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to
the Parent or any of its Subsidiaries that is communicated to or obtained by
103
the Person serving as Agent or any of its Affiliates in any capacity. Neither
Agent shall be liable for any action taken or not taken by it with the consent
or at the request of the Required Lenders (or such other number or percentage
of the Lenders as shall be necessary under the circumstances as provided in
Section 9.02) or in the absence of its own gross negligence or wilful
misconduct. Each Agent shall be deemed not to have knowledge of any Default
unless and until written notice thereof is given to such Agent by a Loan Party
or a Lender, and neither Agent shall be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with any Loan Document, (ii) the contents of any certificate,
report or other document delivered thereunder or in connection therewith, (iii)
the performance or observance of any of the covenants, agreements or other
terms or conditions set forth in any Loan Document, (iv) the validity,
enforceability, effectiveness or genuineness of any Loan Document or any other
agreement, instrument or document, or (v) the satisfaction of any condition set
forth in Article IV or elsewhere in any Loan Document, other than to confirm
receipt of items expressly required to be delivered to such Agent.
Each Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate,
consent, statement, instrument, document or other writing believed by it to be
genuine and to have been signed or sent by the proper Person. Each Agent also
may rely upon any statement made to it orally or by telephone and believed by
it to be made by the proper Person, and shall not incur any liability for
relying thereon. Each Agent may consult with legal counsel (who may be counsel
for the Parent or the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
Each Agent may perform any and all its duties and exercise
its rights and powers by or through any one or more sub-agents appointed by
such Agent. Each Agent and any such sub-agent may perform any and all its
duties and exercise its rights and powers through their respective Related
Parties. The exculpatory provisions of the preceding paragraphs shall apply to
any such sub-agent and to the Related Parties of each Agent and any such
sub-agent, and shall apply to their respective activities in connection with
the syndication of
104
the credit facilities provided for herein as well as activities as Agent.
Subject to the appointment and acceptance of a successor
Agent as provided in this paragraph, an Agent may resign at any time by
notifying the Lenders and the Borrower. Upon any such resignation, the Required
Lenders shall have the right to appoint a successor with the approval of the
Borrower (which approval shall not be unreasonably withheld or delayed and, if
an Event of Default has occurred and is continuing, shall not be required). If
no successor shall have been so appointed by the Required Lenders and shall
have accepted such appointment within 30 days after the retiring Agent gives
notice of its resignation, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent which shall be a bank with an office in New
York, New York, or an Affiliate of any such bank. Upon the acceptance of its
appointment as Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. The fees payable by the Borrower to a successor Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After an Agent's resignation
hereunder, the provisions of this Article and Section 9.03 shall continue in
effect for the benefit of such retiring Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Agent.
Each Lender acknowledges that it has, independently and
without reliance upon either Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon either Agent
or any other Lender and based on such documents and informa tion as it shall
from time to time deem appropriate, continue to make its own decisions in
taking or not taking action under or based upon this Agreement, any other Loan
Document or related agreement or any document furnished hereunder or
thereunder.
ARTICLE IX
105
Miscellaneous
SECTION 9.01. Notices. Except in the case of notices and
other communications expressly permitted to be given by telephone, all notices
and other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower or the Parent, to it at 000 Xxxx
Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000, Attention of Vice
President, Treasurer (Telecopy No. (000) 000-0000) (with a copy, in
the case of notices or other communications relating to Defaults, to
such address, Attention of Executive Vice President, General Counsel
(Telecopy No. (000) 000-0000));
(b) if to the Collateral Agent, to it at Xxx Xxxxxxxxxxxxx
Xxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, Attention of Corporate Trust
Division (Telecopy No. (000) 000-0000;
(c) if to the Administrative Agent, to it at 000 Xxxx Xxxxxx
Xxxx, Xxxxxx, Xxx Xxxxxx 00000, Attention of Assistant
Treasurer-Project Finance (Telecopy No. (000) 000-0000);
(d) if to Lucent, to it at 000 Xxxx Xxxxxx Xxxx, Xxxxxx, Xxx
Xxxxxx 00000, Attention of Assistant Treasurer-Project Finance
(Telecopy No. (000) 000-0000); and
(e) if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and
other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.
SECTION 9.02. Waivers; Amendments. (a) No failure or delay
by either Agent or any Lender in exercising any right or power hereunder or
under any other Loan Document shall operate as a waiver thereof, nor shall any
single or partial
106
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Agents and the Lenders hereunder and under the other Loan Documents are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of any Loan Document or consent to
any departure by any Loan Party therefrom shall in any event be effective
unless the same shall be permitted by paragraph (b) of this Section, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. Without limiting the generality of the foregoing,
the making of a Loan shall not be construed as a waiver of any Default,
regardless of whether an Agent or any Lender may have had notice or knowledge
of such Default at the time.
(b) Neither this Agreement nor any other Loan Document nor
any provision hereof or thereof may be waived, amended or modified except, in
the case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Parent, the Borrower and the Required Lenders or, in the
case of any other Loan Document, pursuant to an agreement or agreements in
writing entered into by the applicable Agent and the Loan Party or Loan Parties
that are parties thereto with the consent of the Required Lenders; provided
that no such agreement shall (i) increase the Commitment of any Lender without
the written consent of such Lender, (ii) reduce the principal amount of any
Loan or the amount of Deferred Interest thereon or reduce the rate of interest
on such Loan or Deferred Interest, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (iii) postpone the
scheduled date of payment of the principal amount of any Loan or any interest
(including Deferred Interest) thereon, or any fees payable hereunder, or reduce
the amount of, waive or excuse any such payment, or postpone the scheduled date
of expiration of any Commitment, without the written consent of each Lender
affected thereby, (iv) change Section 2.16(b) or (c) in a manner that would
alter the pro rata sharing of payments required thereby, without the written
consent of each Lender, (v) change any of the provisions of this Section or the
definition of "Required Lenders" or any other provision of any Loan Document
specifying the number or percentage of Lenders required to waive, amend or
modify any rights thereunder or make any determination or grant any consent
thereunder, without the written consent of each Lender, (vi) release all or any
107
substantial part of the Collateral from the Lien of the Security Agreement
(except as expressly provided in the Security Agreement), without the written
consent of each Lender, (vii) release the Parent or any Guarantor Subsidiary
from its Guarantee under the Guarantee Agreement (except as expressly provided
in the Guarantee Agreement) or limit or condition its obligations thereunder,
without the written consent of each Lender, or (viii) change any provisions of
any Loan Document in a manner that by its terms adversely affects the rights in
respect of payments due to Lenders holding Loans of any Class differently than
those holding Loans of any other Class, without the written consent of Lenders
holding a majority in interest of the outstanding Loans and Deferred Interest
thereon of each affected Class and, in the case of a Class with respect to
which the Availability Period has not ended, a majority in interest of the
Commitments (in addition to any other consents required by this sentence);
provided further that no such agreement shall amend, modify or otherwise affect
the rights or duties of either Agent without the prior written consent of such
Agent.
SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The
Borrower shall pay (i) all costs and expenses incurred by Lucent and each
Agent, including the fees, charges and disbursements of counsel for Lucent or
the Agents, in connection with the negotiation, preparation, execution and
delivery of the Loan Documents (including, in the case of Lucent, expenses
incurred in connection with its due diligence activities) and (ii) all costs
and expenses incurred by either Agent or any Lender, including the fees,
charges and disbursements of any counsel for either Agent or any Lender, in
connection with (A) the enforcement or protection of its rights in connection
with the Loan Documents, including its rights under this Section, or in
connection with the Loans made hereunder, including all such costs and expenses
incurred during any workout, restructuring or negotiations in respect of such
Loans, and (B) in the case of Lucent and the Agents, the administration of, and
any amendments, modifications, waivers or supplements of or to the provisions
of, any of the Loan Documents.
(b) The Borrower shall indemnify each Agent and each Lender,
and each Related Party of any of the foregoing Persons (each such Person being
called an "Indemnitee") against, and hold each Indemnitee harmless from, any
and all losses, claims, damages, liabilities and related expenses, including
the fees, charges and disbursements of any counsel
108
for any Indemnitee, incurred by or asserted against any Indemnitee arising out
of, in connection with, or as a result of (i) the execution or delivery of any
Loan Document or any other agreement or instrument contemplated hereby, the
performance by the parties to the Loan Documents of their respective
obligations thereunder or the consummation of the Transactions or any other
transactions contemplated hereby, (ii) any Loan or the use of the proceeds
therefrom, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Parent or any of its
Subsidiaries or at which any Collateral is located, or any Environmental
Liability related in any way to the Parent or any of its Subsidiaries, or (iv)
any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory and regardless of whether any Indemnitee is a party thereto; provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses have
resulted from the gross negligence or wilful misconduct of such Indemnitee.
(c) To the extent that the Borrower fails to pay any amount
required to be paid by it to either Agent under paragraph (a) or (b) of this
Section, each Lender severally agrees to pay to such Agent such Lender's pro
rata share (determined as of the time that the applicable unreimbursed expense
or indemnity payment is sought) of such unpaid amount; provided that the
unreimbursed expense or indemnified loss, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against such Agent in
its capacity as such. For purposes hereof, a Lender's "pro rata share" shall be
determined based upon its share of the sum of the total outstanding Loans,
Deferred Interest and Commitments at the time.
(d) To the extent permitted by applicable law, neither the
Parent nor the Borrower shall assert, and each of them hereby waives, any claim
against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement or any
agreement or instrument contemplated hereby, the Transactions, any Loan or the
use of the proceeds thereof.
(e) All amounts due under this Section shall be payable not
later than 30 days after written demand therefor.
109
SECTION 9.04. Successors and Assigns. (a) The provisions of
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns permitted hereby, except that
the Borrower may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by the Borrower without such consent shall be
null and void). Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby and, to the extent expressly
contemplated hereby, the Related Parties of each of the Agents and the Lenders)
any legal or equitable right, remedy or claim under or by reason of this
Agreement.
(b) Any Lender may, without the consent of the Borrower
(except as expressly provided below), assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans and Deferred Interest at the time owing
to it); provided that (i) except in the case of an assignment to Lucent or a
Lender or to an Affiliate of Lucent or a Lender, the Administrative Agent must
give its prior written consent to such assignment (which consent shall not be
unreasonably withheld or delayed and, while an Event of Default has occurred
and is continuing, shall not be required), (ii) in the case of an assignment by
a Lucent Lender (other than to Lucent or an Affiliate of Lucent) or an
assignment to a competitor of the Parent and its Restricted Subsidiaries or to
any Affiliate of any such competitor, the Borrower must give its prior written
consent to such assignment (which consent shall not be unreasonably withheld or
delayed), (iii) except in the case of an assignment to Lucent, a Lender or an
Affiliate of Lucent or a Lender or an assignment of the entire remaining amount
of the assigning Lender's Commitment or entire remaining Loans and Deferred
Interest of any Class, the amount of the Commitment and Loans and Deferred
Interest of such Class of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall not be less than
$10,000,000 unless the Borrower otherwise consents, (iv) each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender's rights and obligations under this Agreement, except that
this clause (iv) shall not be construed to prohibit the assignment of a
110
proportionate part of all of the assigning Lender's rights and obligations in
respect of (A) one or more Classes of Loans and Deferred Interest, (B) one or
more Classes of Loans and Deferred Interest separately from (or without
assigning) Commitments or (C) Commitments separately from (or without
assigning) Loans or Deferred Interest, (v) the parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Acceptance,
together with a processing fee of $3,500, and (vi) the assignee, if it shall
not be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire. Subject to acceptance and recording thereof pursuant to
paragraph (d) of this Section, from and after the effective date specified in
each Assignment and Acceptance the assignee thereunder shall be a party hereto
and, to the extent of the interest assigned by such Assignment and Acceptance,
have the rights and obligations of a Lender under this Agreement, and the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all of the
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.13, 2.14, 2.15 and 9.03). Any assignment or transfer by
a Lender of rights or obligations under this Agreement that does not comply
with this paragraph shall be treated for purposes of this Agreement as a sale
by such Lender of a participation in such rights and obligations in accordance
with paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an
agent of the Borrower, shall maintain at one of its offices a copy of each
Assignment and Acceptance delivered to it and a register for the recordation of
the names and addresses of the Lenders, and the Commitments of, and principal
amount of the Loans and amount of Deferred Interest owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive, and the Borrower, the Agents and the Lenders
may treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. The Register shall be available for
inspection by the Borrower and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.
111
(d) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder) and the processing fee referred to in clause (v) of paragraph
(b) of this Section, subject to the Administrative Agent's right to consent to
such assignment to the extent provided in paragraph (b) of this Section, the
Administrative Agent shall accept such Assignment and Acceptance and record the
information contained therein in the Register. No assignment shall be effective
for purposes of this Agreement unless it has been recorded in the Register as
provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower or
the Administrative Agent, sell participations to one or more banks or other
entities (a "Participant") in all or a portion of such Lender's rights and
obligations under this Agreement (including all or a portion of its Commitments
and the Loans and Deferred Interest owing to it); provided that (i) such
Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower, the Agents and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce the Loan
Documents and to approve any amendment, modification or waiver of any provision
of the Loan Documents; provided that such agreement or instrument may provide
that such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver described in the first proviso to Section
9.02(b) that affects such Participant. Subject to paragraph (f) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 2.13, 2.14 and 2.15 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 9.08 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.16(c) as though it were a
Lender.
(f) A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of
112
Section 2.15 unless the Borrower is notified of the participation sold to such
Participant and such Participant agrees, for the benefit of the Borrower, to
comply with Section 2.15(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.
SECTION 9.05. Survival. All covenants, agreements,
representations and warranties made by the Loan Parties in the Loan Documents
and in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of the Loan Documents and the making of any Loans,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that either Agent or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time
any credit is extended hereunder, and shall continue in full force and effect
as long as the principal of or any accrued interest on any Loan or any fee or
any other amount payable under this Agreement is outstanding and unpaid and so
long as the Commitments have not expired or terminated. The provisions of
Sections 2.13, 2.14, 2.15 and 9.03 and Article VIII shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Commitments or the termination of this Agreement or any provision
hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement,
the other Loan Documents and any separate letter agreements with respect to the
agreement of the Parent and the Borrower to cooperate with Lucent with respect
to marketing,
113
selling or syndicating Loans and Commitments or with respect to fees payable to
Lucent or either Agent constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be
effective as delivery of a manually executed counterpart of this Agreement.
SECTION 9.07. Severability. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular
provision in a particular jurisdiction shall not invalidate such provision in
any other jurisdiction.
SECTION 9.08. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each Lender and each of its Affiliates is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
obligations at any time owing by such Lender or Affiliate to or for the credit
or the account of the Borrower against any of and all the obligations of the
Borrower now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under
this Agreement and although such obligations may be unmatured. The rights of
each Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service
of Process. (a) This Agreement shall be construed in accordance with and
governed by the law of the State of New York.
114
(b) Each of the Parent and the Borrower hereby irrevocably
and unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to any Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may
be enforced in other jurisdictions by suit on the judgment or in any other
manner provided by law. Nothing in this Agreement or any other Loan Document
shall affect any right that either Agent or any Lender may otherwise have to
bring any action or proceeding relating to this Agreement or any other Loan
Document against the Parent, the Borrower or their properties in the courts of
any jurisdiction.
(c) Each of the Parent and the Borrower hereby irrevocably
and unconditionally waives, to the fullest extent it may legally and
effectively do so, any objection which it may now or hereafter have to the
laying of venue of any suit, action or proceeding arising out of or relating to
this Agreement or any other Loan Document in any court referred to in paragraph
(b) of this Section. Each of the parties hereto hereby irrevocably waives, to
the fullest extent permitted by law, the defense of an inconvenient forum to
the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.01. Nothing
in this Agreement or any other Loan Document will affect the right of any party
to this Agreement to serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES
115
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Agents and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of
any remedies hereunder or any suit, action or proceeding relating to this
Agreement or any other Loan Document or the enforcement of rights hereunder or
thereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement, (g) with the consent of the Parent or the Borrower or (h)
to the extent such Information (i) becomes publicly available other than as a
result of a breach of this Section or (ii) becomes available to either Agent or
any Lender on a nonconfidential basis from a source other than the Parent or
the Borrower. For the purposes of this Section, "Information" means all
information received from the Parent or the Borrower relating to the Parent,
the Borrower or their businesses, other than any such information that is
publicly available or available to either Agent or any Lender on a
nonconfidential basis prior to disclosure by the Parent or the Borrower,
provided that such information is identified at the time of delivery as
confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section
116
shall be considered to have complied with its obligation to do so if such
Person has exercised the same degree of care to maintain the confidentiality of
such Information as such Person would accord to its own confidential
information.
SECTION 9.13. Interest Rate Limitation. Notwithstanding
anything herein to the contrary, if at any time the interest rate applicable to
any Loan, together with all fees, charges and other amounts which are treated
as interest on such Loan under applicable law (collectively the "Charges"),
shall exceed the maximum lawful rate (the "Maximum Rate") which may be
contracted for, charged, taken, received or reserved by the Lender holding such
Loan in accordance with applicable law, the rate of interest payable in respect
of such Loan hereunder, together with all Charges payable in respect thereof,
shall be limited to the Maximum Rate and, to the extent lawful, the interest
and Charges that would have been payable in respect of such Loan but were not
payable as a result of the operation of this Section shall be cumulated and the
interest and Charges payable to such Lender in respect of other Loans or
periods shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds Effective
Rate to the date of repayment, shall have been received by such Lender.
117
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
WINSTAR NETWORK EXPANSION, LLC,
by
-------------------------------------
Name:
Title:
WINSTAR COMMUNICATIONS, INC.,
by
-------------------------------------
Name:
Title:
STATE STREET BANK AND TRUST COMPANY,
as Collateral Agent,
by
-------------------------------------
Name:
Title:
LUCENT TECHNOLOGIES INC.,
individually and as Administrative Agent,
by
-------------------------------------
Name:
Title:
Schedule 2.01
Commitments
Commitment
Lender Amount
------ ------
Lucent Technologies Inc. $2,000,000,000
