EXHIBIT 10.1
[CONFORMED COPY WITH EXHIBITS
F AND G CONFORMED AS EXECUTED]
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CREDIT AGREEMENT
among
MJD COMMUNICATIONS, INC.,
VARIOUS LENDING INSTITUTIONS,
NATIONSBANK OF TEXAS, N.A.,
as SYNDICATION AGENT
and
BANKERS TRUST COMPANY,
as ADMINISTRATIVE AGENT
____________________________________
Dated as of March 30, 1998
____________________________________
$315,000,000
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TABLE OF CONTENTS
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SECTION 1. Amount and Terms of Credit............................. 1
1.01 Commitment............................................. 1
1.02 Minimum Borrowing Amounts, etc......................... 3
1.03 Notice of Borrowing.................................... 3
1.04 Disbursement of Funds.................................. 3
1.05 Notes.................................................. 4
1.06 Conversions............................................ 6
1.07 Pro Rata Borrowings.................................... 7
1.08 Interest............................................... 7
1.09 Interest Periods....................................... 8
1.10 Increased Costs, Illegality, etc....................... 9
1.11 Compensation........................................... 11
1.12 Change of Lending Office............................... 12
1.13 Replacement of Lenders................................. 12
SECTION 2. Fees................................................... 13
2.01 Fees................................................... 13
2.02 Voluntary Reduction of Commitments..................... 14
2.03 Mandatory Adjustments of Commitments, etc.............. 14
SECTION 3. Payments............................................... 16
3.01 Voluntary Prepayments.................................. 16
3.02 Mandatory Prepayments.................................. 17
3.03 Method and Place of Payment............................ 22
3.04 Net Payments........................................... 22
SECTION 4. Conditions Precedent................................... 24
4.01 Conditions Precedent to Closing Date................... 24
4.02 Conditions Precedent to Term Loans and RF Loans........ 28
4.03 Conditions Precedent to All Loans...................... 30
SECTION 5. Representations, Warranties and Agreements............. 31
5.01 Corporate Status....................................... 31
5.02 Corporate Power and Authority.......................... 31
5.03 No Violation........................................... 31
5.04 Litigation............................................. 31
5.05 Use of Proceeds; Margin Regulations.................... 32
5.06 Governmental Approvals................................. 32
(i)
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5.07 Investment Company Act................................. 33
5.08 Public Utility Holding Company Act..................... 33
5.09 True and Complete Disclosure........................... 33
5.10 Financial Condition; Financial Statements.............. 33
5.11 Security Interests..................................... 34
5.12 Acquisitions........................................... 35
5.13 Tax Returns and Payments............................... 35
5.14 Compliance with ERISA.................................. 35
5.15 Subsidiaries........................................... 36
5.16 Intellectual Property.................................. 37
5.17 Environmental Matters.................................. 37
5.18 Labor Relations........................................ 37
5.19 Compliance with Statutes, etc.......................... 37
SECTION 6. Affirmative Covenants.................................. 38
6.01 Information Covenants.................................. 38
6.02 Books, Records and Inspections......................... 39
6.03 Insurance.............................................. 40
6.04 Payment of Taxes....................................... 40
6.05 Corporate Franchises................................... 40
6.06 Compliance with Statutes, etc.......................... 40
6.07 ERISA.................................................. 40
6.08 Good Repair............................................ 42
6.09 End of Fiscal Years; Fiscal Quarters................... 42
6.10 Interest Rate Agreement................................ 42
6.11 Approvals.............................................. 42
6.12 CoBank Capital......................................... 42
SECTION 7. Negative Covenants..................................... 43
7.01 Changes in Business.................................... 43
7.02 Consolidation, Merger, Sale or Purchase of Assets, etc. 43
7.03 Liens.................................................. 45
7.04 Indebtedness........................................... 47
7.05 Capital Expenditures................................... 49
7.06 Advances, Investments and Loans........................ 49
7.07 Limitation on Creation of Subsidiaries................. 50
7.08 Modifications.......................................... 51
7.09 Dividends, etc......................................... 51
7.10 Transactions with Affiliates........................... 53
(ii)
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7.11 Interest Coverage Ratio................................ 53
7.12 Leverage Ratio......................................... 54
7.13 Senior Leverage Ratio.................................. 55
7.14 Limitation On Issuance of Stock........................ 56
7.15 Designated Senior Debt................................. 56
SECTION 8. Events of Default...................................... 56
8.01 Payments............................................... 56
8.02 Representations, etc................................... 56
8.03 Covenants.............................................. 56
8.04 Default Under Other Agreements......................... 57
8.05 Bankruptcy, etc........................................ 57
8.06 ERISA.................................................. 57
8.07 Pledge Agreement....................................... 58
8.08 Subsidiary Guaranty.................................... 58
8.09 Judgments.............................................. 58
SECTION 9. Definitions............................................ 59
SECTION 10. The Agents............................................ 87
10.01 Appointment........................................... 87
10.02 Nature of Duties...................................... 88
10.03 Lack of Reliance on the Agents........................ 88
10.04 Certain Rights of the Administrative Agent............ 88
10.05 Reliance.............................................. 89
10.06 Indemnification....................................... 89
10.07 Each Agent in its Individual Capacity................. 89
10.08 Holders............................................... 89
10.09 Resignation by the Administrative Agent............... 90
SECTION 11. Miscellaneous......................................... 90
11.01 Payment of Expenses, etc.............................. 90
11.02 Right of Setoff....................................... 91
11.03 Notices............................................... 92
11.04 Benefit of Agreement.................................. 92
11.05 No Waiver; Remedies Cumulative........................ 94
11.06 Payments Pro Rata..................................... 95
11.07 Calculations; Computations............................ 95
11.08 Governing Law; Submission to Jurisdiction; Venue;
Waiver of Jury Trial........................... 96
(iii)
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11.09 Counterparts.......................................... 96
11.10 Effectiveness......................................... 96
11.11 Headings Descriptive.................................. 97
11.12 Amendment or Waiver................................... 97
11.13 Survival.............................................. 98
11.14 Domicile of Loans..................................... 98
11.15 Confidentiality....................................... 98
11.16 Lender Register....................................... 98
ANNEX I -- Commitments
ANNEX II -- Addresses
ANNEX III -- Subsidiaries
ANNEX IV -- ERISA
ANNEX V -- Existing Liens
ANNEX VI -- Existing Indebtedness
ANNEX VII -- Existing Investments
ANNEX VIII -- Governmental Approvals
ANNEX IX -- Affiliate Transactions
EXHIBIT A -- Form of Notice of Borrowing
EXHIBIT B-1 -- Form of B Term Note
EXHIBIT B-2 -- Form of C Term Note-Floating Rate
EXHIBIT B-3 -- Form of C Term Note-Fixed Rate
EXHIBIT B-4 -- Form of RF Note
EXHIBIT B-5 -- Form of AF Note
EXHIBIT C -- Form of Section 3.04 Certificate
EXHIBIT D-1 -- Form of Opinion of Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
EXHIBIT D-2 -- Form of Opinion of White & Case LLP
EXHIBIT E -- Form of Officers' Certificate
EXHIBIT F -- Form of Subsidiary Guaranty
EXHIBIT G -- Form of Pledge Agreement
EXHIBIT H -- Form of Solvency Certificate
EXHIBIT I -- Form of Capital Contribution Agreement
EXHIBIT J -- Form of Consent Letter
EXHIBIT K -- Form of Assignment Agreement
(iv)
CREDIT AGREEMENT, dated as of March 30, 1998, among MJD
COMMUNICATIONS, INC., a Delaware corporation, the lenders from time to time
party hereto (each, a "Lender" and, collectively, the "Lenders"), NATIONSBANK OF
TEXAS, N.A., as Syndication Agent (the "Syndication Agent"), and BANKERS TRUST
COMPANY, as Administrative Agent (the "Administrative Agent" and together with
the Syndication Agent, collectively, the "Agents"). Unless otherwise defined
herein, all capitalized terms used herein and defined in Section 9 are used
herein as so defined.
W I T N E S S E T H :
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WHEREAS, subject to and upon the terms and conditions herein set
forth, the Lenders are willing to make available to the Borrower the credit
facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
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1.01 Commitment. Subject to and upon the terms and conditions
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herein set forth, each Lender severally agrees to make a loan or loans (each, a
"Loan" and, collectively, the "Loans") to the Borrower, which Loans shall be
drawn, to the extent such Lender has a commitment under such Facility, under the
B Term Facility, the C Term Facility, the Revolving Facility and the Acquisition
Facility, as set forth below:
(a) Loans under the B Term Facility (each, a "B Term Loan" and,
collectively, the "B Term Loans") (i) shall be made to the Borrower pursuant to
one or more drawings on and after the Closing Date and prior to the B
Termination Date, provided that B Term Loans incurred pursuant to B Term
Commitments created pursuant to a B Term Commitment Renewal shall not be subject
to the foregoing but shall be made within the time frame specified in the
definition of B Term Commitment Renewal, (ii) except as hereinafter provided,
may, at the option of the Borrower, be incurred and maintained as, and/or
converted into, Base Rate Loans or Eurodollar Loans, provided that all B Term
Loans made as part of the same Borrowing shall, unless specifically provided
herein, consist of Loans of the same Type and (iii) shall not exceed in
aggregate principal amount for any Lender in respect of any incurrence of B Term
Loans the B Term Commitment, if any, of such Lender as in effect immediately
prior to such incurrence. Once repaid, B Term Loans may not be reborrowed,
provided that B Term Loans may be subsequently incurred to the extent of the B
Term Commitments created pursuant to the B Term Commitment Renewal.
(b) Loans under the C Term Facility shall be made pursuant to the
Total C Term Commitment (each, a "C Term Loan-Floating Rate" and, collectively,
the "C Term Loans-Floating Rate") and pursuant to the CoBank Commitment (each, a
"C Term Loan-Fixed Rate" and, collectively, the "C Term Loans-Fixed Rate"), with
(A) the C Term Loans-Floating Rate (i) to be made to the Borrower pursuant to a
single drawing on the Closing Date (and not thereafter), (ii) except as
hereinafter provided, and, in any event, at the option of the Borrower, to be
incurred and maintained as, and/or converted into, Base Rate Loans or Eurodollar
Loans, provided that all C Term Loans-Floating Rate made as part of the same
Borrowing shall, unless specifically provided herein, consist of Loans of the
same Type and (iii) not to exceed in aggregate principal amount for any Lender
at the time of incurrence of C Term Loans-Floating Rate the C Term Commitment,
if any, of such Lender as in effect on such date immediately prior to such
incurrence and (B) the C Term Loans-Fixed Rate to be made to the Borrower by
CoBank on the Closing Date (and not thereafter) by converting the CoBank
Continuing Loans into C Term Loans-Fixed Rate in the aggregate amount of the
CoBank Commitment. Once repaid, C Term Loans-Floating Rate and C-Term Loans-
Fixed Rate may not be reborrowed.
(c) Loans under the Revolving Facility (each, an "RF Loan" and,
collectively, the "RF Loans") (i) shall be made to the Borrower at any time and
from time to time on and after the Closing Date and prior to the AF/RF Maturity
Date, (ii) except as hereinafter provided, may, at the option of the Borrower,
be incurred and maintained as, and/or converted into, Base Rate Loans or
Eurodollar Loans, provided that all RF Loans made as part of the same Borrowing
shall, unless otherwise specifically provided herein, consist of Loans of the
same Type, (iii) may be repaid and reborrowed in accordance with the provisions
hereof, and (iv) shall not exceed (giving effect to any incurrence thereof and
the use of the proceeds of such incurrence) for any Lender in aggregate
principal amount at any time outstanding the Revolving Commitment, if any, of
such Lender at such time.
(d) Loans under the Acquisition Facility (each, an "AF Loan" and,
collectively, the "AF Loans") (i) shall be made to the Borrower at any time and
from time to time on and after the B Utilization Date and prior to the AF/RF
Maturity Date, (ii) except as hereinafter provided, may, at the option of the
Borrower, be incurred and maintained as, and/or converted into, Base Rate Loans
or Eurodollar Loans, provided that all AF Loans made as part of the same
Borrowing shall, unless otherwise specifically provided herein, consist of Loans
of the same Type, (iii) may be repaid and reborrowed in accordance with the
provisions hereof, and (iv) shall not exceed (giving effect to any incurrence
thereof and the use of the proceeds of such incurrence) for any Lender at any
time outstanding in aggregate principal amount the Acquisition Commitment, if
any, of such Lender at such time.
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1.02 Minimum Borrowing Amounts, etc. The aggregate principal amount
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of each Borrowing shall not be less than the Minimum Borrowing Amount. More than
one Borrowing may be incurred on any day, provided that at no time shall there
be outstanding more than eight Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires to
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incur Loans under any Facility, it shall give the Administrative Agent at its
Notice Office, (x) prior to 12:00 Noon (New York time), at least three Business
Days' prior written notice (or telephonic notice promptly confirmed in writing)
of each proposed incurrence of Eurodollar Loans and (y) prior to 11:00 A.M. (New
York time) on the proposed date thereof, written notice (or telephonic notice
promptly confirmed in writing) of each proposed incurrence of Base Rate Loans
and Fixed Rate Loans. Each such notice (each, a "Notice of Borrowing") shall be
in the form of Exhibit A and shall be irrevocable and shall specify (i) the
Facility pursuant to which such incurrence is being made, (ii) the aggregate
principal amount of the Loans to be made pursuant to such incurrence, (iii) the
date of incurrence (which shall be a Business Day) and (iv) whether the
respective Borrowing shall consist of Base Rate Loans, Eurodollar Loans or Fixed
Rate Loans and, if Eurodollar Loans, the Interest Period to be initially
applicable thereto. The Administrative Agent shall promptly give each Lender
written notice (or telephonic notice promptly confirmed in writing) of each
proposed incurrence of Loans of such Lender's proportionate share thereof and
of the other matters covered by the Notice of Borrowing.
(b) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice permitted to be given hereunder, the
Administrative Agent, prior to receipt of written confirmation may act without
liability upon the basis of and consistent with such telephonic notice, believed
by the Administrative Agent in good faith to be from an Authorized Officer of
the Borrower. In each such case, the Borrower hereby waives the right to dispute
the Administrative Agent's record of the terms of such telephonic notice, unless
such record reflects gross negligence or willful misconduct on the part of the
Administrative Agent.
1.04 Disbursement of Funds. (a) No later than 1:00 P.M. (New York
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time) (2:00 P.M. (New York time) in the case of Base Rate Loans made pursuant to
same day notice) on the date specified in each Notice of Borrowing, each Lender
with a Commitment under the respective Facility will make available its pro rata
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share of each Borrowing requested to be made on such date, provided that no
proceeds of the C Term Loans-Fixed Rate will be made available to the Borrower,
with the C Term Loans-Fixed Rate to constitute the conversion of the outstanding
CoBank Continuing Loans. All such amounts shall be made available to the
Administrative Agent in Dollars and immediately available funds at the Payment
Office and the Administrative Agent promptly will make available to the Borrower
by depositing to its account at the Payment Office or as otherwise directed in
the applicable
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Notice of Borrowing the aggregate of the amounts so made available in the type
of funds received. Unless the Administrative Agent shall have been notified by
any Lender prior to the date of the proposed incurrence that such Lender does
not intend to make available to the Administrative Agent its portion of the
Borrowing or Borrowings to be made on such date, the Administrative Agent may
assume that such Lender has made such amount avail able to the Administrative
Agent on such date, and the Administrative Agent, in reliance upon such
assumption, may (in its sole discretion and without any obligation to do so)
make available to the Borrower a corresponding amount. If such corresponding
amount is not in fact made available to the Administrative Agent by such Lender
and the Administrative Agent has made available same to the Borrower, the
Administrative Agent shall be entitled to recover such corresponding amount from
such Lender. If such Lender does not pay such corresponding amount forthwith
upon the Administrative Agent's demand therefor, the Administrative Agent may
notify the Borrower, and, upon receipt of such notice, the Borrower shall
promptly pay such corresponding amount to the Administrative Agent. The
Administrative Agent shall also be entitled to recover on demand from such
Lender or the Borrower, as the case may be, interest on such corresponding
amount in respect of each day from the date such corresponding amount was made
available by the Administrative Agent to the Borrower to the date such
corresponding amount is recovered by the Administrative Agent, at a rate per
annum equal to (x) if paid by such Lender, the overnight Federal Funds Effective
Rate or (y) if paid by the Borrower, the then applicable rate of interest,
calculated in accordance with Section 1.08, for the respective Loans.
(b) Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its commitments hereunder or to prejudice any rights which
the Borrower may have against any Lender as a result of any default by such
Lender hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal of,
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and interest on, the Loans made to it by each Lender shall be evidenced (i) if B
Term Loans, by a promissory note substantially in the form of Exhibit B-1 with
blanks appropriately completed in conformity herewith (each, a "B Term Note"
and, collectively, the "B Term Notes"), (ii) if C Term Loans-Floating Rate, by a
promissory note substantially in the form of Exhibit B-2 with blanks
appropriately completed in conformity herewith (each, a "C Term Note-Floating
Rate" and, collectively, the "C Term Notes-Floating Rate"), (iii) if C Term
Loans-Fixed Rate, by promissory notes substantially in the form of Exhibit B-3
(the "C Term Notes-Fixed Rate"), (iv) if RF Loans, by a promissory note
substantially in the form of Exhibit B-4 with blanks appropriately completed in
conformity herewith (each, an "RF Note" and, collectively, the "RF Notes") and
(v) if AF Loans, by a promissory note substantially in the form of Exhibit B-5,
with blanks appropriately completed in conformity herewith (each, an "AF Note"
and, collectively, the "AF Notes").
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(b) The B Term Note issued to each Lender that makes any B Term Loan
shall (i) be executed by the Borrower, (ii) be payable to the order of such
Lender and be dated the Closing Date, (iii) be in a stated principal amount
equal to the B Term Commitment of such Lender on the Closing Date (or in the
case of a new B Term Note issued pursuant to Section 1.13 or 11.04, the B Term
Loans and B Term Commitment then being assigned) and be payable in the principal
amount of B Term Loans evidenced thereby, (iv) mature on the B Maturity Date,
(v) bear interest as provided in the appropriate clause of Section 1.08 in
respect of the Base Rate Loans and Eurodollar Loans, as the case may be,
evidenced thereby, (vi) be subject to mandatory repayment as provided in Section
3.02 and (vii) be entitled to the benefits of this Agreement and the other
Credit Documents.
(c) The C Term Note-Floating Rate issued to each Lender that makes
any C Term Loan-Floating Rate shall (i) be executed by the Borrower, (ii) be
payable to the order of such Lender and be dated the Closing Date, (iii) be in a
stated principal amount equal to the C Term Loans-Floating Rate made by such
Lender on the Closing Date (or in the case of a new C Term Note-Floating Rate
issued pursuant to Section 1.13 or 11.04, the respective C Term Loans-Floating
Rate evidenced thereby at the time of issuance) and be payable in the principal
amount of C Term Loans-Floating Rate evidenced thereby, (iv) mature on the C
Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the case
may be, evidenced thereby, (vi) be subject to mandatory repayment as provided in
Section 3.02 and (vii) be entitled to the benefits of this Agreement and the
other Credit Documents.
(d) The C Term Note-Fixed Rate issued to each Lender that makes or
acquires any C Term Loan-Fixed Rate shall (i) be executed by the Borrower,
(ii) be payable to the order of such Lender and be dated the Closing
Date, (iii) be in a stated principal amount equal to the relevant C Term Loans-
Fixed Rate continued by CoBank on the Closing Date (or in the case of a new C
Term Note-Fixed Rate issued pursuant to Section 1.13 or 11.04, the respective C
Term Loans Fixed Rate evidenced thereby at the time of issuance) and be payable
in the principal amount of C Term Loans-Fixed Rate evidenced thereby, (iv)
mature on the C Maturity Date, (v) bear interest as provided in Section 1.08(c)
in respect of the Fixed Rate Loans evidenced thereby, (vi) be subject to
mandatory repayment as provided in Section 3.02 and (vii) be entitled to the
benefits of this Agreement and the other Credit Documents.
(e) The RF Note issued to each RF Lender shall (i) be executed by the
Borrower, (ii) be payable to the order of such RF Lender and be dated the
Closing Date, (iii) be in a stated principal amount equal to the Revolving
Commitment of such RF Lender and be payable in the principal amount of the RF
Loans evidenced thereby, (iv) mature on the AF/RF Maturity Date, (v) bear
interest as provided in the appropriate clause of Section 1.08 in respect of the
Base Rate Loans and Eurodollar Loans, as the case may be, evidenced
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thereby, (vi) be subject to mandatory repayment as provided in Section 3.02 and
(vii) be entitled to the benefits of this Agreement and the other Credit
Documents.
(f) The AF Note issued to each AF Lender shall (i) be executed by the
Borrower, (ii) be payable to the order of such AF Lender and be dated the
Initial AF Borrowing Date, (iii) be payable in the principal amount of the AF
Loans evidenced thereby, (iv) mature on the AF/RF Maturity Date, (v) bear
interest as provided in the appropriate clause of Section 1.08 in respect of the
Base Rate Loans and Eurodollar Loans, as the case may be, evidenced thereby,
(vi) be subject to mandatory repayment as provided in Section 3.02 and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.
(g) Each Lender will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will, prior to any
transfer of any of its Notes, endorse on the reverse side thereof the
outstanding principal amount of Loans evidenced thereby. Failure to make any
such notation shall not affect the Borrower's obligations in respect of such
Loans.
1.06 Conversions. The Borrower shall have the option to convert on
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any Business Day all or a portion at least equal to the applicable Minimum
Borrowing Amount of the outstanding principal amount of the Loans owing pursuant
to a single Facility into a Borrowing or Borrowings pursuant to such Facility of
another Type of Loan provided that (i) no partial conversion of a Borrowing of
Eurodollar Loans shall reduce the outstanding principal amount of the Eurodollar
Loans made pursuant to such Borrowing to less than the Minimum Borrowing Amount
applicable thereto, (ii) Base Rate Loans and C Term Loans-Fixed Rate may not be
converted into Eurodollar Loans when a Default under Section 8.01 or an Event of
Default is in existence on the date of the proposed conversion if the
Administrative Agent or the Required Lenders shall have determined in its or
their sole discretion not to permit such conversion, (iii) Borrowings of
Eurodollar Loans resulting from this Section 1.06 shall be limited in number as
provided in Section 1.02 and (iv) no conversion of any C Term Loan-Fixed Rate
shall be made pursuant to this Section 1.06 until the FRE Date applicable
thereto, at which time such Loans shall be converted into Eurodollar Loans
and/or Base Rate Loans as elected by the Borrower in the absence of giving any
such notice, shall be automatically converted into Base Rate Loans) and such
resulting Eurodollar Loans and Base Rate Loans shall thereafter be subject to
conversion as provided in this Section 1.06. Each such con version shall be
effected by the Borrower giving the Administrative Agent at its Notice Office,
prior to 12:00 Noon (New York time), at least three Business Days' (or one
Business Day's, in the case of a conversion into Base Rate Loans) prior written
notice (or telephonic notice promptly confirmed in writing) (each, a "Notice of
Conversion") specifying the Loans to be so converted (including the relevant
Facility), the Type of Loans to be converted into and, if to be converted into a
Borrowing of Eurodollar Loans, the Interest Period to be initially applicable
there to. The Administrative
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Agent shall give each Lender prompt notice of any such proposed conversion
affecting any of its Loans.
1.07 Pro Rata Borrowings. All Loans under this Agreement (other
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than C Term Loans-Fixed Rate) shall be made by the Lenders pro rata on the basis
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of their B Term Commitments, C Term Commitments, Revolving Commitments or
Acquisition Commitments, as the case may be, if any. It is understood that no
Lender shall be responsible for any default by any other Lender in its
obligation to make Loans hereunder and that each Lender shall be obligated to
make the Loans provided to be made by it hereunder, regardless of the failure of
any other Lender to fulfill its commitments hereunder.
1.08 Interest. (a) The unpaid principal amount of each Base Rate
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Loan shall bear interest from the date of the Borrowing thereof until the
earlier of repayment or conversion thereof and maturity (whether by acceleration
or otherwise) at a rate per annum which shall at all times be the Applicable
Base Rate Margin plus the Base Rate in effect from time to time.
(b) The unpaid principal amount of each Eurodollar Loan shall bear
interest from the date of the Borrowing thereof until the earlier of repayment
or conversion thereof and maturity (whether by acceleration or otherwise) at a
rate per annum which shall at all times be the Applicable Eurodollar Margin plus
the relevant Eurodollar Rate.
(c) The unpaid principal amount of each C Term Loan-Fixed Rate shall
bear interest until maturity (whether by acceleration or otherwise) as provided
in the C Term Notes-Fixed Rate.
(d) Interest in respect of any overdue amount payable hereunder shall
accrue at a rate per annum equal to the Base Rate in effect from time to time
plus the sum of (i) 2% and (ii) the Applicable Base Rate Margin, provided that
principal in respect of Eurodollar Loans and C Term Loans-Fixed Rate (prior to
the applicable FRE Date) shall bear interest from the date the same becomes due
(whether by acceleration or otherwise) until (x) in the case of Eurodollar
Loans, the end of the Interest Period then applicable to such Eurodollar Loan
and (y) in the case of C Term Loans-Fixed Rate until paid in full, at a rate per
annum no less than one which is equal to 2% in excess of the rate of interest
applicable thereto on such date.
(e) Interest shall accrue from and including the date of any
Borrowing to but excluding the date of any repayment thereof and shall be
payable (i) in respect of each Base Rate Loan, quarterly in arrears on the last
Business Day of each March, June, September and December commencing on June 30,
1998, (ii) in respect of each Eurodollar Loan, on the last day of each Interest
Period applicable thereto and, in the case of an Interest Period in excess
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of three months, on each date occurring at three month intervals after the first
day of such Interest Period, (iii) in respect of each such Loan, on any
prepayment or conversion (on the amount prepaid or converted), at maturity
(whether by acceleration or otherwise) and, after such maturity, on demand and
(iv) in respect of the C Term Loans-Fixed Rate, as provided in the relevant C
Term Note-Fixed Rate.
(f) All computations of interest hereunder shall be made in
accordance with Section 11.07(b).
(g) The Administrative Agent, upon determining the interest rate for
any Borrowing of Eurodollar Loans for any Interest Period, shall promptly notify
the Borrower and the Lenders thereof.
1.09 Interest Periods. (a) At the time the Borrower gives a Notice
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of Borrowing or Notice of Conversion in respect of the making of, or conversion
into, a Borrowing of Eurodollar Loans (in the case of the initial Interest
Period applicable thereto) or prior to 12:00 Noon (New York time) on the third
Business Day prior to the expiration of an Interest Period applicable to a
Borrowing of Eurodollar Loans, it shall have the right to elect by giving the
Administrative Agent written notice (or telephonic notice promptly confirmed in
writing) of the Interest Period applicable to such Borrowing, which Interest
Period shall, at the option of the Borrower, be a one, two, three, six or, to
the extent available to all Lenders with a Commitment and/or outstanding Loans
under the respective Facility, nine or twelve month period. Notwithstanding
anything to the contrary contained above:
(i) the initial Interest Period for any Borrowing of
Eurodollar Loans shall commence on the date of such Borrowing (including
the date of any conversion from a Borrowing of Base Rate Loans) and each
Interest Period occurring thereafter in respect of such Borrowing shall
commence on the day on which the next preceding Interest Period expires;
(ii) if any Interest Period begins on a day for which there
is no numerically corresponding day in the calendar month at the end of
such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month;
(iii) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day, provided that if any Interest Period would
otherwise expire on a day which is not a Business Day but is a day of
the month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
-8-
(iv) no Interest Period with respect to a Borrowing of RF
Loans or AF Loans shall extend beyond the AF/RF Maturity Date;
(v) no Interest Period with respect to any B Term Loans, C
Term Loans-Floating Rate or C Term Loans-Fixed Rate outstanding as
Eurodollar Loans may be elected that would extend beyond any date upon
which a Scheduled Repayment is required to be made in respect of such
Loans if, after giving effect to the selection of such Interest Period,
the aggregate principal amount of B Term Loans or C Term Loans-Floating
Rate or C Term Loans-Fixed Rate outstanding as Eurodollar Loans,
respectively, maintained as Eurodollar Loans with Interest Periods
ending after such date would exceed the aggregate principal amount of B
Term Loans, C Term Loans-Floating Rate or C Term Loans-Fixed Rate
outstanding as Eurodollar Loans, as the case may be, permitted to be
outstanding after such Scheduled Repayment; and
(vi) no Interest Period may be elected at any time when a
Default under Section 8.01 or an Event of Default is then in existence
if the Administrative Agent or the Required Lenders shall have
determined in its or their sole discretion not to permit such election.
(b) If upon the expiration of any Interest Period, the Borrower has
failed to (or may not) elect a new Interest Period to be applicable to the
respective Borrowing of Eurodollar Loans as provided above, the Borrower shall
be deemed to have elected to convert such Borrowing into a Borrowing of Base
Rate Loans effective as of such expiration.
1.10 Increased Costs, Illegality, etc. (a) In the event that (x)
---------------------------------
in the case of clause (i) below, the Administrative Agent or (y) in the case of
clauses (ii) and (iii) below, any Lender shall have determined (which
determination shall, absent manifest error, be final and conclusive and binding
upon all parties hereto):
(i) on any date for determining the Eurodollar Rate for any
Interest Period that, by reason of any changes arising after the date of
this Agreement affecting the interbank Eurodollar market, adequate and
fair means do not exist for ascertaining the applicable interest rate on
the basis provided for in the definition of Eurodollar Rate or the
making or continuance of any Eurodollar Loan has become impracticable as
a result of a contingency occurring after the Effective Date which
materially and adversely affects the interbank Eurodollar market;
(ii) at any time, that such Lender shall incur increased
costs or reductions in the amounts received or receivable hereunder with
respect to any Eurodollar Loans (other than taxes covered by Section
3.04 and any increased cost or reduction in the amount received or
receivable resulting from the imposition of or a change in the rate
-9-
of taxes or similar charges) because of (x) any change since the
Effective Date in any applicable law, governmental rule, regulation,
guideline or order (or in the interpretation or administration thereof
and including the introduction of any new law or governmental rule,
regulation, guideline or order) (such as, for example, but not limited
to, a change in official reserve requirements, but, in all events,
excluding reserves required under Regulation D to the extent included in
the computation of the Eurodollar Rate) and/or (y) other circumstances
affecting the interbank Eurodollar market or the position of such Lender
in such market; or
(iii) at any time, that the making or continuance of any
Eurodollar Loan has become unlawful by compliance by such Lender in good
faith with any law, governmental rule, regulation, guideline or order
(or would conflict with any such governmental rule, regulation,
guideline or order not having the force of law but with which such
Lender customarily complies even though the failure to comply therewith
would not be unlawful);
then, and in any such event, such Lender (or the Administrative Agent in the
case of clause (i) above) shall (x) on such date and (y) within ten Business
Days of the date on which such event no longer exists give notice (by telephone
confirmed in writing) to the Borrower and to the Administrative Agent of such
determination (which notice the Administrative Agent shall promptly transmit to
each of the other Lenders). Thereafter (x) in the case of clause (i) above,
Eurodollar Loans shall no longer be available until such time as the
Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice by the Administrative Agent no longer
exist, and any Notice of Borrowing or Notice of Con version given by the
Borrower with respect to Eurodollar Loans which have not yet been incurred shall
be deemed rescinded by the Borrower, (y) in the case of clause (ii) above, the
Borrower shall pay to such Lender, within 10 Business Days after the Borrower's
receipt of written demand therefor, such additional amounts (in the form of an
increased rate of, or a different method of calculating, interest or otherwise
as such Lender in its reasonable discretion shall determine after consultation
with the Borrower) as shall be required to compensate such Lender for such
increased costs or reductions in amounts receivable here under (a written notice
as to the additional amounts owed to such Lender, describing the basis for such
increased costs and showing the calculation thereof, submitted to the Borrower
by such Lender shall, absent manifest error, be final and conclusive and binding
upon all parties hereto) and (z) in the case of clause (iii) above, the Borrower
shall take one of the actions specified in Section 1.10(b) as promptly as
possible and, in any event, within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii), the Borrower may (and in the
case of a Eurodollar Loan affected pursuant to Section 1.10(a)(iii), the
Borrower shall within the time period required
-10-
by law) either (x) if the affected Eurodollar Loan is then being made pursuant
to a Borrowing, cancel said Borrowing by giving the Administrative Agent
telephonic notice (confirmed promptly in writing) thereof on the same date that
the Borrower was notified by a Lender pursuant to Section 1.10(a)(ii) or (iii),
or (y) if the affected Eurodollar Loan is then outstanding, upon at least three
Business Days' notice to the Administrative Agent, require the affected Lender
to convert each such Eurodollar Loan into a Base Rate Loan (which conversion, in
the case of the circumstances described in Section 1.10(a)(iii), shall occur no
later than the last day of the Interest Period then applicable to such
Eurodollar Loan (or such earlier date as shall be required by applicable law));
provided, that if more than one Lender is affected at any time, then all
--------
affected Lenders must be treated the same pursuant to this Section 1.10(b).
(c) If any Lender shall have determined that the adoption or
effectiveness of any applicable law, rule or regulation regarding capital
adequacy, or any change therein, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, in each case
after the Effective Date, or compliance by such Lender or its parent corporation
with any request or directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or comparable agency first
made after the Effective Date, has or would have the effect of reducing the rate
of return on such Lender's or its parent corporation's capital or assets as a
consequence of its commitments or obligations hereunder to a level below that
which such Lender or its parent corporation could have achieved but for such
adoption, effectiveness, change or compliance (taking into consideration such
Lender's or its parent corporation's policies with respect to capital adequacy),
then from time to time, within 10 Business Days after demand by such Lender
(with a copy to the Administrative Agent), the Borrower shall pay to such Lender
such additional amount or amounts as will compensate such Lender or its parent
corporation for such reduction. Each Lender, upon determining in good faith that
any additional amounts will be payable pursuant to this Section 1.10(c), will
give prompt written notice thereof to the Borrower, which notice shall describe
the basis for such claim and set forth in reasonable detail the calculation of
such additional amounts, although the failure to give any such notice shall not
release or diminish any of the Borrower's obligations to pay additional amounts
pursuant to this Section 1.10(c) upon the subsequent receipt of such notice.
1.11 Compensation. (a) The Borrower shall, without duplication,
------------
compensate each Lender, upon its written request (which request shall set forth
the basis for requesting such compensation and reasonably detailed calculations
thereof), for all reasonable losses, expenses and liabilities (including,
without limitation, any loss, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required by such Lender
to fund its Eurodollar Loans but excluding in any event the loss of anticipated
profits) which such Lender may sustain: (i) if for any reason (other than a
default by any
-11-
Lender or the Administrative Agent) a Borrowing of Eurodollar Loans by the
Borrower does not occur on a date specified therefor in a Notice of Borrowing or
Notice of Conversion (whether or not withdrawn by the Borrower or deemed
withdrawn pursuant to Section 1.10(a)); (ii) if any prepayment, repayment or
conversion of any of its Eurodollar Loans occurs on a date which is not the last
day of an Interest Period applicable thereto; (iii) if any prepayment of any of
its Eurodollar Loans is not made on any date specified in a notice of prepayment
given by the Borrower; or (iv) as a consequence of (x) any other default by the
Borrower to repay its Eurodollar Loans when required by the terms of this
Agreement or (y) an election made pursuant to Section 1.10(b).
(b) Notwithstanding anything in this Agreement to the contrary, to
the extent any notice or request required by Section 1.10, 1.11 or 3.04 of this
Agreement is given by any Lender more than 120 days after such Lender obtained,
or reasonably should have obtained, knowledge of the occurrence of the event
giving rise to the additional costs, reductions in amounts, losses, taxes or
other additional amounts of the type described in such Section, such Lender
shall not be entitled to compensation under Section 1.10, 1.11 or 3.04 of this
Agreement for any amounts incurred or accruing prior to the giving of such
notice to the Borrower.
1.12 Change of Lending Office. Each Lender agrees that, upon the
------------------------
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), 1.10(c) or 3.04 with respect to such Lender, it will, if requested by the
Borrower, use reasonable efforts (subject to overall policy considerations of
such Lender) to designate another lending office for any Loans affected by such
event, provided that such designation is made on such terms that such Lender
--------
and its lending office suffer no material economic, legal or regulatory
disadvantage, with the object of avoiding the consequence of the event giving
rise to the operation of any such Section. Nothing in this Section 1.12 shall
affect or postpone any of the obligations of the Borrower or the right of any
Lender provided in Section 1.10 or 3.04.
1.13 Replacement of Lenders. (x) Upon the occurrence of any event
----------------------
giving rise to the operation of Section 1.10(a)(ii) or (iii), Section 1.10(c) or
Section 3.04 with respect to any Lender which results in such Lender charging to
the Borrower increased costs materially in excess of those being charged
generally by the Lenders, (y) if a Lender becomes a Defaulting Lender and/or (z)
in the case of a refusal by a Lender to consent to a proposed change, waiver,
discharge or termination with respect to this Agreement which has been approved
by the Required AF/RF Lenders and the Required TF Lenders, the Borrower shall
have the right, if no Default under Section 8.01 or Event of Default then
exists, to replace such Lender (the "Replaced Lender") with one or more other
Eligible Transferee or Transferees, none of whom shall constitute a Defaulting
Lender at the time of such replacement (collectively, the "Replacement Lender")
reasonably acceptable to the Administrative Agent, provided that (i) at the time
of any replacement pursuant to this
-12-
Section 1.13, the Replacement Lender shall enter into one or more Assignment
Agreements pursuant to Section 11.04(b) (and with all fees payable pursuant to
said Section 11.04(b) to be paid by the Replacement Lender) pursuant to which
the Replacement Lender shall acquire all of the Commitments and outstanding
Loans of the Replaced Lender and, in connection therewith, shall pay to the
Replaced Lender an amount equal to the sum of (A) an amount equal to the
principal of, and all accrued and unpaid interest on, all outstanding Loans of
the Replaced Lender and an amount equal to all accrued and unpaid Fees owing to
the Replaced Lender pursuant to Section 2.01, and (ii) all obligations of the
Borrower owing to the Replaced Lender (other than those specifically described
in clause (i) above in respect of which the assignment purchase price has been,
or is concurrently being, paid) shall be paid in full to such Replaced Lender by
the Borrower concurrently with such replacement. Upon the execution of the
respective Assignment Agreements, the payment of amounts referred to in clauses
(i) and (ii) above and, if so requested by the Replacement Lender, delivery to
the Replacement Lender of the appropriate Note or Notes executed by the
Borrower, the Replacement Lender shall become a Lender hereunder and the
Replaced Lender shall cease to constitute a Lender hereunder, except with
respect to indemnification provisions applicable to the Replaced Lender under
this Agreement, which shall survive as to such Replaced Lender.
SECTION 2. Fees.
----
2.01 Fees. (a) The Borrower agrees to pay to the Administrative
----
Agent a commitment commission (the "TF Commitment Commission") for the account
of each Lender with a B Term Commitment that is a Non-Defaulting Lender for any
period on and after the Closing Date during which any B Term Commitments are
outstanding, computed for each day at a rate per annum equal to the Applicable
CC Percentage for such day on the B Term Commitment on such day of such Lender.
Such TF Commitment Commission shall be due and payable in arrears on the last
Business Day of each calendar quarter and on the B Termination Date.
(b) The Borrower agrees to pay to the Administrative Agent a
commitment commission (the "RF Commitment Commission") for the account of each
RF Lender that is a Non-Defaulting Lender for the period from and including the
Closing Date to but not including the date upon which the Total Revolving
Commitment has been terminated, computed for each day at the rate per annum
equal to the Applicable CC Percentage for such day on the unutilized Revolving
Commitment on such day of such Lender. Such RF Commitment Commission shall be
due and payable in arrears on the last Business Day of each calendar quarter and
on the date upon which the Total Revolving Commitment is terminated.
(c) The Borrower agrees to pay to the Administrative Agent a
commitment commission (the "AF Commitment Commission") for the account of each
AF Lender that is
-13-
a Non-Defaulting Lender for the period during which any Acquisition Commitments
are outstanding, computed for each day at the rate per annum equal to the
Applicable CC Percentage for such day on the unutilized Acquisition Commitment
on such day of such Lender. Such AF Commitment Commission shall be due and
payable quarterly in arrears on the last Business Day of each calendar quarter
and upon the date on which the Total Acquisition Commitment is terminated.
(d) The Borrower shall pay to (x) each Agent on the Closing Date, for
its own account and/or for distribution to the Lenders, such fees as heretofore
agreed by the Borrower and the Agents, (y) the Administrative Agent, for its own
account, such other fees as agreed to between the Borrower and the
Administrative Agent, when and as due and (z) CoBank, for its own account, on
the Closing Date, such fees as heretofore agreed by the Borrower and CoBank.
(e) All computations of Fees shall be made in accordance with Section
11.07(b).
2.02 Voluntary Reduction of Commitments. (a) Upon at least one
----------------------------------
Business Day's prior written notice (or telephonic notice confirmed in writing)
to the Administrative Agent at its Notice Office (which notice shall be deemed
to be given on a certain day only if given before 2:00 P.M. (New York time) on
such day and shall be promptly transmitted by the Administrative Agent to each
of the Lenders), the Borrower shall have the right, without premium or penalty,
to reduce, in whole or in part, the unutilized Total Revolving Commitment or
unutilized Total Acquisition Commitment, as the case may be, provided that (w)
any such partial reduction shall apply to proportionately and permanently reduce
the Revolving Commitment or Acquisition Commitment, as the case may be, of each
Lender with such a Commitment, (x) no such reduction shall reduce any Non-
Defaulting Lender's Revolving Commitment or Acquisition Commitment, as the case
may be, in an amount greater than the then unutilized Revolving Commitment or
Acquisition Commitment, as the case may be, of such Lender, (y) any reduction of
the Total Revolving Commitment or Total Acquisition Commitment, as the case may
be, pursuant to this Section 2.02(a) shall reduce the then remaining Scheduled
Reductions applicable thereto pro rata and (z) any partial reduction pursuant to
--- ----
this Section 2.02 shall be in the amount of at least $1,000,000.
(b) At any time after the Closing Date and prior to the B Termination
Date upon at least one Business Day's prior written notice (or telephone notice
promptly confirmed in writing) to the Administrative Agent at its Notice Office
(which notice the Administrative Agent shall promptly transmit to each of the
Lenders), the Borrower shall have the right, without premium or penalty, to
reduce, in whole or in part, the remaining Total B Term Commitment. The amount
of any reduction of the Total B Term Commitment effected
-14-
pursuant to this Section 2.02(b) and/or Section 2.03(b)(ii), (iii)
and/or (iv) shall be applied to reduce pro rata the remaining Scheduled
--- ----
Repayments of B Term Loans.
2.03 Mandatory Adjustments of Commitments, etc. (a) The Total
------------------------------------------
Commitment (and the Commitment of each Lender) shall terminate in its entirety
on the Expiration Date unless the Closing Date has occurred on or before such
date.
(b) The Total B Term Commitment shall (i) be reduced on the date
any B Term Loans are incurred in an amount equal to the aggregate principal
amount of B Term Loans so incurred, (ii) terminate in its entirety (to the
extent not theretofore terminated) at 5:00 P.M. (New York time) on the B
Termination Date, whether or not any B Term Loans are incurred on such date,
(iii) until terminated in full, be reduced on each day on which Term Loans, if
still outstanding, would be required to be repaid pursuant to Sections
3.02(A)(c), (e) and (f) by the amount, if any, by which the amount required to
be applied pursuant to said Sections to repay B Term Loans (determined as if an
unlimited amount of Term Loans were actually outstanding) exceeds the aggregate
principal amount of B Term Loans being repaid, (iv) terminate in its entirety
(to the extent not theretofore terminated) on the date of the initial issuance
of any Permitted Subordinated Debt, (v) terminate in its entirety on the day on
which a Change of Control occurs and (vi) be increased after any B Term Loans
have been mandatorily repaid pursuant to Section 3.02 or the Total B Term Loan
Commitment has been reduced pursuant to clause (iii) or (iv) above in the
aggregate amount of such repayment and/or reduction to the extent new B Term
Commitments are provided pursuant to a B Term Commitment Renewal.
(c) The Total C Term Commitment shall terminate in its entirety on
the Closing Date (after giving effect to the making of C Term Loans-Floating
Rate on such date).
(d) The Total Revolving Commitment shall be reduced on June 30,
2001 and on each successive three-month anniversary of such date in an aggregate
amount equal to 1/13th of Total Revolving Commitment outstanding on June 30,
2001 (each such reduction, together with each reduction of the Total Acquisition
Commitment required by Section 2.03(e), as the same may be reduced as provided
in Section 2.02 and, in the case of the Total Acquisition Commitment, Section
2.03(f), a "Scheduled Reduction").
(e) The Total Acquisition Commitment shall be reduced on each of
March 31, 2002 and each successive three-month anniversary of such date in an
aggregate amount equal to 1/10th of the Total Acquisition Commitment outstanding
on March 31, 2002.
(f) The Total Revolving Commitment and Total Acquisition Commitment
(to the extent outstanding) shall each be reduced on each date on which (x) no
Term Loans or Term Commitments are outstanding (after giving effect to the
application on or prior to such
-15-
date of the provisions of Sections 3.02(A) and 2.03(b)) and (y) Term Loans, if
still outstanding, would be required to be repaid pursuant to Sections
3.02(A)(c), (d), (e), (f) or (g) by the amount, if any, by which the amount
required to be applied pursuant to said Sections as a result of the events
described therein (determined as if an unlimited amount of Term Loans were
actually outstanding) exceeds the aggregate principal amount of Term Loans being
repaid and the B Term Commitments being reduced as a result of such events, with
any commitment reduction pursuant to this Section 2.03(f) to apply pro rata
--- ----
between the Total Revolving Commitment and the Total Acquisition Commitment.
(g) Each of the Total Revolving Commitment and the Total Acquisition
Commitment shall terminate in its entirety on the earlier of (x) the AF/RF
Maturity Date and (y) the date on which a Change of Control occurs.
(h) Each partial reduction of the Commitments under a Facility
pursuant to this Section 2.03 shall apply proportionately to the Commitment
under such Facility of each Lender.
SECTION 3. Payments.
--------
3.01 Voluntary Prepayments. The Borrower shall have the right to
---------------------
prepay Loans (other than C Term Loans-Fixed Rate, with any prepayment in respect
thereof to be as set forth in the C Term Notes-Fixed Rate) in whole or in part,
without premium or penalty, from time to time on the following terms and
conditions: (i) the Borrower shall give the Administrative Agent at the Payment
Office written notice (or telephonic notice promptly confirmed in writing) of
its intent to prepay the Loans, whether such Loans are B Term Loans, C Term
Loans-Floating Rate, RF Loans or AF Loans, the amount of such pre payment and
(in the case of Eurodollar Loans) the specific Borrowing(s) pursuant to which
made, which notice shall be given by the Borrower prior to 12:00 Noon (New York
time) on the Business Day prior to the date of such prepayment, and which notice
shall promptly be transmitted by the Administrative Agent to each of the
Lenders; (ii) each partial prepayment of any Borrowing shall be in an aggregate
principal amount of at least $1,000,000, provided that no partial prepayment of
Eurodollar Loans made pursuant to a Borrowing shall reduce the aggregate
principal amount of the Loans outstanding pursuant to such Borrowing to an
amount less than the Minimum Borrowing Amount applicable thereto; (iii) each
prepayment in respect of any Loans made pursuant to a Borrowing shall be applied
pro rata among such Loans provided that at the Borrower's election in connection
--- ----
with any prepayment of RF Loans or AF Loans pursuant to this Section 3.01, such
prepayment shall not be applied to any RF Loans or AF Loans, as the case may be,
of a Defaulting Lender; and (iv) each prepayment of Term Loans pursuant to this
Section 3.01 shall be applied to B Term Loans (in an amount equal to the B TF
Percentage of such prepayment) and C Term Loans (in an amount equal to the C TF
Percentage of such prepayment) and shall reduce the remaining
-16-
Scheduled Repayments of each of the B Term Loans and the C Term Loans (x) first,
in direct order of maturity to those Scheduled Repayments which will be due and
payable within twelve months after the date of the respective payment and (y)
second, to the extent in excess thereof, on a pro rata basis (based upon the
--- ----
then remaining principal amount of each such Scheduled Repayment).
3.02 Mandatory Prepayments.
---------------------
(A) Requirements:
------------
(a) (i) If on any date (and after giving effect to all other
repayments on such date) the aggregate outstanding principal amount of RF Loans
made by Non-Defaulting Lenders exceeds the Adjusted Total Revolving Commitment
as then in effect, the Borrower shall repay on such date the principal of
outstanding RF Loans of Non-Defaulting Lenders in an aggregate amount equal to
such excess.
(ii) If on any date (and after giving effect to all other repayments
on such date) the aggregate outstanding principal amount of AF Loans made by
Non-Defaulting Lenders exceeds the Adjusted Total Acquisition Commitment then in
effect, the Borrower shall repay on such date the principal of outstanding AF
Loans of Non-Defaulting Lenders in an aggregate amount equal to such excess.
(iii) If on any date prior to the first anniversary of the Closing
Date the Borrower issues Permitted Subordinated Debt at any time that the Senior
Leverage Ratio exceeds 4.0 to 1.0, the proceeds (net of underwriting discounts
and commissions, private placement and/or initial purchaser fees and other
reasonable fees and expenses associated therewith) of such issuance shall be
applied as a mandatory repayment of RF Loans (to the extent outstanding) to the
extent necessary to reduce the Senior Leverage Ratio to 4.0 to 1.0.
(b) (i) On each date set forth below, the Borrower shall repay the
principal amount of B Term Loans set forth opposite such date (each such
repayment, together with each repayment of C Term Loans required by clause
(b)(ii) below, as the same may be reduced as provided in Sections 2.02(b) and
3.02(B), a "Scheduled Repayment"):
Date Amount
---- ------
June 30, 1998 $ 387,500
September 30, 1998 $ 387,500
December 31, 1998 $ 387,500
March 31, 1999 $ 387,500
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June 30, 1999 $ 387,500
September 30, 1999 $ 387,500
December 31, 1999 $ 387,500
March 31, 2000 $ 387,500
June 30, 2000 $ 387,500
September 30, 2000 $ 387,500
December 31, 2000 $ 387,500
March 31, 2001 $ 387,500
June 30, 2001 $ 387,500
September 30, 2001 $ 387,500
December 31, 2001 $ 387,500
March 31, 2002 $ 387,500
June 30, 2002 $ 387,500
September 30, 2002 $ 387,500
December 31, 2002 $ 387,500
March 31, 2003 $ 387,500
June 30, 2003 $ 387,500
September 30, 2003 $ 387,500
December 31, 2003 $ 387,500
March 31, 2004 $ 387,500
June 30, 2004 $ 387,500
September 30, 2004 $ 387,500
December 31, 2004 $24,154,167
March 31, 2005 $24,154,167
June 30, 2005 $24,154,167
September 30, 2005 $24,154,167
December 31, 2005 $24,154,167
B Maturity Date $24,154,167
, provided that any increase in the Total B Term Commitment pursuant to a B Term
Commitment Renewal shall be applied pro rata to increase the then remaining
--- ----
Scheduled Repayments set forth above.
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(ii) On each date set forth below, the Borrower shall repay the principal
amount of C Term Loans-Floating Rate and C Term Loans-Fixed Rate, respectively,
set forth opposite such date:
Floating Rate Fixed Rate
Date Amount Amount
---- ------ ------
April 1, 1998 $ 0 $ 313,567
June 30, 1998 $ 58,734 $ 301,638
September 30, 1998 $ 58,734 $ 307,321
December 31, 1998 $ 58,734 $ 330,617
March 31, 1999 $ 58,734 $ 336,530
June 30, 1999 $ 58,734 $ 342,560
September 30, 1999 $ 58,734 $ 348,712
December 31, 1999 $ 58,734 $ 363,736
March 31, 2000 $ 58,734 $ 370,135
June 30, 2000 $ 58,734 $ 376,663
September 30, 2000 $ 58,734 $ 383,321
December 31, 2000 $ 58,734 $ 402,613
March 31, 2001 $ 58,734 $ 409,540
June 30, 2001 $ 58,734 $ 416,606
September 30, 2001 $ 58,734 $ 515,704
December 31, 2001 $ 58,734 $ 529,893
March 31, 2002 $ 58,734 $ 539,266
June 30, 2002 $ 58,734 $ 548,826
September 30, 2002 $ 58,734 $ 521,965
December 31, 2002 $ 58,734 $ 531,665
March 31, 2003 $ 58,734 $ 541,567
June 30, 2003 $ 58,734 $ 551,674
September 30, 2003 $ 58,734 $ 561,990
December 31, 2003 $ 58,734 $ 572,520
March 31, 2004 $ 58,734 $ 583,267
June 30, 2004 $ 58,734 $ 594,237
September 30, 2004 $ 58,734 $ 49,807
December 31, 2004 $ 58,734 $ 49,807
March 31, 2005 $ 58,734 $ 49,807
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June 30, 2005 $2,731,131 $4,970,106
September 30, 2005 $2,731,131 $4,970,106
December 31, 2005 $2,731,131 $4,970,106
March 31, 2006 $2,731,131 $4,970,106
June 30, 2006 $2,731,131 $4,970,106
September 30, 2006 $2,731,131 $4,970,106
December 31, 2006 $2,731,131 $4,970,106
C Maturity Date $2,731,131 $4,970,106
(c) On the fifth Business Day following the date of receipt thereof
by the Borrower and/or any of its Subsidiaries of the Net Cash Proceeds from any
Asset Sale, an amount equal to 100% of the Net Cash Proceeds from such Asset
Sale shall be applied as a mandatory repayment of principal of the then
outstanding Term Loans and if no Term Loans are then outstanding, to the RF
Loans and the AF Loans, pro rata, among such Loans, provided that up to 100% of
--- ---- --------
the Net Cash Proceeds from Asset Sales shall not be required to be used to so
repay Loans to the extent the Borrower elects, as hereinafter provided, to cause
such Net Cash Proceeds to be used within 180 days to finance an Acquisition or
Acquisitions or Permitted Acquisitions (a "Reinvestment Election"). The Borrower
may exercise its Reinvestment Election with respect to an Asset Sale if (x) no
Default or Event of Default exists and (y) the Borrower delivers a Reinvestment
Notice to the Administrative Agent no later than five Business Days following
the date of the consummation of the respective Asset Sale, with such
Reinvestment Election being effective with respect to the Net Cash Proceeds of
such Asset Sale equal to the Anticipated Reinvestment Amount specified in such
Reinvestment Notice.
(d) On the Business Day following the receipt thereof by the
Borrower, if at the time of such receipt the Senior Leverage Ratio exceeds 4.0
to 1.0, an amount equal to 100% of the proceeds (net of underwriting discounts
and commissions, private placement and/or initial purchaser fees and other
reasonable fees and expenses associated therewith and of any repayment of RF
Loans required by Section 3.02(A)(a)(iii)) from the issuance of Permitted
Subordinated Debt by the Borrower shall be applied as a mandatory repayment of
principal of the then outstanding Term Loans to the extent necessary to reduce
the Senior Leverage Ratio to 4.0 to 1.0, provided that if any such Permitted
Subordinated Debt is issued prior to the consummation of the Ellensberg
Acquisition, then up to $74.0 million of such proceeds that, pursuant to Section
3.02(B)(a), would be required to be used to repay Term Loans shall not be
required to be so applied to the extent that the Borrower elects, as hereinafter
provided, to cause such proceeds to be used within 45 days to finance the
Ellensberg Acquisition or to effect the Permitted PSD Repurchase (a "Special PSD
Election"). The Borrower may exercise its Special PSD Election if it delivers a
Special PSD
-20-
Notice to the Administrative Agent not later than one Business Day following the
date of any issuance of Permitted Subordinated Debt.
(e) On the date of the receipt thereof by the Borrower, if at the
time of such receipt the Senior Leverage Ratio exceeds 4.0 to 1.0, an amount
equal to 100% of the proceeds (net of underwriting discounts and commissions,
private placement and/or initial purchaser fees and other reasonable fees and
expenses associated therewith) of any sale or issuance of its equity or of any
equity contribution (other than equity issued to management and other employees
of the Borrower and its Subsidiaries) shall be applied as a mandatory repayment
of principal of the then outstanding Term Loans to the extent necessary to
reduce the Senior Leverage Ratio to 4.0 to 1.0.
(f) On the Reinvestment Prepayment Date with respect to a
Reinvestment Election, an amount equal to the Reinvestment Prepayment Amount, if
any, for such Reinvestment Election shall be applied as a repayment of the
principal amount of the then outstanding Term Loans.
(g) On the date occurring 45 days after the date of a Special PSD
Election, an amount equal to the related Special PSD Prepayment Amount, if any,
shall be applied as a repayment of the principal amount of the then outstanding
Term Loans.
(h) To the extent not theretofore repaid pursuant to the provisions
of this Agreement, (i) all outstanding RF Loans and AF Loans, respectively,
shall be repaid in full upon the termination of the Total Revolving Commitment
or the Total Acquisition Commitment, as the case may be, and (ii) all
outstanding Term Loans shall be repaid in full on the date a Change in Control
occurs.
(B) Application:
-----------
(a) Each mandatory repayment of Term Loans required to be made
pursuant to Section 3.02(A) shall be applied (i) in the case of any mandatory
repayment required pursuant to Section 3.02(A)(d) or (g), first, to the
-----
outstanding B Term Loans, if any, in an amount equal to the lesser of the amount
of such prepayment and the then outstanding principal amount of B Term Loans
and, second, commencing on the first anniversary of the Closing Date, if the
------
amount of such repayment exceeds the then outstanding principal amount of B Term
Loans, if any, to the outstanding C Term Loans, if any, (ii) in the case of any
mandatory repayment required pursuant to Section 3.02(A)(c),(e) or (f), to the
outstanding B Term Loans, if any, in an amount equal to the B TF Percentage of
such prepayment and to the outstanding C Term Loans, if any, in an amount equal
to the C TF Percentage of such prepayment and (iii) to reduce pro rata the then
--- ----
remaining Scheduled Repayments of the respective Facility.
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(b) With respect to each prepayment of Loans required by Section
3.02(A), (other than C Term Loans-Fixed Rate to the extent provided in the
relevant C Term Note-Fixed Rate), the Borrower may designate the Types of Loans
which are to be prepaid and the specific Borrowing(s) under the affected
Facility pursuant to which made provided that (i) if any prepayment of
--------
Eurodollar Loans made pursuant to a single Borrowing shall reduce the
outstanding Loans made pursuant to such Borrowing to an amount less than the
Minimum Borrowing Amount for such Borrowing, such Borrowing shall be immediately
converted into Base Rate Loans; (ii) each prepayment of any Loans under a
Facility shall be applied pro rata among such Loans; and (iii) except for the
--- ----
differing treatments of Defaulting Lenders and Non-Defaulting Lenders as
expressly provided in Section 3.02(A)(a), each prepayment of any Eurodollar
Loans made pursuant to a Borrowing shall be applied pro rata among such
--- ----
Eurodollar Loans. In the absence of a designation by the Borrower as described
in the preceding sentence, the Administrative Agent shall, subject to the
above, make such designation in its sole discretion with a view, but no
obligation, to minimize breakage costs owing under Section 1.11.
3.03 Method and Place of Payment. Except as otherwise specifically
---------------------------
provided herein, all payments under this Agreement shall be made to the
Administrative Agent for the ratable account of the Lenders entitled thereto,
not later than 1:00 P.M. (New York time) on the date when due and shall be made
in immediately available funds and in Dollars at the Payment Office, it being
understood that written notice by the Borrower to the Administrative Agent to
make a payment from the funds in the Borrower's account at the Payment Office
shall constitute the making of such payment to the extent of such funds held in
such account. Any payments under this Agreement which are made later than 1:00
P.M. (New York time) shall be deemed to have been made on the next succeeding
Business Day. Whenever any payment to be made hereunder shall be stated to be
due on a day which is not a Business Day, the due date thereof shall be extended
to the next succeeding Business Day and, with respect to payments of principal,
interest shall be payable during such extension at the applicable rate in effect
immediately prior to such extension.
3.04 Net Payments. (a) All payments made by the Borrower hereunder
------------
and/or under any Note will be made without setoff, counterclaim or other
defense. Except as provided in Section 3.04(b), all such payments will be made
free and clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such payments
(but excluding, except as provided in the second succeeding sentence, any tax
imposed on or measured by the net income or net profits of a Lender pursuant to
the laws of the jurisdiction in which it is organized or the jurisdiction in
which the principal office or applicable lending office of such Lender is
located or any subdivision thereof or therein) and all interest, penalties or
similar liabilities with respect to such non-excluded taxes, levies,
-22-
imposts, duties, fees, assessments or other charges (all such non-excluded
taxes, levies, imposts, duties, fees, assessments or other charges being
referred to collectively as "Taxes"). If any Taxes are so levied or imposed, the
Borrower agrees to pay the full amount of such Taxes, and such additional
amounts as may be necessary so that every payment of all amounts due under this
Agreement and/or under any Note, after withholding or deduction for or on
account of any Taxes, will not be less than the amount provided for herein or
therein. If any amounts are payable in respect of Taxes pursuant to the
preceding sentence, the Borrower agrees to reimburse each Lender, upon the
written request of such Lender, for taxes imposed on or measured by the net
income or net profits of such Lender pursuant to the laws of the jurisdiction in
which such Lender is organized or in which the principal office or applicable
lending office of such Lender is located or under the laws of any political
subdivision or taxing authority of any such jurisdiction in which such Lender is
organized or in which the principal office or applicable lending office of such
Lender is located and for any withholding of taxes as such Lender shall
determine are payable by, or withheld from, such Lender, in respect of such
amounts so paid to or on behalf of such Lender pursuant to the preceding
sentence and in respect of any amounts paid to or on behalf of such Lender
pursuant to this sentence. The Borrower will furnish to the Agent within 45 days
after the date the payment of any Taxes is due pursuant to applicable law
certified copies of tax receipts evidencing such payment by the Borrower. The
Borrower agrees to indemnify and hold harmless each Lender, and reimburse such
Lender upon its written request, for the amount of any Taxes so levied or
imposed and paid by such Lender.
(b) Each Lender that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes
agrees to deliver to the Borrower and the Agent on or prior to the Effective
Date, or in the case of a Lender that is an assignee or transferee of an
interest under this Agreement pursuant to Section 1.13 or 11.04 (unless the
respective Lender was already a Lender hereunder immediately prior to such
assignment or transfer), on the date of such assignment or transfer to such
Lender, (i) two accurate and complete original signed copies of Internal Revenue
Service Form 4224 or 1001 (or successor forms) certifying to such Lender's
entitlement to a complete exemption from United States withholding tax with
respect to payments to be made under this Agreement and under any Note, or (ii)
if the Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the
Code and cannot deliver either Internal Revenue Service Form 1001 or 4224
pursuant to clause (i) above, (x) a certificate substantially in the form of
Exhibit C (any such certificate, a "Section 3.04 Certificate") and (y) two
accurate and complete original signed copies of Internal Revenue Service Form W-
8 (or successor form) certifying to such Lender's entitlement to a complete
exemption from United States withholding tax with respect to payments of
interest to be made under this Agreement and under any Note. In addition, each
Lender agrees that from time to time after the Effective Date, when a lapse of
time or change in circumstances renders the previous certification obsolete or
inaccurate in any material respect, it will deliver to the Borrower and the
-23-
Administrative Agent two new accurate and complete original signed copies of
Internal Revenue Service Form 4224 or 1001, or Form W-8 and a Section 3.04
Certificate, as the case may be, and such other forms as may be required in
order to confirm or establish the entitlement of such Lender to a continued
exemption from or reduction in United States withholding tax with respect to
payments under this Agreement and any Note, or it shall immediately notify the
Borrower and the Administrative Agent of its inability to deliver any such Form
or Certificate, in which case such Lender shall not be required to deliver any
such Form or Certificate pursuant to this Section 3.04(b). Notwithstanding
anything to the contrary contained in Section 3.04(a), but subject to Section
11.04(b) and the immediately succeeding sentence, (x) the Borrower shall be
entitled, to the extent it is required to do so by law, to deduct or withhold
income or similar taxes imposed by the United States (or any political sub
division or taxing authority thereof or therein) from interest, Fees or other
amounts payable by it hereunder for the account of any Lender which is not a
United States person (as such term is defined in Section 7701(a)(30) of the
Code) for U.S. Federal income tax purposes to the extent that such Lender has
not provided to the Borrower U.S. Internal Revenue Service Forms that establish
a complete exemption from such deduction or withholding and (y) the Borrower
shall not be obligated pursuant to Section 3.04(a) hereof to gross-up payments
to be made by it to a Lender in respect of income or similar taxes imposed by
the United States if (I) such Lender has not provided to the Borrower the
Internal Revenue Service Forms required to be provided to the Borrower pursuant
to this Section 3.04(b) or (II) in the case of a payment, other than interest,
to a Lender described in clause (ii) above, to the extent that such Forms do not
establish a complete exemption from withholding of such taxes. Notwithstanding
anything to the contrary contained in the preceding sentence or elsewhere in
this Section 3.04 and except as set forth in Section 11.04(b), the Borrower
agrees to pay any additional amounts and to indemnify each Lender in the manner
set forth in Section 3.04(a) (without regard to the identity of the jurisdiction
requiring the deduction or withholding) in respect of any Taxes deducted or
withheld by it as described in the immediately preceding sentence as a result of
any changes after the Effective Date in any applicable law, treaty, governmental
rule, regulation, guideline or order, or in the interpretation thereof, relating
to the deducting or withholding of such Taxes.
(c) If the Borrower pays any additional amount under this Section
3.04 to a Lender and such Lender determines in its sole discretion that it has
actually received or realized in connection therewith any refund or any
reduction of, or credit against, its Tax liabilities in or with respect to the
taxable year in which the additional amount is paid, such Lender shall pay to
the Borrower an amount that the Lender shall, in its sole discretion, determine
is equal to the net benefit, after tax, which was obtained by the Lender in such
year as a consequence of such refund, reduction or credit.
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SECTION 4. Conditions Precedent.
--------------------
4.01 Conditions Precedent to Closing Date. The obligation of the
------------------------------------
Lenders to make Loans on the Closing Date is subject to the satisfaction of each
of the following conditions at such time:
(a) Effectiveness; Notes. (i) The Effective Date shall have occurred
--------------------
and (ii) there shall have been delivered to the Administrative Agent for the
account of each Lender the appropriate Note or Notes executed by the Borrower,
in each case, in the amount, maturity and as otherwise provided herein.
(b) Opinions of Counsel. The Administrative Agent shall have received
-------------------
opinions, addressed to each Agent and each of the Lenders and dated the Closing
Date, from (i) Paul, Hastings, Xxxxxxxx & Xxxxxx LLP (and/or other counsel
reasonably acceptable to the Agents), special counsel to the Credit Parties,
which opinion shall cover the matters contained in Exhibit D-1 hereto (except to
the extent relating to any Acquisition not consummated on the Closing Date and
to any Person not a Subsidiary on the Closing Date), and (ii) White & Case LLP,
special counsel to the Agents, which opinion shall cover the matters contained
in Exhibit D-2 hereto, which opinions shall be in form and substance reasonably
satisfactory to the Agents.
(c) Corporate Proceedings. (i) The Administrative Agent shall have
---------------------
received a certificate, dated the Closing Date, signed by an Authorized Officer
of the Borrower in the form of Exhibit E with appropriate insertions and
deletions, together with (x) copies of the certificate of incorporation, by-laws
or other organizational documents of each Credit Party and (y) the resolutions
of each Credit Party referred to in such certificate and all of the foregoing
(including each such certificate of incorporation and by-laws) shall be
reasonably satisfactory to the Administrative Agent and (z) a statement that all
of the applicable conditions set forth in Section 4.03 have been satisfied as of
such date.
(ii) On the Closing Date, all corporate and legal proceedings and all
instruments and agreements in connection with the transactions contemplated by
this Agreement and the other Credit Documents shall be reasonably satisfactory
in form and substance to the Administrative Agent, and the Administrative Agent
shall have received all information and copies of all certificates, documents
and papers, including good standing certificates and any other records of
corporate proceedings and governmental approvals (other than those set forth on
Annex VIII), if any, which the Agents may have reasonably requested in
connection therewith, such documents and papers, where appropriate, to be
certified by proper corporate or governmental authorities.
-25-
(d) Plans; etc. On or prior to the Closing Date, there shall have
-----------
been made available to the Administrative Agent:
(i) all Plans (and for each Plan that is required to file an annual
report on Internal Revenue Service Form 5500-series, a copy of the most
recent such report (including, to the extent required, the related
financial and actuarial statements and other supporting statements,
certifications, schedules and information), and for each Plan that is a
"single-employer plan," as defined in Section 4001(a)(15) of ERISA, the
most recently prepared actuarial valuation therefor) and any other
"employee benefit plans," as defined in Section 3(3) of ERISA, and any
other material agreements, plans or arrangements, with or for the benefit
of current or former employees of the Borrower or any of its Subsidiaries
or any ERISA Affiliate (provided that the foregoing shall apply in the case
of any multiemployer plan, as defined in 4001(a)(3) of ERISA, only to the
extent that any document described therein is in the possession of the
Borrower or any Subsidiary of the Borrower or any ERISA Affiliate or
reasonably available thereto from the sponsor or trustee of any such plan);
(ii) any collective bargaining agreements or any other similar
agreement or arrangements covering the employment arrangements of the
employees of the Borrower or any of its Subsidiaries;
(iii) all agreements entered into by the Borrower or any Subsidiary
governing the terms and relative rights of its capital stock;
(iv) any material agreement with respect to the management of the
Borrower or any of its Subsidiaries;
(v) any material employment agreements entered into by the Borrower
or any of its Subsidiaries; and
(vi) any tax sharing, tax allocation and other similar agreements
entered into by the Borrower and/or any of its Subsidiaries with any entity
not a Credit Party;
with all of the foregoing to be reasonably satisfactory to the Administrative
Agent.
(e) Adverse Change, etc. Since February 18, 1998, nothing shall have
-------------------
occurred, and neither Agent shall have first become aware of any facts or
conditions not previously known, in each case which either Agent shall
reasonably determine (a) has had, or is reasonably likely to have, a material
adverse effect on the rights or remedies of the Lenders or the Agents hereunder
or under any other Credit Document, or on the ability of the Credit
-26-
Parties taken as a whole to perform their obligations under the Credit Documents
or (b) has had or is reasonably likely to have a Material Adverse Effect.
(f) Litigation. There shall be no actions, suits or proceedings
----------
pending or, to the knowledge of the Borrower, threatened (a) with respect to
this Agreement or any other Credit Document or (b) which either Agent shall
reasonably determine has had or is reasonably likely to have (i) a Material
Adverse Effect or (ii) a material adverse effect on the rights or remedies of
the Lenders or the Agents hereunder or under any other Credit Document or on the
ability of the Credit Parties taken as a whole to perform their obligations
under the Credit Documents.
(g) Approvals. All necessary material governmental and third
---------
party approvals (other than those set forth on Annex VIII) in connection with
the Credit Documents (including, without limitation, all necessary material
approvals required by the FCC and the applicable PUCs) shall have been obtained
and remain in effect.
(h) Subsidiary Guaranty. Each Intermediary Holding Company that
-------------------
is a Subsidiary on the Closing Date shall have duly authorized, executed and
delivered a Subsidiary Guaranty in the form of Exhibit F hereto (as modified,
amended, amended and restated or supplemented from time to time in accordance
with the terms hereof and thereof, the "Subsidiary Guaranty"), and the
Subsidiary Guaranty shall be in full force and effect.
(i) Pledge Agreement. The Borrower and each Parent Company that
----------------
is a Subsidiary on the Closing Date shall have each duly authorized, executed
and delivered a Pledge Agreement in the form of Exhibit G (as modified, amended,
amended and restated or supplemented from time to time in accordance with the
terms thereof and hereof, the "Pledge Agreement") and shall have delivered to
the Collateral Agent, as pledgee thereunder, all of the certificates
representing the Pledged Securities owned by such Persons, endorsed in blank or
accompanied by executed and undated stock powers, and the Pledge Agreement shall
be in full force and effect.
(j) Solvency. The Borrower shall have delivered to the
--------
Administrative Agent, a solvency certificate, dated the Closing Date and in the
form of Exhibit H hereto.
(k) Capital Contribution Agreement. The Specified Shareholders
------------------------------
shall have duly authorized, executed and delivered an agreement (the "Capital
Contribution Agreement") in the form of Exhibit I hereto and such Capital
Contribution Agreement shall be in full force and effect.
-27-
(l) Consent Letter. The Administrative Agent shall have received
--------------
a letter from CT Corporation System, substantially in the form of Exhibit J
hereto, indicating its consent to its appointment by each Credit Party as its
agent to receive service of process.
(m) Refinancing. On the Closing Date and concurrently with the
-----------
incurrence of Loans on such date, (x) the Indebtedness to be Refinanced (other
than the CoBank Continuing Loans converted pursuant to Section 1.01(b)(B)) shall
have been repaid in full, together with interest thereon, (y) the CoBank
Continuing Loans shall have been converted into C Term Loans-Fixed Rate pursuant
to Section 1.01(b)(B) and (z) the creditors under the Indebtedness to be
Refinanced shall have terminated and released all security interests in and
Liens on the capital stock of and/or assets owned by the Borrower or any of its
Subsidiaries, and the Administrative Agent shall have received evidence
(including releases) in form, scope and substance satisfactory to it that the
matters set forth in this Section 4.01(m) have been satisfied at such time.
(n) Fees. The Borrower shall have paid to the Agents and the
----
Lenders all Fees and expenses agreed upon by such parties to be paid on or prior
to the Closing Date (for which, in the case of legal fees and expenses, the
Borrower shall have received in advance a written invoice in reasonable detail).
4.02 Conditions Precedent to Term Loans and RF Loans. The
-----------------------------------------------
obligation of the Lenders to make Term Loans and/or RF Loans on any date
(including on the Closing Date) to finance an Acquisition is subject, at the
time of such incurrence of such Loans, to the satisfaction of the following
conditions:
(a) Consummation of the Acquisition, etc. The Acquisition being
-------------------------------------
financed with the proceeds of such Term Loans and/or RF Loans (x) shall have
received all requisite board of directors and shareholder approval and (y) shall
have been consummated in accordance with the Acquisition Documents relating to
such Acquisition (the "Applicable Acquisition Documents") and all applicable
laws, and the Administrative Agent shall have received true and correct copies
of each of the Applicable Acquisition Documents, certified as such by an
Authorized Officer of the Borrower, each of which shall have been duly
authorized, executed and delivered by the parties thereto and shall be in full
force and effect and in form and substance reasonably satisfactory to the Agents
(it being agreed that the Acquisition Documents relating to the Ellensburg
Acquisition and the Taconic Acquisition in the form delivered to the Agents
prior to the Effective Date are satisfactory to the Agents except as modified by
schedules subsequently delivered and that any increase in the purchase price
under the Acquisition Documents relating to the Ellensburg Acquisition
unspecified in amount shall, to the extent in excess of $5 million, be
satisfactory to the Agents). On or prior to such time, all conditions precedent
set forth in the Applicable Acquisition Documents shall have been satisfied, or
waived or consented to with the consent of the Agents, not to be unreasonably
withheld (with all conditions stated to require the approval or satisfaction
-28-
of, or to be acceptable to, the Borrower and/or any Subsidiary to require the
approval or satisfaction of, or to be acceptable to, the Agents, not be
unreasonably withheld) and all applicable waiting periods with respect thereto
have expired without, in all such cases, any action being taken by any competent
authority which imposes material adverse conditions upon the consummation of
such Acquisition.
(b) Capital Contributions. If the Acquisition being financed is
---------------------
the Ellensburg Acquisition or the Taconic Acquisition, the Borrower shall have
received at the time of the consummation of such Acquisition additional cash
common equity investments from the Borrower's shareholders aggregating (without
duplication) $15.0 million in the case of the Ellensburg Acquisition and/or
$16.3 million in the case of the Taconic Acquisition, as the case may be.
(c) Opinions. The Administrative Agent shall have received an
--------
opinion or opinions, addressed to each Agent and each Lender, and dated the date
of such Loans, from Paul, Hastings, Xxxxxxxx & Xxxxxx LLP (and/or other counsel
reasonably acceptable to the Agents) covering the matters contained in Exhibit
D-1 relating to the Acquisition being financed and the Persons becoming Credit
Parties as a result thereof, which opinion shall be in form and substance
reasonably satisfactory to the Agents.
(d) Corporate Proceedings. The Administrative Agent shall have
---------------------
received a certificate dated the date of such Loans, signed by an Authorized
Officer of the Borrower in the form of Exhibit E hereto (but only to the extent
relating to the Acquisition being financed and the new Credit Parties resulting
from such Acquisition), together with all organizational documents and
resolutions referred to therein, and all the foregoing shall be reasonably
satisfactory to the Agents, (y) all the documentation specified in Section
4.01(d) to the extent relating to such new Credit Parties shall have been made
available to the Administrative Agent and (z) each of such new Credit Parties
shall have duly authorized, executed and delivered (i) a counterpart of the
Subsidiary Guaranty (if an Intermediary Holding Company) and/or (ii) a
counterpart of the Pledge Agreement (if a Parent Company) and, in such case,
shall have delivered to the Collateral Agent, as pledgee thereunder, all of the
certificates representing the Pledged Securities owned by such new Credit
Parties, endorsed in blank or accompanied by executed and undated stock powers.
(e) Litigation. There shall be no material actions, suits or
----------
proceedings pending or, to the knowledge of the Borrower, threatened (a) with
respect to the Acquisition being financed or (b) which either Agent shall
reasonably determine has had or is reasonably likely to have a Material Adverse
Effect.
(f) Audits and Financial Statements for Certain Acquisitions. (i)
--------------------------------------------------------
If the Acquisition being financed is the El Paso Acquisition or the Chouteau
Acquisition, each of the Lenders shall have received an audit of the financial
statements referred to in
-29-
Section 5.10(b)(iii) or (iv), as the case may be, prepared by Xxxxxxxx
Associates LLP (in the case of the financial statements of El Paso) and Xxxxxxx,
Xxxxxxxxx & Company (in the case of the financial statements of Chouteau), which
accounting firm shall have delivered an unqualified opinion in respect thereof.
(ii) If the Acquisition being financed is the UI
Acquisition, each of the Lenders shall have received the consolidated balance
sheet of UI as at December 31, 1997 and the related consolidated statements of
operations and cash flows for the period ended as of said date, audited by an
independent accounting firm reasonably acceptable to the Agents, who shall have
delivered an unqualified opinion in respect thereof, which statements shall have
been prepared in accordance with GAAP and practices consistently applied, except
to the extent, if any, provided in the notes thereto and shall present fairly
the consolidated financial position of UI at the date thereof and the results
for the period covered thereby in accordance with GAAP, except to the extent, if
any, provided in the notes thereto.
(g) Refinancing. (i) Except to the extent such security interets
-----------
and Liens are otherwise permitted by Section 7.03, the creditors of the Acquired
Company or Companies to be acquired with the proceeds of such Loans shall have
terminated and released all security interests in and Liens on the capital stock
and/or assets owned by such Acquired Company or Companies to the satisfaction of
the Administrative Agent, (ii) the Administrative Agent shall have received
evidence (including releases) in form, scope and substance satisfactory in that
the matters set forth in clause (i) above have been satisfied at such time and
(iii) except in the case of any Acquisition consummated on the Closing Date, the
Borrower shall have delivered to the Administrative Agent a revised Annex V,
modified to include Liens on the assets of such Acquired Companies that are to
remain outstanding, that is satisfactory to the Administrative Agent.
4.03 Conditions Precedent to All Loans. The obligation of each
---------------------------------
Lender to make Loans (including Loans made on the Closing Date) is subject, at
the time of the making of each such Loan, to the satisfaction of the following
conditions:
(a) Notice of Borrowing. The Administrative Agent shall have
-------------------
received a Notice of Borrowing meeting the requirements of Section 1.03.
(b) No Default; Representations and Warranties. At the time of
------------------------------------------
each making of Loans and also after giving effect thereto, (i) there shall exist
no Default or Event of Default and (ii) all representations and warranties made
by any Credit Party contained herein or in the other Credit Documents shall be
true and correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of such
Loans, except to the extent that such representations and warranties expressly
relate to an earlier date, in which case such representations and warranties
shall be true and correct as of such earlier date.
-30-
(c) Senior Leverage Ratio. No Loans may be made at any time when
---------------------
the Senior Leverage Ratio is above 4.0 to 1.0 except for the incurrence of (i)
Loans to finance the Specified Purposes, (ii) RF Loans in an aggregate
outstanding amount not to exceed $30 million to be used solely to finance
working capital purposes and (iii) RF Loans in an aggregate amount at the time
of the incurrence thereof equal to an Interim Prepayment Amount outstanding at
such time to the extent such RF Loans are used to fund an Acquisition or a
Permitted Acquisition effected pursuant to the Reinvestment Election that
created such Interim Prepayment Amount and/or to repay Term Loans as required on
the Reinvestment Prepayment Date with respect to such Reinvestment Election.
The acceptance of the benefits of each Loan shall constitute a
representation and warranty by the Borrower that all of the applicable
conditions specified in Section 4.01 (in the case of Loans on the Closing Date),
4.02 (in the case of Term Loans and/or RF Loans incurred to finance
Acquisitions) and/or 4.03 (in the case of all Loans), as the case may be, have
been satisfied as of that time. All of the certificates, legal opinions and
other documents and papers referred to in Sections 4.01 and 4.02, unless
otherwise specified, shall be delivered to the Administrative Agent for the
benefit of each of the Lenders and, except for the Notes, in sufficient
counterparts for each of the Lenders and shall be reasonably satisfactory in
form and substance to the Agents.
SECTION 5. Representations, Warranties and Agreements. In order
------------------------------------------
to induce the Lenders to enter into this Agreement and to make the Loans, the
Borrower makes the following representations and warranties to, and agreements
with, the Lenders, all of which shall survive the execution and delivery of this
Agreement and the making of the Loans:
5.01 Corporate Status. Each of the Borrower and its Subsidiaries
----------------
(i) is a duly organized and validly existing corporation and is in good
standing, in each case under the laws of the jurisdiction of its organization
and has the corporate power and authority to own its property and assets and to
transact the business in which it is engaged and (ii) is duly qualified and is
authorized to do business and, to the extent relevant, is in good standing in
all jurisdictions where it is required to be so qualified and where the failure
to be so qualified, authorized or in good standing is reasonably likely to have
a Material Adverse Effect.
5.02 Corporate Power and Authority. Each Credit Party has the
-----------------------------
corporate power and authority to execute, deliver and carry out the terms and
provisions of the Credit Documents to which it is a party and has taken all
necessary action to authorize the execution, delivery and performance of the
Credit Documents to which it is a party. Each Credit Party has duly executed and
delivered each Credit Document to which it is a party and each such Credit
Document constitutes the legal, valid and binding obligation of such Person
enforceable in accordance with its terms, except to the extent that the
enforceability thereof
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may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights generally and
general equitable principles (regardless of whether enforcement is sought in
equity or at law).
5.03 No Violation. Neither the execution, delivery or performance
------------
by any Credit Party of the Credit Documents to which it is a party nor
compliance with the terms and provisions thereof, (i) will contravene any
applicable provision of any law, statute, rule, regulation, order, writ,
injunction or decree of any court or governmental instrumentality, (ii) will
(after giving effect to the Refinancing) conflict or be inconsistent with or
result in any breach of, any of the terms, covenants, conditions or provisions
of, or constitute a default under, or (other than pursuant to the Pledge
Agreement) result in the creation or imposition of (or the obligation to create
or impose) any Lien upon any of the property or assets of the Borrower or any of
its Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust
or other material agreement or instrument to which the Borrower or any of its
Subsidiaries is a party or by which it or any of its property or assets are
bound or to which it may be subject or (iii) will violate any provision of the
organizational documents (including by-laws) of the Borrower or any of its
Subsidiaries.
5.04 Litigation. There are no actions, suits or proceedings
----------
pending or, to the knowledge of the Borrower, threatened with respect to the
Borrower or any of its Subsidiaries (i) that have had, or that are reasonably
likely to have, a Material Adverse Effect or (ii) that have, or that are
reasonably likely to have had, a material adverse effect on the rights or
remedies of the Lenders or on the ability of the Credit Parties taken as a whole
to perform their obligations under the Credit Documents.
5.05 Use of Proceeds; Margin Regulations. (a) The proceeds of
-----------------------------------
all Term Loans shall be utilized to finance the Acquisitions, to effect the
Refinancing, to retire Existing Warrants, to repurchase outstanding shares of
preferred stock of the Borrower having an aggregate liquidation preference of
$130,164 for an aggregate purchase price equal to such liquidation preference
plus accrued dividends of $12,131 (the "Preferred Repurchase") and to pay
certain fees and expenses relating to the Transaction (all of the foregoing,
collectively, the "Specified Purposes").
(b) (i) The proceeds of RF Loans may be used for working capital
and capital expenditure requirements (including to finance Permitted CLEC
Expenditures), to effect the Preferred Repurchase and to retire Existing
Warrants and, on and after the B Utilization Date, to finance Acquisitions and
Permitted Acquisitions.
(c) The proceeds of AF Loans may only be used (x) to finance
capital expenditure requirements and Permitted Acquisitions and/or (y) to repay
RF Loans to the extent that the proceeds of such RF Loans had been used to
finance capital expenditure requirements and/or Permitted Acquisitions.
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(d) Neither the making of any Loan hereunder, nor the use of the
proceeds thereof, will violate the provisions of Regulation G, T, U or X of the
Board of Governors of the Federal Reserve System and no part of the proceeds of
any Loan will be used to purchase or carry any Margin Stock or to extend credit
for the purpose of purchasing or carrying any Margin Stock, provided that
proceeds of AF Loans may be utilized to purchase Margin Stock if (A) such
purchase (x) is pursuant to a Permitted Acquisition of the Person issuing such
Margin Stock and (y) is effected pursuant to a friendly transaction (as
determined by the Agents) not in violation of such Regulations G, T, U or X and
(B) at no time shall the market value of all Margin Stock held by the Borrower
and its Subsidiaries exceed 25% of the consolidated total assets of the Borrower
subject to Sections 7.02 and 7.03.
5.06 Governmental Approvals. Except for (x) such approvals set
----------------------
forth on Annex VIII as have not been obtained and (y) such consents, approvals
and filings as have been obtained or made on or prior to the Closing Date and
remain in full force and effect, no order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any foreign or domestic governmental or public body or authority
(including, without limitation, the FCC and applicable PUCs), or any subdivision
thereof, is required to authorize or is required in connection with (i) the
execution, delivery and performance of any Credit Document or (ii) the legality,
validity, binding effect or enforceability of any Credit Document.
5.07 Investment Company Act. Neither the Borrower nor any of its
----------------------
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
5.08 Public Utility Holding Company Act. Neither the Borrower nor
----------------------------------
any of its Subsidiaries is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
5.09 True and Complete Disclosure. All factual information (taken
----------------------------
as a whole) heretofore or contemporaneously furnished by or on behalf of the
Borrower in writing to the Agents for purposes of or in connection with this
Agreement or any transaction contemplated herein is, and all other such factual
information (taken as a whole) hereafter furnished by or on behalf of any Credit
Party in writing to the Lenders hereunder will be, true and accurate in all
material respects on the date as of which such information is dated or certified
and not incomplete by omitting to state any material fact necessary to make such
information (taken as a whole) not misleading at such time in light of the
circumstances under which such information was provided. The projections and pro
---
forma financial information contained in such materials are based on good faith
-----
estimates and assumptions believed by the Borrower to be reasonable at the time
made (it being recognized by the Lenders that such
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projections as to future events are not to be viewed as facts and that actual
results during the period or periods covered by any such projections may differ
from the projected results and that such assumptions and estimates may prove to
be inaccurate).
5.10 Financial Condition; Financial Statements. (a) On and as of
-----------------------------------------
the Closing Date, on a pro forma basis after giving effect to the Transaction
--- -----
(determined as if each Acquisition (other than the UI Acquisition) was
consummated on the Closing Date) and all Indebtedness incurred, and to be
incurred (including, without limitation, the Loans and the application of the
proceeds thereof), and Liens created, and to be created, by each Credit Party in
connection therewith, (x) the fair valuation of all of the tangible and
intangible assets of the Borrower and its Subsidiaries (on a consolidated basis)
will exceed their debts, (y) the Borrower and its Subsidiaries will not have
incurred or intended to incur debts beyond their ability to pay such debts as
such debts mature and (z) the Borrower and its Subsidiaries will not have
unreason ably small capital with which to conduct their business. For purposes
of this Section 6.10, "debt" means any liability on a claim, and "claim" means
(i) the right to payment whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured; or (ii) the right to an
equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.
(b) (i) The consolidated balance sheet of Ellensburg as at
December 31, 1997 and the related consolidated statements of operations and cash
flows for the period ended as of said date, which have been audited by Xxxx-
Xxxxx LLP, who delivered an unqualified opinion in respect thereof, (ii) the
consolidated balance sheet of Taconic as at December 31, 1997 and the related
consolidated statements of operations and cash flows for the period ended as of
said date, which have been audited by KPMG Peat Marwick LLP, who delivered an
unqualified opinion in respect thereof, (iii) the consolidated balance sheet of
El Paso as at December 31, 1997 and the related consolidated statements of
operations and cash flows for the period ended as of said date, and (iv) the
consolidated balance sheet of Chouteau as at December 31, 1997 and the related
consolidated statements of operations and cash flows for the period ended as of
said date, copies of all of which have heretofore been furnished to each Lender,
present fairly the consolidated financial position of the respective Acquired
Companies at the dates of said statements and the results for the periods
covered thereby in accordance with GAAP, except to the extent provided in the
notes to said financial statements. All such financial statements have been
prepared in accordance with GAAP and practices consistently applied except to
the extent provided in the notes to said financial statements. The pro forma
--- -----
consolidated balance sheet of the Borrower as of December 31, 1997, a copy of
which has heretofore been furnished to each Lender, presents a good faith
estimate of the consolidated pro forma financial condition of the Borrower
--- -----
(after giving effect to the Transaction, including the consummation of each
Acquisition (other than the UI Acquisition)
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and all Indebtedness incurred or to be incurred in connection therewith) as at
the date thereof. Nothing has occurred since December 31, 1997 that has had or
is reasonably likely to have a Material Adverse Effect.
(c) Except as reflected in the financial statements described in
Section 5.10(b) or in the footnotes thereto, there were as of the Closing Date
no liabilities or obligations with respect to the Borrower or any of its
Subsidiaries (or any of the Acquired Companies) of a nature (whether absolute,
accrued, contingent or otherwise and whether or not due) which, either
individually or in aggregate, is reasonably likely to be material to the
Borrower and its Subsidiaries (after giving effect to each Acquisition other
than the UI Acquisition) taken as a whole, except as incurred in the ordinary
course of business consistent with past practices.
5.11 Security Interests. At any time on or after the Closing
------------------
Date, the Pledge Agreement creates, as security for the obligations purported to
be secured thereby, a valid and enforceable Lien on all of the Collateral
subject thereto at such time, at such time superior to and prior to the rights
of all third Persons and subject to no other Liens (except for Liens permitted
under Section 7.03(a)), in favor of the Collateral Agent for the benefit of the
Secured Creditors, which Lien has been perfected under applicable law. No
filings or recordings are required in order to perfect, or continue the
perfection of, the Lien on the Pledged Securities created under the Pledge
Agreement, except for filings or recordings required in connection with the
Pledge Agreement which shall have been made on or prior to the Closing Date or
as otherwise required in accordance with the terms of the Pledge Agreement.
5.12 Acquisitions. All representations and warranties by the
------------
Borrower or any Subsidiary thereof formed to effect any Acquisition set forth in
the Acquisition Documents relating to Acquisitions that have been consummated
and, to the knowledge of the Borrower, all representations and warranties made
by all other Persons in such Acquisition Documents, were true and correct in all
material respects as of the time such representations and warranties were made
and shall be true and correct in all material respects as of the date Term Loans
and/or RF Loans are incurred to finance such Acquisition as if such
representations and warranties were made on and as of such date, except to the
extent such representations and warranties expressly relate to an earlier date.
5.13 Tax Returns and Payments. Each of the Borrower and its
------------------------
Subsidiaries has filed all federal income tax returns and all other material tax
returns, domestic and foreign, required to be filed by it and has paid all
material taxes and assessments payable by it which have become due, except for
those contested in good faith and adequately disclosed and fully provided for on
the financial statements of the Borrower and its Subsidiaries if and to the
extent required by GAAP. Each of the Borrower and its Subsi diaries has at all
times paid, or has provided adequate reserves (in the good faith judgment of the
management of
-35-
the Borrower) for the payment of, all federal, state and foreign income taxes
applicable for all prior fiscal years which are still open for audit and for the
current fiscal year to date. There is no action, suit, proceeding,
investigation, audit, or claim now pending or, to the knowledge of the Borrower,
threatened by any authority regarding any taxes relating to the Borrower or any
of its Subsidiaries which is reasonably likely to have a Material Adverse
Effect.
5.14 Compliance with ERISA. (i) Annex IV sets forth each Plan and
---------------------
Multiemployer Plan; (ii) except as set forth on Annex IV, each Plan (and each
related trust, insurance contract or fund) is in substantial compliance with its
terms and with all applicable laws, including without limitation ERISA and the
Code; each Plan which is intended to be qualified under Section 401(a) of the
Code has received a determination letter from the Internal Revenue Service to
the effect that it meets the requirements of Section 401(a) of the Code; except
as set forth on Annex IV, no Reportable Event has occurred with respect to a
Plan; to the knowledge of the Borrower, no Multiemployer Plan is insolvent or in
reorganization; except as set forth on Annex IV, no Plan has an Unfunded Current
Liability which, when added to the aggregate amount of Unfunded Current
Liabilities with respect to all other Plans, exceeds $750,000; no Plan which is
subject to Section 412 of the Code or Section 302 of ERISA has an accumulated
funding deficiency, within the meaning of such sections of the Code or ERISA, or
has applied for or received a waiver of an accumulated funding deficiency or an
extension of any amortization period, within the meaning of Section 412 of the
Code or Section 303 or 304 of ERISA; all contributions required to be made with
respect to a Plan or a Multiemployer Plan have been timely made; neither the
Borrower nor any Subsidiary nor any ERISA Affiliate has incurred any material
liability (including any indirect, contingent or secondary liability) to or on
account of a Plan or a Multiemployer Plan pursuant to Section 409, 502(i),
502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section
401(a)(29), 4971 or 4975 of the Code or reasonably expects to incur any such
liability under any of the foregoing sections with respect to any Plan or any
Multiemployer Plan; no condition exists which presents a material risk to the
Borrower or any Subsidiary or any ERISA Affiliate of incurring a material
liability to or on account of a Plan or, to the knowledge of the Borrower, of
any Multiemployer Plan pursuant to the foregoing provisions of ERISA and the
Code; no proceedings have been instituted to terminate or appoint a trustee to
administer any Plan which is subject to Title IV of ERISA; except as would not
result in any material liability, no action, suit, proceeding, hearing, audit or
investigation with respect to the administration, operation or the investment of
assets of any Plan (other than routine claims for benefits) is pending, or to
the best knowledge of the Borrower expected or threatened; using actuarial
assumptions and computation methods consistent with Part 1 of subtitle E of
Title IV of ERISA, the aggregate liabilities of the Borrower and its
Subsidiaries and its ERISA Affiliates to all Multiemployer Plans in the event of
a complete withdrawal therefrom, as of the close of the most recent fiscal year
of each such Plan ended prior to the date of the most recent Loan incurrence,
would not exceed $15,000; except as would not result in a material liability,
each group health plan (as defined
-36-
in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) which covers or
has covered employees or former employees of the Borrower, any Subsidiary or any
ERISA Affiliate has at all times been operated in compliance with the provisions
of Part 6 of subtitle B of Title I of ERISA and Section 4980B of the Code; no
lien imposed under the Code or ERISA on the assets of the Borrower or any
Subsidiary or any ERISA Affiliate exists or is reasonably likely to arise on
account of any Plan; and the Borrower and its Subsidiaries do not maintain or
contribute to any employee welfare benefit plan (as defined in Section 3(1) of
ERISA) which provides benefits to retired employees or other former employees
(other than as required by Section 601 of ERISA) or any Plan the obligations
with respect to which could reasonably be expected to have a material adverse
effect on the ability of the Borrower to perform its obligations under this
Agreement.
5.15 Subsidiaries. On and as of the Closing Date and after giving
------------
effect to the consummation of the Acquisitions effected on such date, the
Borrower has no Subsidiaries other than those Subsidiaries listed on Annex III,
which correctly sets forth, as of the Closing Date and after giving effect to
the consummation of the Acquisitions effected on such date, the percentage
ownership (direct and indirect) of the Borrower in each class of capital stock
of each of its Subsidiaries and also identifies the direct owner thereof.
5.16 Intellectual Property. Each of the Borrower and its
---------------------
Subsidiaries owns or holds a valid transferable license to use all the patents,
trademarks, service marks, trade names, technology, know-how, copyrights,
licenses, franchises and formulas or rights with respect to the foregoing, that
are used in the operation of the business of the Borrower or such Subsidiary as
presently conducted and are material to such business where the failure to own
or hold a valid license is reasonably likely to have a Material Adverse Effect.
5.17 Environmental Matters. Each of the Borrower and its
---------------------
Subsidiaries is in material compliance with all applicable Environmental Laws
governing its business for which failure to comply is reasonably likely to have
a Material Adverse Effect, and neither the Borrower nor any of its Subsidiaries
is liable for any material penalties, fines or forfeitures for failure to comply
with any of the foregoing in the manner set forth above. All licenses, permits,
registrations or approvals required for the business of the Borrower and each of
its Subsidiaries under any Environmental Law have been secured and each of the
Borrower and its Subsidiaries is in substantial compliance therewith, except
such licenses, permits, registrations or approvals the failure to secure or to
comply therewith is not reasonably likely to have a Material Adverse Effect.
There are no Environmental Claims pending or, to the knowledge of the Borrower
threatened, against the Borrower or any of its Subsidiaries wherein any decision
ruling or finding is reasonably likely to have a Material Adverse Effect.
5.18 Labor Relations. No Credit Party is engaged in any unfair labor
---------------
practice that is reasonably likely to have a Material Adverse Effect. There is
(i) no unfair
-37-
labor practice complaint pending against any Credit Party or, to the Borrower's
knowledge, threatened against any of them, before the National Labor Relations
Board, and no grievance or arbitration proceeding arising out of or under any
collective bargaining agreement is so pending against any Credit Party or, to
the Borrower's knowledge, threatened against any of them, (ii) no strike, labor
dispute, slowdown or stoppage pending against any Credit Party or, to the
Borrower's knowledge, threatened against any Credit Party and (iii) no union
representation question, to the Borrower's knowledge, existing with respect to
the employees of any Credit Party and no union organizing activities, to the
Borrower's knowledge, are taking place, except with respect to any matter
specified in clause (i), (ii) or (iii) above, either individually or in the
aggregate, such as is not reasonably likely to have a Material Adverse Effect.
5.19 Compliance with Statutes, etc. Each of the Borrower and its
------------------------------
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the owner
ship of its property, except such non-compliance as has not had, and is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect.
SECTION 6. Affirmative Covenants. The Borrower hereby covenants and
---------------------
agrees that until the Commitments have terminated, no Notes are outstanding and
the Loans, together with interest, Fees and all other Obligations (other than
any indemnities described in Section 11.13 which are not then owing) incurred
hereunder, are paid in full:
6.01 Information Covenants. The Borrower will furnish to each
---------------------
Lender:
(a) Annual Financial Statements. Within 90 days after the close of
---------------------------
each fiscal year of the Borrower, the consolidated and consolidating balance
sheet of the Borrower and the Intermediary Holding Companies, as at the end of
such fiscal year and the related consolidated and consolidating statements of
operations and of cash flows for such fiscal year, and in each case setting
forth comparative consolidated and consolidating figures for the preceding
fiscal year, and (x) in the case of consolidated statements, examined by
independent certified public accountants of recognized national standing whose
opinion shall not be qualified as to the scope of audit and as to the status of
the Borrower as a going concern or (y) in the case of consolidating statements,
certified by the chief financial officer of the Borrower, together with a
certificate of such accounting firm stating that in the course of its regular
audit of the business of the Borrower and the Intermediary Holding Companies,
which audit was conducted in accordance with generally accepted auditing
standards, no Default or Event of Default which has occurred and is continuing
has come to their attention or, if such a Default or Event of Default has come
to their attention a statement as to the nature thereof.
-38-
(b) Quarterly Financial Statements. Within 45 days after the close
------------------------------
of each of the first three quarterly accounting periods in each fiscal year
commencing March 31, 1998, the consolidated and consolidating balance sheet of
the Borrower and the Intermediary Holding Companies, as at the end of such
quarterly period and the related consolidated and consolidating statements of
operations and of cash flows for such quarterly period and for the elapsed
portion of the fiscal year ended with the last day of such quarterly period, and
in each case setting forth comparative consolidated and consolidating figures
for the related periods in the prior fiscal year, all of which shall be in
reasonable detail and certified by the chief financial officer or controller of
the Borrower, subject to changes resulting from audit and normal year-end audit
adjustments.
(c) Monthly Reports. Commencing April 30, 1998, within 45 days after
---------------
after the end of each monthly accounting period of the fiscal years ended
December 31, 1998 and December 31, 1999 (other than the last monthly accounting
period in any such fiscal year), the internally prepared consolidating income
statements of the Borrower and the Intermediary Holding Companies for such
period, all of which shall be certified by the chief financial officer or
controller of the Borrower subject to changes resulting from audit and normal
year-end audit adjustments.
(d) Budgets; etc. Not more than 30 days after the commencement of
-------------
each fiscal year of the Borrower ending after the Closing Date, consolidated and
consolidating budgets of the Borrower and its Subsidiaries in reasonable detail
for each of the twelve months of such fiscal year as customarily prepared by
management for its internal use setting forth, with appropriate discussion, the
principal assumptions upon which such budgets are based. Together with each
delivery of consolidated financial statements pursuant to Sections 6.01(a), (b)
and (c), a comparison of the current year-to-date consolidated financial results
for the Borrower against the consolidated budget of the Borrower required to be
submitted pursuant to this clause (d) shall be presented.
(e) Officer's Certificates. At the time of the delivery of the
----------------------
financial statements provided for in Sections 6.01(a), (b) and (c), a
certificate of the chief financial officer, controller or other Authorized
Officer of the Borrower to the effect that no Default or Event of Default exists
or, if any Default or Event of Default does exist, specifying the nature and
extent thereof, which certificate in the case of the certificate delivered
pursuant to Sections 6.01(a) and (b), shall set forth the calculations required
to establish (I) the Leverage Ratio as at the last day of the fiscal year or
fiscal quarter covered by such financial statements and (II) whether the
Borrower and its Subsidiaries were in compliance with the provisions of Sections
7.11, 7.12 and 7.13 as at the end of such fiscal period.
(f) Notice of Default or Litigation. Promptly, and in any event
-------------------------------
within five Business Days after any officer of the Borrower obtains knowledge
thereof, notice of (x) the occurrence of any event which constitutes a Default
or Event of Default, which notice shall
-39-
specify the nature thereof, the period of existence thereof and what action the
Borrower proposes to take with respect thereto and (y) the commencement of, or
any significant adverse development in, any litigation or governmental
proceeding pending against the Borrower or any of its Subsidiaries which has had
or is reasonably likely to have a Material Adverse Effect or has had or is
reasonably likely to have a material adverse effect on the ability of the Credit
Parties to perform their obligations under the Credit Documents.
(g) Other Information. Promptly upon transmission thereof, copies of
-----------------
any filings and registrations with, and reports to, the Securities and Exchange
Commission or any successor thereto (the "SEC") by the Borrower or any of its
Subsidiaries, and with reasonable promptness, such other information or
documents (financial or otherwise) as the Administrative Agent on its own behalf
or on behalf of the Required Lenders may reasonably request from time to time.
6.02 Books, Records and Inspections. The Borrower will, and will
------------------------------
cause its Subsidiaries to, permit, upon reasonable notice to the chief financial
officer, controller or any other Authorized Officer of the Borrower, officers
and designated representatives of the Administrative Agent or the Required
Lenders to visit and inspect any of the properties or assets of the Borrower and
any of its Subsidiaries in their possession and to examine the books of account
of the Borrower and any of its Subsidiaries and discuss the affairs, finances
and accounts of the Borrower and of any of its Subsidiaries with, and be advised
as to the same by, its and their officers and independent accountants, all at
such reasonable times and intervals during normal business hours and to such
reasonable extent as the Administrative Agent or the Required Lenders may
desire.
6.03 Insurance. The Borrower will, and will cause each of its
---------
Subsidiaries to, at all times maintain in full force and effect insurance with
reputable and solvent insurers in such amounts, covering such risks and
liabilities and with such deductibles or self-insured retentions as are in
accordance with normal industry practice. The Borrower will, and will cause each
of its Subsidiaries to, furnish to the Administrative Agent on the Closing Date
and thereafter annually, upon request of the Administrative Agent, a summary of
the insurance carried.
6.04 Payment of Taxes. The Borrower will pay and discharge, and will
----------------
cause each of its Subsidiaries to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any properties belonging to it, prior to the date on which penalties attach
thereto, and all lawful claims which, if unpaid, would become a Lien or charge
upon any material properties of the Borrower or any of its Subsidiaries,
provided that neither the Borrower nor any Subsidiary shall be required to pay
any such tax, assessment, charge, levy or claim which is being contested in good
faith and by proper proceedings if it has maintained adequate reserves (in the
-40-
good faith judgment of the management of the Borrower) with respect thereto
in accordance with GAAP.
6.05 Corporate Franchises. The Borrower will do, and will cause each
--------------------
Subsidiary to do, or cause to be done, all things reasonably necessary to
preserve and keep in full force and effect its existence and to preserve its
material rights and franchises, other than those the failure to preserve which
could not reasonably be expected to have a Material Adverse Effect, provided
that any transaction permitted by Section 7.02 will not constitute a breach of
this Section 6.05.
6.06 Compliance with Statutes, etc. The Borrower will, and will
------------------------------
cause each Subsidiary to, comply with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign (including all Environmental Laws), in respect of the
conduct of its business and the ownership of its property other than those the
non-compliance with which is not reasonably likely to have a Material Adverse
Effect or have a material adverse effect on the ability of the Credit Parties to
perform their obligations under the Credit Documents.
6.07 ERISA. As soon as possible and, in any event, within 10 days
-----
after the Borrower knows or has reason to know of the occurrence of any of the
following, the Borrower will deliver to each of the Lenders a certificate of the
chief financial officer of the Borrower setting forth the full details as to
such occurrence and the action, if any, that the Borrower, any Subsidiary or any
ERISA Affiliate is required or proposes to take, together with any notices
required or proposed to be given to or filed with or by the Borrower, any
Subsidiary, any ERISA Affiliate, the PBGC, a Plan or Multiemployer Plan
participant or the Plan administrator with respect thereto: that a Reportable
Event has occurred (except to the extent that the Borrower has previously
delivered to the Lender a certificate and notices (if any) concerning such event
pursuant to the next clause hereof); that a contributing sponsor (as defined in
Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA is subject
to the advance reporting requirement of PBGC Regulation Section 4043.61 (without
regard to subparagraph (b)(1) thereof), and an event described in sub section
.62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is
reasonably expected to occur with respect to such Plan within the following 30
days; that an accumulated funding deficiency, within the meaning of Section 412
of the Code or Section 302 of ERISA, has been incurred or an application may
reasonably be expected to be or has been made for a waiver or modification of
the minimum funding standard (including any required installment payments) or an
extension of any amortization period under Section 412 of the Code or Section
303 or 304 of ERISA with respect to a Plan; that any contribution required to be
made with respect to a Plan or Multiemployer Plan has not been timely made; that
a Plan or Multiemployer Plan has been or may be reasonably be expected to be
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA; that a Plan has an Unfunded Current Liability which, when added to the
aggregate amount of Unfunded Current Liabilities with respect to
-41-
all other Plans, exceeds the aggregate amount of such Unfunded Current
Liabilities that existed on the Closing Date by $100,000; that proceedings may
reasonably be expected to be or have been instituted to terminate or appoint a
trustee to administer a Plan which is subject to Title IV of ERISA; that a
proceeding has been instituted pursuant to Section 515 of ERISA to collect a
delinquent contribution to a Multiemployer Plan; that the Borrower, any
Subsidiary or any ERISA Affiliate will or may reasonably be expected to incur
any material liability (including any indirect, contingent, or secondary
liability) to or on account of the termination of or withdrawal from a Plan or
Multiemployer Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of
ERISA or with respect to a Plan under Section 401(a)(29), 4971, 4975 or 4980 of
the Code or Section 409 or 502(i) or 502(l) of ERISA or with respect to a group
health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the
Code) under Section 4980B of the Code; or that the Borrower or any Subsidiary
may incur any material liability pursuant to any employee welfare benefit plan
(as defined in Section 3(1) of ERISA) that provides benefits to retired
employees or other former employees (other than as required by Section 601 of
ERISA) or any Plan in addition to the liability that existed on the Closing Date
pursuant to any such plan or plans. Upon request by any Lender, the Borrower
will deliver to such Lender a complete copy of the annual report (on Internal
Revenue Service Form 5500-series) of each Plan (including, to the extent
required, the related financial and actuarial statements and opinions and other
supporting statements, certifications, schedules and information) required to be
filed with the Internal Revenue Service. In addition to any certificates or
notices delivered to the Lenders pursuant to the first sentence hereof, copies
of any records, documents or other information required to be furnished to the
PBGC, and any material notices received by the Borrower, any Subsidiary or any
ERISA Affiliate with respect to any Plan or Multiemployer Plan shall be
delivered to the Lender no later than 10 days after the date such records,
documents and/or information has been furnished to the PBGC or such notice has
been received by the Borrower, the Subsidiary or the ERISA Affiliate, as
applicable.
6.08 Good Repair. The Borrower will, and will cause each of its
-----------
Subsidiaries to, ensure that its material properties and equipment used or
useful in its business are kept in good repair, working order and condition,
normal wear and tear excepted, and, subject to Section 7.05, that from time to
time there are made in such properties and equipment all needful and proper
repairs, renewals, replacements, extensions, additions, betterments and
improvements thereto, to the extent and in the manner useful or customary for
companies in similar businesses.
6.09 End of Fiscal Years; Fiscal Quarters. The Borrower will, for
------------------------------------
financial reporting purposes, cause (i) each of its, and each of its
Subsidiaries', fiscal years and fourth fiscal quarters to end on December 31 of
each year and (ii) each of its, and each of its Subsidiaries', first three
fiscal quarters to end on the last day of March, June and September of each
year.
-42-
6.10 Interest Rate Agreement. The Borrower will enter into Interest
-----------------------
Rate Agreements reasonably satisfactory to the Agents (x) no later than the date
occurring 30 days after the Closing Date, to the extent, if any, necessary so
that at least 25% of the aggregate outstanding principal amount of the
Consolidated Debt at the time of the entering into of any such Interest Rate
Agreement has a fixed interest rate or is covered by such Interest Rate
Agreements for a period of at least two years following the Closing Date and (y)
no later than the date occurring nine months after the Closing Date, to the
extent, if any, necessary so that at least 50% of outstanding Consolidated Debt
at the time of the entering into of any such Interest Rate Agreement has a fixed
interest rate or is covered by such Interest Rate Agreements for a period of at
least two years following the Closing Date.
6.11 Approvals. The Borrower will use reasonable best efforts to
---------
obtain as promptly as practicable after (i) the Closing Date, the approvals set
forth in Annex VIII and (ii) the consummation of any Permitted Acquisition, any
approvals not obtained on or prior to the date of the consummation of such
Permitted Acquisition, provided that (x) it shall not be a default under this
Section 6.11 if the Borrower fails to obtain any such approval, after having
used reasonable best efforts to obtain same and (y) the Borrower may cease to
seek to obtain any such approvals if it has been advised by counsel or the
applicable governmental agency that it will not, or is not reasonably likely to,
obtain such approval, provided further that, in the event the Borrower is able
to obtain any approval required to be obtained in accordance with the terms of
this Section 6.11, the Borrower shall use reasonable best efforts to obtain as
promptly as practicable after receipt of such approval, an opinion of local
counsel reasonably satisfactory to the Administrative Agent covering the
regulatory aspects of the respective Acquisition or Permitted Acquistion, as the
case may be, which opinion shall be in form and substance reasonably
satisfactory to the Administrative Agent.
6.12 CoBank Capital. The Borrower will purchase such participation
--------------
certificates in CoBank as CoBank may require from time to time in accordance
with its bylaws. The Borrower hereby consents and agrees that the amount of any
distributions with respect to its patronage with CoBank that are made in
qualified written notices of allocation (as defined in 26 U.S.C. 1388) and that
are received by the Borrower from CoBank, will be taken into account by the
Borrower at their stated Dollar amounts whether the distribution be evidenced by
a participation certificate or other form of written notice that such
distribution has been made and recorded in the name of the Borrower on the
records of CoBank.
SECTION 7. Negative Covenants. The Borrower hereby covenants and
------------------
agrees that until the Commitments have terminated, no Notes are outstanding and
the Loans, together with interest, Fees and all other Obligations (other than
any indemnities described in Section 11.13 which are not then owing) incurred
hereunder, are paid in full:
7.01 Changes in Business. The Borrower will not permit at any time
-------------------
the business activities taken as a whole conducted by the Borrower and its
Subsidiaries to be
-43-
materially different from the business activities taken as a whole (including
incidental activities) conducted by the Borrower and its Subsidiaries on the
Closing Date (determined as if all the Acquisitions were consummated on such
date) and businesses reasonably related thereto (the "Business").
7.02 Consolidation, Merger, Sale or Purchase of Assets, etc. The
-------------------------------------------------------
Borrower will not, and will not permit any Subsidiary to, wind up, liquidate or
dissolve its affairs, or enter into any transaction of merger or consolidation,
or convey, sell, lease or otherwise dispose of all or any part of its property
or assets (other than inventory or obsolete equipment or excess equipment no
longer needed in the conduct of the business in the ordinary course of business)
or purchase, lease or otherwise acquire all or any part of the property or
assets of any Person (other than purchases or other acquisitions of inventory,
leases, materials and equipment in the ordinary course of business) or agree to
do any of the foregoing at any future time without a contingency relating to
obtaining any required approval hereunder, except that the following shall be
permitted:
(a) (i) any Subsidiary may be merged or consolidated with or into,
or be liquidated into, the Borrower or a Subsidiary Guarantor (so long as
the Borrower or such Subsidiary Guarantor is the surviving corporation), or
all or any part of its business, properties and assets may be conveyed,
sold or transferred to the Borrower or any Subsidiary Guarantor, provided
--------
that neither the Borrower nor any Subsidiary Guarantor may be a party to
any merger, consolidation or liquidation otherwise permitted by this clause
(a) (i) involving a Person that is not a Subsidiary except in connection
with a Permitted Acquisition, (ii) any Subsidiary that is not a Subsidiary
Guarantor may be merged or consolidated with or into, or convey, sell or
transfer its assets to, another Subsidiary that is not a Subsidiary
Guarantor, provided that if the stock of either such Person was pledged
pursuant to the Pledge Agreement the stock of the surviving entity or the
transferee entity, as the case may be, shall also be pledged pursuant to a
Pledge Agreement and (iii) each of Chautauqua & Erie Telephone Company and
ST Long Distance Corporation may transfer CLEC assets to MJD TeleChoice, so
long as the aggregate fair market value of all such assets so transferred
by such Persons (determined in good faith by senior management of the
Borrower) on and after the Closing Date does not exceed $5,000,000,
provided that no such merger or consolidation otherwise permitted above
between a Pledged Subsidiary and Non-Pledged Subsidiary, and no such
conveyance, sale or transfer by a Pledged Subsidiary to a Non-Pledged
Subsidiary, shall be permitted unless, after giving effect thereto, the Pro
Forma EBITDA Test is satisfied;
(b) capital expenditures to the extent within the limitations set
forth in Section 7.05 hereof;
-44-
(c) the investments, acquisitions and transfers or dispositions of
properties permitted pursuant to Section 7.06;
(d) each of the Borrower and any Subsidiary may lease (as lessee)
real or personal property in the ordinary course of business (so long as
such lease does not create a Capitalized Lease Obligation not otherwise
permitted by Section 7.04(c));
(e) licenses or sublicenses by the Borrower and its Subsidiaries of
intellectual property in the ordinary course of business, provided, that
--------
such licenses or sublicenses shall not interfere with the business of the
Borrower or any Subsidiary;
(f) (i) sales or dispositions of Non-Core Assets to the extent that
the aggregate Net Cash Proceeds received from all such sales and
dispositions permitted by this clause (f)(i) shall not exceed $40,000,000
in the aggregate and $25,000,000 in any fiscal year of the Borrower and
(ii) additional sales or dispositions of assets to the extent that the
aggregate Net Cash Proceeds received from all such sales and dispositions
permitted by this clause (f)(ii) shall not exceed $2,500,000 in any fiscal
year of the Borrower, provided that (x) each such sale or disposition
pursuant to this clause (f) shall be in an amount at least equal to the
fair market value thereof and for proceeds consisting of at least 85% cash
and (y) the Net Cash Proceeds of any such sale are applied to repay the
Loans to the extent required by Section 3.02(A)(c), provided further that
----------------
the sale or disposition of the capital stock of any Subsidiary of the
Borrower pursuant to this clause (f) shall be prohibited unless it is for
all of the outstanding capital stock of such Subsidiary owned by the
Borrower and its Subsidiaries;
(g) the Acquisitions;
(h) leases and subleases permitted under Section 7.03(d) and (g);
and
(i) Permitted Acquisitions.
7.03 Liens. The Borrower will not, and will not permit any of its
-----
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets of any kind (real or personal, tangible or
intangible) of the Borrower or any such Subsidiary whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts receivable or notes with recourse to the
Borrower or any of its Subsidiaries) or assign any right to receive income,
except:
-45-
(a) Liens for taxes not yet delinquent or Liens for taxes being
contested in good faith and by appropriate proceedings for which adequate
reserves (in the good faith judgment of the management of the Borrower)
have been established;
(b) Liens in respect of property or assets of the Borrower or any of
its Subsidiaries imposed by law which were incurred in the ordinary course
of business, such as carriers', warehousemen's and mechanics' Liens,
statutory landlord's Liens, and other similar Liens arising in the ordinary
course of business, and (x) which do not in the aggregate materially
detract from the value of such property or assets or materially impair the
use thereof in the operation of the business of the Borrower or any of its
Subsidiaries or (y) which are being contested in good faith by appropriate
proceedings, which proceedings have the effect of preventing the forfeiture
or sale of the property or asset subject to such Lien;
(c) Liens created by or pursuant to this Agreement or the other
Credit Documents;
(d) Liens created pursuant to (x) Capital Leases in respect of
Capitalized Lease Obligations permitted by Section 7.04(c) and (y) Capital
Leases securing Permitted MJD Capital Debt;
(e) Liens arising from judgments, decrees or attachments and Liens
securing appeal bonds arising from judgments, in each case in circumstances
not constituting an Event of Default under Section 8.09;
(f) Liens (other than any Lien imposed by ERISA) incurred or deposits
made in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social security, or
to secure the performance of tenders, statutory obligations, surety and
appeal bonds, bids, leases, government contracts, performance and
return-of-money bonds and other similar obligations incurred in the
ordinary course of business (exclusive of obligations in respect of the
payment for borrowed money);
(g) leases or subleases granted to others not interfering in any
material respect with the business of the Borrower or any of its
Subsidiaries;
(h) easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances not
interfering in any material respect with the ordinary conduct of the
business of the Borrower or any of its Subsidiaries;
(i) Liens arising from precautionary UCC financing statement filings
regarding operating leases entered into by the Borrower or any of its
Subsidiaries in the
-46-
ordinary course of business and statutory and common law landlords' liens
under leases to which the Borrower or any of its Subsidiaries is a party;
(j) purchase money Liens securing payables arising from the purchase
by the Borrower or any Subsidiary Guarantor of any equipment or goods in
the normal course of business, provided that such payables shall not
constitute Indebtedness;
(k) any interest or title of a lessor under any lease permitted by
this Agreement;
(l) Liens in existence on, and which are to continue in effect after,
the Closing Date which are listed, and the property subject thereto
described in, Annex V, plus extensions and renewals of such Liens, provided
that (x) the aggregate principal amount of the Indebtedness, if any,
secured by such Liens does not increase from that amount outstanding at the
time of any such extension or renewal and (y) any such extension or renewal
does not encumber any additional assets or properties of the Borrower or
any of its Subsidiaries;
(m) Liens arising pursuant to purchase money mortgages or security
interests securing Indebtedness representing the purchase price (or
financing of the purchase price within 90 days after the respective
purchase) of assets acquired by the Borrower or any Subsidiary after the
Closing Date, provided that (x) any such Liens attach only to the assets so
acquired, (y) the Indebtedness secured by any such Lien does not exceed
100%, nor is less than 70%, of the lesser of the fair market value or
purchase price of the property being purchased at the time of the
incurrence of such Indebtedness and (z) all Indebtedness secured by Liens
created pursuant to this clause (m) (other than Permitted MJD Capital Debt)
shall not exceed $5,000,000 at any time outstanding;
(n) if (x) the Taconic Acquisition is consummated, Liens on assets of
Taconic existing on the Closing Date and securing the Indebtedness of
Taconic permitted by Section 7.04(f)(i); and (y) the UI Acquisition is
consummated, Liens on assets of UI existing on the Closing Date and
securing the Indebtedness of UI permitted by Section 7.04(f)(iii); and
(o) Liens on property or assets acquired pursuant to a Permitted
Acquisition, or on property or assets of a Person in existence at the time
such Person is acquired pursuant to a Permitted Acquisition, in each case
securing Permitted Acquired Debt, provided that (x) such Liens do not
--------
attach to the capital stock of any Subsidiary of the Borrower and (y) such
Liens existed prior to, and were not incurred in contemplation of, such
Permitted Acquisition and do not attach to any other asset of the Borrower
or any of its Subsidiaries.
-47-
7.04 Indebtedness. The Borrower will not, and will not permit any
------------
of its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(b) Indebtedness owing by (i) any Subsidiary Guarantor to another
Subsidiary Guarantor or the Borrower, (ii) the Borrower to any Subsidiary
Guarantor, (iii) any Subsidiary that is not a Subsidiary Guarantor to any
other Subsidiary that is not a Subsidiary Guarantor, (iv) the Borrower or
any Subsidiary Guarantor to any Subsidiary that is not a Subsidiary
Guarantor, so long as such Indebtedness is subordinated to the Obligations
on a basis satisfactory to the Administrative Agent and/or (v) any
Subsidiary that is not a Subsidiary Guarantor to the Borrower and/or a
Subsidiary Guarantor, so long as such Indebtedness constitutes a senior
obligation and is evidenced by an intercompany note (which may be a grid
note) pledged to the Collateral Agent pursuant to the Pledge Agreement;
(c) Capitalized Lease Obligations initially incurred after the
Closing Date, provided that the aggregate Capitalized Lease Obligations
(exclusive of Permitted MJD Capital Debt) outstanding at any time under all
Capital Leases entered into after Closing Date shall not exceed $2,000,000;
(d) Indebtedness under Interest Rate Agreements to the extent
entered into in compliance with Section 6.10;
(e) Indebtedness incurred pursuant to purchase money mortgages
permitted by Section 7.03(m);
(f) if (i) the Taconic Acquisition is consummated and after giving
effect thereto, up to $7 million of Indebtedness of Taconic, to the extent
existing on the Closing Date, may remain outstanding after such
consummation, less the aggregate amount of all repayments of principal
thereon effected after the Closing Date, (ii) the Chouteau Acquisition is
consummated and after giving effect thereto, up to $7 million of
subordinated Indebtedness of the Borrower, in form and substance
satisfactory to the Agents, that is issued in connection with such
consummation less any repayments of principal made thereon and (iii) the UI
Acquisition is consummated and after giving effect thereto, up to $12.51
million of Indebtedness of UI, to the extent existing on the Closing Date,
may remain outstanding after such consummation, less the aggregate amount
of all repayments of principal thereon effected after the Closing Date;
-48-
(g) Indebtedness (the "Existing Indebtedness") in existence on, and
which is to continue in effect after, the Closing Date and which is listed
on Annex VI hereto, without giving effect to any subsequent extension,
renewal or refinancing thereof except as permitted pursuant to Section
7.04(l);
(h) Indebtedness of the Borrower or any of its Subsidiaries which
may be deemed to exist in connection with agreements providing for
indemnification, purchase price adjustments and similar obligations in
connection with Permitted Acquisitions, Acquisitions or sales of assets
permitted by this Agreement (so long as any such obligations are those of
the Person making the respective acquisition or sale, and are not
guaranteed by any other Person);
(i) Permitted Acquired Debt;
(j) Permitted Subordinated Debt to the extent (I) the proceeds
thereof are utilized to repay Loans to the extent required by Section
3.02(A)(a)(iii) and/or 3.02(A)(d) and (II) after giving effect to any
incurrence of Permitted Subordinated Debt (and the use of the proceeds
thereof), Section 7.12 shall be complied with as of the last day of the
last fiscal quarter then ended (determined as if such Permitted
Subordinated Debt had been issued on such last day);
(k) Permitted MJD Capital Debt;
(l) Permitted Refinancing Indebtedness, so long as no Default or
Event of Default is in existence at the time of the incurrence thereof and
immediately after giving effect thereto;
(m) Indebtedness of the Borrower consisting of (i) CLEC Back-Stop
Letters of Credit and reimbursement obligations with respect thereto, so
long as the aggregate outstanding stated amounts of all such letters of
credit and reimbursement obligations do not exceed $1,000,000 at any time
and (ii) Permitted Letters of Credit and reimbursement obligations with
respect thereto, so long as the aggregate outstanding stated amounts of all
such letters of credit and reimbursement obligations do not exceed
$1,000,000 at any time; and
(n) additional unsecured Indebtedness of the Borrower and the
Subsidiary Guarantors not to exceed an aggregate outstanding principal
amount of $5.0 million at any time.
7.05 Capital Expenditures. (a) The Borrower will not, and will not
--------------------
permit any of its Subsidiaries to, incur Consolidated Capital Expenditures,
provided that the Borrower and its Subsidiaries may make (i) Permitted CLEC
Expenditures and (ii) Other
-49-
Consolidated Capital Expenditures not to exceed in the aggregate in any fiscal
year an amount equal to 30% of Consolidated EBITDA for such fiscal year.
(b) In the event that the maximum amount which is permitted to be
expended in respect of Other Consolidated Capital Expenditures during any fiscal
year pursuant to Section 7.05(a) (without giving effect to this clause (b)) is
not fully expended during such fiscal year, the maximum amount which may be
expended during the immediately succeeding fiscal year pursuant to Section
7.05(a) shall be increased by such unutilized amount.
7.06 Advances, Investments and Loans. The Borrower will not, and
-------------------------------
will not permit any of its Subsidiaries to, lend money or credit or make
advances to any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital contribution to any
Person, except:
(a) the Borrower or any Subsidiary may invest in cash and Cash
Equivalents;
(b) the Borrower and any Subsidiary may acquire and hold receivables
owing to them, if created or acquired in the ordinary course of business
and payable or dischargeable in accordance with customary trade terms
and/or reasonable extensions thereof;
(c) the intercompany Indebtedness described in Section 7.04(b) shall
be permitted;
(d) loans and advances to officers, directors and employees in the
ordinary course of business (x) for relocation purposes and/or the purchase
from the Borrower of the capital stock (or options or warrants relating
thereto) of the Borrower and (y) otherwise in an aggregate principal amount
not to exceed $1 million at any time outstanding shall be permitted;
(e) the Borrower and each Subsidiary may acquire and own investments
(including debt obligations) received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers arising in
the ordinary course of business;
(f) Interest Rate Agreements entered into pursuant to Section 6.10
shall be permitted;
(g) advances, loans and investments in existence on the Effective
Date and listed on Annex VII, without giving effect to any additions
thereto or replacements thereof, shall be permitted;
-50-
(h) the Borrower and each Subsidiary may make capital contributions
(i) to any of their Subsidiaries to the extent a Subsidiary Guarantor and
(ii) to any Subsidiary that is not a Subsidiary Guarantor, if after giving
effect thereto the aggregate capital contributions (net of any return
thereon) made after the Closing Date permitted pursuant to this clause (ii)
shall not exceed an amount equal to 25% of the Consolidated Capital
Expenditures permitted to be made by the Borrower and its Subsidiaries
during the then fiscal year of the Borrower;
(i) Subsidiaries may be established or created in accordance with
the provisions of Section 7.07;
(j) Acquisitions and Permitted Acquisitions shall be permitted;
(k) investments constituting, or to be used to make, Permitted CLEC
Expenditures by the Borrower and its Subsidiaries in any corporation that
is (or, after giving effect to such investment, will be) directly or
indirectly wholly-owned by the Borrower to the extent such corporation is
engaged in no business other than the competitive local exchange carrier
business (any such corporation, a "CLEC Company");
(l) loans and investments not otherwise permitted by the foregoing
clauses (a) through (k), provided that the aggregate amount of the loans
and investments made pursuant to this clause (l) shall not exceed
$2,000,000; and
(m) the Borrower and its Subsidiaries may acquire and hold
investments consisting of non-cash consideration received from sales of
assets effected in accordance with the requirements of Sections 7.02(f).
7.07 Limitation on Creation of Subsidiaries. The Borrower will not,
--------------------------------------
and will not permit any Subsidiary to, establish, create or acquire any direct
Subsidiary; provided that the Borrower and its Subsidiaries shall be permitted
to establish, create or acquire Wholly-Owned Subsidiaries (or 90%-Owned
Subsidiaries in the case of Telcos), so long as (i) 100% of the capital stock of
such new Subsidiary (if a Parent Company) or at least 90% of the capital stock
of such new Subsidiary (if a TelCo) is pledged pursuant to the Pledge Agreement
(provided that the stock of any new TelCo acquired or created pursuant to a
Permitted Acquisition shall not have to be pledged if, after giving effect to
the acquisition or creation thereof, the Pro Forma EBITDA Test is satisfied) and
the certificates representing such stock, together with stock powers duly
executed in blank, are delivered to the Collateral Agent and (ii) such new
Subsidiary executes a counterpart of the Subsidiary Guaranty (in the case of a
new Intermediary Holding Company) and/or the Pledge Agreement (in the case of a
new Parent Company), in each case on the same basis (and to the same extent) as
such
-51-
Subsidiary would have executed such Credit Documents if it were a Credit Party
on the Closing Date.
7.08 Modifications. The Borrower will not, and will not permit any
-------------
of its Subsidiaries to:
(a) make (or give any notice in respect thereof) any voluntary or
optional payment or prepayment or redemption or acquisition for value of
(including, without limitation, by way of depositing with the trustee with
respect thereto money or securities before due for the purpose of paying
when due) or exchange of any Permitted Acquired Debt, any Indebtedness
permitted by Section 7.04(f), any Permitted Subordinated Debt, any
Permitted Refinancing Indebtedness or any Existing Indebtedness, provided
that (i) the respective obligor may refinance any of the foregoing
Indebtedness with the proceeds of Permitted Refinancing Indebtedness so
long as no Default or Event of Default is in existence at the time of the
incurrence of such Permitted Refinancing Indebtedness and immediately after
giving effect thereto and (ii) in the event the Borrower has made a Special
PSD Election and the Ellensberg Acquisition has not been consummated prior
to the date occurring 45 days after such Special PSD Election, the Borrower
may effect the Permitted PSD Repurchase;
(b) amend or modify (or permit the amendment or modification of) in
any manner adverse to the interests of the Lenders, any provisions of any
Permitted Acquired Debt, any Permitted Refinancing Indebtedness, any
Indebtedness permitted by Section 7.04(f), any Permitted Subordinated Debt
or any Existing Indebtedness; and/or
(c) amend, modify or change in any manner adverse to the interests
of the Lenders the organizational documents (including by-laws) of any
Credit Party, the Existing Warrants, any agreement entered into by the
Borrower with respect to its capital stock, or any Acquisition Document or
enter into any new agreement in any manner adverse to the interests of the
Lenders with respect to the capital stock of the Borrower.
7.09 Dividends, etc. (a) The Borrower will not, and will not permit
---------------
any of its Subsidiaries to, declare or pay any dividends (other than dividends
payable solely in capital stock of such Person) or return any capital to, its
stockholders, members and/or other owners or authorize or make any other
distribution, payment or delivery of property or cash to its stockholders,
members and/or other owners as such, or redeem, retire, purchase or otherwise
acquire, directly or indirectly, for a consideration, any shares of any class of
its capital stock or other ownership interests now or hereafter outstanding (or
any warrants for or options or stock appreciation rights in respect of any of
such shares), or set aside any
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funds for any of the foregoing purposes, or permit any of its Subsidiaries to
purchase or otherwise acquire for consideration any shares of any class of the
capital stock or other ownership interests of the Borrower or any other
Subsidiary, as the case may be, now or hereafter outstanding (or any options or
warrants or stock appreciation rights issued by such Person with respect to its
capital stock) (all of the foregoing "Dividends"), except that:
(i) any Subsidiary may pay dividends or return capital or make
distributions and other similar payments with regard to its capital stock
or other membership interests to the Borrower or to another Subsidiary;
(ii) the Borrower or any of its Subsidiaries may purchase the
Minority Shares for an aggregate purchase price not to exceed $750,000;
(iii) the Borrower, STE or Xxxxxx Telephone may retire or redeem all
the Existing Warrants on or after the Closing Date with the proceeds of
Loans for the price required by the terms thereof, provided that none of
the Borrower, STE or Xxxxxx Telephone shall voluntarily agree to a price to
be paid for the Existing Warrants (as opposed to a determination of such
price by third parties as provided in the Existing Warrants) without the
consent of the Agents (which consent shall not be unreasonably withheld);
(iv) the Preferred Repurchase shall be permitted to be effected; and
(v) the Borrower may redeem or repurchase its stock (or options,
warrants and/or appreciation rights in respect thereof) from shareholders,
officers, employees, consultants and directors (or their estates) upon the
death, permanent disability, retirement or termination of employment of any
such Person or otherwise in accordance with any shareholder agreement,
stock option plan or any employee stock ownership plan provided that (x) no
Default or Event of Default is then in existence or would arise therefrom
and (y) the aggregate amount of all cash paid in respect of all such
shares, options, warrants and rights so redeemed or repurchased in any
calendar year, does not exceed $1 million;
(b) The Borrower will not, and will not permit any of its
Subsidiaries to, create or otherwise cause or suffer to exist (other than as a
result of a requirement of law) any encumbrance or restriction which prohibits
or otherwise restricts (A) the ability of any Subsidiary to (a) pay dividends or
make other distributions or pay any Indebtedness owed to the Borrower or any
Subsidiary, (b) make loans or advances to the Borrower or any Subsidiary, (c)
transfer any of its properties or assets to the Borrower or any Subsidiary or
(B) the ability of any Subsidiary to create, incur, assume or suffer to exist
any Lien upon its property or assets to secure the Obligations, other than
prohibitions or restrictions existing under or by reason of: (i) this Agreement
and the other Credit Documents; (ii) applicable law; (iii)
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customary non-assignment provisions entered into in the ordinary course of
business and consistent with past practices; (iv) any restriction or encumbrance
with respect to a Subsidiary imposed pursuant to an agreement which has been
entered into for the sale or disposition of all or substantially all of the
capital stock or assets of such Subsidiary, so long as such sale or disposition
is permitted under this Agreement; (v) Liens permitted under Sections 7.03(d),
(m) and/or (n) and any documents or instruments governing the terms of any
Indebtedness or other obligations secured by any such Liens, provided that such
prohibitions or restrictions apply only to the assets subject to such Liens and
(vi) any agreement or instrument governing Permitted Acquired Debt, to the
extent such restriction or encumbrance (x) is not applicable to any Person or
the properties or assets of any Person (other than the Person or the properties
or assets of the Person acquired pursuant to the respective Permitted
Acquisition) and (y) was not created (or made more restrictive) in connection
with or in anticipation of the respective Permitted Acquisition.
7.10 Transactions with Affiliates. The Borrower will not, and will
----------------------------
not permit any Subsidiary to, enter into any transaction or series of
transactions after the Closing Date whether or not in the ordinary course of
business, with any Affiliate other than on terms and conditions substantially as
favorable to the Borrower or such Subsidiary as would be obtainable by the
Borrower or such Subsidiary at the time in a comparable arm's-length transaction
with a Person other than an Affiliate, provided that the foregoing restrictions
shall not apply to (i) transactions solely among Credit Parties and their 90%-
Owned Subsidiaries, (ii) employment arrangements entered into in the ordinary
course of business with officers of the Borrower and its Subsidiaries, (iii)
customary fees paid to members of the Board of Directors of the Borrower and of
its Subsidiaries, (iv) management fees paid to MJD Partners, Inc. during any
fiscal year not in excess of 2.5% of Consolidated EBITDA for such year and, so
long as no Default or Event of Default exists at the time of any such payment or
would result therefrom, advisory fees paid to Xxxxx and Carousel during any
fiscal year not in excess of 1% of Consolidated EBITDA for such year, (v)
arrangements with directors, officers and employees not otherwise prohibited by
this Agreement, (vi) payment of customary legal fees and expenses to Paul,
Hastings, Xxxxxxxx & Xxxxxx LLP and (vii) the transactions set forth on Annex IX
hereto.
7.11 Interest Coverage Ratio. (a) At any time prior to the Trigger
-----------------------
Date, the Borrower will not permit the ratio of (i) Consolidated Annualized
EBITDA as at the end of any fiscal quarter set forth below to (ii) Consolidated
Interest Expense for the four quarters then ending to be less than the ratio set
forth opposite such fiscal quarter:
Fiscal Quarter Ending:
---------------------
Ratio
-----
September 30, 1998
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through March 31, 1999 1.50 to 1.0
June 30, 1999
through September 30, 2000 1.75 to 1.0
Thereafter 2.00 to 1.0
(b) At any time on and after the Trigger Date, the Borrower will not
permit the ratio of (i) Consolidated Annualized EBITDA as of the end of any
fiscal quarter set forth below to (ii) Consolidated Interest Expense for the
four quarters then ending to be less than the ratio set forth opposite such
fiscal quarter:
Fiscal Quarter Ending:
---------------------
Ratio
-----
Trigger Date
through September 30, 2001 1.50 to 1.0
December 31, 2001
through September 30, 2002 1.70 to 1.0
December 31, 2002
through September 30, 2003 1.80 to 1.0
Thereafter 2.00 to 1.0
7.12 Leverage Ratio. (a) At any time prior to the Trigger Date, the
--------------
Borrower will not permit the Leverage Ratio determined as at the end of any
fiscal quarter set forth below to be more than the ratio set forth opposite such
fiscal quarter:
Fiscal Quarter Ending:
---------------------
Ratio
-----
June 30, 1998
through March 31, 1999 6.50 to 1.0
June 30, 1999
through September 30, 2000 5.75 to 1.0
December 31, 2000
through September 30, 2001 5.50 to 1.0
December 31, 2001
through September 30, 2002 5.25 to 1.0
December 31, 2002
through September 30, 2003 5.00 to 1.0
December 31, 2003
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through September 30, 2004 4.50 to 1.0
Thereafter 4.25 to 1.0
(b) At any time on and after the Trigger Date, the Borrower will not
permit the Leverage Ratio determined as at the end of any fiscal quarter set
forth below to be more than the ratio set forth opposite such fiscal quarter:
Fiscal Quarter Ending:
---------------------
Ratio
-----
Trigger Date
through September 30, 2002 6.50 to 1.0
December 31, 2002
through September 30, 2003 6.00 to 1.0
Thereafter 5.50 to 1.0
7.13 Senior Leverage Ratio. (a) At any time prior to the Trigger
---------------------
Date, the Borrower will not permit the Senior Leverage Ratio determined as at
the end of any fiscal quarter set forth below to be more than the ratio set
forth opposite such fiscal quarter:
Fiscal Quarter Ending:
---------------------
Ratio
-----
June 30, 1998
through March 31, 1999 6.40 to 1.0
June 30, 1999
through September 30, 2000 5.50 to 1.0
December 31, 2000
through September 30, 2001 5.25 to 1.0
December 31, 2001
through September 30, 2002 5.00 to 1.0
December 31, 2002
through September 30, 2003 4.75 to 1.0
December 31, 2003
through September 30, 2004 4.25 to 1.0
Thereafter 4.00 to 1.0
provided that if (x) a contribution has to be made to the Borrower under the
Capital Contribution Agreement as of June 30, 1999 pursuant to the terms
thereof, (y) the full $15 million available under the Capital Contribution
Agreement is so contributed and (z) after
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giving effect to such contribution and the concurrent repayment of Loans, the
Senior Leverage Ratio on June 30, 1999 is 5.50 to 1.0 or above, then the maximum
Senior Leverage Ratio permitted on June 30, 1999 shall be increased to 6.00 to
1.0 and such maximum Senior Leverage Ratio shall stay in effect until June 30,
2000, at which time the maximum Senior Leverage Ratio will decrease to 5.50 to
1.0, with the above table to be thereafter applicable.
(b) At any time on and after the Trigger Date, the Borrower will not
permit the Senior Leverage Ratio determined as at the end of any fiscal quarter
set forth below to be more than the ratio set forth opposite such quarter:
Fiscal Quarter Ending:
---------------------
Ratio
-----
Trigger Date
through September 30, 2001
4.00 to 1.0
December 31, 2001
through September 30, 2002 3.75 to 1.0
December 31, 2002
though September 30, 2003 3.50 to 1.0
Thereafter 3.25 to 1.0
7.14 Limitation On Issuance of Stock. The Borrower will not permit any
-------------------------------
of its Subsidiaries, directly or indirectly, to issue any shares of such
Subsidiary's capital stock or other securities (or warrants, rights or options
to acquire shares or other equity securities), except (i) for replacements of
then outstanding shares of capital stock, (ii) for stock splits, stock dividends
and similar issuances which do not decrease the percentage ownership of the
Borrower and its Subsidiaries taken as a whole in any class of the capital stock
of such Subsidiary, (iii) for issuances to the Borrower or any of its
Subsidiaries in connection with the creation of new Subsidiaries permitted under
Section 7.07, (iv) to qualify directors to the extent required by applicable law
and (v) for shares of STE and Xxxxxx Telephone issued in connection with the
exercise of any of the Existing Warrants.
7.15 Designated Senior Debt. The Borrower shall not designate any
----------------------
Indebtedness as Designated Senior Debt (as defined in the indenture governing
Permitted Subordinated Debt).
SECTION 8. Events of Default. Upon the occurrence of any of the
-----------------
following specified events (each, an "Event of Default"):
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8.01 Payments. The Borrower shall (i) default in the payment when due of
--------
any principal of the Loans or (ii) default, and such default shall continue for
five or more Business Days, in the payment when due of any interest on the Loans
or any Fees or any other amounts owing hereunder or under any other Credit
Document; or
8.02 Representations, etc. Any representation, warranty or statement made
--------------------
by any Credit Party herein or in any other Credit Document or in any statement
or certificate delivered or required to be delivered pursuant hereto or thereto
shall prove to be untrue in any material respect on the date as of which made or
deemed made; or
8.03 Covenants. Any Credit Party shall (a) default in the due performance
---------
or observance by it of any term, covenant or agreement contained in Section 6.10
or 7, or (b) default in the due performance or observance by it of any term,
covenant or agreement (other than those referred to in Section 8.01, 8.02 or
clause (a) of this Section 8.03) contained in this Agreement and such default
shall continue unremedied for a period of at least 30 days after written notice
to the Borrower by the Administrative Agent or the Required Lenders; or
8.04 Default Under Other Agreements. (a) The Borrower or any of its
------------------------------
Subsidiaries shall (i) default in any payment with respect to any Indebtedness
(other than the Obligations) beyond the period of grace, if any, applicable
thereto or (ii) default in the observance or performance of any agreement or
condition relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause, any such
Indebtedness to become due prior to its stated maturity; or (b) any such
Indebtedness of the Borrower or any of its Subsidiaries shall be declared to be
due and payable (or shall be required to be prepaid as a result of a default
thereunder or of an event of the type that constitutes an Event of Default)
prior to the stated maturity thereof, provided that it shall not constitute an
Event of Default pursuant to this Section 8.04 unless the aggregate principal
amount of all Indebtedness referred to in clauses (a) and (b) above exceeds $3.0
million in the aggregate at any one time; or
8.05 Bankruptcy, etc. The Borrower or any Material Subsidiary shall
---------------
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy," as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced against the
Borrower or any of its Material Subsidiaries and the petition is not
controverted within 20 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
the Borrower or any of its Material Subsidiaries; or the Borrower or any of its
Material Subsidiaries commences any other proceeding under any reorganization,
arrangement, adjustment of debt,
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relief of debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the Borrower or any
of its Material Subsidiaries; or there is commenced against the Borrower or any
of its Material Subsidiaries any such proceeding which remains undismissed for a
period of 60 days; or the Borrower or any of its Material Subsidiaries is
adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or the Borrower or any of its
Material Subsidiaries suffers any appointment of any custodian or the like for
it or any substantial part of its property to continue undischarged or unstayed
for a period of 60 days; or the Borrower or any of its Material Subsidiaries
makes a general assignment for the benefit of creditors; or any corporate action
is taken by the Borrower or any of its Material Subsidiaries for the purpose of
effecting any of the foregoing; or
8.06 ERISA. (a) Any Plan or Multiemployer Plan shall fail to satisfy the
-----
minimum funding standard required for any plan year or part thereof under
Section 412 of the Code or Section 302 of ERISA or a waiver of such standard or
extension of any amortization period is sought or granted under Section 412 of
the Code or Section 303 or 304 of ERISA, a Reportable Event shall have occurred,
a contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to sub paragraph
(b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66,
.67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur
with respect to such Plan within the following 30 days, any Plan which is
subject to Title IV of ERISA shall have had or is likely to have a trustee
appointed to administer such Plan, any Plan or Multiemployer Plan which is
subject to Title IV of ERISA is, shall have been or is likely to be terminated
or to be the subject of termination proceedings under ERISA, any Plan shall have
an Unfunded Current Liability, a contribution required to be made with respect
to a Plan, Multiemployer Plan has not been timely made, the Borrower or any
Subsidiary or any ERISA Affiliate has incurred or is likely to incur any
liability to or on account of a Plan or Multiemployer Plan under Section 409,
502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or
Section 401(a)(29), 4971 or 4975 of the Code or on account of a group health
plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code)
under Section 4980B of the Code, or the Borrower or any Subsidiary has incurred
or is likely to incur liabilities pursuant to one or more employee welfare
benefit plans (as defined in Section 3(1) of ERISA) that provide benefits to
retired employees or other former employees (other than as required by Section
601 of ERISA) or Plans; (b) there shall result from any such event or events the
imposition of a lien, the granting of a security interest, or a liability or a
material risk of incurring a liability; and (c) such lien, security interest or
liability, individually, and/or in the aggregate, in the opinion of the Required
Lenders, has had, or is reasonably likely to have, a Material Adverse Effect; or
8.07 Pledge Agreement. (a) Except in each case to the extent resulting from
----------------
the negligent or willful failure of the Collateral Agent to continue to hold
Pledged Securities
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under the Pledge Agreement, the Pledge Agreement shall cease to be, in any
material respect, in full force and effect, or shall cease, in any material
respect, to give the Collateral Agent the Liens, powers and privileges purported
to be created thereby in favor of the Collateral Agent, or (b) any Credit Party
shall default in the due performance or observance of any material term,
covenant or agreement on its part to be performed or observed pursuant to the
Pledge Agreement and such default shall continue for 15 or more days after
written notice to the respective Credit Party by the Administrative Agent; or
8.08 Subsidiary Guaranty. Any Subsidiary Guaranty or any material provision
-------------------
thereof shall cease to be in full force and effect, or any Subsidiary Guarantor
or any Person acting by or on behalf of such Subsidiary Guarantor shall deny or
disaffirm such Subsidiary Guarantor's obligations under any Subsidiary Guaranty;
or
8.09 Judgments. One or more judgments or decrees shall be entered against
---------
the Borrower or any of its Subsidiaries involving a liability (to the extent not
paid or covered by insurance) in excess of $3.0 million in the aggregate for all
such judgments and decrees for the Borrower and its Subsidiaries and all such
judgments and decrees in excess of such amount shall not have been vacated,
discharged or stayed or bonded pending appeal within 60 days from the entry
thereof;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent shall, upon the written
request of the Required Lenders, by written notice to the Borrower, take any or
all of the following actions, without prejudice to the rights of the
Administrative Agent or any Lender to enforce its claims against any Subsidiary
Guarantor or the Borrower, except as otherwise specifically provided for in this
Agreement (provided that, if an Event of Default specified in Section 8.05 shall
--------
occur with respect to the Borrower, the result which would occur upon the giving
of written notice by the Administrative Agent as specified in clauses (i) and
(ii) below shall occur automatically without the giving of any such notice): (i)
declare the Total Commitment terminated, whereupon the Commitment of each Lender
shall forthwith terminate immediately and any Fees shall forthwith become due
and payable without any other notice of any kind; (ii) declare the principal of
and any accrued interest in respect of all Loans and all obligations owing
hereunder to be, whereupon the same shall become, forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower; and (iii) enforce, as Collateral Agent (or
direct the Collateral Agent to enforce), any and all of the Liens and rights
created pursuant the Pledge Agreement.
SECTION 9. Definitions. As used herein, the following terms shall have the
-----------
meanings herein specified unless the context otherwise requires. Defined terms
in this Agreement shall include in the singular number the plural and in the
plural the singular:
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"Acquired Companies" shall mean each of the parent corporations that
are acquired by the Borrower pursuant to the Acquisitions, and their respective
Subsidiaries.
"Acquisition Commitment" shall mean, with respect to each Lender, the
amount, if any, specified by such Lender in a written notice to the Borrower and
the Administrative Agent as its Acquisition Commitment in response to a written
request by the Borrower to some or all of the then existing Lenders and to other
Eligible Transferees acceptable to the Agents and the Borrower to provide
Acquisition Commitments (or such lesser amount as is allocated to such Lender by
the Agents if the aggregate Acquisition Commitments offered by all Lenders
exceed the maximum Acquisition Commitments requested by the Borrower (which
maximum shall not exceed $165 million) and which amount shall be set forth
opposite such Lender's name in a revised Annex I prepared by the Administrative
Agent directly below the column entitled "Acquisition Commitment," as the same
may be (x) reduced or terminated from time to time pursuant to Section 2.02,
2.03 and/or 8 or (y) adjusted from time to time as a result of assignments to or
from such Lender pursuant to Section 1.13 and/or 11.04.
"Acquisition Documents" shall mean, with respect to any Acquisition,
the Agreement and Plan of Merger executed by the Borrower, an Intermediary
Holding Company, an acquisition Subsidiary and the respective Acquired Company
(or other purchase or similar agreement) governing such Acquisition and all
other material agreements and documents relating to such Acquisition, in the
form delivered to the Administrative Agent pursuant to Section 4.02(a) and as
same may be amended, modified, amended and restated or supplemented from time to
time pursuant to the terms hereof and thereof.
"Acquisition Facility" shall mean the Facility evidenced by the Total
Acquisition Commitment.
"Acquisitions" shall mean the Chouteau Acquisition, the Ellensburg
Acquisition, the El Paso Acquisition, the Taconic Acquisition and the UI
Acquisition.
"Adjusted Total Acquisition Commitment" shall mean at any time the
Total Acquisition Commitment less the aggregate Acquisition Commitment of all
Defaulting Lenders.
"Adjusted Total Revolving Commitment" shall mean at any time the Total
Revolving Commitment less the aggregate Revolving Commitments of all Defaulting
Lenders.
"Administrative Agent" shall have the meaning provided in the first
paragraph of this Agreement and shall include any successor to the
Administrative Agent appointed pursuant to Section 10.09.
-00-
"XX Xxxxxxxxxx Xxxxxxxxxx" shall have the meaning provided in Section
2.01(c).
"AF Lender" shall mean at any time each Lender with an Acquisition
Commitment or with outstanding AF Loans.
"AF Loan" shall have the meaning provided in Section 1.01(d).
"AF Note" shall have the meaning provided in Section 1.05(a).
"AF/RF Maturity Date" shall mean September 30, 2004.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors
and officers of such Person), controlled by, or under direct or indirect common
control with such Person. A Person shall be deemed to control a corporation if
such Person possesses, directly or indirectly, the power (i) to vote 10% or more
of the securities having ordinary voting power for the election of directors of
such corporation or (ii) to direct or cause the direction of the management and
policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise.
"Agents" shall have the meaning provided in the first paragraph of this
Agreement.
"Agreement" shall mean this Credit Agreement, as the same may be from time
to time further modified, amended, amended and restated and/or supplemented.
"Anticipated Reinvestment Amount" shall mean, with respect to any
Reinvestment Election, the amount specified in the Reinvestment Notice delivered
by the Borrower in connection therewith as the amount of the Net Cash Proceeds
from the related Asset Sale that the Borrower intends to use to finance one or
more Acquisitions or Permitted Acquisitions within 180 days.
"Applicable Acquisition Documents" shall have the meaning provided in
Section 4.02(a).
"Applicable Base Rate Margin" shall mean (i) in the case of AF Loans and RF
Loans, 1.50% less the Margin Reduction Discount, if any, (ii) in the case of B
----
Term Loans, 1.75% less the Margin Reduction Discount, if any and (iii) in the
----
case of C Term Loans-Floating Rate, 2.00% less the Margin Reduction Discount, if
----
any.
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"Applicable CC Percentage" shall mean (i) .375% at any time the Applicable
Eurodollar Margin for RF Loans is 1.50%; and (ii) .50% at all other times.
"Applicable Eurodollar Margin" shall mean (i) in the case of AF Loans and
RF Loans, 2.50% less the Margin Reduction Discount, if any, (ii) in the case of
----
B Term Loans, 2.75% less the Margin Reduction Discount, if any and (iii) in the
----
case of C Term Loans-Floating Rate, 3.00% less the Margin Reduction Discount, if
----
any.
"Asset Sale" shall mean and include (x) the sale, transfer or other
disposition by the Borrower or any Subsidiary to any Person other than the
Borrower or any Subsidiary Guarantor of any asset of the Borrower or such
Subsidiary (other than sales, transfers or other dispositions in the ordinary
course of business of inventory and/or obsolete or excess equipment) and/or (y)
the receipt by the Borrower or any Subsidiary of any insurance, condemnation or
similar proceeds in connection with a casualty or taking of any of its assets in
excess of the costs incurred by the Borrower and its Subsidiaries in respect of
such event and of repairing or replacing the assets so damaged, destroyed or
taken but in all cases only to the extent that the aggregate Net Cash Proceeds
of all such sales, transfers, dispositions and receipts in any fiscal year are
in excess of $1,000,000.
"Assignment Agreement" shall mean the Assignment Agreement in the form of
Exhibit K (appropriately completed).
"Authorized Officer" shall mean any senior officer of the Borrower
designated as an authorized officer in writing to the Administrative Agent by
the Borrower.
"B Maturity Date" shall mean March 31, 2006.
"B Term Commitment" shall mean, with respect to each Lender, (A) the
amount, if any, set forth opposite such Lender's name on Annex I hereto directly
below the column entitled "B Term Commitment" as the same may be (x) reduced or
terminated from time to time pursuant to Section 2.02, 2.03 and/or 8 and/or (y)
adjusted from time to time as a result of assignments to or from such Lender
pursuant to Section 1.13 and/or 11.04 plus (B) the amount, if any, of a B Term
Commitment of such Lender committed to pursuant to a B Term Commitment Renewal.
"B Term Commitment Renewal" shall mean the providing of additional B Term
Commitments from time to time after any mandatory repayment of B Term Loans
and/or mandatory reduction of B Term Commitments pursuant to Section
2.03(b)(iii) or (iv) (each, a "B Reduction Event") in an aggregate amount (the
"Additional B Commitment Amount"), selected by the Borrower, not to exceed the
principal amount of the B Term Loans so repaid and the B Term Commitments so
reduced, with any B Term Commitment Renewal to be effected by: (i) the Borrower
requesting in writing some or all of the Lenders
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and/or other Eligible Transferees acceptable to the Agents and the Borrower to
provide an additional B Term Commitment, which request shall be given within 90
days following the B Reduction Event but in any event prior to the date
occurring 255 days after the Closing Date and (ii) each such Lender or Eligible
Transferee who desires to do so, providing a written notice to the Borrower and
the Administrative Agent in response to such request setting forth the
additional B Term Commitment it will offer, with the amount so specified (or
such lesser amount as is allocated to such Lender by the Agents if the aggregate
offered additional B Term Commitments exceed the Additional B Commitment Amount)
to be such Person's additional B Term Commitment, it being agreed that any such
additional B Term Commitments shall terminate on the date occurring 270 days
after the Closing Date (after giving effect to the making of B Term Loans, if
any, on such date) and each such Person with an additional B Term Commitment
shall be a Lender.
"B Term Facility" shall mean the Facility evidenced by the Total B Term
Commitment.
"B Term Loan" shall have the meaning provided in Section 1.01(a).
"B Term Note" shall have the meaning provided in Section 1.05(a).
"B Termination Date" shall mean the date occurring 270 days after the
Closing Date.
"B TF Percentage" shall mean, at any time of determination thereof, a
fraction (expressed as a percentage) the numerator of which is equal to the sum
of (x) the aggregate principal amount of B Term Loans outstanding at such time
and (y) the Total B Term Commitment at such time and the denominator of which is
equal to the sum of (x) the aggregate principal amount of B Term Loans and C
Term Loans outstanding at such time and (y) the Total B Term Commitment at such
time.
"B Utilization Date" shall mean the date on which the Total B Term
Commitment is first reduced to zero (determined without giving effect to any
increase to the B Term Commitment pursuant to a B Term Commitment Renewal).
"Bankruptcy Code" shall have the meaning provided in Section 8.05.
"Base Rate" at any time shall mean the higher of (i) the rate which is 1/2
of 1% in excess of the Federal Funds Effective Rate and (ii) the Prime Lending
Rate.
"Base Rate Loan" shall mean each Loan (other than any C Term Loan-Fixed
Rate prior to the FRE Date applicable thereto) bearing interest at the rates
provided in Section 1.08(a).
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"Borrower" shall mean MJD Communications, Inc., a Delaware corporation.
"Borrowing" shall mean the incurrence of Base Rate Loans or Eurodollar
Loans pursuant to a single Facility by the Borrower from the Lenders having
Commitments with respect to such Facility on a pro rata basis on a given date
--- ----
(or resulting from conversions on a given date), having in the case of
Eurodollar Loans the same Interest Period; provided that Base Rate Loans
incurred pursuant to Section 1.10(b) shall be considered part of any related
Borrowing of Eurodollar Loans.
"BTCo" shall mean Bankers Trust Company in its individual capacity.
"Business" shall have the meaning provided in Section 7.01.
"Business Day" shall mean (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which shall be
in the City of New York a legal holiday or a day on which banking institutions
are authorized by law or other governmental actions to close and (ii) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (i) and which is also a day for trading by and between banks
in Dollar deposits in the interbank Eurodollar market.
"C Maturity Date" shall mean March 31, 2007.
"C Term Commitment" shall mean, with respect to each Lender, the amount, if
any, set forth opposite such Lender's name on Annex I hereto directly below the
column entitled "C Term Commitment" as the same may be terminated pursuant to
Section 2.03.
"C Term Facility" shall mean the Facility evidenced by the Total C Term
Commitment and the CoBank Commitment.
"C Term Loan-Fixed Rate" and "C Term Loan-Floating Rate" shall each have
the meaning provided in Section 1.01(b).
"C Term Loans" shall mean and include the C Term Loans-Floating Rate and
the C Term Loans-Fixed Rate.
"C Term Notes-Fixed Rate" and "C Term Note-Floating Rate" shall each have
the meaning provided in Section 1.05(a).
"C Term Notes" shall mean and include the C Term Notes-Fixed Rate and the C
Term Notes-Floating Rate.
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"C TF Percentage" shall mean, at any time of determination thereof 100%
less the then B TF Percentage.
"Capital Contribution Agreement" shall have the meaning provided in Section
4.01(k).
"Capital Lease" as applied to any Person shall mean any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"Capitalized Lease Obligations" shall mean all obligations under Capital
Leases of the Borrower or any of its Subsidiaries in each case taken at the
amount thereof accounted for as liabilities in accordance with GAAP.
"Carousel" shall mean Carousel Capital Partners, L.P., a Delaware limited
partnership.
"Carousel Affiliate" shall mean Carousel and each investment fund
controlled by Carousel.
"Cash Equivalents" shall mean (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than six months from the date of acquisition, (ii) Dollar denominated time
deposits, certificates of deposit and bankers' acceptances of (x) any Lender
that is a domestic commercial bank of recognized standing having capital and
surplus in excess of $500,000,000 or (y) any bank (or the parent company of such
bank) whose short-term commercial paper rating from Standard & Poor's Ratings
Services, a division of XxXxxx-Xxxx, Inc. ("S&P") is at least A-1 or the
equivalent thereof or from Xxxxx'x Investors Service, Inc. ("Xxxxx'x") is at
least P-1 or the equivalent thereof (any such bank, an "Approved Bank"), in each
case with maturities of not more than six months from the date of acquisition,
(iii) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (i) above entered into
with any bank meeting the qualifications specified in clause (ii) above, (iv)
commercial paper issued by any Approved Bank or by the parent company of any
Approved Bank and commercial paper issued by, or guaranteed by, any industrial
or financial company with a short-term commercial paper rating of at least A-1
or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by
Moody's, or guaranteed by any industrial company with a long term unsecured debt
rating of at least A or A2, or the equivalent of each thereof, from S&P or
Moody's, as the case may be, and in each case maturing within six months after
the date of acquisition, (v) marketable direct obligations issued by any state
of the United States of America or any political subdivision of any such state
or any public instrumentality thereof
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maturing within six months from the date of acquisition thereof and, at the time
of acquisition, having one of the two highest ratings obtainable from either S&P
or Moody's, and (vi) investments in money market funds substantially all of
whose assets are comprised of securities of the type described in clauses (i)
through (v) above.
"Cash Proceeds" shall mean, with respect to any Asset Sale, the aggregate
cash payments (including any cash received by way of deferred payment pursuant
to a note receivable issued in connection with such Asset Sale, other than the
portion of such deferred payment constituting interest, but only as and when so
received) received by the Borrower and/or any Subsidiary from such Asset Sale.
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as amended, 42 U.S.C. (S) 9601 et seq.
-- ----
"Change of Control" shall mean at any time and for any reason (a) prior to
a Qualified IPO, the Permitted Holders cease to be the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act) on a fully diluted
basis in the aggregate of at least 50.1% of the total economic and voting
interest in the Borrower's capital stock, (b) on and after a Qualified IPO, (i)
any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of
the Exchange Act), other than one or more Permitted Holders, is or becomes the
"beneficial owner" (as defined in clause (a) above) on a fully diluted basis of
more than 25% of the total voting interest in the capital stock of the Borrower
or (ii) during any period of two consecutive years individuals who at the
beginning of such period constituted the Board of Directors of the Borrower
(together with any new directors whose election by such Board of Directors or
whose nomination for election by the stockholders of the Borrower was approved
by a vote of a majority of the directors of the Borrower then still in office
who were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors of the Borrower then in office
or (c) a "change of control" or similar event shall occur as provided in any
other agreement governing or evidencing material Indebtedness of the Borrower.
"Chouteau" shall mean Chouteau Telephone Company, an Oklahoma corporation.
"Chouteau Acquisition" shall mean the acquisition by the Borrower of
Chouteau pursuant to the Applicable Acquisition Documents.
"CLEC" shall mean competitive local exchange carriers.
"CLEC Back-Stop Letters of Credit" shall mean each standby letter of credit
issued by a financial institution for the account of the Borrower in support of
the
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reimbursement obligations of MJD TeleChoice under any letter of credit issued
for its account in support of obligations incurred in the ordinary course of
business with respect to customer deposits and other similar statutorily
mandated obligations.
"CLEC Company" shall have the meaning in Section 7.06(k) and shall in
any event include MJD TeleChoice.
"CLEC Expenditures" shall mean expenditures with respect to the
acquisition, creation and/or maintenance of any CLEC.
"Closing Date" shall mean the date on which the initial Loans under this
Agreement are made.
"CoBank" shall mean CoBank, ACB.
"CoBank Commitment" shall mean $51,506,404, as the same may be
terminated pursuant to Section 2.03.
"CoBank Continuing Loans" shall mean the principal amounts outstanding
under the CoBank loans identified below which are accruing interest at the fixed
rates identified below for periods ending on the dates identified below:
Existing Principal Interest Period End
Loan No. Amount Date Current Interest Rate
-------- ------------------ ------------------- ----------------------
000084977 $10,000,000.00 09/02/02 9.96%
000085771 $15,000,000.00 09/05/00 9.23%
000084932 $11,077,685.00 09/02/02 9.96%
574742001 $ 2,674,839.89 08/30/04 10.37%
574742002 $ 9,513,879.29 09/30/04 10.57%
000085156 $ 3,240,000.00 09/02/02 9.76%
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated and rulings issued thereunder. Section
references to the Code are to the Code, as in effect at the date of this
Agreement and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all of the Collateral as defined in the Pledge
Agreement.
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"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Lenders.
"Commitment" shall mean, with respect to each Lender, such Lender's Term
Commitment, Revolving Commitment, Acquisition Commitment and/or CoBank
Commitment.
"Commitment Commission" shall mean the TF Commitment Commission, the
RF Commitment Commission and the AF Commitment Commission.
"Consolidated Annualized EBITDA" shall mean, as of the last day of any
fiscal quarter, (x) Consolidated EBITDA for the six month's then ended
multiplied by (y) two.
"Consolidated Capital Expenditures" shall mean, for any period, the
aggregate of all cash expenditures (including in all events all amounts expended
under Capital Leases (other than Capital Leases evidencing MJD Capital Debt) but
excluding any amount representing capitalized interest) by the Borrower and its
Subsidiaries during that period that, in conformity with GAAP, are or are
required to be included in the property, plant or equipment reflected in the
consolidated balance sheet of the Borrower and its Subsidiaries, provided that
Consolidated Capital Expenditures shall in any event (x) exclude the purchase
price paid in cash in connection with the acquisition of any Person (including
through the purchase of all of the capital stock or other ownership interests of
such Person or through merger or consolidation) pursuant to an Acquisition or a
Permitted Acquisition whether or not allocable to property, plant and equipment
and (y) exclude amounts expended with insurance proceeds.
"Consolidated Debt" shall mean, as of any date of determination, (i) the
aggregate stated balance sheet amount of all Indebtedness of the Borrower and
its Subsidiaries on a consolidated basis as determined in accordance with GAAP
plus (ii) any Indebtedness for borrowed money of any other Person as to which
the Borrower and/or any of its Subsidiaries has created a guarantee or other
Contingent Obligation (but only to the extent of such guarantee or other
Contingent Obligation).
"Consolidated EBIT" shall mean, for any period, (A) the sum of the amounts
for such period of (i) Consolidated Net Income, (ii) provisions for taxes based
on income, (iii) Consolidated Interest Expense, (iv) amortization or write-off
of deferred financing costs to the extent deducted in determining Consolidated
Net Income, (v) losses on sales of assets (excluding sales in the ordinary
course of business) and other extraordinary losses, (vi) non-core income
relating to Non-Core Assets to the extent not included in any determination of
Consolidated Net Income, (vii) to the extent Consolidated EBIT is being
determined for any period that includes all or a portion of the twelve-month
period ended December 31, 1997,
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any non-recurring losses incurred during such twelve-month period associated
with the start-up of ST Long Distance Corporation to the extent same do not
exceed $1.4 million for the twelve-month period ended December 31, 1997, (viii)
dividends paid by CoBank to the Borrower on common stock of CoBank held by the
Borrower to the extent not included in any determination of Consolidated Net
Income and (ix) the non-cash cash portion of any retirement or pension plan
expense incurred by the Borrower or any of its Subsidiaries less (B) gains on
sales of assets (excluding sales in the ordinary course of business) and other
extraordinary gains and other one-time non-cash gains, all as determined on a
consolidated basis in accordance with GAAP.
"Consolidated EBITDA" shall mean, for any period, the sum of the
amounts for such period of (i) Consolidated EBIT, (ii) depreciation expense and
(iii) amortization expense including any amortization or write-off related to
the write-up of any assets as a result of purchase accounting, provided that
Consolidated EBITDA for any such period during which an Acquisition or a
Permitted Acquisition was consummated or a disposition of a business was
effected shall be determined on a pro forma basis as if such Acquisition or
--- -----
Permitted Acquisition were consummated or disposition effected, as the case may
be, on the first day of such period and, in the event the Borrower delivers to
the Administrative Agent within 20 Business Days following the consummation of
an Acquisition or a Permitted Acquisition a Cost Adjustment Certificate, as if
the savings based on the cost reduction synergies set forth therein were
achieved for each day during such pre-consummation period (such pro forma
--- ----
determination to be made on the basis that a one day pro rata share of the cost
--- ----
reduction synergies set forth in such Cost Adjustment Certificate to be achieved
during the first full 12 months following such consummation will apply to each
day during such pre-consummation period).
"Consolidated Interest Expense" shall mean, for any period, total
interest expense (including the portion that is attributable to Capital Leases
in accordance with GAAP) of the Borrower and its Subsidiaries on a consolidated
basis with respect to all outstanding Indebtedness of the Borrower and its
Subsidiaries (including, without limitation, all commissions, discounts and
other fees and charges owed with respect to letters of credit and bankers'
acceptance financing and without duplication net costs and/or net benefits under
Interest Rate Agreements, but excluding, however, amortization of deferred
financing costs to the extent included in total interest expense), provided that
for the purposes of determining Consolidated Interest Expense as used in Section
7.11, Consolidated Interest Expense for any date of determination prior to March
31, 1999 shall mean Consolidated Interest Expense for the period from the
Closing Date to such date of determination as so determined, that is annualized.
"Consolidated Net Income" shall mean for any period, the net income
(or loss) of the Borrower and its Subsidiaries on a consolidated basis for
such period taken as a single accounting period determined in conformity with
GAAP, provided that there shall be
--------
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excluded from the calculation thereof (without duplication) (i) the income (or
loss) of any Person (other than Subsidiaries of the Borrower) in which any other
Person (other than the Borrower or any of its Subsidiaries) has a joint
interest, except to the extent of the amount of dividends or other distributions
actually paid to the Borrower or any of its Subsidiaries by such Person during
such period, (ii) the income (or loss) of any Person accrued prior to the date
it becomes a Subsidiary of the Borrower or is merged into or consolidated with
the Borrower or any of its Subsidiaries or that Person's assets are acquired by
the Borrower or any of its Subsidiaries, (iii) the income of any Subsidiary of
the Borrower to the extent that the declaration or payment of dividends or
similar distributions by that Subsidiary of that income is not at the time
permitted by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
that Subsidiary, (iv) all one time costs and expenses paid during such period in
respect of the Transaction and (v) non-cash costs arising from implementation of
SFAS 106 and SFAS 109.
"Contingent Obligations" shall mean as to any Person any obligation of
such Person guaranteeing or intending to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(a) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (b) to advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (d) otherwise to assure or hold harmless the owner of
such primary obligation against loss in respect thereof, provided, however, that
the term Contingent Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated
maximum of the Contingent Obligation or, if none, the stated or determinable
amount of the primary obligation in respect of which such Contingent Obligation
is made or, if there is no stated or determinable amount of the primary
obligation, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"Cost Adjustment Certificate" shall mean, with respect to an
Acquisition or a Permitted Acquisition, a certificate executed by an Authorized
Officer of the Borrower setting forth the factually supportable and identifiable
cost reduction synergies estimated in good faith to result from such Acquisition
or Permitted Acquisition, as the case may be, during the 12 months following the
date of the consummation of such Acquisition or Permitted Acquisition, as the
case may be, which certificate shall be in form and substance reasonably
satisfactory to the Agents.
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"Credit Documents" shall mean this Agreement, the Notes, the Pledge
Agreement and the Subsidiary Guaranty.
"Credit Party" shall mean the Borrower and each Subsidiary party to a
Credit Document.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" shall mean any Lender with respect to which a
Lender Default is in effect.
"Dividends" shall have the meaning provided in Section 7.09.
"Dollars" and the sign "$" shall each mean freely transferable lawful
money of the United States.
"Effective Date" shall have the meaning provided in Section 11.10.
"Eligible Transferee" shall mean and include a commercial bank,
financial institution or other institutional "accredited investor" as defined
in SEC Regulation D.
"Ellensburg" shall mean Ellensburg Telephone Company, a Washington
corporation.
"Ellensburg Acquisition" shall mean the acquisition of Ellensburg by
the Borrower pursuant to the Applicable Acquisition Documents.
"El Paso" shall mean Ravenswood Communications, Inc., an Illinois
corporation.
"El Paso Acquisition" shall mean the acquisition of El Paso by the
Borrower pursuant to the Applicable Acquisition Documents.
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigations (other than internal reports prepared
by the Borrower or any of its Subsidiaries solely in the ordinary course of such
Person's business and not in response to any third party action or request of
any kind) or proceedings relating to any Environmental Law or any permit issued,
or any approval given, under any such Environmental Law (hereafter, "Claims"),
including, without limitation, (a) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal, response, remedial or
other actions
-72-
or damages pursuant to any applicable Environmental Law, and (b) any and all
Claims by any third party seeking damages, contribution, indemnification, cost
recovery, compensation or injunctive relief resulting from Hazardous Materials
arising from alleged injury or threat of injury to health, safety or the
environment.
"Environmental Law" means any applicable federal, state, foreign or
local statute, law, rule, regulation, ordinance, code and rule of common law now
or hereafter in effect and in each case as amended, and any binding judicial or
administrative interpretation thereof, including any binding judicial or
administrative order, consent decree or judgment, relating to the environment or
Hazardous Materials, including, without limitation, CERCLA; RCRA; the Federal
Water Pollution Control Act, as amended, 33 U.S.C. (S) 1251 et seq.; the
-- ----
Toxic Substances Control Act, 15 U.S.C. (S) 7401 et seq.; the
-- ----
Clean Air Act, 42 U.S.C. (S) 2601 et seq.; the Safe Drinking Water Act, 42
-- ----
U.S.C. (S) 300F et seq.; the Oil Pollution Act of 1990, 33 U.S.C. (S) 2701 et
-- ---- --
seq.; and any applicable state and local or foreign counterparts or equivalents.
----
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at the
date of this Agreement and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with the Borrower or a Subsidiary would be deemed to be
a "single employer" within the meaning of Section 414(b) or (c) of the Code and
with respect to Sections 412 and 4971 of the Code and Section 302 of ERISA,
Section 414(b), (c), (m) or (o) of the Code.
"Eurodollar Loans" shall mean each Loan (other than any C Term Loan-
Fixed Rate prior to the FRE Date applicable thereto) bearing interest at the
rates provided in Section 1.08(b).
"Eurodollar Rate" shall mean with respect to each Interest Period for
a Eurodollar Loan, (i) the offered quotation to first-class banks in the
interbank Eurodollar market by the Administrative Agent for dollar deposits of
amounts in same day funds comparable to the outstanding principal amount of the
Eurodollar Loans for which an interest rate is then being determined with
maturities comparable to the Interest Period to be applicable to such Eurodollar
Loans, determined as of 10:00 A.M. (New York time) on the date which is two
Business Days prior to the commencement of such Interest Period divided (and
rounded upward to the next whole multiple of 1/16 of 1%) by (ii) a percentage
equal to 100% minus the then stated maximum rate of all reserve requirements
(including, without limitation, any marginal, emergency, supplemental, special
or other reserves) applicable to
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any member bank of the Federal Reserve System in respect of Eurocurrency
liabilities as defined in Regulation D (or any successor category of liabilities
under Regulation D).
"Event of Default" shall have the meaning provided in Section 8.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Existing Indebtedness" shall have the meaning provided in Section
7.04(g).
"Existing Warrants" shall mean warrants to purchase up to 12,500
shares of common stock of STE and up to 7.69 shares of common stock of Xxxxxx
Telephone, in each case as such number of shares may be adjusted pursuant to the
terms of such warrants after the Closing Date, as the same may be amended,
modified or supplemented after the Closing Date pursuant to the terms thereof
and hereof.
"Expiration Date" shall mean June 30, 1998.
"Facility" shall mean any of the credit facilities established under
this Agreement, i.e., the B Term Facility, the C Term Facility, the Revolving
----
Facility or the Acquisition Facility.
"FCC" shall mean the Federal Communications Commission and any
successor regulatory body.
"Federal Funds Effective Rate" shall mean for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal Funds transactions with members of the
Federal Reserve System arranged by Federal Funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Administrative Agent from three Federal
Funds brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to, or referred to in,
Section 2.01.
"Fixed Rate Loans" shall mean the C Term Loans-Fixed Rate.
"FRE Date," with respect to any C Term Loan-Fixed Rate, shall have the
meaning provided in the C Term Note-Fixed Rate evidencing such C Term Loan-
Fixed Rate.
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"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect on the date of this Agreement; it being
understood and agreed that determinations in accordance with GAAP for purposes
of Section 7, including defined terms as used therein, are subject (to the
extent provided therein) to Section 11.07(a).
"Hazardous Materials" shall mean (a) petroleum or petroleum products,
radioactive materials, asbestos in any form that is friable, urea formaldehyde
foam insulation, and radon gas; (b) any chemicals, materials or substance
defined as or included in the definition of "hazardous substances," "hazardous
waste", "hazardous materials," "extremely hazardous substances," restricted
hazardous waste," "toxic substances," "toxic pollutants," "contaminants," or
"pollutants," or words of similar import, under any applicable Environmental
Law; and (c) any other chemical, material or substance, the release of which is
prohibited, limited or regulated by any governmental authority.
"Indebtedness" of any Person shall mean, without duplication, (i) all
indebtedness of such Person for borrowed money, (ii) the deferred purchase
price of assets or services which in accordance with GAAP would be shown on
the liability side of the balance sheet of such Person, (iii) the face amount of
all letters of credit issued for the account of such Person and, without
duplication, all drafts drawn there under, (iv) all indebtedness of a second
Person secured by any Lien on any property owned by such first Person, whether
or not such indebtedness has been assumed (to the extent of the fair market
value of such property), (v) all Capitalized Lease Obligations of such Person,
(vi) all obligations of such Person to pay a specified purchase price
for goods or services whether or not delivered or accepted, i.e., take-or-pay
----
and similar obligations, (vii) all net obligations of such Person under
Interest Rate Agreements and (viii) all Contingent Obligations of such Person
(other than Contingent Obligations arising from the guaranty by such Person
of the obligations of the Borrower and/or its Subsidiaries to the extent such
guaranteed obligations do not constitute Indebtedness and are otherwise
permitted hereunder), provided that Indebtedness shall not include trade
--------
payables, accrued expenses and receipt of progress and advance payments, in
each case arising in the ordinary course of business.
"Indebtedness to be Refinanced" shall mean Indebtedness of the
Borrower and its Subsidiaries owing to CoBank (exclusive of the CoBank
Continuing Loans), Rural Telephone Financing Corp. and Fleet Equity Partners in
such aggregate principal amounts as are set forth in the pay-off letters
delivered by such Persons to the Administrative Agent on the Closing Date.
"Initial AF Borrowing Date" shall mean the date upon which the initial
incurrence of AF Loans occurs.
"Interest Period" with respect to any Loan shall mean the interest
period applicable thereto, as determined pursuant to Section 1.09.
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"Interim Prepayment Amount" shall mean, at any time, (i) the
Anticipated Reinvestment Amount specified in a Reinvestment Notice delivered no
earlier than 180 days prior to such time less (ii) the aggregate principal
amount of RF Loans made after the delivery of such Reinvestment Notice and prior
to such time to finance Permitted Acquisitions or Acquisitions effected pursuant
to the related Reinvestment Election.
"Interest Rate Agreement" shall mean any interest rate swap agreement,
any interest rate cap agreement, any interest rate collar agreement or other
similar agreement or arrangement designed to protect the Borrower or any
Subsidiary against fluctuations in interest rates.
"Intermediary Holding Company" shall mean MJD Holdings Corp., MJD
Ventures, Inc., MJD Services Corp., STE and any other Subsidiary first acquired
or created after the Closing Date that is not an operating company (but that
owns directly or indirectly one or more operating companies) and is not subject
to regulatory restrictions on borrowings or issuances of guaranties of
indebtedness for borrowed money.
"Xxxxx" shall mean Xxxxx Investment Associates V, L.P., a Delaware
limited partnership, and Xxxxx Equity Partners V, L.P., a Delaware limited
partnership.
"Xxxxx Affiliate" shall mean Xxxxx and each investment fund controlled
by Xxxxx.
"Lender" shall have the meaning provided in the first paragraph of
this Agreement.
"Lender Default" shall mean (i) the refusal (which has not been
retracted) or failure of a Lender to make available its portion of any
incurrence of Loans or (ii) a Lender having notified the Administrative Agent
and/or the Borrower that it does not intend to comply with the obligations under
Section 1.01, in the case of either clause (i) or (ii) as a result of the
appointment of a receiver or conservator with respect to such Lender at the
direction or request of any regulatory agency or authority.
"Lender Register" shall have the meaning provided in Section 11.16.
"Leverage Ratio" shall mean, at any date of determination, the ratio
of (x) the remainder of (i) Consolidated Debt on such date less (ii) the
----
amount, if positive, of (A) the aggregate amount of cash or Cash Equivalents
held by the Borrower and its Subsidiaries on such date less (B) all overdue
accounts payable of the Borrower and its Subsidiaries at such time not paid in
accordance with past practice as determined as of the Closing Date to (y)
Consolidated Annualized EBITDA as of the last day of the fiscal quarter then or
last ended.
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"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement or any
lease in the nature thereof).
"Loan" shall have the meaning provided in Section 1.01.
"Management Affiliate" shall mean Messrs. Duda, Leach, Xxxxxx, Xxxxxxx
and Xxxxxxxxx or (to the extent same are controlled by one or more of the
foregoing Persons) Bugger Associates and MJD Partners, L.P.
"Margin Reduction Discount" shall mean zero, provided that the Margin
--------
Reduction Discount shall be increased to .25% per annum (in the case of B Term
Loans and C Term Loans-Floating Rate) or .50%, .75% or 1.00% per annum (in the
case of RF Loans and AF Loans), as specified in clauses (i), (ii), (iii) or (iv)
below, as the case may be, when, and for so long as, the ratio set forth in such
clause has been satisfied as at the end of the then Relevant Fiscal Quarter:
(i) the Margin Reduction Discount for B Term Loans and C Term Loans-
Floating Rate shall be .25% per annum in the event that as of the end of
the Relevant Fiscal Quarter the Leverage Ratio is less than 5.00 to 1; or
(ii) the Margin Reduction Discount for RF Loans and AF Loans shall
be .50% per annum in the event that as of the end of the Relevant Fiscal
Quarter the Leverage Ratio is less than 5.50 to 1 but equal to or greater
than 5.00 to 1;
(iii) the Margin Reduction Discount for RF Loans and AF Loans shall
be .75% per annum in the event that as of the end of the Relevant Fiscal
Quarter the Leverage Ratio is equal to or greater than 4.50 to 1 but less
than 5.00 to 1; and
(iv) the Margin Reduction Discount for RF Loans and AF Loans shall
be 1.00% per annum in the event that as of the end of the Relevant Fiscal
Quarter the Leverage Ratio is less than 4.50 to 1.
The Leverage Ratio shall be determined as of the last day of the Relevant Fiscal
Quarter, by delivery of an officer's certificate of the Borrower to the Lenders
pursuant to Section 6.01(e), which certificate shall set forth the calculation
of the Leverage Ratio. The Margin Reduction Discount so determined shall apply,
except as set forth below, from the date on which such officer's certificate is
delivered to the Administrative Agent to the earlier of (x) the date on which
the next certificate is delivered to the Administrative Agent pursuant to
Section 6.01(e) and (y) the 45th day following the end of the fiscal quarter in
which such first certificate was delivered to the Administrative Agent (or the
90th day if such fiscal quarter was the last fiscal quarter of a fiscal year).
Notwithstanding anything to the contrary contained above, the
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Margin Reduction Discount shall be zero (x) if no officer's certificate has
been delivered to the Lenders pursuant to Section 6.01(e) which sets forth the
Leverage Ratio as of the last day of the Relevant Fiscal Quarter or the
financial statements upon which any such calculations are based have not been
delivered, until such a certificate and/or financial statements are delivered
and (y) at all times when there shall exist a Default under Section 8.01 or an
Event of Default. It is understood and agreed that the Margin Reduction Discount
as provided above shall in no event be cumulative and only the Margin Reduction
Discount available pursuant to any of clauses (i), (ii), (iii) or (iv) if any,
contained in this definition shall be applicable.
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean a material adverse effect on the
business, property, assets, liabilities or condition (financial or otherwise)
of the Borrower and its Subsidiaries taken as a whole after giving effect to the
Transaction.
"Material Subsidiary" shall mean any Subsidiary having gross assets at
any time with a value of at least 5% of consolidated gross assets of the
Borrower and its Subsidiaries and/or gross revenues for the last four fiscal
quarters of at least 5% of the consolidated gross revenues of the Borrower and
its Subsidiaries.
"Minimum Borrowing Amount" shall mean (i) in the case of B Term Loans,
$10,000,000 (or, if the Total B Term Commitment is less than $10,000,000, the
greater of the then remaining Total B Term Commitment and $1,000,000) and (ii)
in the case of C Term Loans, AF Loans and RF Loans (x) maintained as Base Rate
Loans, $500,000 and (y) maintained as Eurodollar Loans, $1,000,000.
"Minority Shares" shall mean up to 15% of the capital stock of Odin
Telephone Company held by Richfield Associates on the Closing Date and the four
shares of Sunflower Telephone Inc. held on the Closing Date by Xxxxx and Xxxxxxx
Xxxxxxx and Xxxxxxxx & Xxxxxxx Trust Account for H.A. and Xxxx Xxxxxxx.
"MJD Capital" shall mean MJD Capital Corp., a South Dakota
corporation.
"MJD TeleChoice" shall mean MJD TeleChoice, Inc., a Delaware
corporation.
"Multiemployer Plan" shall mean any multiemployer plan as defined in
section 4001(a)(3) of ERISA which is contributed to by (or to which there is an
obligation to contribute of) the Borrower or any of its Subsidiaries or an ERISA
Affiliate and each such plan for the five year period immediately following the
latest date on which the Borrower,
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any such Subsidiary or ERISA Affiliate contributed to or had an obligation to
contribute to such plan.
"NationsBank" shall mean NationsBank of Texas, N.A.
"Net Cash Proceeds" shall mean, with respect to any Asset Sale, the
Cash Proceeds resulting therefrom net (without duplication) of expenses of sale
(including payment of principal, premium and interest of Indebtedness secured by
the assets the subject of the Asset Sale and required to be, and which is,
repaid under the terms thereof as a result of such Asset Sale), and incremental
taxes paid or payable as a result thereof.
"90%-Owned Subsidiary" shall mean any Subsidiary to the extent at
least 90% of the capital stock or other ownership interests in such Subsidiary
is owned directly or indirectly by the Borrower.
"Non-Core Assets" shall mean (i) assets of the Borrower and its
Subsidiaries not used in their core business of providing local exchange carrier
services (e.g., assets used in the operation of the cable television business,
----
cellular telephone business and radio stations) and (ii) the stock and/or other
equity interests in any Subsidiary not primarily engaged in the core business of
providing local exchange carrier services, in the case of either clause (i) or
(ii) to the extent such assets are certified as non-core assets by an Authorized
Officer of the Borrower in an officer's certificate delivered to the
Administrative Agent.
"Non-Defaulting Lender" shall mean a Lender that is not a Defaulting
Lender.
"Non-Pledged Subsidiary" shall mean any Subsidiary that is not a
Pledged Subsidiary.
"Note" shall mean and include each B Term Note, each C Term Note, each
RF Note and each AF Note.
"Notice of Borrowing" shall have the meaning provided in Section 1.03.
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Administrative Agent at
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx or such other office as the
Administrative Agent may designate to the Borrower in writing from time to time.
"Obligations" shall mean all amounts, direct or indirect, contingent
or absolute, of every type or description, and at any time existing, owing to
the Administrative
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Agent, the Collateral Agent, or any Lender pursuant to the terms of this
Agreement or any other Credit Document.
"Other Consolidated Capital Expenditures" shall mean all Consolidated
Capital Expenditures other than CLEC Expenditures.
"Parent Company" shall mean at any time each Subsidiary (including
each Intermediary Holding Company that is a Subsidiary at such time) that owns
the capital stock of any Subsidiary that is a TelCo.
"Payment Office" shall mean the office of the Administrative Agent at
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx or such other office as the
Administrative Agent may designate to the Borrower and the Lenders in writing
from time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Acquired Debt" shall mean Indebtedness of a Subsidiary
acquired after the Closing Date pursuant to a Permitted Acquisition, to the
extent such Indebtedness was outstanding prior to the consummation of the
Permitted Acquisition and remains outstanding as Indebtedness of the respective
Subsidiary after giving effect thereto, provided that (i) such Indebtedness was
not incurred in connection with or in anticipation of such Permitted Acquisition
or the respective Person becoming Subsidiary of the Borrower, (ii) such
Indebtedness does not constitute Indebtedness of the Borrower or any of its
Subsidiaries other than the respective Subsidiary acquired pursuant to the
respective Permitted Acquisition and shall not be secured by any assets of any
Person other than assets of the Subsidiary so acquired serving as security
therefor at the time of the respective Permitted Acquisition, (iii) no Person
(other than the respective Subsidiary or a direct parent or a Subsidiary of the
respective Subsidiary to the extent such parent or Subsidiary is acquired in
connection with such Permitted Acquisition) shall have any liability (contingent
or otherwise) with respect to any Permitted Acquired Debt and (iv) the aggregate
principal amount of all such Indebtedness shall not exceed at any time
outstanding more than 5% of the Senior Consolidated Debt as such time.
"Permitted Acquisition" shall mean any acquisition by the Borrower or
any Subsidiary Guarantor of a company, business, division or product line
located in the United States if (i) immediately prior to, and after giving
effect to, such acquisition all the covenants contained in this Agreement
(including Sections 7.11, 7.12 and 7.13) shall be complied with on a pro forma
--- -----
basis (as if the acquisition had been consummated on the first day of the six
month period then last ended) and (ii) the acquired company, business, division
or product line is in the Business and, after giving effect to such acquisition,
constitutes a Subsidiary or
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(in the case of a business, division or product line) is owned by a Subsidiary,
provided that no Acquisition shall constitute a Permitted Acquisition.
"Permitted CLEC Expenditures" shall mean CLEC Expenditures to the
extent that such CLEC Expenditures shall not exceed $5 million per fiscal year
($15 million per fiscal year during any period in which the Senior Leverage
Ratio is 4.0 to 1.0 or less), provided that if the aforesaid maximum amount
which is permitted for CLEC Expenditures for any fiscal year is not expended
then the maximum amount of Permitted CLEC Expenditures which may be expended
during any year of the immediately succeeding two fiscal years shall be
increased in the aggregate by such unused amount.
"Permitted Holders" shall mean each Carousel Affiliate, each Xxxxx
Affiliate and each Management Affiliate.
"Permitted Letters of Credit" shall mean (i) each standby letter of
credit issued by a financial institution acceptable to the Administrative Agent
for the account of the Borrower or any of its Subsidiaries in support of
obligations arising in the ordinary course of business of the Borrower or such
Subsidiary and (ii) each trade letter of credit issued by a financial
institution acceptable to the Administrative Agent for the account of the
Borrower or any of its Subsidiaries and for the benefit of sellers of goods to
the Borrower or such Subsidiary in support of commercial transactions of the
Borrower or such Subsidiary in the ordinary course of business.
"Permitted Liens" shall mean Liens described in clauses (a) through
(o), inclusive, of Section 7.03.
"Permitted MJD Capital Debt" shall mean Indebtedness of MJD Capital
under Capital Leases and purchase money mortgages in respect of equipment
acquired by MJD Capital to lease or sublease to subsidiaries of the Borrower,
provided that the maximum amount of such Indebtedness incurred in any fiscal
year shall not exceed $2.5 million.
"Permitted PSD Repurchase" shall mean the obligation of the Borrower
to repurchase Permitted Subordinated Debt issued prior to the consummation of
the Ellensberg Acquisition in an aggregate principal amount not to exceed $74.0
million (i.e., the anticipated consideration required to effect the Ellensburg
-----
Acquisition) if such Acquisition is not consummated within 45 days of the
issuance of such Permitted Subordinated Debt in accordance with the terms of the
documentation governing the same.
"Permitted Refinancing Indebtedness" shall mean any Indebtedness of
the Borrower and/or any Subsidiary of the Borrower issued or given in exchange
for, or the proceeds of which are used to, extend, refinance, renew, replace,
substitute or refund any Indebtedness of such Person permitted pursuant to
Sections 7.04(f), (g), (i) and (j) or any
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Indebtedness of such Person issued to so extend, refinance, renew, replace,
substitute or refund any such Indebtedness, so long as (a) such Indebtedness has
a weighted average life to maturity greater than or equal to the weighted
average life to maturity of the Indebtedness being refinanced, (b) such
refinancing or renewal does not (i) increase the amount of such Indebtedness
outstanding immediately prior to such refinancing or renewal or (ii) add
guarantors, obligors or security from that which applied to such Indebtedness
being refinanced or renewed, (c) such refinancing or renewal Indebtedness has
substantially the same (or, from the perspective of the Lenders, more favorable)
subordination provisions, if any, as applied to the Indebtedness being renewed
or refinanced, and (d) all other terms of such refinancing or renewal
(including, without limitation, with respect to the amortization schedules,
redemption provisions, maturities, covenants, defaults and remedies), taken as a
whole, are not less favor able to the respective borrower than those previously
existing with respect to the Indebtedness being refinancing or renewed.
"Permitted Subordinated Debt" shall mean unsecured and unguaranteed
Indebtedness of the Borrower that is fully subordinated to the payment in full
of all of the Obligations, all of the terms and conditions of which shall be
reasonably satisfactory to the Agents.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
or any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" shall mean any pension plan as defined in Section 3(2) of ERISA
(other than a multiemployer plan as defined in Section 3(37) of ERISA), which is
maintained or contributed to by (or to which there is an obligation to
contribute of) the Borrower or any of its Subsidiaries or an ERISA Affiliate and
that is subject to Title IV of ERISA, and each such plan for the five year
period immediately following the latest date on which the Borrower any such
Subsidiary of the Borrower or an ERISA Affiliate maintained, contributed to or
had an obligation to contribute to such plan.
"Pledge Agreement" shall have the meaning provided in Section 4.01(i).
"Pledged Securities" shall mean all the Pledged Securities as defined
in the Pledge Agreement.
"Pledged Subsidiary" shall mean each Subsidiary the capital stock of
which is pledged pursuant to the Pledge Agreement.
"Preferred Repurchase" shall have the meaning provided in Section
5.05(a).
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"Prime Lending Rate" shall mean the rate which BTCo announces from
time to time as its prime lending rate, the Prime Lending Rate to change when
and as such prime lending rate changes. The Prime Lending Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. BTCo may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate.
"Pro Forma EBITDA Test" shall be satisfied, after giving effect to any
merger, consolidation, conveyance, sale or transfer referred to in Section
7.02(a) or the creation or acquisition of a new TelCo pursuant to a Permitted
Acquisition the capital stock of which is not to be pledged under the Pledge
Agreement, if the percentage of Consolidated EBITDA for the 12 months last ended
at such time (determined in the case of the acquisition or creation of a new
TelCo pursuant to a Permitted Acquisition as if such Permitted Acquisition was
consummated on the first day of such 12 month period) attributable to all Non-
Pledged Subsidiaries does not exceed 10%.
"PUC" shall mean a public utility commission, public service
commission or any similar agency or commission.
"Qualified IPO" shall mean a registered initial public offering of the
common stock of the Borrower generating proceeds of at least $75,000,000.
"RCRA" shall mean the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. (S) 6901 et seq.
-- ----
"Refinancing" shall mean the refinancing transactions contemplated by
Section 4.01(m).
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing margin requirements.
"Reinvestment Election" shall have the meaning provided in Section
3.02(A)(c).
"Reinvestment Notice" shall mean a written notice signed by an
Authorized Officer of the Borrower stating that the Borrower, in good faith,
intends and expects that the Borrower and its Subsidiaries will use all or a
specified portion of the Net Cash Proceeds of
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an Asset Sale to finance a Permitted Acquisition or an Acquisition within 180
days following the consummation of such Asset Sale.
"Reinvestment Prepayment Amount" shall mean, with respect to any
Reinvestment Election, the amount, if any, on the Reinvestment Prepayment Date
relating thereto by which (a) the Anticipated Reinvestment Amount in respect of
such Reinvestment Election exceeds (b) the aggregate amount thereof expended by
the Borrower and its Subsidiaries to finance Permitted Acquisitions.
"Reinvestment Prepayment Date" shall mean, with respect to any
Reinvestment Election, the earliest of (i) the date, if any, upon which the
Administrative Agent, on behalf of the Required Lenders, shall have delivered a
written termination notice to the Borrower, provided that such notice may only
be given while an Event of Default under 8.01 exists and (ii) the date occurring
180 days after the date of the related Reinvestment Notice.
"Relevant Fiscal Quarter" shall mean, at any time, the last fiscal
quarter of the Borrower with respect to which an officer's certificate has been
delivered to the Lenders pursuant to Section 6.01(e).
"Replaced Lender" shall have the meaning provided in Section 1.13.
"Replacement Lender" shall have the meaning provided in Section 1.13.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day notice period is waived under subsection
.22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.
"Required AF Lenders" shall mean Non-Defaulting Lenders whose
outstanding Acquisition Commitments (or, after the termination thereof,
outstanding AF Loans) constitute greater than 50% of the Adjusted Total
Acquisition Commitment (or, after the termination thereof, the outstanding AF
Loans of Non-Defaulting Lenders).
"Required AF/RF Lenders" shall mean Non-Defaulting Lenders the sum of
whose outstanding Acquisition Commitments and Revolving Commitments (or, after
the termination thereof, outstanding AF Loans or RF Loans, as the case may be)
constitute greater than 50% of the sum of (i) the Adjusted Total Acquisition
Commitment (or, after the termination thereof, the outstanding AF Loans of Non-
Defaulting Lenders) and (ii) the Adjusted Total Revolving Commitment (or, after
the termination thereof, the outstanding RF Loans of Non-Defaulting Lenders).
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"Required B TF Lenders" shall mean Non-Defaulting Lenders the sum of
whose outstanding B Term Loans and B Term Commitments under such Facility
represents an amount greater than 50% of the sum of all outstanding B Term Loans
and B Term Commitments.
"Required C TF Lenders" shall mean Non-Defaulting Lenders the sum of
whose outstanding C Term Loans represents an amount greater than (i) in the
event that any single Lender holds outstanding C Term Loans representing an
amount greater than 45% of the sum of all outstanding C Term Loans, 75% of the
sum of all outstanding C Term Loans and (ii) in all other circumstances, 50% of
the sum of all outstanding C Term Loans.
"Required RF Lenders" shall mean Non-Defaulting Lenders whose
outstanding Revolving Commitments (or, after the termination thereof,
outstanding RF Loans) constitute greater than 50% of the Adjusted Total
Revolving Commitment (or, after the termination thereof, the outstanding RF
Loans of Non-Defaulting Lenders).
"Required Lenders" shall mean Non-Defaulting Lenders the sum of whose
Acquisition Commitments (or, after the termination thereof, outstanding AF
Loans), Revolving Commitments (or, after the termination thereof, outstanding RF
Loans), outstanding Term Loans and Term Commitments constitute greater than 50%
of the sum of (i) the Adjusted Total Acquisition Commitment (or, after the
termination thereof, the outstanding AF Loans of Non-Defaulting Lenders), (ii)
the Adjusted Total Revolving Commitment (or, after the termination thereof, the
outstanding RF Loans of Non-Defaulting Lenders), (iii) all outstanding Term
Loans of Non-Defaulting Lenders and (iv) all Term Commitments of Non-Defaulting
Lenders.
"Required TF Lenders" shall mean Non-Defaulting Lenders the sum of
whose outstanding Term Loans and Term Commitments represents an amount greater
than 50% of the sum of all outstanding Term Loans and Term Commitments of Non-
Defaulting Lenders.
"Revolving Commitment" shall mean, with respect to each Lender, the
amount set forth opposite such Lender's name in Annex I hereto directly below
the column entitled "Revolving Commitment," as the same may be (x) reduced or
terminated from time to time pursuant to Section 2.02, 2.03 and/or 8 or (y)
adjusted from time to time as a result of assignments to or from such Lender
pursuant to Section 1.13 and/or 11.04.
"Revolving Facility" shall mean the Facility evidenced by the Total
Revolving Commitment.
"RF Commitment Commission" shall have the meaning provided in Section
2.01(b).
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"RF Lender" shall mean at any time each Lender with a Revolving
Commitment or with outstanding RF Loans.
"RF Loan" shall have the meaning provided in Section 1.01(c).
"RF Note" shall have the meaning provided in Section 1.05(a).
"Scheduled Reduction" shall have the meaning provided in Section
2.03(d).
"Scheduled Repayment" shall have the meaning provided in Section
3.02(A)(b).
"SEC" shall have the meaning provided in Section 6.01(g).
"SEC Regulation D" shall mean Regulation D as promulgated under the
Securities Act of 1933, as amended, as the same may be in effect from time to
time.
"Section 3.04 Certificate" shall have the meaning provided in Section
3.04(b)(ii).
"Secured Creditor" shall mean and include any Secured Creditor as
defined in the Pledge Agreement.
"Senior Consolidated Debt" shall mean, at any time, (i) Consolidated
Debt at such time less (ii) any such Consolidated Debt that constitutes
Permitted Subordinated Debt, Indebtedness permitted by Section 7.04(f)(ii)
and/or Permitted Refinancing Indebtedness incurred to refinance the foregoing
types of Indebtedness.
"Senior Leverage Ratio" shall mean, at any date of determination, the
ratio of (x) the remainder of (i) Senior Consolidated Debt on such date less
----
(ii) the amount, if positive, of (A) the aggregate amount of all cash and Cash
Equivalents held by the Borrower and its Subsidiaries at such time less (B) all
overdue accounts payable of the Borrower and its Subsidiaries at such time not
paid in accordance with past practice as determined as of the Closing Date to
(y) Consolidated Annualized EBITDA as of the last day of the fiscal quarter then
or last ended.
"Xxxxxx Telephone" shall mean Xxxxxx Telephone Company, a Maine
corporation.
"Special PSD Election" shall have the meaning provided in Section
3.02(A)(d).
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"Special PSD Notice" shall mean a written notice signed by an
Authorized Officer of the Borrower stating that the Borrower, in good faith,
intends and expects that the Borrower and its Subsidiaries will use $74.0
million to finance the Ellensburg Acquisition within 45 days following the
incurrence of the Permitted Subordinated Debt or will apply such amount pursuant
to the Permitted PSD Repurchase if such Acquisition is not so consummated.
"Special PSD Prepayment Amount" shall mean the amount, if any, on the
date occurring 45 days after the Special PSD Election by which (a) $74.0 million
exceeds (b) the aggregate amounts expended by the Borrower and its Subsidiaries
to finance the Ellensburg Acquisition and/or to effect the Permitted PSD
Repurchase.
"Specified Purposes" shall have the meaning provided in Section
5.05(a).
"Specified Shareholders" shall mean Xxxxx and Carousel.
"STE" shall mean ST Enterprises, Ltd., a Kansas corporation.
"Subsidiary" of any Person shall mean and include (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity in which such Person directly or indirectly through
Subsidiaries, has more than a 50% equity interest at the time, provided that,
except for purposes of Sections 5.04, 5.13, 5.14, 6.01(f), 6.04, 6.07, 6.09,
7.10, 8.05, 8.06 and 8.09, neither MJD TeleChoice nor any other CLEC Company
shall constitute a Subsidiary. Unless otherwise expressly provided, all
references herein to "Subsidiary" shall mean a Subsidiary of the Borrower.
"Subsidiary Guarantors" shall mean each Subsidiary party to the
Subsidiary Guaranty.
"Subsidiary Guaranty" shall have the meaning provided in Section
4.01(h).
"Syndication Agent" shall have the meaning provided in the first
paragraph of this Agreement.
"Taconic" shall mean Taconic Telephone Corp., a New York corporation.
"Taconic Acquisition" shall mean the acquisition of Taconic by the
Borrower pursuant to the Applicable Acquisition Documents.
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"Taxes" shall have the meaning provided in Section 3.04(a).
"TelCo" shall mean any Subsidiary that is an operating company (except
to the extent same is a Non-Core Asset).
"Term Commitment" shall mean for any Lender the sum of its B Term
Commitment and its C Term Commitment.
"Term Loans" shall mean, collectively, the B Term Loans and the C Term
Loans.
"TF Commitment Commission" shall have the meaning provided in Section
2.01(a).
"Total Acquisition Commitment" shall mean the sum of the Acquisition
Commitments of each of the Lenders, provided that the Total Acquisition
Commitment shall not at any time exceed $165 million.
"Total B Term Commitment" shall mean the sum of the B Term Commitments
of each of the Lenders.
"Total C Term Commitment" shall mean the sum of the C Term Commitments
of each of the Lenders.
"Total Commitment" shall mean the sum of the Total B Term Commitment,
the Total C Term Commitment, the Total Revolving Commitment, the Total
Acquisition Commitment and the CoBank Commitment.
"Total Revolving Commitment" shall mean the sum of the Revolving
Commitments of each of the Lenders.
"Total Term Commitment" shall mean, at any time, the sum of the Total
B Term Commitment and Total C Term Commitment.
"Transaction" shall mean (i) the consummation of the Acquisitions,
(ii) the repayment of all Indebtedness of the Acquired Companies except as
permitted by Section 7.04 and (iii) the incurrence of Term Loans on the Closing
Date.
"Trigger Date" shall mean the date, which shall be the last day of a
fiscal quarter ending after the Closing Date, as of which the Senior Leverage
Ratio is first determined to be 4.00 to 1.0 or less.
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"Type" shall mean any type of Loan determined with respect to the
interest option applicable thereto, i.e., a Base Rate Loan or Eurodollar Loan.
----
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in New York.
"UI" shall mean Utilities, Inc., a Maine corporation.
"UI Acquisition" shall mean the acquisition by the Borrower of UI
pursuant to the Applicable Acquisition Documents.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the actuarial present value of the accumulated plan benefits under
the Plan as of the close of its most recent plan year, determined in accordance
with actuarial assumptions at such time consistent with Statement of Financial
Accounting Standards No. 87, exceeds the market value of the assets allocable
thereto.
"U.S." shall mean the United States of America.
"Wholly-Owned Subsidiary" of any Person shall mean any Subsidiary of
such Person to the extent all of the capital stock or other ownership interests
in such Subsidiary, other than directors' qualifying shares, is owned directly
or indirectly by such Person.
"Written" or "in writing" shall mean any form of written communication
or a communication by means of telex, facsimile transmission, telegraph or
cable.
SECTION 10. The Agents.
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10.01 Appointment. The Lenders hereby designate BTCo as
-----------
Administrative Agent (for purposes of this Section 10, the terms "Administrative
Agent" shall include BTCo in its capacity as Collateral Agent pursuant to the
Pledge Agreement) and NationsBank as Syndication Agent to act as specified
herein and in the other Credit Documents. Each Lender hereby irrevocably
authorizes, and each holder of any Note by the acceptance of such Note shall be
deemed irrevocably to authorize, the respective Agents to take such action on
its behalf under the provisions of this Agreement, the other Credit Documents
and any other instruments and agreements referred to herein or therein and to
exercise such powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of the respective Agent by the terms
hereof and thereof and such other powers as are reasonably incidental thereto.
The respective Agent may perform any of its duties hereunder by or through their
respective officers, directors, agents, employees or affiliates.
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10.02 Nature of Duties. The respective Agent shall not have any
----------------
duties or responsibilities except those expressly set forth in this Agreement
and the other Credit Documents. Neither the respective Agent nor or any of its
respective officers, directors, agents, employees or affiliates shall be liable
for any action taken or omitted by them hereunder or under any other Credit
Document or in connection herewith or therewith, unless caused by their gross
negligence or willful misconduct. The duties of the respective Agent shall be
mechanical and administrative in nature; the respective Agent shall not have by
reason of this Agreement or any other Credit Document a fiduciary relationship
in respect of any Lender or the holder of any Note; and nothing in this
Agreement or any other Credit Document, expressed or implied, is intended to or
shall be so construed as to impose upon any Agent any obligations in respect of
this Agreement or any other Credit Document except as expressly set forth herein
or therein.
10.03 Lack of Reliance on the Agents. Independently and without
------------------------------
reliance upon either Agent, each Lender and the holder of each Note, to the
extent it deems appropriate, has made and shall continue to make (i) its own
independent investigation of the financial condition and affairs of the Borrower
and its Subsidiaries in connection with the making and the continuance of the
Loans and the taking or not taking of any action in connection herewith and (ii)
its own appraisal of the creditworthiness of the Borrower and its Subsidiaries
and, except as expressly provided in this Agreement, neither Agent shall have
any duty or responsibility, either initially or on a continuing basis, to
provide any Lender or the holder of any Note with any credit or other
information with respect thereto, whether coming into its possession before the
making of the Loans or at any time or times thereafter. Neither Agent shall be
responsible to any Lender or the holder of any Note for any recitals,
statements, information, representations or warranties herein or in any
document, certificate or other writing delivered in connection herewith or for
the execution, effectiveness, genuineness, validity, enforceability, perfection,
collectibility, priority or sufficiency of this Agreement or any other Credit
Document or the financial condition of the Borrower and its Subsidiaries or be
required to make any inquiry concerning either the performance or observance of
any of the terms, provisions or conditions of this Agreement or any other Credit
Document, or the financial condition of the Borrower and its Subsidiaries or the
existence or possible existence of any Default or Event of Default.
10.04 Certain Rights of the Administrative Agent. If the
------------------------------------------
Administrative Agent shall request instructions from the Required Lenders with
respect to any act or action (including failure to act) in connection with this
Agreement or any other Credit Document, the Administrative Agent shall be
entitled to refrain from such act or taking such action unless and until the
Administrative Agent shall have received instructions from the Required Lenders;
and the Administrative Agent shall not incur liability to any Person by reason
of so refraining. Without limiting the foregoing, neither any Lender nor the
holder of any Note shall have any right of action whatsoever against the
Administrative Agent as a result of the
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Administrative Agent acting or refraining from acting hereunder or under any
other Credit Document in accordance with the instructions of the Required
Lenders.
10.05 Reliance. The Administrative Agent shall be entitled to rely,
--------
and shall be fully protected in relying, upon any note, writing, resolution,
notice, statement, certificate, telex, teletype, facsimile or telecopier
message, cablegram, radiogram, order or other document or telephone message
signed, sent or made by any Person that the Administrative Agent believed to be
the proper Person, and, with respect to all legal matters pertaining to this
Agreement and any other Credit Document and its duties hereunder and thereunder,
upon advice of counsel selected by the Administrative Agent.
10.06 Indemnification. To the extent an Agent is not reimbursed and
---------------
indemnified by the Borrower, each Defaulting Lender (to the extent so able) and
the Non-Defaulting Lenders will reimburse and indemnify the Administrative
Agent, in proportion to their respective Loans and Commitments, for and against
any and all liabilities, obligations, losses, damages, penalties, claims,
actions, judgments, costs, expenses or disbursements of whatsoever kind or
nature which may be imposed on, asserted against or incurred by such Agent in
performing its respective duties hereunder or under any other Credit Document,
in any way relating to or arising out of this Agreement or any other Credit
Document; provided that no Lender shall be liable for any portion of such
--------
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the gross negligence or willful
misconduct of an Agent.
10.07 Each Agent in its Individual Capacity. With respect to its
-------------------------------------
obligation to make Loans under this Agreement, each Agent shall have the rights
and powers specified herein for a "Lender" and may exercise the same rights and
powers as though it were not performing the duties specified herein; and the
term "Lenders," "Required Lenders," "holders of Notes" or any similar terms
shall, unless the context clearly otherwise indicates, include each Agent in its
individual capacity. Each Agent may accept deposits from, lend money to, and
generally engage in any kind of banking, trust or other business with any Credit
Party or any Affiliate of any Credit Party as if it were not performing the
duties specified herein, and may accept fees and other consideration from the
Borrower, or any other Credit Party for services in connection with this
Agreement and otherwise without having to account for the same to the Lenders.
10.08 Holders. The Administrative Agent may deem and treat the
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payee of any Note as the owner thereof for all purposes hereof unless and until
a written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Administrative Agent. Any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, transferee, assignee or indorsee, as the
case may be, of such Note or of any Note or Notes issued in exchange therefor.
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10.09 Resignation by the Administrative Agent. (a) The
---------------------------------------
Administrative Agent may resign from the performance of all its functions and
duties hereunder and/or under the other Credit Documents at any time by giving
15 Business Days' prior written notice to the Borrower and the Lenders. Such
resignation shall take effect upon the appointment of a successor Administrative
Agent pursuant to clauses (b) and (c) below or as otherwise provided below.
(b) Upon any such notice of resignation, the Required Lenders shall
appoint a successor Administrative Agent hereunder or thereunder who shall be a
commercial bank or trust company reasonably acceptable to the Borrower (such
consent not to be unreasonably withheld).
(c) If a successor Administrative Agent shall not have been so
appointed within such 15 Business Day period, the Administrative Agent, with the
consent of the Borrower (such consent not to be unreasonably withheld), shall
then appoint a successor Administrative Agent who shall serve as Administrative
Agent hereunder or thereunder until such time, if any, as the Required Lenders
appoint a successor Administrative Agent as provided above.
(d) If no successor Administrative Agent has been appointed pursuant
to clause (b) or (c) above by the 30th Business Day after the date such notice
of resignation was given by the Administrative Agent, the Administrative Agent's
resignation shall become effective and the Required Lenders shall thereafter
perform all the duties of the Administrative Agent hereunder and/or under any
other Credit Document until such time, if any, as the Required Lenders appoint a
successor Administrative Agent as provided above.
(e) The Syndication Agent may resign from its duties hereunder at any
time upon four Business Days' prior written notice to the Borrower and the
Administrative Agent.
SECTION 11. Miscellaneous.
-------------
11.01 Payment of Expenses, etc. The Borrower agrees to: (i)
-------------------------
whether or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses of the Agents in connection with the
negotiation, preparation, execution and delivery of the Credit Documents and the
documents and instruments referred to therein and any amendment, waiver or
consent relating thereto (including, without limitation, the reasonable fees and
disbursements of White & Case LLP) and of each Agent and each of the Lenders in
connection with the enforcement of the Credit Documents and the documents and
instruments referred to therein (including, without limitation, the reasonable
fees and disbursements of counsel for the Agents and for each of the Lenders);
(ii) pay and hold each of the Lenders harmless from and against any and all
present and future stamp and other similar taxes with respect to the foregoing
matters and save each of the Lenders harmless from and
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against any and all liabilities with respect to or resulting from any delay or
omission (other than to the extent attributable to such Lender) to pay such
taxes; and (iii) indemnify each Lender (including in its capacity as Agent), its
officers, directors, employees, representatives and agents from and hold each of
them harmless against any and all losses, liabilities, claims, damages or
expenses incurred by any of them as a result of, or arising out of, or in any
way related to, or by reason of, (a) any investigation, litigation or other
proceeding (whether or not any Agent or any Lender is a party thereto and
whether or not any such investigation, litigation or other proceeding is between
or among any Agent, any Lender, any Credit Party or any third Person or
otherwise (except to the extent between or among any Lenders in their capacity
as such)) related to the entering into and/or performance of any Credit Document
or the use of the proceeds of any Loans hereunder or the Transaction or the
consummation of any transactions contemplated in any Credit Document, or (b) the
actual or alleged presence of Hazardous Materials in the air, surface water or
ground water or on the surface or subsurface of any property owned or operated
at any time by Borrower or any of its Subsidiaries or the generation, storage,
transportation, handling or disposal of Hazardous Materials by the Borrower or
any of its Subsidiaries at any location, or the noncompliance by the Borrower or
any of its Subsidiaries with any Environmental Law or any Environmental Claim in
connection with the Borrower or any of its Subsidiaries or business or
operations or any property owned or operated at any time by the Borrower or any
of its Subsidiaries, including, in each case, without limitation, the reasonable
fees and disbursements of counsel incurred in connection with any such
investigation, litigation or other proceeding (but excluding any such losses,
liabilities, claims, damages or expenses to the extent incurred by reason of the
gross negligence or willful misconduct of the Person to be indemnified or of any
other indemnitee who is such Person or an affiliate of such Person).
11.02 Right of Setoff. In addition to any rights now or hereafter
---------------
granted under applicable law or otherwise, and not by way of limitation of any
such rights, if an Event of Default then exists, each Lender is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to any Credit Party or to any other Person,
any such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special but not trust accounts) and any
other Indebtedness at any time held or owing by such Lender (including, without
limitation, by branches and agencies of such Lender wherever located) to or for
the credit or the account of any Credit Party against and on account of the
Obligations and liabilities of such Credit Party to such Lender under this
Agreement or under any of the other Credit Documents, including, without
limitation, all interests in Obligations of such Credit Party purchased by such
Lender pursuant to Section 11.06(b), and all other claims of any nature or
description arising out of or connected with this Agreement or any other Credit
Document, irrespective of whether or not such Lender shall have made any demand
hereunder and although said Obligations, liabilities or claims, or any of them,
shall be contingent or unmatured.
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11.03 Notices. Except as otherwise expressly provided herein, all
-------
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier, facsimile or cable communication) and
mailed, telegraphed, telexed, telecopied, faxed, cabled or delivered, if to the
Borrower at the address specified opposite its signature below, if to any
Lender, at its address specified for such Lender on Annex II hereto; or, at such
other address as shall be designated by any party in a written notice to the
other parties hereto. All such notices and communications shall be mailed,
telegraphed, telexed, telecopied, or cabled or sent by overnight courier, and
shall be effective when received.
11.04 Benefit of Agreement. (a) This Agreement shall be binding
--------------------
upon and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto, provided that the Borrower may not assign or
--------
transfer any of its rights or obligations hereunder without the prior written
consent of the Lenders. Each Lender may at any time grant participations in any
of its rights hereunder or under any of the Notes to another financial
institution, provided that in the case of any such participation, the
participant shall not have any rights under this Agreement or any of the other
Credit Documents (the participant's rights against such Lender in respect of
such participation to be those set forth in the agreement executed by such
Lender in favor of the participant relating thereto) and all amounts payable by
the Borrower hereunder shall be determined as if such Lender had not sold such
participation, except that the participant shall be entitled to the benefits of
Sections 1.10 and 3.04 of this Agreement to the extent that such Lender would be
entitled to such benefits if the participation had not been entered into or
sold, and, provided further, that no Lender shall transfer, grant or assign any
participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Credit Document except to
the extent such amendment or waiver would (i) extend the final scheduled
maturity of any Loan or Note in which such participant is participating (it
being understood that any waiver of any prepayment of, or the method of any
application of any prepayment to, the Loans shall not constitute an extension of
the final maturity date), or reduce the rate or extend the time of payment of
interest or Fees (except in connection with a waiver of the applicability of any
post-default increase in interest rates), or reduce the principal amount
thereof, or increase such participant's participating interest in any Commitment
over the amount thereof then in effect (it being understood that a waiver of any
Default or Event of Default or of a mandatory reduction in the Total Commitment
or a mandatory prepayment shall not constitute a change in the terms of any
Commitment), (ii) release all or substantially all of the Collateral or (iii)
consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement or any other Credit Document.
(b) Notwithstanding the foregoing, (x) any Lender may assign all or a
portion of its outstanding B Term Loans and/or C Term Loans, its B Term
Commitment, Revolving Commitment and/or Acquisition Commitment and its rights
and obligations hereunder (which
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assignment does not have to be pro rata among the Facilities) to (i) one or more
--------
Lenders and/or Affiliates of such Lender which are Eligible Transferees or (ii)
in the case of any Lender that is a fund that invests in loans, any other fund
that invests in loans and is managed and/or advised by the same investment
advisor of such Lender or by an Affiliate of such investment advisor, and (y)
with the consent of the Administrative Agent and, if no Default under Section
8.01 or 8.05 or Event of Default exists, the Borrower (which consents shall not
be unreasonably withheld), any Lender may assign all or a portion of its
outstanding B Term Loans and/or C Term Loans, its B Term Commitment, Revolving
Commitment and/or Acquisition Commitment and its rights and obligations
hereunder to one or more Eligible Transferees (treating any fund that invests in
loans and any other fund that invests in loans and is managed and/or advised by
the same investment advisor of such fund or by an Affiliate of such investment
advisor of such fund or by an Affiliate of such investment advisor as a single
Eligible Transferee). No assignment pursuant to the immediately preceding
sentence shall to the extent such assignment represents an assignment to an
institution other than one or more Lenders hereunder, be in an aggregate amount
less than $5,000,000 unless the entire Commitment and Loans of the assigning
Lender is so assigned. If any Lender so sells or assigns all or a part of its
rights hereunder or under the Notes, any reference in this Agreement or the
Notes to such assigning Lender shall thereafter refer to such Lender and to the
respective assignee to the extent of their respective interests and the
respective assignee shall have, to the extent of such assignment (unless
otherwise provided therein), the same rights and benefits as it would if it were
such assigning Lender. Each assignment pursuant to this Section 11.04(b) shall
be effected by the assigning Lender and the assignee Lender executing an
Assignment Agreement and giving the Administrative Agent written notice thereof.
At the time of any such assignment, (i) either the assigning or the assignee
Lender shall pay to the Administrative Agent a nonrefundable assignment fee of
$3,500 (provided that only one assignment fee shall be payable in respect of any
reasonably contemporaneous assignment by a fund that invests in loans to any one
or more funds that invests in loans and are managed and/or advised by the same
investment advisor of such fund or by an Affiliate of such investment advisor),
(ii) Annex I shall be deemed to be amended to reflect the Commitments and Loans
of the respective assignee (which shall result in a direct reduction to the
Commitment of the assigning Lender) and of the other Lenders, and (iii) upon
surrender of the old Notes the Borrower will, at its own expense, issue new
Notes to the respective assignee and to the assigning Lender in conformity with
the requirements of Section 1.05, provided further that such transfer or
----------------
assignment will not become effective until recorded by the Administrative Agent
on the Lender Register pursuant to Section 11.16. To the extent of any
assignment pursuant to this Section 11.04(b) to a Person which is not already a
Lender hereunder and which is not a United States Person (as such term is
defined in Section 7701(a)(30) of the Code) for Federal income tax purposes, the
respective assignee Lender shall provide to the Borrower and the Administrative
Agent the appropriate Internal Revenue Service Forms (and, if applicable, a
Section 3.04 Certificate) described in Section 3.04(b). To the extent that an
assignment pursuant to this Section 11.04(b) would, at the time of such
assignment, result in increased costs under Section 1.10 or 3.04 from those
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being charged by the respective assigning Lender prior to such assignment, then
the Borrower shall not be obligated to pay such increased costs (although the
Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
assignment). Nothing in this clause (b) shall prevent or prohibit any Lender
from pledging its Notes or Loans to a Federal Reserve Bank in support of
borrowings made by such Lender from such Federal Reserve Bank and, with the
consent of the Administrative Agent and the Borrower (which consents shall not
be unreasonably withheld), any Lender which is a fund may pledge all or any
portion of its Loans and Notes to its trustee in support of its obligations to
its trustee.
(c) Notwithstanding any other provisions of this Section 11.04, no
transfer or assignment of the interests or obligations of any Lender hereunder
or any grant of participation therein shall be permitted if such transfer,
assignment or grant would require the Borrower or any of its Subsidiaries to (i)
file a registration statement with the SEC, (ii) qualify the Loans under the
"Blue Sky" laws of any State or (iii) integrate such transfer or assignment with
a separate securities offering of securities of the Borrower or any of its
Subsidiaries.
(d) Each Lender initially party to this Agreement hereby represents,
and each Person that became a Lender pursuant to an assignment permitted by this
Section 11 will, upon its becoming party to this Agreement, represent that it is
an Eligible Transferee which makes or invests in loans in the ordinary course of
its business and that it will make or acquire Loans for its own account in the
ordinary course of such business, provided that subject to the preceding clauses
--------
(a) and (b), the disposition of any promissory notes or other evidences of or
interests in Indebtedness held by such Lender shall at all times be within its
exclusive control.
11.05 No Waiver; Remedies Cumulative. No failure or delay on the
------------------------------
part of the Administrative Agent or any Lender in exercising any right, power or
privilege hereunder or under any other Credit Document and no course of dealing
between any Credit Party and the Administrative Agent or any Lender shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or under any other Credit Document preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege hereunder or thereunder. The rights and remedies herein expressly
provided are cumulative and not exclusive of any rights or remedies which the
Administrative Agent or any Lender would otherwise have. No notice to or demand
on any Credit Party in any case shall entitle any Credit Party to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Administrative Agent or the Lenders to any other or
further action in any circumstances without notice or demand.
11.06 Payments Pro Rata. (a) The Administrative Agent agrees that
-----------------
promptly after its receipt of each payment from or on behalf of any Credit
Party in respect
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of any Obligations of such Credit Party hereunder, it shall distribute such
payment to the Lenders (other than any Lender that has expressly waived its
right to receive its pro rata share thereof) pro rata based upon their
--- ----
respective shares, if any, of the Obligations with respect to which such payment
was received.
(b) Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans or Fees, of a sum which with respect to the related sum or sums
received by other Lenders is in a greater proportion than the total of such
Obligation then owed and due to such Lender bears to the total of such
Obligation then owed and due to all of the Lenders immediately prior to such
receipt, then such Lender receiving such excess payment shall purchase for cash
without recourse or warranty from the other Lenders an interest in the
Obligations of the respective Credit Party to such Lenders in such amount as
shall result in a proportional participation by all of the
Lenders in such amount, provided that if all or any portion of such excess
--------
amount is thereafter recovered from such Lender, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding Sections 11.06(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Lenders as opposed to Defaulting Lenders.
11.07 Calculations; Computations. (a) The financial statements to
--------------------------
be furnished to the Lenders pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in
writing by the Borrower to the Lenders), provided that (x) except as otherwise
specifically provided herein, all computations determining compliance with
Sections 7.11, 7.12 and 7.13, including definitions used therein, shall utilize
accounting principles and policies in effect at the time of the preparation of,
and in conformity with those used to prepare, the December 31, 1997 historical
financial statements of the Acquired Companies delivered to the Lenders pursuant
to Section 5.10(b) and (y) that if at any time such computations utilize
accounting principles different from those utilized in the financial statements
furnished to the Lenders, such financial statements shall be accompanied by
reconciliation work-sheets.
(b) All computations of interest and Fees hereunder shall be made on
the actual number of days elapsed over a year of 360 days (365-366 days in
the case of interest on Base Rate Loans).
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11.08 Governing Law; Submission to Jurisdiction; Venue; Waiver of
-----------------------------------------------------------
Jury Trial. (a) This Agreement and the other Credit Documents and the rights
----------
rights and obligations of the parties hereunder and thereunder shall be
construed in accordance with and be governed by the law of the State of New
York. Any legal action or proceeding with respect to this Agreement or any other
Credit Document may be brought in the courts of the State of New York sitting in
the Borough of Manhattan or of the United States for the Southern District of
New York, and, by execution and delivery of this Agreement, each Credit Party
hereby irrevocably accepts for itself and in respect of its property, generally
and unconditionally, the jurisdiction of the aforesaid courts. Each Credit Party
further irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to each Credit Party
located outside New York City and by hand delivery to each Credit Party located
within New York City, at its address for notices pursuant to Section 11.03, such
service to become effective 30 days after such mailing. Each Credit Party hereby
irrevocably designates appoints and empowers CT Corporation System, with offices
on the date hereof located at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its
agent for service of process in respect of any such action or proceeding.
Nothing herein shall affect the right of the Administrative Agent, any Lender to
serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against any Credit Party in any other
jurisdiction.
(b) Each Credit Party hereby irrevocably waives any objection which
it may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Agreement or
any other Credit Document brought in the courts referred to in clause (a) above
and hereby further irrevocably waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
(c) Each of the parties to this Agreement hereby irrevocably waives
all right to a trial by jury in any action, proceeding or counterclaim arising
out of or relating to this Agreement, the other Credit Documents or the
transactions contemplated hereby or thereby.
11.09 Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
11.10 Effectiveness. This Agreement shall become effective on the
-------------
date (the "Effective Date") on which the Borrower and each of the Lenders shall
have signed a copy hereof (whether the same or different copies) and shall have
delivered the same to the Administrative Agent at the Payment Office of the
Administrative Agent or, in the case of
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the Lenders, shall have given to the Administrative Agent telephonic (confirmed
in writing), written telex or facsimile transmission notice (actually received)
at such office that the same has been signed and mailed to it. The
Administrative Agent will give the Borrower and each Lender prompt written
notice of the occurrence of the Effective Date.
11.11 Headings Descriptive. The headings of the several sections
--------------------
and subsections of this Agreement are inserted for convenience only and shall
not in any way affect the meaning or construction of any provision of this
Agreement.
11.12 Amendment or Waiver. Neither this Agreement nor any other
-------------------
Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the Borrower, the Required AF/RF Lenders and the Required
TF Lenders, provided that no such change, waiver, discharge or termination
shall, without the consent of each Lender (other than a Defaulting Lender)
directly affected thereby, (i) extend the AF/RF Maturity Date, the B Maturity
Date or the C Maturity Date (it being understood that any waiver of any
prepayment of, or the method of application of any prepayment to, the Loans
shall not constitute any such extension), or reduce the rate or extend the time
of payment of interest (other than as a result of waiving the applicability of
any post-default increase in interest rates) or Fees, or reduce the principal
amount thereof, or increase the Commitment of any Lender over the amount thereof
then in effect (it being understood that a waiver of any Default or Event of
Default or of a mandatory reduction in the Total Commitment shall not constitute
a change in the terms of any Commitment of any Lender), (ii) amend, modify or
waive any provision of this Section 11.12, (iii) reduce the percentage specified
in, or (except to give effect to any additional facilities hereunder) otherwise
modify, the definition of Required Lenders, (iv) consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement, (v) release all or substantially all of the Collateral or (vi)
release all or substantially all of the Subsidiary Guaranties; provided further,
that no such change, waiver, discharge or termination shall, (t) without the
consent of the Required AF/RF Lenders, reduce the percentage specified in, or
otherwise modify, the definition of Required AF/RF Lenders, (u) without the
consent of the Required TF Lenders, reduce the percentage specified in, or
otherwise modify, the definition of Required TF Lenders, (v) without the consent
of the Required AF Lenders, reduce the percentage specified in, or otherwise
modify, the definition of Required AF Lenders or amend, waive or reduce any
Scheduled Reduction applicable to the Acquisition Facility, (w) without the
consent of the Required RF Lenders, reduce the percentage specified in, or
otherwise modify, the definition of Required RF Lenders or amend, waive or
reduce any Scheduled Reduction applicable to the Revolving Facility, (x) without
the consent of the Required B TF Lenders, reduce the percentage specified in, or
otherwise modify, the definition of Required B TF Lenders or amend, waive or
reduce any Scheduled Repayment applicable to the B Term Facility, (y) without
the consent of the Required C TF Lenders, reduce the percentage specified in, or
otherwise modify, the definition of Required C TF Lenders or amend, waive or
-99-
reduce any Scheduled Repayment applicable to the C Term Facility or (z) without
the consent of any Agent affected thereby, amend any provision of Section 10.
11.13 Survival. All indemnities set forth herein including, without
--------
limitation, in Section 1.10, 1.11, 3.04, 10.06 or 11.01 shall survive the
execution and delivery of this Agreement and the making and repayment of the
Loans.
11.14 Domicile of Loans. Each Lender may transfer and carry its
-----------------
Loans at, to or for the account of any branch office, subsidiary or affiliate of
such Lender, provided that the Borrower shall not be responsible for costs
arising under Section 1.10 or 3.04 resulting from any such transfer (other than
a transfer pursuant to Section 1.12) to the extent not otherwise applicable to
such Lender prior to such transfer.
11.15 Confidentiality. Each of the Lenders agrees that it will use
---------------
its best efforts not to disclose without the prior consent of the Borrower
(other than to its employees, auditors, counsel or other professional advisors,
to affiliates or to another Lender if the Lender or such Lender's holding or
parent company in its sole discretion determines that any such party should have
access to such information) any information with respect to the Borrower or any
of its Subsidiaries which is furnished pursuant to any Credit Document and which
is designated by the Borrower or the Borrower to the Lenders in writing as
confidential; provided, that any Lender may disclose any such information (a) as
has become generally available to the public, (b) as may be required or
appropriate in any report, statement or testimony sub mitted to any municipal,
state or Federal regulatory body having or claiming to have jurisdiction over
such Lender or to the Federal Reserve Board or the Federal Deposit Insurance
Corporation or similar organiza tions (whether in the United States or
elsewhere) or their successors or to the National Association of Insurance
Commissioners, (c) as may be required or appropriate in response to any summons
or subpoena or in connection with any litigation (notice of which will be
promptly sent to the Borrower to the extent permitted by Law), (d) in order to
comply with any law, order, regulation or ruling applicable to such Lender, and
(e) to any prospective transferee that is an Eligible Transferee that is
acceptable to the Borrower in connection with any contemplated transfer of any
of the Notes or any interest therein by such Lender to the extent that such
prospective transferee is notified of the confidentiality requirements relating
thereto. No Lender shall be obligated or required to return any materials
furnished by the Borrower or any Subsidiary. The Borrower hereby agrees that the
failure of a Lender to comply with the provisions of this Section 11.15 shall
not relieve the Credit Parties of any of their obligations to such Lender under
this Agreement and the other Credit Documents.
-100-
11.16 Lender Register. The Borrower hereby designates the
---------------
Administrative Agent to serve as the Borrower's agent, solely for purposes of
this Section 11.16, to maintain a register (the "Lender Register") on which it
will record the Commitments from time to time of each of the Lender (including
Acquisition Commitments, if effected, and any B Term Commitments resulting from
a B Term Commitment Renewal), the Loans made by each of the Lenders and each
repayment in respect of the principal amount of the Loans of each of the
Lenders. Failure to make any such recordation, or any error in such recordation
shall not affect the Borrower's obligations in respect of such Loans. With
respect to any Lender, the transfer of the Commitments (or the post-Closing Date
effectiveness of new Commitments) or Loans of such Lender and the rights to the
principal of, and interest on, such Loans or any Loan made pursuant to such
Commitments shall not be effective until such transfer is recorded on the Lender
Register maintained by the Administrative Agent with respect to ownership of
such Commitments and Loans and prior to such recordation all amounts owing to
the transferor with respect to such Commitments and Loans shall remain owing to
the transferor. The registration of assignment or transfer of all or part of any
Commitments and Loans shall be recorded by the Administrative Agent on the
Lender Register only upon the acceptance by the Administrative Agent of a
properly executed and delivered Assignment Agreement pursuant to Section
11.04(b). The Borrower agrees to indemnify the Administrative Agent from and
against any and all losses, claims, damages and liabilities of whatsoever nature
which may be imposed on, asserted against or incurred by the Administrative
Agent in performing its duties under this Section 11.16 (but excluding such
losses, claims, liabilities or liabilities incurred by reason of the
Administrative Agent's gross negligence or willful misconduct).
-101-
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.
MJD COMMUNICATIONS, INC.
By /s/ Xxxxxx Xxxxx
--------------------------------------
Title: Vice President, Secretary and
Chief Financial Officer
BANKERS TRUST COMPANY,
Individually and as Administrative Agent
By /s/ G. Xxxxxx Xxxxx
--------------------------------------
Title: Vice President
NATIONSBANK OF TEXAS, N.A.,
By /s/ Xxxxxx X. Xxxxxxxx
--------------------------------------
Title: Vice President
COBANK, ACB
By /s/ Xxxx X. Xxxxxxx
--------------------------------------
Title: Assistant Vice President
FIRST UNION NATIONAL BANK
By /s/ Xxx Xxxxxx
--------------------------------------
Title: Senior Vice President
PRIME INCOME TRUST
By /s/ Xxxxxx Xxxxxxxx
--------------------------------------
Title: Assistant Vice President
XXXXXX FINANCIAL, INC.
By /s/ Xxxxxxx Xxxxx
--------------------------------------
Title: Vice President
THE TRAVELERS INSURANCE COMPANY
By /s/ Xxxxxx X. Xxxxx
--------------------------------------
Title: Investment Officer
UNION BANK OF CALIFORNIA, N.A.
By /s/ Xxxxxxxxx X. Xxxx
--------------------------------------
Title: Vice President
CENTURA BANK
By /s/ Xxxxxxx Xxxxx
--------------------------------------
Title: Corporate Banking Officer
TORONTO DOMINION (TEXAS), INC.
By /s/ Xxxxx X. Xxxxxx
--------------------------------------
Title:
FLEET NATIONAL BANK
By /s/ Xxxxx X. Xxxxxxxx
--------------------------------------
Title: Vice President
XXXXXXX XXXXX SENIOR FLOATING
RATE FUND, INC.
By /s/ Xxxx X. Xxxxxxxx
--------------------------------------
Title: Authorized Signatory
PILGRIM AMERICA PRIME RATE TRUST
By /s/ Xxxxxx Xxxx
--------------------------------------
Title: Assistant Porfolio Manager
ANNEX I
-------
COMMITMENTS
-----------
B Term C Term CoBank Revolving
Lender Commitment Commitment Commitment Commitment
------ ------------ -------------- -------------- -----------
Bankers Trust Company $ 47,500,000 $ 7,993,595.94 $ 0 $15,000,000
NationsBank of Texas,
N.A. $ 10,000,000 $ 0 $ 0 $15,000,000
CoBank, ACB $ 0 $ 0 $51,506,404.18 $ 0
First Union National Bank $ 10,000,000 $ 0 $ 0 $15,000,000
Prime Income Trust $ 15,000,000 $ 3,999,999.97 $ 0 $ 0
Xxxxxx Financial, Inc. $ 5,000,000 $ 0 $ 0 $ 7,500,000
The Travelers Insurance $ 15,000,000 $ 4,999,999.96 $ 0 $ 0
Company
Union Bank of California, $ 7,500,000 $ 0 $ 0 $ 9,000,000
N.A.
Centura Bank $ 10,000,000 $ 0 $ 0 $14,500,000
Toronto Dominion (Texas),
Inc. (for First Dominion $ 5,000,000 $ 1,999,999.98 $ 0 $ 0
Capital)
Fleet National Bank $ 7,500,000 $ 0 $ 0 $ 9,000,000
Xxxxxxx Xxxxx Senior
Floating Rate Fund, Inc. $ 10,000,000 $ 1,499,999.98 $ 0 $ 0
Xxxxxxx Xxxxxxx Prime
Rate Trust $ 12,500,000 $ 2,999,999.98 $ 0 $ 0
------------ -------------- -------------- -----------
$155,000,000 $23,493,595.82 $51,506,404.18 $85,000,000
============ ============== ============== ===========
ANNEX II
--------
ADDRESSES
---------
Bankers Trust Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxx Xxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
NationsBank of Texas, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxx Xxxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
CoBank ACB
000 Xxxxxxxx Xxxxxxx X.X., Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
First Union National Bank
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxx Xxxxxxx
Telephone No.: (000) 000-0000
ANNEX II
Page 2
Telecopier No.: (000) 000-0000
Prime Income Trust (Xxxx Xxxxxx)
Two World Trade Center, 72nd Floor
New York, New York 10048
Attention: Xxxxxx Xxxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Xxxxxx Financial, Inc.
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Xxxxxx Financial, Inc.
000 Xxxxxx 0X Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
The Travelers Insurance Company
Xxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Xxxxx Xxxxxxxx
Telephone No.: (000) 000-0000
ANNEX II
Page 3
Telecopier No.: (000) 000-0000
Union Bank of California, N.A.
000 Xxxxx Xxxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Centura Bank
000 Xxxxxxxxxx Xxxx, 0xx Xxxxx
X.X. Xxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
First Dominion Capital
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Copy to:
Toronto Dominion (Texas), Inc.
000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
ANNEX II
Page 4
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Fleet National Bank
1185 Avenue of the Americas, XXX00X
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Xxxxxxx Xxxxx Senior Floating Rate Fund, Inc.
000 Xxxxxxx Xxxx Xxxx
Sec. 1
Plainsboro, New Jersey 08536
Attention: Xxxx Baraski
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx Xxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Pilgrim America Prime Rate Trust
Two Renaissance Square
00 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxx Xxxx
Telephone No.: (000) 000-0000
ANNEX II
Page 5
Telecopier No.: (000) 000-0000
ANNEX III
SUBSIDIARIES
A. MJD COMMUNICATIONS, INC.
------------------------
1. Common Stock
MJD Partners, L.P. 38,145.00
Xxxx X. Xxxx 537.00
Xxxxxx X. Xxxxx, Xx. 490.00
Carousel 47.881.93
Xxxxx 47,881.93
Xxxxxxx and Xxxxx Xxxxxxxxx 414.00
Xxxx Xxxxxxxxx MP Plan 311.00
Xxxxxx X. Xxxxxxx 400.00
Xxxx X. Xxxxxx 200.00
Xxxxx Xxxxx 30.00
Xxxxxxx Xxxxx 300.00
Xxxx Xxxx 30.00
Xxxxxx X. Xxxxxx 45.00
Xxxxxxx X. Xxxx 150.00
Xxxxxxx X. Xxxxx 100.00
Xxxxxxx X. Xxxxx 85.00
------------
Subtotal 137,000.86
2. Options to Purchase Common Stock
Xxxx X. Xxxxxx 1,421
Xxxxxx X. Xxxxxxx 1,066
Xxxxxx X. Xxxxx, Xx. 711
Xxxx X. Xxxx 1,066
-------
Subtotal 4,264
3. Class A Voting Common Stock Purchase Warrants
Xxxx X. Xxxxxx 10
Xxxxxx X. Xxxxxxx 21
Xxxx X. Xxxx 17
Xxxxxx X. Xxxxx, Xx. 15
Bugger Associates, Inc. 21
----
Subtotal 84.00
B. MJD HOLDINGS CORP. - 3,000 shares of Common Stock, par value $.01
------------------
per share, authorized, 100 shares issued and outstanding.
MJD Communications, Inc. - 100 shares
Xxxxxxxx Place, 000 X. Xxxxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
C. ST ENTERPRISES, LTD. - 200,000 shares of Common Stock, par value $.01
--------------------
per share, authorized, 90,000 shares issued and outstanding.
MJD Communications, Inc. - 90,000 shares
Xxxxxxxx Place, 000 X. Xxxxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Common Stock Purchase Warrants - 12,857.01 warrants issued and outstanding.
ALTA Subordinated Debt Partners II, L.P. - Warrants to purchase
5,222.49 shares
c/o Burr, Egan, Deleage & Co.
Xxx Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
ALTA Subordinated Debt Partners III, L.P. - Warrants to purchase
7,411.54 shares
c/o Burr, Egan, Deleage & Co.
Xxx Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Xxxxx XxXxxxxx - Warrants to purchase 111.49 shares
c/o Paul, Hastings, Xxxxxxxx
& Xxxxxx LLP
Ninth Floor
0000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Xxxxxxx Xxxxxx - Warrants to purchase 111.49 shares
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
D. All the issued and outstanding stock of the following entities is held by
ST Enterprises, Ltd., X.X. Xxx 000, Xxxxx Xxxx, Xxxxxx 00000:
NORTHLAND TELEPHONE COMPANY OF MAINE, INC. -
------------------------------------------
200 shares of Common stock, par value $.01 per
share, authorized, 100 shares issued and
outstanding.
STE/NE ACQUISITION CORP. (d/b/a NORTHLAND TELEPHONE
----------------------- -------------------
COMPANY OF VERMONT) - 1,000 shares of Common Stock,
------------------
par value $.01 per share, authorized, 1,000 shares issued
and outstanding
ST PAGING, INC. - 10,000 shares of Common Stock,
--------------
par value $.01 per share, authorized, 750 shares
issued and outstanding
ST COMMUNICATIONS, INC. - 10,000 shares of
----------------------
Common Stock, par value $100 per share,
authorized, 54 shares issued and outstanding
ST COMPUTER RESOURCES, INC. - 10,000 shares of
--------------------------
Common Stock, no par value per share, authorized,
500 shares issued and outstanding
ST BROADCASTING COMPANY, INC. - 1,500 shares of
----------------------------
common stock, par value $100 per share,
authorized, 750 shares issued and outstanding
E. BREADBASKET ENTERPRISES, INC. - 250,000 shares of Common Stock, par
----------------------------
value $1.00 per share, authorized, 10,000 shares issued and outstanding
ST Broadcasting Company, Inc. - 10,000 shares
X.X. Xxx 000,
Xxxxx Xxxx, Xxxxxx 00000
F. ST LONG DISTANCE, INC. - 1,000 shares of Common Stock, par value $.01
---------------------
per share, authorized, 100 shares issued and outstanding.
ST Enterprises, Ltd. - 100 common shares
000 X. Xxxxxxxxx
X. X. Xxx 000
Xxxxx Xxxx, Xxxxxx 00000
G. SUNFLOWER TELEPHONE COMPANY, INC. - 1,500 shares of Common Stock,
--------------------------------
par value $100 per share, and 1,500 shares of Preferred Stock, par value
$100 per share, authorized, 234 preferred shares issued and outstanding
and 968 common shares issued (234 preferred shares and 282 common
shares held in treasury)
ST Enterprises, Ltd. - 682 common shares
Xxxxx and Xxxxxxxx Xxxxxxx - 2 common shares
Xxxxxxxxxx, Xxxxxx 00000
Estate of Xxxx Xxxxxxx - 2 common shares
c/o Foulston & Siefkin Trust Account
for H.A. and/or Xxxx Xxxxxxx
Foulston & Siefkin L.L.P.
X.X. Xxx 0000
Xxxxx Xxxx, Xxxxxx 00000
H. STE FINANCE COMPANY, INC. - 30,000 shares of Common Stock, par value
------------------------
$1.00 per share, authorized, 1,000 shares issued and outstanding.
Sunflower Telephone Company, Inc. - 1,000 common shares
P. X. Xxx 000
Xxxxx Xxxx, Xxxxxx 00000
I. MJD VENTURES, INC. - 100 shares of Common Stock, par value $.01 per share,
-----------------
authorized, 100 shares issued and outstanding.
MJD Communications, Inc. - 100 common shares
J. SIDNEY TELEPHONE COMPANY - 100,000 shares of Common Stock, par value $.01
------------------------
per share, authorized, 100 common shares issued and outstanding.
MJD Ventures, Inc. - 100 common shares
Xxxxxxxx Place, 000 X. Xxxxxxxx Xxxxxx,
Xxxxx 000, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
ALTA Subordinated Debt Partners, II, L.P. -
Warrants to purchase 3.18 common shares
ALTA Subordinated Debt Partners III, L.P. -
Warrants to purchase 4.51 common shares
K. MJD SERVICES CORP. - 100 shares of Common Stock, par value $.01 per share,
-----------------
authorized, 100 shares issued and outstanding.
MJD Communications, Inc. - 100 common shares
L. All of the issued and outstanding stock of the following entities is held by
MJD Services Corp., Xxxxxxxx Place, 000 X. Xxxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000:
BLUESTEM TELEPHONE COMPANY - 100 shares of Common
--------------------------
Stock, par value $.01 per share, authorized, 100 shares
issued and outstanding
BIG XXXXX TELECOM, INC. - 100 shares of Common Stock,
-----------------------
par value $.01 per share, authorized, 100 shares issued and
outstanding
COLUMBINE ACQUISITION CORP. - 100 shares of Common
---------------------------
Stock, par value $.01 per share, authorized, 100 common
shares issued and outstanding
M. ODIN TELEPHONE EXCHANGE, INC. - 150 shares of Common Stock, no par value per
-----------------------------
share, authorized, 101 shares issued and outstanding (5.7143 shares held in
treasury).
MJD Services Corp. - 80.9928 common shares
Xxxxxxxx Place, 000 X. Xxxxxxxx Xxxxxx
Xxxxx 000, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Richfield Associates, Inc. - 14.2929 common shares
000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xxx Xxxx 00000
N. MJD TELECOM, INC. - 100 shares of Common Stock, par value $.01 per share,
-----------------
authorized, 100 shares issued and outstanding.
MJD Communications, Inc. - 100 shares
O. CHAUTAUQUA & ERIE TELEPHONE CORPORATION - 100,000 shares of Common Stock,
---------------------------------------
par value $.01 per share, and 35,000 shares of Preferred Stock, par value
$50 per share, authorized, 100 common shares issued and outstanding and no
preferred shares issued and outstanding.
MJD Holdings Corp. - 100 common shares
Xxxxxxxx Place, 000 X. Xxxxxxxx Xxxxxx
Xxxxx 000, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
P. KADOKA TELEPHONE CO. - 5,000 shares of Common Stock, par value $100 per
--------------------
share, authorized, 1,212 shares issued and outstanding.
MJD Holdings Corp. - 1,212 common shares
Q. MJD TELECOM, INC. - 100 shares of Common Stock, par value $.01 per share,
-----------------
authorized, 100 shares issued and outstanding.
MJD Communications, Inc. - 100 shares
R. MJD TELECHOICE CORP. - 100 shares of Common Stock, par value $.01 per share,
--------------------
authorized, 100 shares issued and outstanding.
MJD Communications, Inc. - 100 shares
S. MJD CAPITAL CORP. - 100 shares of Common Stock, par value $.01 per share,
-----------------
authorized, 100 shares issued and outstanding.
MJD Communications, Inc. - 100 shares
T. C-R COMMUNICATIONS, INC. - 750 shares of Common Stock, without par value,
------------------------
authorized, 749 shares issued and outstanding.
MJD Ventures, Inc. - 750 shares
U. C-R TELEPHONE COMPANY - 100 shares of Common Stock, par value $10.00 per
---------------------
share, authorized, 100 shares issued and outstanding.
C-R Communications, Inc. - 100 shares
ANNEX IV
The following plans were the only plans maintained by MJD
Communications, Inc. or any of its Subsidiaries subject to Title IV of ERISA:
1. STE/NE Acquisition Corp. Pension Plan for Vermont Employees of
Transferred GTE Operations (Northland). This plan was
terminated in 1997 and the assets of the plan have been
distributed.
2. Chautaqua & Erie Telephone Corporation Management Pension
Plan. This plan was terminated in 1997 and the assets of the
plan have been distributed.
3. Pension Plan for Employees of Chautaqua & Erie Telephone
Corporation Union Pension Plan. This plan was terminated in
1997 and the assets of the plan have been distributed.
4. Taconic Telephone Corp. Union Employee Defined Benefit Plan.
The plan has been terminated and the assets are in the process
of being distributed.
5. Taconic Telephone Corp. Management Employee Defined Benefit
Plan. The plan has been terminated and the assets are in the
process of being distributed.
The following outlines the retiree health benefits made available to
certain employees of MJD Communications, Inc. and its Subsidiaries:
1. Odin Telephone Exchange, Inc. has made available to retired
employees and surviving spouses of retired employees the
ability to purchase health care benefits at the group rate
paid by the company.
2. Chautaqua & Erie Telephone Corporation has made available to
retired management employees and surviving spouses of retired
management employees the ability to purchase health care
benefits at the group rate paid by the company. The Company
also provides that retired employees can purchase up to
$20,000 of life insurance coverage.
ANNEX V
EXISTING LIENS
A. LIENS ON CAPITAL STOCK AND OTHER EQUITY INTERESTS OF MJD COMMUNICATIONS AND
---------------------------------------------------------------------------
THE SUBSIDIARIES
----------------
1. Under Kansas law, the minority stockholders of Sunflower Telephone
Company, Inc. have the right to participate in any issuance of stock by
Sunflower Telephone Company, Inc. on a pro rata basis.
B. ARRANGEMENTS REQUIRING MJD AND/OR THE SUBSIDIARIES TO ISSUE OR SELL CAPITAL
---------------------------------------------------------------------------
STOCK OR OTHER EQUITY INTERESTS
-------------------------------
1. There are currently outstanding 4,264 options to purchase shares of
Class A Voting Common Stock of MJD Communications, Inc. pursuant to the
MJD Communications, Inc. 1995 Stock Option Plan (the "Plan"). An
additional 1,420 options are available for issuance under the Plan
(there will not be additional issuances of options under the Plan). The
options vest in 20% increments over the 5 year period beginning on the
date of the optionholder's employment and are exercisable at the fair
market value of the stock at the date of grant. A list of optionholders
is set forth in Annex III.
2. There are currently outstanding 84 MJD Communications, Inc. Class A
Voting Stock Purchase Warrants (the "Warrants"). The Warrants are
exercisable at a price of $.01 per share at any time during the 20 year
period following the date of issuance. A list of the holders of Warrants
is set forth in Annex III (A).
3. There are currently outstanding 12,500 ST Enterprises, Ltd. Common Stock
Purchase Warrants, exercisable at a price of $.01 per share when the
fair market value of ST Enterprises, Ltd. exceeds a certain target
(subject to the put rights described in Annex V(C) below). A list of the
holders of such warrants is set forth in Annex III(C).
4. There are currently outstanding 7.69 Xxxxxx Telephone Company Common
Stock Purchase Warrants, exercisable at any time at a rate of $.01 per
share. A list of the holders of such warrants is set forth in Annex
III(J).
C. RIGHTS AND OBLIGATIONS TO REPURCHASE CAPITAL STOCK OR OTHER EQUITY INTERESTS
----------------------------------------------------------------------------
1. Pursuant to the Amended and Restated Certificate of Incorporation of MJD
Communications, Inc., the Series C Preferred Stock then outstanding
shall, at the option of the Corporation, be redeemed in whole or in part
upon the occurrence of (i) an Investor Sale, (ii) the Sale of the
Corporation, or (iii) an IPO (each an "Optional Redemption").
2. Pursuant to the Purchase Agreement dated as of June 30, 1994 for Notes
and Warrants by and among MJD Communications, Inc., ST Enterprises,
Ltd., BEDCO and the other parties thereto (the "BEDCO Purchase
Agreement"), by the election of a majority-in-interest of the BEDCO
Investors, the BEDCO Investors have the right to put their ST
Enterprises, Ltd. Common Stock Purchase Warrants to ST Enterprises, Ltd.
upon the earlier of June 30, 1999 for shares of common stock of ST
Enterprises, Ltd. or their fair market value.
D. MORTGAGES
---------
1. Supplemental Mortgage and Security Agreement dated as of February 1,
1988 by Taconic Telephone Corp. in favor of the United States of America
(as filed in Columbia, Dutchess and Rensselaer Counties, New York.
2. Restated Mortgage, Security Agreement and Financing Statement (the
"Agreement") dated as of June 22, 1990 by C-R Telephone Company in favor
of the United States of America. The underlying debt under the Agreement
has been paid; the release of the liens under the Agreement is in
process.
3. Supplemental Mortgage, Security Agreement and Financing Statement dated
as of May 1, 1995 by C-R Telephone Company in favor of United States of
America (the "Agreement"). The underlying debt under the Agreement has
been paid; the release of the liens under the Agreement is in process.
E. LIENS ON TANGIBLE PERSONAL PROPERTY
-----------------------------------
1. Liens on the capital stock of the Subsidiaries as described in Annex
V(A).
2. Liens on the tangible personal property of Taconic Telephone Corp. in
favor of Key Bank N.A. and the United States of America pursuant to
Supplemental Mortgage and Security Agreement dated as of February 1,
1988 by Taconic Telephone Corp. in favor of the United States of
America. /1/
3. Liens on certain tangible personal property of Taconic Telephone Corp.
in favor of KeyCorp. Leasing Ltd. pursuant to Operating Lease.
4. Liens on certain personal tangible property of Taconic Telephone Corp.
in favor of IBM Credit Corporation pursuant to Operating Lease.
5. Liens on the personal tangible property of MJD Capital Corp. in favor of
NationsBank N.A., pursuant to Promissory Note dated November 7, 1997 in
the principal amount of $99,976.25.
6. Liens on certain personal tangible property of MJD Capital Corp. in
favor of Centura Bank, pursuant to a Loan Agreement dated as of October
8, 1997, between MJD Capital Corp. and Centura Bank (the "Loan
Agreement"). MJD Capital Corp. has not made any borrowings pursuant to
this credit facility.
F. MISCELLANEOUS
-------------
1. Equipment Lease dated August 1, 1997 (less than $50,000) between MJD
Communications, Inc. and Centura Bank (the "Lease"). (The Lease will
be assigned to MJD Capital Corp. post-closing.)
2. Lease between ST Enterprises, Ltd. and Xxxxx Leasing Ltd. for one
(1) Canon Copier with cabinet and ADF.
--------------------
/1/ Key Bank N.A. loans to be repaid in full n March 30, 1998 and release of
liens in favor of Key Bank N.A. will be terminated thereafter.
ANNEX VI
EXISTING INDEBTEDNESS
1. Indemnification Agreement dated July 31, 1994 among WFT Acquisition Co.,
STE/NE Acquisition Corp. and Vermont Telephone Company, Inc.
2. Promissory Note dated October 8, 1997, from MJD Capital Corp. to Centura
Bank in the principal amount of $500,000. MJD Capital Corp. has not made any
borrowings pursuant to this credit facility.
3. Promissory Note dated November 7, 1997 from MJD Capital Corp. to NationsBank
N.A. in the principal amount of $ 99,976.25 (under a $1 Million facility).
4. Promissory Note from MJD Communications, Inc. to Farm Credit Leasing
Corporation in the principal amount of $38,997.13 dated August 28, 1997 (the
"Note"). (The Note will be assigned to MJD Capital Corp. post-closing.)
5. Secured Note and Co-Mortgage among Key Bank, RUS and Taconic Telephone Corp.
in the principal amount of $3,100,000./2/
6. Promissory Note dated October 1, 1996 from C-R Communications, Inc. to
Communications Management, Inc. in the principal amount of $ 156,520.
7. Unsecured Demand Notes to C&E Telephone from various holders in the
aggregate principal amount of $879,000. See list attached hereto.
--------------------
/2/ Key Bank portion of debt to be paid in full on March 30, 1998. RUS portion
of the debt will remain outstanding.
3. C-R Communications has made available retiree health benefits
that may be purchased by retired directors.
4. Big Xxxxx Telephone Inc. has made available to retired
employees and surviving spouses of retired employees the
ability to purchase health care benefits at the group rate
paid by the company.
5. Upon the acquisition of Northland Telephone Copany of Maine
and Northland Telephone Company of Vermont, ST Enterprises,
Ltd. has agreed to provide reimbursements for the health
benefits for employees retiring after the age of 62 up to
$1,000 and $150 per year to be provided towards the cost of
life insurance.
6. Taconic Telephone Corp. has made available to retired
employees and surviving spouses of retired employees the
ability to purchase health care benefits at the group rate
paid by the company.
ANNEX VII
EXISTING INVESTMENTS
A. INVESTMENTS
-----------
1. Odin Telephone Exchange, Inc. owns 2,006 shares (representing 14.28%) of
the common stock, $.01 par value of Southern Illinois Cellular Corp.,
("SICC") which provides cellular telephone services within certain
restricted areas of central and southern Illinois.
2. Sunflower Telephone Company, Inc. owns approximately 5.06% of
Professional Electronic Networks, L.C., which owns 49.5% of Ohio
Professional Electronic Network Limited Liability Company, a provider of
online access to public records in the State of Ohio.
3. The following entities own shares of Rural Telephone Bank:
o Sunflower Telephone Company, Inc. -- 571 Class C shares
o Xxxxxx Telephone Company -- 131 Class C shares
o Northland Telephone Company of Maine, Inc. -- 2,176 Class C shares
o Big Xxxxx Telecom, Inc. -- 5 Class C shares
o Odin Telephone Exchange, Inc. -- 33 Class C and 856 Class B shares
o C-R Telephone Company -- 18 Class C Shares.
4. ST Enterprises, Ltd. owns 4,033 shares (6.557%) of the Kansas
Consolidated Professional Resources Limited Partnership, a telephone
consulting firm.
5. ST Enterprises, Ltd. owns 1 share of Dodge City Country Club.
6. Big Xxxxx Telecom, Inc. owns 6,569 shares of Common Stock of USTN
Holdings, Inc. (the "USTN Shares"). The USTN Shares are being converted
into 6,569 shares of Illuminet Holdings, Inc. as a result of the name
change from USTN Holdings, Inc. to Illuminet Holdings, Inc.
7. Odin Telephone Exchange, Inc. owns 2 shares of Class A Voting Common
Stock and 1,155 shares of Class B Nonvoting Common Stock of U.S. Intelco
Holdings, Inc., which will be converted into 7,713 shares of Illuminet
Holdings, Inc.
8. C-R Telephone Company owns 2 shares of Class A Voting Common Stock and
884 shares of Class B Nonvoting Common Stock which will be converted
into 7,156 shares of Illuminet Holdings, Inc.
9. Sunflower Telephone Company, Inc. is the owner of 20 limited partnership
units of Angeles Income Properties, Ltd. IV and 40 limited partnership
units of Angeles Income Properties, Ltd.
10. The Company and/or the Subsidiaries will invest from time to time in
various short-term investments, including without limitation, commercial
paper and certificates of deposit.
11. The following entities have ownership in CoBank in the form of Class B
Participation Certificate:
o MJD Services Corp. - 100,053.78 units
o MJD Holdings Corp. - 49,839.08 units
o STE Finance Company, Inc. - 456,922.43 units
o STE/NE Acquisition Corp. - 179,346.46 units
o Northland Telephone Company of Maine, Inc. - 626,730.33 units
o Sunflower Telephone Company, Inc. - 93,201.49 units
o C&E Telephone Corp. - 8,852.2 units
12. MJD Ventures, Inc. held RTFC Subordinated Capital Certificates ("SCCs")
originally issued at the time of the January 1996 acquisition of Xxxxxx
Telephone Company in the amount of $123,684.00. The Certificates will
be repurchased by the RTFC as the loan balance is reduced. The SCC
balance of 12/31/97 was $356,018.40.
13. MJD Ventures, Inc. holds Patronage Capital Certificates in RTFC in the
amount of $14,605.37.
14. Xxxxxx Telephone Company, Inc. holds Patronage Capital Certificates in
RTFC in the amount of $4,389.31.
15. Stock option and warrants as described on Annex III.
16. C-R Cellular, Inc. owns 6.67% of the Illinois Valley Cellular RSA-2-I
Partnership, an Illinois General Partnership which provides cellular
telephone services within certain restricted areas of north central
Illinois.
17. C-R Cellular, Inc. owns 6.67% of the Illinois Valley Cellular RSA-2-II
Partnership, an Illinois General Partnership which provides cellular
telephone services within certain restricted areas of north central
Illinois.
18. C-R Cellular, Inc. owns 6.67% of the Illinois Valley Cellular RSA-2-III
Partnership, an Illinois General Partnership which provides cellular
telephone services within certain restricted areas of north central
Illinois.
19. C-R Cellular, Inc. owns 700 shares (12.5%) of the Illinois Valley
Cellular RSA 2, Inc., an Illinois corporation which provides switching
services to the Illinois Valley Cellular RSA 2-I, 2-II and 2-III
Partnerships described above.
20. C-R Communications, Inc. owns a 5.20833% membership interest in
Illinet Communciations of Central Illinois, L.L.C., an Illinois limited
liability company engaged in the operaton of cable television
properties.
21. C-R Communications, Inc. owns a 9.09% membership interest in Illinet
Communications, L.L.C., an Illinois limited liability company engaged in
the provision of internet network transport facilities and equipment.
22. X-X Xxxx Distance owns one share of stock in Associated Network
Partners, Inc. ("ANPI"), an Illinois corporation that was formed by a
group of Illinois independent telephone companies to act as a buyers
club for interexchange telephone capacity so that the participating LECs
or their affiliates could pool their minutes in order to get volume
discounts.
23. Chautauqua & Erie Network, Inc. owns a 3.847% general partnership
interest in the New York State Independent Network Partnership
("NYSINET"), which operates a statewide SS7 network in New York.
24. Taconic Telephone Corp. owns 31,380 shares of Common Stock of Frontier
Corp., a public company traded on the New York Stock Exchange.
25. Taconic Telephone Corp. owns 43,885 shares of Common Stock of USTN
Holdings, Inc. (the "USTN Shares"). The STN Shares are being converted
into 43,885 shares of Illuminet Holdings, Inc. as a result of a name
change from USTN Holdings, Inc. to Illuminet Holdings, Inc.
26. Taconic Cellular Corp. owns a 16.667% general partnership interest in
the Xxxxxx Valley RSA Cellular Partnership.
27. Taconic Telephone Corp. owns a 7.5% limited partnership interest in the
Orange County - Poughkeepsie Limited Partnership.
28. Taconet Corp. owns a 3.847% general partnership interest in the New York
State Independent Network Partnership ("NYSINET"), which operates a
statewide SS7 network in New York.
29. Taconet Wireless Corp. owns a 15% general partnership interest and a 14%
limited partnership interest in the River Run PCS Limited Partnership.
This partnership was formed for the purpose of bidding in the FCC
auction of PCS licenses. The partnership was unsuccessful in the
bidding, and is in the process of being dissolved.
30. Taconic Cellular Corp.owns a 25% general partnership interest in the
Columbia/Xxxxxx Cellular Partnership, which acts as a retail agent for
Nynex Mobile in the RSA 6 service area.
B. ADVANCES
--------
Travel and lodging advances in the ordinary course of business [not to
exceed $_________ per year].
ANNEX VIII
----------
REGULATORY MATTERS
------------------
A. MJD Communications, Inc. filed applications with the Colorado Public
Utilities Commission to obtain consent for the pledge of MJD Communications,
Inc.'s subsidiaries' stock and Inter-Company promissory notes, and for a
change of control.
B. MJD Communications, Inc. filed applications with the Vermont Public Utitlies
Commission to obtain consent for the pledge of MJD Communications, Inc's
subsidiaries' stock and Inter-Company promissory notes.
ANNEX IX
--------
TRANSACTIONS WITH AFFILIATES
----------------------------
A. Management Services Agreement dated as of August 1, 1996 by and between Odin
Telephone Exchange, Inc. and MJD Services Corp.
EXHIBIT A
---------
FORM OF NOTICE OF BORROWING
---------------------------
___________ ___, _____
Bankers Trust Company,
as Administrative Agent for the
Lenders party to the Credit Agreement
referred to below
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: _____
Ladies and Gentlemen:
The undersigned, MJD Communications, Inc. (the "Borrower"), refers to
the Credit Agreement, dated as of March 30, 1998 (as amended, amended and
restated, modified or supplemented from time to time, the "Credit Agreement,"
the capitalized terms defined therein being used herein as therein defined),
among the Borrower, the lenders from time to time party thereto (the "Lenders"),
NationsBank of Texas, N.A., as Syndication Agent, and you, as Administrative
Agent, and, pursuant to Section 1.03(a) of the Credit Agreement, hereby gives
you irrevocable notice that the undersigned hereby requests a Borrowing under
the Credit Agreement, and in that connection sets forth below the information
relating to such Borrowing (the "Proposed Borrowing") as required by Section
1.03(a) of the Credit Agreement:
(i) The Proposed Borrowing is to consist of [B Term Loans] [C Term
Loans - Fixed Rate] [C Term Loans - Floating Rate] [RF Loans] [AF Loans].
(ii) The aggregate principal amount of the Proposed Borrowing is ________.
(iii) The Business Day of the Proposed Borrowing is [____________]./1/
(iv) The Loans to be made pursuant to the Proposed Borrowing shall be
initially maintained as [Base Rate Loans] [Eurodollar Loans] [Fixed Rate Loans].
_______________________
/1/ Shall be a Business Day which (x) in the case of Base Rate Loans and Fixed
Rate Loans, may be the date hereof if this Notice of Borrowing is delivered to
the Administrative Agent at its Notice Office prior to 11:00 A.M. (New York
time) on such date and (y) in the case of Eurodollar Loans, shall be at least
three Business Days after the date hereof.
EXHIBIT A
PAge 2
(v) The initial Interest Period for the Proposed Borrowing is [one month]
[three months] [six months], subject to the availability to all Lenders with
Commitments and/or outstanding Loans under the respective Facility, [nine]
[twelve] month.]/2/
The undersigned hereby certifies that the following statements are
true on the date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties contained in the Credit
Agreement and the other Credit Documents are and will be true and correct
in all material respects, both before and after giving effect to the
Proposed Borrowing and to the application of the proceeds thereof, as
though made on such date, unless stated to relate to a specific earlier
date, in which case such representations and warranties shall be true and
correct in all material respects as of such earlier date; and
(B) no Default or Event of Default has occurred and is continuing, or
would result from such Proposed Borrowing or from the application of the
proceeds thereof.
Very truly yours,
MJD COMMUNICATIONS, INC.
By:__________________________________________
Name:
Title:
_____________________
/2/ To be included for a Proposed Borrowing of Eurodollar Loans.
EXHIBIT B-1
-----------
FORM OF B TERM NOTE
-------------------
$________ New York, New York
__________ __, ____
FOR VALUE RECEIVED, MJD COMMUNICATIONS, INC., a Delaware corporation
(the "Borrower"), hereby promises to pay to the order of ________________ (the
"Lender"), in lawful money of the United States of America in immediately
available funds, at the Payment Office (as defined in the Agreement referred to
below) initially located at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on the
B Maturity Date (as defined in the Agreement) the principal sum of ___________
DOLLARS ($________) or, if less, the then unpaid principal amount of all B Term
Loans (as defined in the Agreement referred to below) made by the Lender
pursuant to the Agreement.
The Borrower also promises to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the B Term Notes referred to in the Credit
Agreement, dated as of March 30, 1998, among the Borrower, the lenders from time
to time party thereto (including the Lender), NationsBank of Texas, N.A., as
Syndication Agent, and Bankers Trust Company, as Administrative Agent (as
amended, amended and restated, modified or supplemented from time to time, the
"Agreement"), and is entitled to the benefits thereof and of the other Credit
Documents (as defined in the Agreement). This Note is secured pursuant to the
Pledge Agreement (as defined in the Agreement). As provided in the Agreement,
this Note is subject to voluntary prepayment and mandatory repayment prior to
the B Maturity Date, in whole or in part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
EXHIBIT B-1
Page 2
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
MJD COMMUNICATIONS, INC.
By_____________________________
Name:
Title:
EXHIBIT B-2
-----------
FORM OF C TERM NOTE-FLOATING RATE
---------------------------------
$________ New York, New York
_________ __, ____
FOR VALUE RECEIVED, MJD COMMUNICATIONS, INC., a Delaware corporation
(the "Borrower"), hereby promises to pay to the order of ________________ (the
"Lender"), in lawful money of the United States of America in immediately
available funds, at the Payment Office (as defined in the Agreement referred to
below) initially located at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on the
C Maturity Date (as defined in the Agreement) the principal sum of ___________
DOLLARS ($________) or, if less, the then unpaid principal amount of all C Term
Loans-Floating Rate (as defined in the Agreement referred to below) made by the
Lender pursuant to the Agreement.
The Borrower also promises to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the C Term Notes-Floating Rate referred to in the
Credit Agreement, dated as of March 30, 1998, among the Borrower, the lenders
from time to time party thereto (including the Lender), NationsBank of Texas,
N.A., as Syndication Agent, and Bankers Trust Company, as Administrative Agent
(as amended, amended and restated, modified or supplemented from time to time,
the "Agreement"), and is entitled to the benefits thereof and of the other
Credit Documents (as defined in the Agreement). This Note is secured pursuant
to the Pledge Agreement (as defined in the Agreement). As provided in the
Agreement, this Note is subject to voluntary prepayment and mandatory repayment
prior to the C Maturity Date in whole or in part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
EXHIBIT B-2
Page 2
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
MJD COMMUNICATIONS, INC.
By___________________________________
Name:
Title:
EXHIBIT B-3
-----------
FORM OF C TERM NOTE - FIXED RATE
--------------------------------
$________ New York, New York
__________ __, ____
FOR VALUE RECEIVED, MJD COMMUNICATIONS, INC., a Delaware corporation
(the "Borrower"), hereby promises to pay to the order of CoBank, ACB (the
"Lender"), in lawful money of the United States of America in immediately
available funds, at the Payment Office (as defined in the Agreement referred to
below) initially located at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, the
principal sum of ___________ DOLLARS ($________), which aggregate amount shall
be payable as provided on Schedule I hereto. Capitalized terms used and not
otherwise defined herein shall have the meanings ascribed to them in the
Agreement referred to below.
The Borrower also promises to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1 of this Note. All payments of
principal, interest and all other amounts due under this Note shall be made in
the manner provided in Section 3.03 of the Agreement referred to below.
This Note is one of the C Term Notes-Fixed Rate referred to in the
Credit Agreement, dated as of March 30, 1998, among the Borrower, the lenders
from time to time party thereto (including the Lender), NationsBank of Texas,
N.A., as Syndication Agent, and Bankers Trust Company, as Administrative Agent
(as amended, amended and restated, modified or supplemented from time to time,
the "Agreement"), and is entitled to the benefits thereof and of the other
Credit Documents (as defined in the Agreement). This Note is secured equally
and ratably with all other Notes issued pursuant to the Agreement and is subject
to voluntary prepayment as set forth in Section 2 below.
In case an Event of Default shall occur and be continuing, the
principal of and accrued interest on this Note may be declared to be or become
due and payable in the manner and with the effect provided in the Agreement.
SECTION 1. Interest. During the period commencing on the Closing
--------
Date and ending on the FRE Date identified on Schedule I hereto (the "Fixed Rate
Period"), interest shall accrue on the unpaid principal amount of this Note at a
rate of ________ percent (____%) per annum and shall be payable quarterly in
arrears on the last Business Day of each March, June, September and December
commencing on June 30, 1998 and on any
EXHIBIT B-3
Page 2
prepayment, at maturity (whether by acceleration or otherwise) and, after such
maturity, on demand. From and after the FRE Date, interest shall be payable on
this Note as provided in the Agreement for Eurodollar Loans and/or Base Rate
Loans as the Loans evidenced hereby shall be maintained from time to time.
SECTION 2. Voluntary Prepayment. During the Fixed Rate Period, the
--------------------
Borrower may, on one Business Day's prior notice, prepay in full, but not in
part, the outstanding principal balance of this Note. Notwithstanding the
foregoing, the Borrower's right to prepay shall be conditioned upon the payment
of a surcharge as defined and calculated below (the "Surcharge") on the date
such prepayment is made. The Surcharge shall be an amount equal to the sum of:
(a) the present value of any funding losses incurred or imputed by CoBank to be
incurred as a result of such prepayment, plus, (b) .5% of the amount prepaid.
----
Such Surcharge, including the amount of any funding losses incurred by CoBank,
shall be determined and calculated in accordance with methodology established by
CoBank and notified in writing to the Borrower. After the FRE Date, this Note
may be prepaid as provided in the Agreement.
SECTION 3. Application of Mandatory Prepayments. All mandatory
------------------------------------
prepayments of Term Loans required pursuant to Section 3.02(A)(c) through (g) of
the Agreement that are to be applied to the C Term Loans-Fixed Rate (x) will
first be applied to those C Term Loans-Fixed Rate as to which the FRE Date has
occurred (all in accordance with the Agreement) and (y) to the extent (after
giving effect to all payments under clause (x)) such prepayments are to be
applied to C Term Loans-Fixed Rate as to which the FRE Date has not occurred,
such prepayment amount shall, unless otherwise agreed by the Borrower and
CoBank, be allocated among the outstanding principal amounts of such C Term
Loans-Fixed Rate, as determined by CoBank. To the extent any such prepayment is
applied to the outstanding principal balance of this Note during the Fixed Rate
Period, a Surcharge shall be payable in connection with such prepayment.
SECTION 4. Application of Scheduled Repayments. Each Scheduled
-----------------------------------
Repayment of C Term Loans-Fixed Rate made by the Borrower shall be allocated to
this Note in accordance with the repayment schedule set forth on Schedule I
hereto.
SECTION 5. Waiver. The Borrower hereby waives presentment, demand,
------
protest or notice of any kind in connection with this Note.
SECTION 6. Governing Law. THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE
-------------
WITH AND BE GOVERNED BY
EXHIBIT B-3
Page 3
THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF
LAWS.
MJD COMMUNICATIONS, INC.
By______________________________________
Name:
Title:
EXHIBIT B-4
-----------
FORM OF RF NOTE
---------------
_________$ New York, New York
__________ __, ____
FOR VALUE RECEIVED, MJD COMMUNICATIONS, INC., a Delaware corporation
(the "Borrower"), hereby promises to pay to the order of _______________________
(the "Lender"), in lawful money of the United States of America in immediately
available funds, at the Payment Office (as defined in the Agreement referred to
below) initially located at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on the
AF/RF Maturity Date (as defined in the Agreement) the principal sum of
_________________ DOLLARS ($_________) or, if less, the then unpaid principal
amount of all RF Loans (as defined in the Agreement) made by the Lender pursuant
to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the RF Notes referred to in the Credit Agreement,
dated as of March 30, 1998, among the Borrower, the lenders from time to time
party thereto (including the Lender), NationsBank of Texas, N.A., as Syndication
Agent, and Bankers Trust Company, as Administrative Agent (as amended, amended
and restated, modified or supplemented from time to time, the "Agreement"), and
is entitled to the benefits thereof and of the other Credit Documents (as
defined in the Agreement). This Note is secured pursuant to the Pledge
Agreement (as defined in the Agreement). As provided in the Agreement, this
Note is subject to voluntary prepayment and mandatory repayment prior to the
AF/RF Maturity Date, in whole or in part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
EXHIBIT B-4
Page 2
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
MJD COMMUNICATIONS, INC.
By_____________________________________________
Title:
EXHIBIT B-5
-----------
FORM OF AF NOTE
---------------
$ _________ New York, New York
__________ __, ____
FOR VALUE RECEIVED, MJD COMMUNICATIONS, INC., a Delaware corporation
(the "Borrower"), hereby promises to pay to the order of _______________________
(the "Lender"), in lawful money of the United States of America in immediately
available funds, at the Payment Office (as defined in the Agreement referred to
below) initially located at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on the
AF/RF Maturity Date (as defined in the Agreement) the principal sum of
_________________ DOLLARS ($_________) or, if less, the then unpaid principal
amount of all AF Loans (as defined in the Agreement) made by the Lender pursuant
to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the AF Notes referred to in the Credit Agreement,
dated as of March 30, 1998, among the Borrower, the lenders from time to time
party thereto (including the Lender), NationsBank of Texas, N.A., as Syndication
Agent, and Bankers Trust Company, as Administrative Agent (as amended, amended
and restated, modified or supplemented from time to time, the "Agreement"), and
is entitled to the benefits thereof and of the other Credit Documents (as
defined in the Agreement). This Note is secured pursuant to the Pledge
Agreement (as defined in the Agreement). As provided in the Agreement, this
Note is subject to voluntary prepayment and mandatory repayment prior to the
AF/RF Maturity Date, in whole or in part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may be
declared to be due and payable in the manner and with the effect provided in the
Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
EXHIBIT B-5
Page 2
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
MJD COMMUNICATIONS, INC.
By_____________________________________
Title:
EXHIBIT C
---------
FORM OF SECTION 3.04 CERTIFICATE
--------------------------------
Reference is hereby made to the Credit Agreement, dated as of March
30, 1998, among MJD Communications, Inc. ("MJD"), various lenders from time to
time party thereto, NationsBank of Texas, N.A., as Syndication Agent, and
Bankers Trust Company, as Administrative Agent (as amended, amended and
restated, modified or supplemented from time to time, the "Credit Agreement").
Capitalized terms used herein that are not defined herein shall have the
meanings ascribed to them in the Credit Agreement. Pursuant to the provisions of
Section 3.04(b)(ii) of the Credit Agreement, the undersigned (the "Lender")
hereby represents and warrants that:
1. The Lender is not a "bank" for purposes of Section 881(c)(3)(A) of
the Internal Revenue Code of 1986, as amended (the "Code").
2. The Lender is not subject to regulatory or other legal
requirements as a "bank" in any jurisdiction and has not been treated as a
"bank" for purposes of any tax, securities law or other filing or
submission made to any governmental authority, any application made to a
rating agency or qualification for any exemption from tax, securities law
or other legal requirements.
3. The Lender meets all of the requirements under Code Section 871(h)
or 881(c) to be eligible for a complete exemption from withholding of
United States Taxes on interest payments made to it under the Credit
Agreement.
4. The Lender shall promptly notify MJD and the Administrative Agent
if any of the representations and warranties made herein are no longer true
and correct.
[NAME OF LENDER]
By________________________________
Title:
Date: _______________, ____
March 30, 1998
To the Administrative Agent,
the Syndication Agent, the
Collateral Agent and each of
the Lenders party to the
Credit Agreement referred to below
Ladies and Gentlemen:
We have acted as special New York counsel to MJD Communications, Inc., a
Delaware corporation (the "Borrower"), and each Subsidiary of the Borrower party
to any Document referred to below (collectively with the Borrower, the "Credit
Parties"), in connection with the execution and delivery of the Credit
Agreement, dated as of March 30, 1998 (the "Credit Agreement"), among the
Borrower, the financial institutions party thereto (the "Lenders"), NationsBank
of Texas, N.A., as Syndication Agent, and Bankers Trust Company, as
Administrative Agent, and the transactions contemplated thereby. This opinion is
delivered to you pursuant to Section 4.01(b) of the Credit Agreement. Unless
otherwise indicated, capitalized terms used herein but not otherwise defined
herein shall have the respective meanings set forth in the Credit Agreement.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of such documents as we
have deemed necessary or appropriate as a basis for the opinions set forth
herein, including, without limitation, the following (collectively, the
"Documents"): (a) the Credit Agreement, (b) the Notes, (c) the Subsidiary
Guaranty, (d) the Pledge Agreement, (e) the Applicable Acquisition Documents,
(f) the Capital Contribution Agreement and (g) such other public
Page 2
and corporate documents and records as we deem necessary or appropriate in
connection with this opinion.
In our examination we have assumed (a) the genuineness of all signatures
(other than as to any Credit Party), (b) the authenticity of all documents
submitted to us as originals, (c) the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies, (d) all parties to the Documents,
other than the Credit Parties, have the requisite power and authority to
execute, deliver and perform such Documents, (e) such Documents have been duly
authorized by all requisite action of the parties thereto (other than the Credit
Parties), and have been duly executed and delivered by such parties, and (f) the
Documents are the legal, valid, binding and enforceable obligations of the
parties thereto (other than the Credit Parties). As to questions of fact not
independently verified by us we have relied, to the extent we deemed
appropriate, upon representations and certificates of officers of each Credit
Party, public officials and other appropriate persons.
Whenever a statement herein is qualified by "known to us", "to our
knowledge" or a similar phrase, it is intended to indicate that, during the
course of our representation of the Credit Parties, no information that would
give us current actual knowledge of the inaccuracy of such statement has come to
the attention of those attorneys in this firm who have rendered legal services
in connection with the transaction described in the introductory paragraph
hereof. However, except as otherwise expressly indicated, we have not undertaken
any independent investigation to determine the accuracy of such statement, and
any limited inquiry undertaken by us during the preparation of this opinion
should not be regarded as such an investigation; no inference as to our
knowledge of any matters bearing on the accuracy of any such statement should be
drawn from the fact of our representation of any of the Credit Parties. We note
that Xxxxxx X. Xxxxxxxxx, a member of this Firm, is a director and an indirect
shareholder of the Borrower; however, Xx. Xxxxxxxxx has not rendered any legal
services to the Borrower in connection with the transaction described in the
introductory paragraph hereof and none of his knowledge regarding the Borrower
may be imputed to any person who did render such services.
Based upon the foregoing, we are of the opinion that:
1. Each Credit Party (i) is a duly organized and validly existing
corporation in good standing under the laws of the jurisdiction of its
organization, (ii) has the corporate power and authority to own its property and
assets and to transact the
Page 3
business in which it is engaged and presently proposes to engage and (iii) is
duly qualified and is authorized to do business and is in good standing in all
jurisdictions where the failure to be so qualified could reasonably be expected
to have a Material Adverse Effect.
2. Each Credit Party has the corporate power and authority to
execute, deliver and carry out the terms and provisions of each of the Documents
to which it is a party and has taken all necessary corporate action to authorize
the execution, delivery and performance by it of each of the Documents to which
it is a party. Each Credit Party has duly executed and delivered each Document
to which it is a party and each such Document constitutes the legal, valid and
binding obligations of such Credit Party enforceable against such Credit Party
in accordance with its terms.
3. Neither the execution, delivery or performance by any Credit Party
of the Documents to which it is a party, nor compliance by them with the terms
and provisions thereof, nor the consummation of the transactions contemplated
therein, (i) will contravene any applicable provision of any law, statute, rule
or regulation (including, without limitation, Regulations G, T, U and X of the
Board of Governors of the Federal Reserve System) or any order, writ, injunction
or decree of any court or governmental instrumentality known to us to be
applicable to such Credit Party, (ii) will conflict or be inconsistent with or
result in any breach of, in each case in any material respect, any of the terms,
covenants, conditions or provisions of, or constitute a default under, or (other
than pursuant to the Pledge Agreement) result in the creation or imposition of
(or the obligation to create or impose) any Lien upon any of the property or
assets of the Borrower or any of its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, debt agreement, debt instrument or other
material contract known to us to which the Borrower or any of its Subsidiaries
is a party or by which it or any of its property or assets are bound or to which
it may be subject or (iii) will violate any provision of the certificate of
incorporation, by-laws or equivalent organizational documents of such Credit
Party.
4. There are no actions, suits or proceedings pending or, to our
knowledge, threatened in writing, against the Borrower or any of its
Subsidiaries (i) with respect to the Transaction or any Document or (ii) that if
adversely determined, would reasonably be expected to have a Material Adverse
Effect.
5. No order, consent, approval, license, authorization, or validation
of, or filing, recording or registration with, or exemption by, any foreign or
domestic
Page 4
governmental or public body or authority (other than the Federal Communications
Commission and any applicable state public utility or similar commission ("PUC")
as to which we express no opinion), or any subdivision thereof, or any other
third party (except as have been obtained or made on or prior to the date hereof
and remain in full force and effect on the date hereof), is required to
authorize, or is required in connection with, (i) the execution, delivery and
performance of any Document or (ii) the legality, validity, binding effect or
enforceability of any such Document.
6. No Credit Party is an "investment company" or, to our knowledge,
a company "controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.
7. No Credit Party is a "holding company," or, to our knowledge, a
"subsidiary company" of a "holding company," or , to our knowledge, an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
8. Based solely on a review of the stock ledgers of each of the issuers
of equity securities listed on Annex B of the Pledge Agreement, each Credit
Party is the record owner of all of the Stock (as such term is defined in the
Pledge Agreement) listed under its name on Annex B to the Pledge Agreement. All
such Stock has been duly authorized and validly issued, is fully paid and non-
assessable, and is free of preemptive rights (however, we express no opinion as
to any preemptive rights that may have been granted by any Person other than a
Credit Party). After giving effect to the delivery to the Collateral Agent of
the Pledged Stock and Pledged Notes (as each such term is defined in the Pledge
Agreement), the security interest created in favor of the Collateral Agent under
the Pledge Agreement constitutes a valid and enforceable perfected security
interest in such Pledged Stock and Pledged Notes (and the proceeds thereof) in
favor of the Collateral Agent for the benefit of the Secured Creditors, subject
to no other security interest. No other filings or recordings are required in
order to perfect (or maintain the perfection of) the security interest in the
Pledged Stock and Pledged Notes created under the Pledge Agreement.
Page 5
The opinions set forth above are subject to the following qualifications
and exceptions:
(a) Our opinions set forth above are subject to the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or other law affecting creditors' rights generally.
(b) Our opinions are subject to the effect of general principles of
equity, including (without limitation) concepts of materiality, reasonableness,
good faith and fair dealing, election of remedies, estoppel and other similar
doctrines affecting the enforceability of agreements generally (regardless of
whether considered in a proceeding in equity or at law).
(c) The availability of specific performance, injunctive relief and
other equitable remedies is subject to the discretion of the tribunal before
which any proceeding therefor may be brought.
(d) Our opinions in paragraph 8 in respect of the security interests
created pursuant to the Pledge Agreement are subject to the effect of Section
9-306 of the UCC.
(e) We express no opinion as to the enforceability of any provision
contained in any Document allowing any person to set off and apply any party's
deposits with such Person against such party's obligations under the Documents
without prior notice having been given to such party.
(f) We express no opinion as to the enforceability of (i) choice of law
or forum selection provisions, (ii) any waiver by the parties of any
constitutional rights or remedies, and (iii) any grants to the Administrative
Agent, the Collateral Agent or the Lenders of powers of attorney.
(g) Our opinions in paragraph 3 hereof, insofar as they relate to the
enforceability of indemnification provisions set forth in the Credit Documents,
are subject to the effect of federal and state securities laws and public policy
relating thereto. In addition, certain cases in the Federal District Courts have
called into question the enforceability of private contractual agreements
allocating financial responsibility under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 ("CERCLA"), as between parties
who are potentially responsible parties under CERCLA,
Page 6
and the reasoning in such cases could be utilized by parties attempting to avoid
indemnity under both CERCLA and state environmental statutes which may contain
similar language respecting indemnity agreements.
(h) We express no opinion with respect to the effect of noncompliance
by the Lenders with any state or federal laws or regulations applicable to the
Lenders in connection with the transactions described in the Documents.
(i) We express no opinion as to the enforceability of any provision of
the Documents which purports to excuse the Administrative Agent, the Collateral
Agent or the Lenders from liability for, or require the Credit Parties to
indemnify the Administrative Agent, the Collateral Agent or the Lenders against,
the Administrative Agent's, the Collateral Agent's or the Lenders' gross
negligence or willful misconduct, as the case may be.
(j) The enforceability of provisions in the Documents to the effect
that terms may not be waived or modified except in writing may be limited under
certain circumstances.
(k) The rights of debtors, guarantors and other secured parties to
receive notices under Sections 9-504 and 9-505 of the UCC may not be waived
prior to default, the failure to comply with such notice requirements may bar or
limit the recovery of any deficiency remaining after the retention or sale of
repossessed collateral, and a secured party may be required to obtain, after
appropriate notice and hearing, a judgment or decree of a court of competent
jurisdiction permitting the secured party to enforce its rights to take
possession and dispose of any of its collateral.
(l) The rights of debtors, guarantors and other secured parties to
redeem collateral under Section 9-506 of the UCC may not be waived prior to
default.
(m) The duties to exercise reasonable care in the custody and
preservation of collateral in a secured party's possession and to deal with and
dispose of collateral in a commercially reasonable manner as required by the UCC
or other applicable law may not be disclaimed by agreement, waived or released
prior to a default.
(n) Notwithstanding certain language of the Documents relating to the
recovery of expenses, attorneys fees and legal expenses, the Administrative
Agent, the Collateral Agent and the Lenders may be limited to recovery of any
reasonable expenses
Page 7
or attorney's fees and legal expenses with respect to the enforcement of the
Documents or the liens and security interests created thereunder.
(o) We express no opinion as to any provisions in the Documents
(i) deeming sales of, or otherwise dealing with, pledged collateral to have been
made in a commercially reasonable manner; or (ii) restoring the Administrative
Agent, the Collateral Agent or any secured party to its original position after
the Administrative Agent or the Collateral Agent has commenced any proceeding
and such proceeding has been discontinued or abandoned for any reason or shall
have been determined adversely to the Administrative Agent or the Collateral
Agent.
(p) Except as expressly provided in paragraph 8 we express no opinion
with respect to a security interest in money, securities or instruments.
(q) With respect to the security interests created under the Pledge
Agreement, we have assumed with your permission and without independent
investigation that from and after the date of this opinion and at all relevant
times hereafter:
(i) all the Pledged Stock and the Pledged Notes are and
will remain in the possession of the Collateral Agent in the
State of New York;
(ii) the Pledgors had and have rights in or title to the
Pledged Stock and the Pledged Notes (and we do not express any
opinion herein as to any of such rights or title);
(iii) none of the Pledged Stock or the Pledged Notes
consists of uncertificated securities;
(iv) the Secured Creditors (as defined in the Pledge
Agreement) do not have any knowledge of any adverse claim in
respect of the Pledged Stock or the Pledged Notes;
(v) that the laws of the State of New York exclusively
govern the pledge of the Pledged Stock and the Pledged Notes
and the realization of any rights thereto under the Pledge
Agreement regardless of the jurisdiction of incorporation or
organization of any issuer of such Pledged Stock or the
Pledged Notes; and
Page 8
(vi) we have not been requested to render and, with your
permission, we express no opinion as to the applicability to
the obligations of the Borrower under the Credit Agreement of
Section 548 of the Bankruptcy Code and Article 10 of the New
York Debtor & Creditor Law relating to fraudulent transfers
and obligations. We understand, without independent
verification, that , to the extent they have deemed necessary
in the context of the proposed transaction, the Lenders have
satisfied themselves on the basis of, among other things, the
financial information furnished to the Lenders and their
knowledge of the credit facilities available to the Borrower,
that neither the Borrower nor any of its Subsidiaries is
insolvent and that neither the Borrower nor any of its
Subsidiaries will be rendered insolvent by the transactions
contemplated by the Credit Agreement and the other Credit
Documents and that, after giving effect to such transactions,
neither the Borrower nor any of its Subsidiaries will be left
with unreasonably small capital with which to engage in its
anticipated business and that neither the Borrower nor any of
its Subsidiaries will have intended to incur, or will have
believed it has incurred, debts beyond its ability to pay as
such debts mature.
Notwithstanding the qualifications and exceptions set forth in clauses
(c), (e) and (f) above, such qualifications and exceptions do not render the
remedies under the Credit Documents inadequate for the practical realization of
the benefits intended to be provided under the Credit Documents.
We are members of the Bar of the State of New York, and we do not hold
ourselves out as being conversant with, and express no opinion as to, the laws
of any jurisdiction other than those of the United States of America, the State
of New York and the general corporate law of the State of Delaware.
This opinion is being furnished only to the addresses and is solely for
their benefit and the benefit of their permitted participants and assigns in
connection with the above transaction. This opinion may not be relied upon for
any other purpose, or relied upon by any other person, firm or corporation for
any purpose, without our prior written consent.
Very truly yours,
March 27, 1998
SJG:EFL
To: The Administrative Agent, the Syndication
Agent and the Lenders party to the Credit
Agreement referred to below
Re: Credit Agreement, dated as of March 27, 1998 (the "Credit
Agreement"), among MJD Communications, Inc. (the "Borrower"), the
lenders from time to time party thereto (each, a "Lender" and,
collectively, the "Lenders"), NationsBank of Texas, N.A., as
Syndication Agent, and Bankers Trust Company, as Administrative
---------------------------------------------------
Agent
-----
Ladies and Gentlemen:
We have acted as special counsel to the Lenders party to the Credit
Agreement in connection with the execution and delivery of the Credit Agreement.
This opinion is delivered to you pursuant to Section 4.01(b) of the Credit
Agreement. Terms used herein which are defined in the Credit Agreement shall
have the respective meanings set forth in the Credit Agreement unless otherwise
defined herein.
In connection with this opinion, we have examined the originals, or
certified, conformed or reproduction copies, of all records, agreements,
instruments and documents as we have deemed relevant or necessary as the basis
for the opinions hereinafter expressed. In stating our opinion, we have assumed
the genuineness of all signatures on original or certified copies, the
authenticity of documents submitted to us
as originals and the conformity to original or certified copies of all copies
submitted to us as certified or reproduction copies.
We have also assumed, for purposes of the opinions expressed herein,
that the parties to the Credit Agreement have the corporate power and authority
to enter into and perform the Credit Agreement and that the Credit Agreement has
been duly authorized, executed and delivered by each such party.
Based upon the foregoing, and subject to the limitations set forth
herein, we are of the opinion that the Credit Agreement constitutes the valid
and binding obligation of each Credit Party enforceable in accordance with its
terms, except to the extent that enforcement may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws affecting
creditors' rights generally and by equity principles (regardless of whether
enforcement is sought in equity or at law).
We have not been requested to render and, with your permission, we
express no opinion as to the applicability to the obligations of the Borrower
under the Credit Agreement of Section 548 of the Bankruptcy Code and Article 10
of the New York Debtor & Creditor Law relating to fraudulent transfers and
obligations. We understand, without independent verification, that, to the
extent they have deemed necessary in the context of the proposed transaction,
the Lenders have satisfied themselves on the basis of, among other things, the
financial information furnished to the Lenders and their knowledge of the credit
facilities available to the Borrower, that neither the Borrower nor any of its
Subsidiaries is insolvent and that neither the Borrower nor any of its
Subsidiaries will be rendered insolvent by the transactions contemplated by the
Credit Agreement and the other Credit Documents and that, after giving effect to
such transactions, neither the Borrower nor any of its Subsidiaries will be left
with unreasonably small capital with which to engage in its anticipated business
and that neither the Borrower nor any of its Subsidiaries will have intended to
incur, or will have believed it has incurred, debts beyond its ability to pay as
such debts mature.
This opinion is limited to the federal law of the United States of
America and the law of the State of New York.
Very truly yours,
-2-
EXHIBIT E
---------
FORM OF OFFICER'S CERTIFICATE
-----------------------------
I, the undersigned, [President][Vice President] of MJD Communications,
Inc., a corporation organized and existing under the laws of the State of
Delaware (the "Company"), do hereby certify on behalf of the Company that:
1. This Certificate is furnished pursuant to the Credit Agreement,
dated as of March 30, 1998, among the Company, the lenders from time to time
party thereto, NationsBank of Texas, N.A., as Syndication Agent, and Bankers
Trust Company, as Administrative Agent (such Credit Agreement, as in effect on
the date of this Certificate, being herein called the "Credit Agreement").
Unless otherwise defined herein, capitalized terms used in this Certificate
shall have the meanings set forth in the Credit Agreement.
2. The following named individuals are elected or appointed officers
of the respective Credit Party set forth above such individuals' names below,
each holds the office of such Credit Party set forth opposite his name and has
held such office since ______ ___, 19__./1/ The signature written opposite the
name and title of each such officer is his genuine signature.
[NAME OF CREDIT PARTY]
Name/2/ Office Signature
---------- ----------- ------------
---------- ----------- ------------
---------- ----------- ------------
3. Attached hereto as Exhibit A is a certified copy of the
Certificate of Incorporation, Certificate of Formation or equivalent
organizational document of each Credit Party, as filed in the Office of the
Secretary of State of the State of such Credit
_______________
/1/ Insert a date prior to the time of any action relating to the Credit
Documents.
/2/ Include name, office and signature of each officer who will sign any Credit
Document on behalf of such Credit Party, including, in the case of the Company,
the officer who will sign the certification at the end of this Certificate.
EXHIBIT E
Page 2
Party's organization, together with all amendments thereto adopted through the
date hereof.
4. Attached hereto as Exhibit B are true and correct copies of the
By-Laws, partnership agreement, limited liability company agreement or
equivalent organizational document of each Credit Party which are in full force
and effect on the date hereof, together with all amendments thereto adopted
through the date hereof and which, in the case of all By-Laws, were duly
adopted.
5. Attached hereto as Exhibit C are true and correct copies of the
resolutions of each Credit Party which were duly adopted on __________, 19__ [by
unanimous written consent of the Board of Directors of each Credit Party] [by a
meeting of the Board of Directors of each Credit Party at which a quorum was
present and acting throughout], and said resolutions have not been rescinded,
amended or modified. Except as attached hereto as Exhibit C, no resolutions
have been adopted by the Board of Directors of any Credit Party which deal with
the execution, delivery or performance of any of the Credit Documents to which
such Credit Party is party.
6. On the date hereof, all of the applicable conditions set forth in
Sections 4.01(e), (f), (g) and (m), 4.02(a), (b) and (e) and 4.03(b) of the
Credit Agreement have been satisfied.
7. Attached hereto as Exhibit D are true and correct copies of all
Plans, employee benefit plans and other documents referred to in Section
4.01(d)(i) of the Credit Agreement.
8. Attached hereto as Exhibit E are true and correct copies of all
collective bargaining agreements and other similar agreements referred to in
Section 4.01(d)(ii) of the Credit Agreement.
9. Attached hereto as Exhibit F are true and correct copies of all
agreements governing the terms and relative rights of the capital stock of the
Company or any Subsidiary referred to in Section 4.01(d)(iii) of the Credit
Agreement.
10. Attached hereto as Exhibit G are true and correct copies of all
material management agreements referred to in Section 4.01(d)(iv) of the Credit
Agreement.
11. Attached hereto as Exhibit H are true and correct copies of all
material employment agreements referred to in Section 4.01(d)(v) of the Credit
Agreement.
EXHIBIT E
Page 3
12. Attached hereto as Exhibit I are true and correct copies of all
tax sharing agreements, tax allocation and other similar agreements referred to
in Section 4.01(d)(vi) of the Credit Agreement.
13. Attached hereto as Exhibit J is a true and correct copy of the
Capital Contribution Agreement.
14. Attached hereto as Exhibit K is a true and correct copy of the
documentation delivered in connection with the Refinancing pursuant to Section
4.01(m) of the Credit Agreement.
15. Attached hereto as Exhibit L are true and correct copies of the
Applicable Acquisition Documents.
16. On the date hereof, the representations and warranties contained
in the Credit Agreement or in the other Credit Documents are true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date hereof, both before and after giving effect
to the incurrence of Loans on the date hereof and the application of the
proceeds thereof, unless stated to relate to a specific earlier date, in which
case such representations and warranties were true and correct in all material
respects as of such earlier date.
17. On the date hereof, no Default or Event of Default has occurred
and is continuing or would result from the making of any Loans on the date
hereof or from the application of the proceeds thereof.
18. There is no proceeding for the dissolution or liquidation of any
Credit Party or threatening its existence.
IN WITNESS WHEREOF, I have hereunto set my hand this __ day of March,
1998.
MJD COMMUNICATIONS, INC.
By_______________________
Name:
Title:
EXHIBIT E
Page 4
EXHIBIT E
Page 5
I, the undersigned, [Secretary/Assistant Secretary] of the Company, do
hereby certify that:
1. [Name of Person making above certifications] is the duly elected
and qualified [President/Vice President] of the Company and the signature above
is his genuine signature.
2. The certifications made by [name of Person making above
certifications] on behalf of the Company in Items 2, 3, 4, 5 and 18 above are
true and correct.
IN WITNESS WHEREOF, I have hereunto set my hand this _______ day of
March, 1998.
MJD COMMUNICATIONS, INC.
By__________________________
Name:
Title:
EXHIBIT F CONFORMED
AS EXECUTED
SUBSIDIARY GUARANTY
-------------------
SUBSIDIARY GUARANTY, dated as of March 30, 1998 (as amended, amended
and restated, modified or supplemented from time to time, this "Guaranty"), made
by each of the undersigned (each, a "Guarantor" and together with any other
entity that becomes a party hereto pursuant to Section 26 hereof, collectively,
the "Guarantors"). Except as otherwise defined herein, terms used herein and
defined in the Credit Agreement (as defined below) shall be used herein as
therein defined.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS MJD Communications, Inc. (the "Borrower"), the lenders from
time to time party thereto (the "Lenders"), Nationsbank of Texas, N.A., as
Syndication Agent (the "Syndication Agent"), and Bankers Trust Company, as
Administrative Agent (the "Administrative Agent", and together with the Lenders,
the Syndication Agent and the Collateral Agent, the "Lender Creditors"), have
entered into a Credit Agreement, dated as of March 30, 1998 (as amended, amended
and restated, modified or supplemented from time to time, the "Credit
Agreement"), providing for the making of Loans as contemplated therein;
WHEREAS, the Borrower may from time to time be party to one or more
Interest Rate Agreements (each such Interest Rate Agreement with an Interest
Rate Creditor (as defined below), a "Secured Interest Rate Agreement") with
Bankers Trust Company, in its individual capacity ("BTCo"), any Lender or a
syndicate of financial institutions organized by BTCo or such Lender or an
affiliate of BTCo or such Lender (even if BTCo or any such Lender ceases to be a
Lender under the Credit Agreement for any reason), and any institution that
participates therein, and in each case their subsequent assigns (collectively,
the "Interest Rate Creditors," and together with the Lender Creditors,
collectively, the "Creditors");
WHEREAS, each Guarantor is a wholly-owned direct or indirect
Subsidiary of the Borrower;
WHEREAS, it is a condition to the making of Loans under the Credit
Agreement that each Guarantor shall have executed and delivered this Guaranty;
and
WHEREAS, each Guarantor will obtain benefits from the incurrence of
Loans by the Borrower under the Credit Agreement and the entering into of
Secured Interest Rate Agreements and, accordingly, desires to execute this
Guaranty in order to satisfy the conditions described in the preceding paragraph
and to induce the Lenders to make Loans to the Borrower and Interest Rate
Creditors to enter into Secured Interest Rate Agreements;
NOW, THEREFORE, in consideration of the foregoing and other benefits
accruing to each Guarantor, the receipt and sufficiency of which are hereby
acknowledged, each Guarantor hereby makes the following representations and
warranties to the Creditors and hereby covenants and agrees with each Creditor
as follows:
1. Each Guarantor irrevocably and unconditionally, and jointly and
severally, guarantees:
(i) to the Lender Creditors, the full and prompt payment when due
(whether at the stated maturity, by acceleration or otherwise) of (a) the
principal of and interest on the Notes issued by, and the Loans made to,
the Borrower under the Credit Agreement and (b) all other obligations
(including obligations which, but for any automatic stay under Section
362(a) of the Bankruptcy Code, would become due) and liabilities owing by
the Borrower to the Lender Creditors under the Credit Agreement and the
other Credit Documents (including, without limitation, indemnities, Fees
and interest thereon) now existing or hereafter incurred under, arising out
of or in connection with the Credit Agreement or any other Credit Document
and the due performance and compliance with the terms of the Credit
Documents by the Borrower (all such principal, interest, liabilities and
obligations, the "Credit Document Obligations"); and
(ii) to the Interest Rate Creditors, the full and prompt payment when
due (whether at the stated maturity, by acceleration or otherwise) of all
obligations (including obligations which, but for any automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities
owing by the Borrower under any Secured Interest Rate Agreement, whether
now in existence or hereafter arising, and the due performance and
compliance by the Borrower with all terms, conditions and agreements
contained therein (all such obligations and liabilities, the "Interest Rate
Obligations", and the Interest Rate Obligations together with the Credit
Document Obligations, collectively, the "Guaranteed Obligations").
-2-
Each Guarantor understands, agrees and confirms that the Creditors may enforce
this Guaranty up to the full amount of the Guaranteed Obligations against each
Guarantor without proceeding against the Borrower, any other Guarantor or any
security for the Guaranteed Obligations, or under any other guaranty covering
all or a portion of the Guaranteed Obligations. All payments by each Guarantor
under this Guaranty shall be made on the same basis as payments by the Borrower
under Sections 3.03 and 3.04 of the Credit Agreement.
2. Additionally, each Guarantor, jointly and severally,
unconditionally and irrevocably, guarantees the payment of any and all
Guaranteed Obligations to the Creditors whether or not due or payable by the
Borrower upon the occurrence in respect of the Borrower of any of the events
specified in Section 8.05 of the Credit Agreement, and unconditionally and
irrevocably, jointly and severally, promises to pay such Guaranteed Obligations
to the Creditors, on demand, in lawful money of the United States of America.
3. The liability of each Guarantor hereunder is exclusive and
independent of any security for or other guaranty of the indebtedness of the
Borrower whether executed by such Guarantor, any other Guarantor, any other
guarantor or by any other party, and the liability of each Guarantor hereunder
shall not be affected or impaired by (a) any direction as to application of
payment by the Borrower or by any other party, (b) any other continuing or other
guaranty, undertaking or maximum liability of a guarantor or of any other party
as to the indebtedness of the Borrower, (c) any payment on or in reduction of
any such other guaranty or undertaking, (d) any dissolution, termination or
increase, decrease or change in personnel by the Borrower or (e) any payment
made to any Creditor on the indebtedness which any Creditor repays to the
Borrower pursuant to court order in any bankruptcy, reorganization, arrangement,
moratorium or other debtor relief proceeding, and each Guarantor waives any
right to the deferral or modification of its obligations hereunder by reason of
any such proceeding.
4. The obligations of each Guarantor hereunder are independent of the
obligations of any other Guarantor, any other guarantor or the Borrower, and a
separate action or actions may be brought and prosecuted against each Guarantor
whether or not action is brought against any other Guarantor, any other
guarantor or the Borrower and whether or not any other Guarantor, any other
guarantor of the Borrower or the Borrower be joined in any such action or
actions.
5. Each Guarantor hereby waives notice of acceptance of this Guaranty
and notice of any liability to which it may apply, and waives promptness,
diligence, presentment, demand of payment, protest, notice of dishonor or
nonpayment of any such liabilities, suit or taking of other action by the
Administrative Agent or any other Creditor
-3-
against, and any other notice to, any party liable thereon (including such
Guarantor or any other guarantor of the Borrower).
6. Any Creditor may at any time and from time to time without the
consent of, or notice to, any Guarantor, without incurring responsibility to
such Guarantor, without impairing or releasing the obligations of such Guarantor
hereunder, upon or without any terms or conditions and in whole or in part:
(i) change the manner, place or terms of payment of, and/or change
or extend the time of payment of, renew or alter, any of the Guaranteed
Obligations, any security therefor, or any liability incurred directly or
indirectly in respect thereof, and the guaranty herein made shall apply to
the Guaranteed Obligations as so changed, extended, renewed or altered;
(ii) sell, exchange, release, surrender, realize upon or otherwise
deal with in any manner and in any order any property by whomsoever at any
time pledged or mortgaged to secure, or howsoever securing, the Guaranteed
Obligations or any liabilities (including any of those hereunder) incurred
directly or indirectly in respect thereof or hereof, and/or any offset
thereagainst;
(iii) exercise or refrain from exercising any rights against the
Borrower, any other guarantor or others or otherwise act or refrain from
acting;
(iv) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Borrower to creditors of the Borrower
(other than the Creditors);
(v) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Creditors regardless of
what liabilities of the Borrower remain unpaid;
(vi) consent to or waive any breach of, or any act, omission or
default under, any of the Credit Documents, the Secured Interest Rate
Agreements or any of the instruments or agreements referred to therein, or
otherwise amend, modify or supplement any of the Credit Documents, the
Secured Interest Rate Agreements or any of such other instruments or
agreements; and/or
-4-
(vii) act or fail to act in any manner referred to in this Guaranty
which may deprive such Guarantor of its right to subrogation against the
Borrower to recover full indemnity for any payments made pursuant to this
Guaranty.
7. No invalidity, irregularity or unenforceability of all or any part
of the Guaranteed Obligations or of any security therefor shall affect, impair
or be a defense to this Guaranty, and this Guaranty shall be primary, absolute
and unconditional notwithstanding the occurrence of any event or the existence
of any other circumstances which might constitute a legal or equitable discharge
of a surety or guarantor except payment in full of the Guaranteed Obligations.
8. This Guaranty is a continuing one and all liabilities to which it
applies or may apply under the terms hereof shall be conclusively presumed to
have been created in reliance hereon. No failure or delay on the part of any
Creditor in exercising any right, power or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
expressly specified are cumulative and not exclusive of any rights or remedies
which any Creditor would otherwise have. No notice to or demand on any
Guarantor in any case shall entitle such Guarantor to any other further notice
or demand in similar or other circumstances or constitute a waiver of the rights
of any Creditor to any other or further action in any circumstances without
notice or demand. It is not necessary for any Creditor to inquire into the
capacity or powers of the Borrower or any of its Subsidiaries or the officers,
directors, partners or agents acting or purporting to act on its behalf, and any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.
9. Any indebtedness of the Borrower now or hereafter held by any
Guarantor is hereby subordinated to the indebtedness of the Borrower to the
Creditors; and such indebtedness of the Borrower to any Guarantor, if the
Collateral Agent so requests after an Event of Default (as hereinafter defined)
has occurred, shall be collected, enforced and received by such Guarantor as
trustee for the Creditors and be paid over to the Creditors on account of the
indebtedness of the Borrower to the Creditors, but without affecting or
impairing in any manner the liability of such Guarantor under the other
provisions of this Guaranty. Prior to the transfer by any Guarantor of any note
or negotiable instrument evidencing any indebtedness of the Borrower to such
Guarantor, such Guarantor shall xxxx such note or negotiable instrument with a
legend that the same is subject to this subordination.
10. (a) Each Guarantor hereby waives any right (except as shall be
required by applicable statute and cannot be waived) to require the Creditors
to: (i)
-5-
proceed against the Borrower, any other Guarantor, any other guarantor of the
Borrower or any other party; (ii) proceed against or exhaust any security held
from the Borrower, any other Guarantor, any other guarantor of the Borrower or
any other party; or (iii) pursue any other remedy in the Creditors' power
whatsoever. Each Guarantor waives any defense based on or arising out of any
defense of the Borrower, any other Guarantor, any other guarantor of the
Borrower or any other party other than payment in full of the Guaranteed
Obligations, including, without limitation, any defense based on or arising out
of the disability of the Borrower, any other Guarantor, any other guarantor of
the Borrower or any other party, or the unenforceability of the Guaranteed
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of the Borrower other than payment in full of the Guaranteed
Obligations. The Creditors may, at their election, foreclose on any security
held by the Administrative Agent, the Collateral Agent or the other Creditors by
one or more judicial or nonjudicial sales, whether or not every aspect of any
such sale is commercially reasonable (to the extent such sale is permitted by
applicable law), or exercise any other right or remedy the Creditors may have
against the Borrower or any other party, or any security, without affecting or
impairing in any way the liability of any Guarantor hereunder, except to the
extent the Guaranteed Obligations have been paid in full. Each Guarantor waives
any defense arising out of any such election by the Administrative Agent, the
Collateral Agent and the other Creditors, even though such election may operate
to impair or extinguish any right of reimbursement or subrogation or other right
or remedy of such Guarantor against the Borrower, any other Guarantor or any
other party or any security.
(b) Each Guarantor waives all presentments, demands for performance,
protests and notices, including, without limitation, notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional
Indebtedness. Each Guarantor assumes all responsibility for being and keeping
itself informed of the Borrower's financial condition and assets, and of all
other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which any Guarantor
assumes and incurs hereunder, and agrees that the Creditors shall have no duty
to advise such Guarantor of information known to them regarding such
circumstances or risks.
(c) Until such time as the Guaranteed Obligations have been paid in
full in cash or Cash Equivalents, each Guarantor hereby waives all rights of
subrogation which it may at any time otherwise have as a result of this Guaranty
(whether contractual, under Section 509 of the Bankruptcy Code, or otherwise) to
the claims of the Creditors against the Borrower, any other Guarantor or any
other guarantor of the Guaranteed Obligations and all contractual, statutory or
common law rights of reimbursement, contribution or
-6-
indemnity from the Borrower or any other Guarantor which it may at any time
otherwise have as a result of this Guaranty.
11. If and to the extent that any Guarantor makes any payment to any
Creditor or to any other Person pursuant to or in respect of this Guaranty, any
claim which such Guarantor may have against the Borrower by reason thereof shall
be subject and subordinate to the prior payment in full of the Guaranteed
Obligations to each Creditor. Prior to the transfer by any Guarantor of any
note or negotiable instrument evidencing any indebtedness of the Borrower to
such Guarantor, such Guarantor shall xxxx such note or negotiable instrument
with a legend that the same is subject to this subordination.
12. Each Guarantor covenants and agrees that on and after the date
hereof and until the Total Commitment and all Secured Interest Rate Agreements
have been terminated, no Note remains outstanding and all Guaranteed Obligations
have been paid in full, such Guarantor shall take, or will refrain from taking,
as the case may be, all actions that are necessary to be taken or not taken so
that no violation of any provision, covenant or agreement contained in Section 6
or 7 of the Credit Agreement, and so that no Event of Default, is caused by the
actions of such Guarantor or any of its Subsidiaries.
13. Each Guarantor hereby jointly and severally agrees to pay, to the
extent not paid pursuant to Section 11.01 of the Credit Agreement, all
reasonable out-of-pocket costs and expenses (including, without limitation, the
reasonable fees and disbursements of counsel) of each Creditor in connection
with the enforcement of this Guaranty and of the Administrative Agent in
connection with any amendment, waiver or consent relating to this Guaranty.
14. This Guaranty shall be binding upon each Guarantor and its
successors and assigns and shall inure to the benefit of the Creditors and their
successors and assigns to the extent permitted under the Credit Agreement.
15. Neither this Guaranty nor any provision hereof may be changed,
waived, discharged or terminated except with the written consent of the Required
Lenders (or to the extent required by Section 11.12 of the Credit Agreement,
with the written consent of each Lender) and each Guarantor affected thereby (it
being understood that the addition or release of any Guarantor hereunder shall
not constitute a change, waiver, discharge or termination affecting any
Guarantor other than the Guarantor so added or released), provided that (x) no
--------
such change, waiver, modification or variance shall be made to this Section 15
without the consent of each Creditor affected thereby and (y) any change,
waiver, modification or variance affecting the rights and benefits of a single
Class (as defined below) of Creditors (and not all Creditors in a like or
similar manner) shall
-7-
require the written consent of the Requisite Creditors (as defined below) of
such Class. For the purpose of this Guaranty, the term "Class" shall mean each
class of Creditors, i.e., whether (i) the Lender Creditors as holders of the
----
Credit Document Obligations or (ii) the Interest Rate Creditors as holders of
the Interest Rate Obligations. For the purpose of this Guaranty, the term
"Requisite Creditors" of any Class shall mean (i) with respect to the Credit
Document Obligations, the Required Lenders and (ii) with respect to the Interest
Rate Obligations, the holders of at least a majority of all obligations
outstanding from time to time under the Secured Interest Rate Agreements.
16. Each Guarantor acknowledges that an executed (or conformed) copy
of each of the Credit Documents and the Secured Interest Rate Agreements has
been made available to its principal executive officers and such officers are
familiar with the contents thereof.
17. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Creditor Law) and not by way of limitation of any such rights, upon
the occurrence and during the continuance of an Event of Default (such term
shall mean and include any "Event of Default" as defined in the Credit Agreement
or any payment default under any Secured Interest Rate Agreement continuing
after any applicable grace period), each Creditor is hereby authorized, at any
time or from time to time, without notice to any Guarantor or to any other
Person, any such notice being expressly waived, to set off and to appropriate
and apply any and all deposits (general or special) and any other indebtedness
at any time held or owing by such Creditor to or for the credit or the account
of any Guarantor, against and on account of the obligations and liabilities of
such Guarantor to such Creditor under this Guaranty, irrespective of whether or
not such Creditor shall have made any demand hereunder and although said
obligations, liabilities, deposits or claims, or any of them, shall be
contingent or unmatured. Each Creditor agrees to promptly notify the relevant
Guarantor after any such set off and application, provided that the failure to
--------
give such notice shall not affect the validity of such set off and application.
18. All notices, requests, demands or other communications provided
for hereunder made in writing (including communications by facsimile
transmission) shall be deemed to have been duly given or made when delivered to
the Person to which such notice, request, demand or other communication is
required or permitted to be given or made under this Guaranty, addressed to such
party at (i) in the case of any Lender Creditor, as provided in the Credit
Agreement, (ii) in the case of each Guarantor, at its address set forth opposite
its signature below and (iii) in the case of any Interest Rate Creditor, at such
address as such Interest Rate Creditor shall have specified in writing to the
Guarantors; or in any case at such other address as any of the Persons listed
above may hereafter notify the others in writing.
-8-
19. If claim is ever made upon any Creditor for repayment or recovery
of any amount or amounts received in payment or on account of any of the
Guaranteed Obligations and any such Creditor repays all or part of said amount
by reason of (i) any judgment, decree or order of any court or administrative
body having jurisdiction over such Creditor or any of its property or (ii) any
settlement or compromise of any such claim effected by such Creditor with any
such claimant (including the Borrower), then and in such event each Guarantor
agrees that any such judgment, decree, order, settlement or compromise shall be
binding upon such Guarantor, notwithstanding any revocation hereof or other
instrument evidencing any liability of the Borrower, and each Guarantor shall be
and remain liable to such Creditor hereunder for the amount so repaid or
recovered to the same extent as if such amount had never originally been
received by any such Creditor.
20. (a) THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE
CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS. Any legal action or proceeding with respect to this Guaranty
or any other Credit Document may be brought in the courts of the State of New
York or of the United States of America for the Southern District of New York,
and, by execution and delivery of this Guaranty, each Guarantor hereby
irrevocably accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Each Guarantor
hereby irrevocably designates, appoints and empowers CT Corporation System with
offices on the date hereof at 0000 Xxxxxxxx, Xxx Xxxx, XX 00000, as its
designee, appointee and agent to receive, accept and acknowledge for and on its
behalf, and in respect of its property, service of any and all legal process,
summons, notices and documents which may be served in any such action or
proceeding. If for any reason such designee, appointee and agent shall cease to
be available to act as such, each Guarantor agrees to designate a new designee,
appointee and agent in New York City on the terms and for the purposes of this
provision satisfactory to the Administrative Agent under this Agreement. Each
Guarantor further irrevocably consents to the service of process out of any of
the aforementioned courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to each
Guarantor at its address set forth opposite its signature below, such service to
become effective 30 days after such mailing. Nothing herein shall affect the
right of any of the Creditors to serve process in any other manner permitted by
law or to commence legal proceedings or otherwise proceed against any Guarantor
in any other jurisdiction.
(b) Each Guarantor hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid actions
or proceedings arising out of or in connection with this Guaranty or any other
Credit Document brought in the courts referred to in clause (a) above and hereby
further
-9-
irrevocably waives and agrees not to plead or claim in any such court that such
action or proceeding brought in any such court has been brought in an
inconvenient forum.
(c) Each Guarantor and each Creditor hereby irrevocably waive all
rights to a trial by jury in any action, proceeding or counterclaim arising out
of or relating to this Guaranty, the other Credit Documents or the transactions
contemplated hereby or thereby.
21. (a) After the Termination Date (as defined below), this Guaranty
shall terminate (provided that all indemnities set forth herein shall survive
any such termination) and the Administrative Agent, at the request and expense
of the respective Guarantor, will execute and deliver to such Guarantor a proper
instrument or instruments acknowledging the satisfaction and termination of this
Guaranty as provided above. As used in this Guaranty, "Termination Date" shall
mean the date upon which the Total Commitment and all Secured Interest Rate
Agreements have been terminated, no Note under the Credit Agreement is
outstanding (and all Loans have been paid in full) and all other Obligations (as
defined in the Credit Agreement) have been paid in full (other than arising from
indemnities for which no request has been made).
(b) In the event that (x) all of the capital stock of one or more
Guarantors is sold or otherwise disposed of (including by way of the merger or
consolidation of such Guarantor with or into another Person) or liquidated, in
any such case in compliance with the requirements of Section 7.02 of the Credit
Agreement (or such sale or other disposition or liquidation has been approved in
writing by the Required Lenders (or all Lenders if required by Section 11.12 of
the Credit Agreement)), and the proceeds of such sale, disposition or
liquidation are applied, to the extent applicable, in accordance with the
provisions of the Credit Agreement, such Guarantor shall be released from this
Guaranty and this Guaranty shall, as to each such Guarantor or Guarantors,
terminate, and have no further force or effect (it being understood and agreed
that the sale of one or more Persons that own, directly or indirectly, all of
the capital stock, partnership interests or other equity interests of any
Guarantor shall be deemed to be a sale of such Guarantor for the purposes of
this Section 21).
22. Each Guarantor, in addition to the subrogation rights it shall
have against the Borrower under applicable law as a result of any payment it
makes hereunder, shall also have a right of contribution against all other
Guarantors in respect of any such payment pro rata among same based on their
--- ----
respective net fair values as enterprises, provided any such right of
--------
contribution shall be subject and subordinate to the prior payment in full of
the Guaranteed Obligations (and such Guarantor's obligations in respect
thereof). It is the desire and intent of each Guarantor and the Creditors that
this Guaranty shall be enforced to the full extent permissible under the
laws and public
-10-
policies applied in each jurisdiction in which enforcement is sought. If and to
the extent that the obligations of any Guarantor under this Guaranty would, in
the absence of this sentence, be adjudicated to be invalid or unenforceable
because of any applicable state or federal law relating to fraudulent
conveyances or transfers, then the amount of such Guarantor's liability
hereunder in respect of the Guaranteed Obligations shall be deemed to
be reduced ab initio to that maximum amount which would be permitted without
-- ------
causing such Guarantor's obligations hereunder to be so invalidated.
23. The Creditors agree that this Guaranty may be enforced only by
the action of the Administrative Agent or the Collateral Agent, in each case
acting upon the instructions of the Required Lenders and that no other Creditor
shall have any right individually to seek to enforce or to enforce this Guaranty
or to realize upon the security to be granted by the Pledge Agreement, it being
understood and agreed that such rights and remedies may be exercised by the
Administrative Agent or the Collateral Agent for the benefit of the Creditors
upon the terms of this Guaranty and the Pledge Agreement. The Creditors further
agree that this Guaranty may not be enforced against any director, officer or
employee of any Guarantor.
24. This Guaranty may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. A set of counterparts executed by all
the parties hereto shall be lodged with the Borrower and the Administrative
Agent.
25. All payments made by any Guarantor hereunder will be made without
setoff, counterclaim or other defense.
26. It is understood and agreed that any Subsidiary of the Borrower
that is required to execute a counterpart of this Guaranty pursuant to the
Credit Agreement shall automatically become a Guarantor hereunder by executing a
counterpart hereof and delivering the same to the Administrative Agent.
-11-
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.
c/o MJD COMMUNICATIONS, INC. MJD HOLDINGS CORP.,
000 Xxxx Xxxxxxxx Xxxxxx as a Guarantor
Xxxxx 000
Xxxxxxxxx, XX 00000 By /s/ Xxxxxx Xxxxx
----------------------------------
Title: Vice President, Secretary and
Chief Financial Officer
c/o MJD COMMUNICATIONS, INC. MJD VENTURES, INC.,
000 Xxxx Xxxxxxxx Xxxxxx as a Guarantor
Xxxxx 000
Xxxxxxxxx, XX 00000
By /s/ Xxxxxx Xxxxx
----------------------------------
Title: Vice President, Secretary and
Chief Financial Officer
c/o MJD COMMUNICATIONS, INC. MJD SERVICES CORP.,
000 Xxxx Xxxxxxxx Xxxxxx as a Guarantor
Xxxxx 000
Xxxxxxxxx, XX 00000
By /s/ Xxxxxx Xxxxx
----------------------------------
Title: Vice President, Secretary and
Chief Financial Officer
c/o MJD COMMUNICATIONS, INC. ST ENTERPRISES LTD.,
000 Xxxx Xxxxxxxx Xxxxxx as a Guarantor
Xxxxx 000
Xxxxxxxxx, XX 00000
By /s/ Xxxxxx Xxxxx
----------------------------------
Title: Vice President, Secretary and
Chief Financial Officer
-12-
Accepted and Agreed to:
BANKERS TRUST COMPANY,
as Administrative Agent for the Lenders
By /s/ G. Xxxxxx Xxxxx
------------------------------------
Title: Vice President
-13-
EXHIBIT G CONFORMED
AS EXECUTED
PLEDGE AGREEMENT
----------------
PLEDGE AGREEMENT, dated as of March 30, 1998 (as amended, amended and
restated, modified or supplemented from time to time, the "Agreement"), made by
each of the undersigned (each, a "Pledgor" and together with any other entity
that becomes a party hereto pursuant to Section 24 hereof, collectively, the
"Pledgors"), in favor of BANKERS TRUST COMPANY, as Collateral Agent (including
any successor collateral agent, the "Pledgee") for the benefit of the Secured
Creditors (as defined below). Except as otherwise defined herein, terms used
herein and defined in the Credit Agreement (as defined below) shall be used
herein as therein defined.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, MJD Communications, Inc. (the "Borrower"), the lenders from
time to time party thereto (the "Lenders"), NationsBank of Texas, N.A., as
Syndication Agent (the "Syndication Agent"), and Bankers Trust Company, as
Administrative Agent (the "Administrative Agent" and together with the Lenders,
the Syndication Agent, the Collateral Agent and the Pledgee, the "Lender
Creditors"), have entered into a Credit Agreement, dated as of March 30, 1998
(as amended, modified or supplemented from time to time, the "Credit
Agreement"), providing for the making of Loans as contemplated therein;
WHEREAS, the Borrower may from time to time be a party to one or more
Interest Rate Agreements (each such Interest Rate Agreement with an Interest
Rate Creditor (as defined below), a "Secured Interest Rate Agreement") with
Bankers Trust Company, in its individual capacity ("BTCo"), any Lender or a
syndicate of financial institutions organized by BTCo or such Lender or an
affiliate of BTCo or such Lender (even if BTCo or any such Lender ceases to be a
Lender under the Credit Agreement for any reason), and any institution that
participates therein, and in each case their subsequent assigns (collectively,
the "Interest Rate Creditors," and together with the Lender Creditors,
collectively, the "Secured Creditors");
WHEREAS, pursuant to the Subsidiary Guaranty, dated as of March 30,
1998 (as amended, modified or supplemented from time to time, the "Subsidiary
Guaranty"), each Pledgor that is a Subsidiary Guarantor has jointly and
severally
guaranteed to the Secured Creditors the payment when due of the Guaranteed
Obligations (as defined in the Subsidiary Guaranty);
WHEREAS, it is a condition precedent to the making of Loans under the
Credit Agreement that each Pledgor shall have executed and delivered to the
Pledgee this Agreement;
WHEREAS, each Pledgor desires to execute this Agreement to satisfy the
conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to each
Pledgor, the receipt and sufficiency of which are hereby acknowledged, each
Pledgor hereby makes the following representations and warranties to the Pledgee
and hereby covenants and agrees with the Pledgee as follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is made by each Pledgor
------------------------
for the benefit of the Secured Creditors to secure:
(i) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due) and liabilities of such Pledgor, now
existing or hereafter incurred under, arising out of or in connection with
any Credit Document to which such Pledgor is a party and the due
performance of and compliance by such Pledgor with the terms of each such
Credit Document by such Pledgor (all such obligations and liabilities under
this clause (i), except to the extent consisting of obligations or
indebtedness with respect to Secured Interest Rate Agreements, being herein
collectively called the "Credit Document Obligations");
(ii) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due) and liabilities of such Pledgor, now
existing or hereafter incurred under, arising out of or in connection with
any Secured Interest Rate Agreement, including all obligations, if any, of
such Pledgor under its Guaranty (if any) in respect of Secured Interest
Rate Agreements (all such obligations and liabilities under this clause
(ii) being herein collectively called the "Interest Rate Obligations");
-2-
(iii) any and all sums advanced by the Pledgee in order to preserve
the Collateral (as hereinafter defined) and/or its security interest
therein;
(iv) in the event of any proceeding for the collection of the
Obligations (as defined below) or the enforcement of this Agreement, after
an Event of Default (such term, as used in this Agreement, shall mean any
Event of Default under the Credit Agreement or any payment default by the
Borrower under any Secured Interest Rate Agreement after the expiration of
any applicable grace period) shall have occurred and be continuing, the
reasonable expenses of retaking, holding, preparing for sale or lease,
selling or otherwise disposing of or realizing on the Collateral, or of any
exercise by the Pledgee of its rights hereunder, together with reasonable
attorneys' fees and court costs; and
(v) all amounts paid by any Secured Creditor as to which such
Secured Creditor has the right to reimbursement under Section 11 of this
Agreement;
all such obligations, liabilities, sums and expenses set forth in clauses (i)
through (v) of this Section 1 being herein collectively called the
"Obligations".
2. DEFINITION OF STOCK, NOTES, PARTNERSHIP INTERESTS, MEMBERSHIP
-------------------------------------------------------------
INTERESTS, SECURITIES, ETC. As used herein, (i) the term "Stock" shall mean (x)
---------------------------
all of the issued and outstanding shares of stock at any time owned by any
Pledgor of any corporation (other than (I) any Excluded Entity and (II) a
corporation that is not organized under the laws of the United States or any
State or territory thereof (a "Foreign Corporation")) and (y) with respect to a
Foreign Corporation that is a first-tier Subsidiary (other than any Excluded
Entity), all of the issued and outstanding shares of capital stock at any time
owned by any Pledgor of such Foreign Corporation, provided that such Pledgor
--------
shall not be required to pledge hereunder (and the term "Stock" shall not
include) more than 65% of the total combined voting power of all classes of
capital stock of any Exempted Foreign Corporation entitled to vote; (ii) the
term "Notes" shall mean all promissory notes at any time issued to, or held by,
any Pledgor; (iii) the term "Partnership Interest" shall mean the entire
partnership interest (whether general and/or limited partnership interests) at
any time owned by any Pledgor in any partnership (other than (I) an Excluded
Entity and (II) a partnership that is not organized under the laws of the United
States or any State or territory thereof (a "Foreign Partnership")) and (y) with
respect to a Foreign Partnership (other than an Excluded Entity), the entire
partnership interest at any time owned by any Pledgor in such Foreign
Partnership, provided that such Pledgor shall not be required to pledge
--------
hereunder (and the term "Partnership Interest" shall not include) more than 65%
of the total voting power of all classes of partnership interests of any such
Foreign Partnership entitled to vote (with any partnership (other than an
Excluded Entity) in which any Pledgor owns a partnership interest being herein
called
-3-
a "Pledged Partnership"); (iv) the term "Membership Interest" shall mean the
entire membership interest at any time owned by any Pledgor in any limited
liability company (other than (other than (I) an Excluded Entity and (II) a
limited liability company that is not organized under the laws of the United
States or any State or territory thereof (a "Foreign LLC")) and (y) with respect
to a Foreign LLC (other than an Excluded Entity), the entire membership interest
at any time owned by any Pledgor in such Foreign LLC, provided that such Pledgor
--------
shall not be required to pledge hereunder (and the term "Membership Interest"
shall not include) more than 65% of the total voting power of all classes of the
membership interests of any such Foreign LLC entitled to vote (with any limited
liability company (other than an Excluded Entity) in which any Pledgor owns a
membership interest being herein called a "Pledged LLC"); (v) the term
"Securities" shall mean all of the Stock, Notes, Partnership Interests and
Membership Interests; (vi) the term "Exempted Foreign Corporation" shall mean
any Foreign Corporation that is treated as a corporation or an association
taxable as a corporation for U.S. Federal income tax purposes and (vii) the term
"Excluded Entity" shall mean (w) any corporation, partnership, limited liability
company or association which is not a Parent Company, an Intermediary Holding
Company or a TelCo, (x) ST Enterprises, Ltd. to the extent (and only to the
extent) the Existing Warrants remain outstanding, (y) STE/NE Acquisition Corp.
(D/B/A Northland of Vermont), Big Xxxxx Telecom, Columbine Acquisition Corp. and
Sunflower Telephone Company, in each case to the extent (and only to the extent)
the relevant Pledgor has not obtained the appropriate regulatory approval to
pledge the capital stock of any such Person on the Closing Date and, thereafter,
in compliance with Section 6.11 of the Credit Agreement and (z) any TelCo
acquired or created pursuant to a Permitted Acquisition after the Closing Date
if (I) the relevant Pledgor has not obtained the appropriate regulatory approval
to pledge the capital stock or other equity interests of such Telco in
compliance with Section 6.11 of the Credit Agreement and (II) after giving
effect to the acquisition or creation of such TelCo, the Pro Forma EBITDA Test
is satisfied. Each Pledgor represents and warrants that on the date hereof: (a)
each Subsidiary of such Pledgor whose equity interest is required to be pledged
hereunder, and the direct ownership thereof, is listed on Annex A hereto; (b)
the Stock held by such Pledgor consists of the number and type of shares of the
stock of the corporations as described in Annex B hereto; (c) such Stock
constitutes that percentage of the issued and outstanding capital stock of the
issuing corporation as set forth in Annex B hereto; (d) the Notes held by such
Pledgor consist of the promissory notes described in Annex C hereto; (e) such
Pledgor is the holder of record and sole beneficial owner of the Stock and Notes
held by such Pledgor and there exists no options or preemption rights in respect
of any of the Stock; (f) the Partnership Interests and Membership Interests, as
the case may be, held by such Pledgor constitute that percentage of the entire
interest of the respective Pledged Partnership or Pledged LLC, as the case may
be, as is set forth under its name in Annex D hereto; and (g) on the date
hereof, such Pledgor owns or possesses no other Securities except as described
on Annexes B, C and D hereto.
-4-
3. PLEDGE OF SECURITIES, ETC.
--------------------------
3.1 Pledge. To secure the Obligations and for the purposes set
------
forth in Section 1, each Pledgor hereby:
(i) grants and pledges to the Pledgee a security interest in
all of the Collateral owned by such Pledgor;
(ii) pledges and deposits as security with the Pledgee the
Securities owned by such Pledgor on the date hereof, if any, and delivers
to the Pledgee certificates or instruments therefor, duly endorsed in blank
in the case of Notes and accompanied by undated stock or other powers duly
executed in blank by such Pledgor in the case of Stock, Partnership
Interests or Membership Interests, as the case may be, or such other
instruments of transfer as are acceptable to the Pledgee;
(iii) assigns, transfers, hypothecates, mortgages, charges and
sets over to the Pledgee all of such Pledgor's right, title and interest in
and to such Securities (and in and to all certificates or instruments
evidencing such Securities), to be held by the Pledgee, upon the terms and
conditions set forth in this Agreement;
(iv) grants, pledges, assigns and transfers to the Pledgee
all of such Pledgor's (x) Partnership Interest and all of such Pledgor's
right, title and interest in each Pledged Partnership and (y) Membership
Interest and all of such Pledgor's right, title and interest in each
Pledged LLC, in each case including, without limitation:
(a) all the capital thereof and its interest in all profits,
losses and other distributions to which such Pledgor shall at any
time be entitled in respect of such Partnership Interest and/or
Membership Interest;
(b) all other payments due or to become due to such Pledgor in
respect of such Partnership Interest and/or Membership Interest,
whether under any partnership agreement, limited liability company
agreement or otherwise, whether as contractual obligations, damages,
insurance proceeds or otherwise;
(c) all of its claims, rights, powers, privileges, authority,
options, security interest, liens and remedies, if any, under any
partnership
-5-
agreement, limited liability company agreement or at law or
otherwise in respect of such Partnership Interest and/or Membership
Interest;
(d) all present and future claims, if any, of the Pledgor
against any Pledged Partnership and any Pledged LLC for moneys
loaned or advanced, for services rendered or otherwise;
(e) all of such Pledgor's rights under any partnership agreement
or limited liability company agreement or at law to exercise and
enforce every right, power, remedy, authority, option and privilege
of such Pledgor relating to the Partnership Interest and/or
Membership Interest, including any power to terminate, cancel or
modify any partnership agreement or any limited liability company
agreement, to execute any instruments and to take any and all other
action on behalf of and in the name of such Pledgor in respect of
any Partnership Interest or Membership Interest and any Pledged
Partnership and any Pledged LLC to make determinations, to exercise
any election (including, but not limited to, election of remedies)
or option or to give or receive any notice, consent, amendment,
waiver or approval, together with full power and authority to
demand, receive, enforce, collect or receipt for any of the
foregoing, to enforce or execute any checks, or other instruments or
orders, to file any claims and to take any action in connection with
any of the foregoing;
(f) all other property hereafter delivered in substitution for
or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and other property at
any time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof; and
(g) to the extent not otherwise included, all proceeds of any or
all of the foregoing.
3.2 Subsequently Acquired Securities. If any Pledgor shall acquire
--------------------------------
(by purchase, stock dividend or otherwise) any additional Securities at any time
or from time to time after the date hereof, such Pledgor will forthwith pledge
and deposit such Securities (or certificates or instruments representing such
Securities) as security with the Pledgee and deliver to the Pledgee certificates
or instruments thereof, duly endorsed in blank in the case of Notes and
accompanied by undated stock or other powers duly executed in blank by such
Pledgor (and accompanied by any transfer tax stamps required
-6-
in connection with the pledge of such Securities) in the case of Stock,
Partnership Interests or Membership Interests, as the case may be, or such other
instruments of transfer as are acceptable to the Pledgee, and will promptly
thereafter deliver to the Pledgee a certificate executed by a principal
executive officer of such Pledgor describing such Securities and certifying that
the same have been duly pledged with the Pledgee hereunder. No Pledgor shall be
required at any time to pledge hereunder any Securities which constitute more
than 65% of the total combined voting power of all classes of ownership
interests of any Exempted Foreign Corporation, Foreign Partnership or Foreign
LLC, as the case may be, entitled to vote.
3.3 Uncertificated Securities. Notwithstanding anything to the
-------------------------
contrary contained in Sections 3.1 and 3.2, if any Securities (whether or not
now owned or hereafter acquired) are uncertificated securities, the respective
Pledgor shall promptly notify the Pledgee thereof, and shall promptly take all
actions required to perfect the security interest of the Pledgee under
applicable law (including, in any event, under Articles 8 and 9 of the New York
Uniform Commercial Code if applicable). Each Pledgor further agrees to take
such actions as the Pledgee deems necessary or desirable to effect the foregoing
and to permit the Pledgee to exercise any of its rights and remedies hereunder,
and agrees to provide an opinion of counsel reasonably satisfactory to the
Pledgee with respect to any such pledge of uncertificated Securities promptly
upon request of the Pledgee.
3.4 Definitions of Pledged Stock, Pledged Notes, Pledged Partnership
----------------------------------------------------------------
Interests, Pledged Membership Interests, Pledged Securities and Collateral. All
--------------------------------------------------------------------------
Stock at any time pledged or required to be pledged hereunder is hereinafter
called the "Pledged Stock, all Notes at any time pledged or required to be
pledged hereunder are hereinafter called the "Pledged Notes", all Partnership
Interests at any time pledged or required to be pledged hereunder are
hereinafter called the "Pledged Partnership Interests," all Membership Interests
at any time pledged or required to be pledged hereunder are hereinafter called
the "Pledged Membership Interests", all Pledged Stock, Pledged Notes, Pledged
Partnership Interests and Pledged Membership Interests, together are called the
"Pledged Securities"; and the Pledged Securities, together with all proceeds
thereof, including any securities and moneys received and at the time held by
the Pledgee hereunder, are hereinafter called the "Collateral."
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee shall
---------------------------------------------
have the right to appoint one or more sub-agents for the purpose of retaining
physical possession of the Pledged Securities, which may be held (in the
discretion of the Pledgee) in the name of the relevant Pledgor, endorsed or
assigned in blank or in favor of the Pledgee or any nominee or nominees of the
Pledgee or a sub-agent appointed by the Pledgee.
-7-
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until there
---------------------------------------
shall have occurred and be continuing an Event of Default, each Pledgor shall be
entitled to exercise all voting rights attaching to any and all Pledged
Securities owned by it, and to give consents, waivers or ratifications in
respect thereof, provided that no vote shall be cast or any consent, waiver or
--------
ratification given or any action taken which would violate, result in breach of
any covenant contained in, or be inconsistent with, any of the terms of this
Agreement, the Credit Agreement, any other Credit Document or any Secured
Interest Rate Agreement (collectively, the "Secured Debt Agreements"), or which
would have the effect of impairing the value of the Collateral or any part
thereof or the position or interests of the Pledgee or any other Secured
Creditor therein. All such rights of a Pledgor to vote and to give consents,
waivers and ratifications shall cease in case an Event of Default shall occur
and be continuing and Section 7 hereof shall become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until an Event of
---------------------------------
Default shall have occurred and be continuing, all cash dividends, distributions
or other amounts payable in respect of the Pledged Securities shall be paid to
the respective Pledgor, provided that all dividends, distributions or other
--------
amounts payable in respect of the Pledged Securities which are determined by the
Pledgee, in its absolute discretion, to represent in whole or in part an
extraordinary, liquidating or other distribution in return of capital not
permitted by the Credit Agreement shall be paid, to the extent so determined to
represent an extraordinary, liquidating or other distribution in return of
capital not permitted by the Credit Agreement, to the Pledgee and retained by it
as part of the Collateral (unless such cash dividends or distributions are
applied to repay the Obligations pursuant to Section 9 of this Agreement). The
Pledgee shall also be entitled to receive directly, and to retain as part of the
Collateral:
(i) all other or additional stock, or other securities or
property (other than cash) paid or distributed by way of dividend or
otherwise in respect of the Collateral;
(ii) all other or additional stock or other securities or property
(including cash) paid or distributed in respect of the Collateral by way of
stock-split, spin-off, split-up, reclassification, combination of shares or
similar rearrangement; and
(iii) all other or additional stock or other securities or property
(including cash) which may be paid in respect of the Collateral by reason of
any consolidation, merger, exchange of stock, conveyance of assets,
liquidation or similar corporate reorganization (other than the Net Cash
Proceeds from any Asset Sale applied to repay Loans and/or reinvested in
accordance with the relevant provisions of the Credit Agreement).
-8-
Nothing contained in this Section 6 shall limit or restrict in any way the
Pledgee's right to receive the proceeds of the Collateral in any form in
accordance with Section 3 of this Agreement. All dividends, distributions or
other payments which are received by the respective Pledgor contrary to the
provisions of this Section 6 or Section 7 shall be received in trust for the
benefit of the Pledgee, shall be segregated from other property or funds of such
Pledgor and shall be forthwith paid over to the Pledgee as Collateral in the
same form as so received (with any necessary endorsement).
7. REMEDIES IN CASE OF AN EVENT OF DEFAULT. (a) In case an Event of
---------------------------------------
Default shall have occurred and be continuing, the Pledgee shall be entitled to
exercise all of the rights, powers and remedies (whether vested in it by this
Agreement or any other Secured Debt Agreement or by law) for the protection and
enforcement of its rights in respect of the Collateral, including, without
limitation, all the rights and remedies of a secured party upon default under
the Uniform Commercial Code of the State of New York, and the Pledgee shall be
entitled, without limitation, to exercise any or all of the following rights,
which each Pledgor hereby agrees to be com mercially reasonable:
(i) to receive all amounts payable in respect of the Collateral
otherwise payable under Section 6 to such Pledgor;
(ii) to transfer all or any part of the Collateral into the
Pledgee's name or the name of its nominee or nominees;
(iii) to accelerate any Pledged Note which may be accelerated in
accordance with its terms, and take any other lawful action to collect upon
any Pledged Note (including, without limitation, to make any demand for
payment thereon);
(iv) to vote all or any part of the Pledged Stock, Pledged
Partnership Interests and Pledged Membership Interests (whether or not
transferred into the name of the Pledgee) and give all consents, waivers and
ratifications in respect of the Collateral and otherwise act with respect
thereto as though it were the out right owner thereof (each Pledgor hereby
irrevocably constituting and appointing the Pledgee the proxy and attorney-
in-fact of such Pledgor, with full power of substitution to do so); and
(v) at any time or from time to time to sell, assign and deliver,
or grant options to purchase, all or any part of the Collateral, or any
interest therein, at any public or private sale, without demand of
performance, advertisement or notice of intention to sell or of the time or
place of sale or adjournment thereof or to redeem
-9-
or otherwise (all of which are hereby waived by each Pledgor), for cash, on
credit or for other property, for immediate or future delivery without any
assumption of credit risk, and for such price or prices and on such terms as
the Pledgee in its absolute discretion may determine, provided that at least
--------
10 days' notice of the time and place of any such sale shall be given to
such Pledgor. The Pledgee shall not be obligated to make such sale of
Collateral regardless of whether any such notice of sale has theretofore
been given. Each purchaser at any such sale shall hold the property so sold
absolutely free from any claim or right on the part of any Pledgor, and each
Pledgor hereby waives and releases to the fullest extent permitted by law
any right or equity of redemption with respect to the Collateral, whether
before or after sale hereunder, all rights, if any, of marshalling the
Collateral and any other security for the Obligations or otherwise, and all
rights, if any, of stay and/or appraisal which it now has or may at any time
in the future have under rule of law or statute now existing or hereafter
enacted. At any such sale, unless prohibited by applicable law, the Pledgee
on behalf of all Secured Creditors (or certain of them) may bid for and
purchase (by bidding in Obligations or otherwise) all or any part of the
Collateral so sold free from any such right or equity of redemption. Neither
the Pledgee nor any Secured Creditor shall be liable for failure to collect
or realize upon any or all of the Collateral or for any delay in so doing
nor shall it be under any obligation to take any action whatsoever with
regard thereto.
8. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy of the
--------------------------
Pledgee provided for in this Agreement or any other Secured Debt Agreement, or
now or hereafter existing at law or in equity or by statute shall be cumulative
and concurrent and shall be in addition to every other such right, power or
remedy. The exercise or beginning of the exercise by the Pledgee or any other
Secured Creditor of any one or more of the rights, powers or remedies provided
for in this Agreement or any other Secured Debt Agreement or now or hereafter
existing at law or in equity or by statute or otherwise shall not preclude the
simultaneous or later exercise by the Pledgee or any other Secured Creditor of
all such other rights, powers or remedies, and no failure or delay on the part
of the Pledgee or any other Secured Creditor to exercise any such right, power
or remedy shall operate as a waiver thereof. Unless otherwise required by the
Credit Documents, no notice to or demand on any Pledgor in any case shall
entitle it to any other or further notice or demand in similar other
circumstances or constitute a waiver of any of the rights of the Pledgee or any
other Secured Creditor to any other further action in any circumstances without
demand or notice. The Secured Creditors agree that this Agreement may be
enforced only by the action of the Administrative Agent or the Pledgee, in each
case acting upon the instructions of the Required Lenders (or, after the date on
which all Credit Document Obligations have been paid in full, the holders of at
least the majority of the outstanding Interest Rate Obligations) and that no
other Secured
-10-
Creditor shall have any right individually to seek to enforce or to enforce this
Agreement or to realize upon the security to be granted hereby, it being
understood and agreed that such rights and remedies may be exercised by the
Administrative Agent or the Pledgee or the holders of at least a majority of the
outstanding Interest Rate Obligations, as the case may be, for the benefit of
the Secured Creditors upon the terms of this Agreement.
9. APPLICATION OF PROCEEDS. (a) All moneys collected by the Pledgee
-----------------------
or the Collateral Agent upon any sale or other disposition of the Collateral,
together with all other moneys received by the Pledgee or the Collateral Agent
hereunder, shall be applied as follows:
(i) first, to the payment of all Obligations owing to the Pledgee
or the Collateral Agent of the type described in clauses (iii) and (iv) of
the definition of "Obligations" contained in Section 1 hereof;
(ii) second, to the extent proceeds remain after the application
pursuant to preceding clause (i), an amount equal to the outstanding
Obligations to the Secured Creditors shall be paid to the Secured Creditors
as provided in Section 9(c) with each Secured Creditor receiving an amount
equal to its out standing Obligations or, if the proceeds are insufficient
to pay in full all such Obligations, its Pro Rata Share of the amount
--- ----
remaining to be distributed to be applied, with respect to the Credit
Document Obligations, firstly to the payment of interest in respect of the
unpaid principal amount of Loans outstanding, secondly to the payment of
principal of Loans outstanding, then to the other Credit Document
Obligations; and
(iii) third, to the extent proceeds remain after the application
pursuant to the preceding clauses (i) and (ii) and following the
termination of this Agreement pursuant to Section 18 hereof, to the
relevant Pledgor or, to the extent directed by such Pledgor or a court of
competent jurisdiction, to whomever may be lawfully entitled to receive
such surplus.
(b) For purposes of this Agreement, "Pro Rata Share" shall mean, when
--- ----
calculating a Secured Creditor's portion of any distribution or amount, the
amount (expressed as a percentage) equal to a fraction the numerator of which is
the then outstanding amount of the relevant Obligations owed such Secured
Creditor and the denominator of which is the then outstanding amount of all
Obligations.
(c) All payments required to be made to the (i) Lender Creditors
hereunder shall be made to the Administrative Agent for the account of the
respective Lender Creditors and (ii) Interest Rate Creditors hereunder shall be
made to the paying
-11-
agent under the applicable Secured Interest Rate Agreement or, in the case of
Secured Interest Rate Agreements without a paying agent, directly to the
applicable Interest Rate Creditor.
(d) For purposes of applying payments received in accordance with
this Section 9, the Pledgee and the Collateral Agent shall be entitled to rely
upon (i) the Administrative Agent for a determination (which the Administrative
Agent agrees to provide upon request to the Pledgee and the Collateral Agent) of
the outstanding Credit Document Obligations and (ii) any Interest Rate Creditor
for a determination (which each Interest Rate Creditor agrees to provide upon
request to the Pledgee and the Collateral Agent) of the outstanding Interest
Rate Obligations owed to such Interest Rate Creditor. Unless it has actual
knowledge (including by way of written notice from a Secured Creditor) to the
contrary, the Administrative Agent under the Credit Agreement, in furnishing
information pursuant to the preceding sentence, and the Pledgee and the
Collateral Agent, in acting hereunder, shall be entitled to assume that (x) no
Credit Document Obligations other than principal, interest and regularly
accruing fees are owing to any Lender Creditor and (y) no Secured Interest Rate
Agreements or Interest Rate Obligations with respect thereto are in existence.
(e) It is understood that the Pledgors shall remain jointly and
severally liable to the extent of any deficiency between (x) the amount of the
Obligations for which it is liable directly or as a Guarantor that are satisfied
with proceeds of the Collateral and (y) the aggregate outstanding amount of the
Obligations.
10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral by the
------------------------
Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.
11. INDEMNITY. Each Pledgor jointly and severally agrees (i) to
---------
indemnify and hold harmless the Pledgee and the other Secured Creditors from and
against any and all claims, demands, losses, judgments and liabilities
(including liabilities for penalties) of whatsoever kind or nature, and (ii) to
reimburse the Pledgee for all reasonable costs and expenses, including
reasonable attorneys' fees, arising in connection with any amendment, waiver or
modification to this Agreement and the Pledgee and the other Secured Creditors
for all reasonable costs and expenses (including reasonable attorney's fees)
growing out of or resulting from the exercise by the Pledgee of any right or
remedy granted to it hereunder or under any other Secured Debt Agreement except,
-12-
with respect to clauses (i) and (ii) above, for those arising from the Pledgee's
gross negligence or willful misconduct. In no event shall the Pledgee be liable,
in the absence of gross negligence or willful misconduct on its part, for any
matter or thing in connection with this Agreement other than to account for
moneys or other property actually received by it in accordance with the terms
hereof. If and to the extent that the obligations of any Pledgor under this
Section 11 are unenforceable for any reason, such Pledgor hereby agrees to make
the maximum contribution to the payment and satisfaction of such obligations
which is permissible under applicable law.
12. FURTHER ASSURANCES; POWER OF ATTORNEY. (a) Each Pledgor agrees
-------------------------------------
that it will join with the Pledgee in executing and, at such Pledgor's own
expense, file and refile under the Uniform Commercial Code such financing
statements, continuation statements and other documents in such offices as the
Pledgee may deem necessary or appropriate and wherever required or permitted by
law in order to perfect and preserve the Pledgee's security interest in the
Collateral hereunder and hereby authorizes the Pledgee to file financing
statements and amendments thereto relative to all or any part of the Collateral
without the signature of such Pledgor where permitted by law, and agrees to do
such further acts and things and to execute and deliver to the Pledgee such
additional conveyances, assignments, agreements and instruments as the Pledgee
may reasonably require or deem advisable to carry into effect the purposes of
this Agreement or to further assure and confirm unto the Pledgee its rights,
powers and remedies hereunder or thereunder.
(b) Each Pledgor hereby appoints the Pledgee, such Pledgor's
attorney-in-fact, with full authority in the place and stead of such Pledgor and
in the name of such Pledgor or otherwise, from time to time after the occurrence
and during the continuance of an Event of Default, in the Pledgee's reasonable
discretion to take any action and to execute any instrument which the Pledgee
may reasonably deem necessary or advisable to accomplish the purposes of this
Agreement.
13. THE PLEDGEE AS COLLATERAL AGENT. The Pledgee will hold in
-------------------------------
accordance with this Agreement all items of the Collateral at any time received
under this Agreement. It is expressly understood and agreed that the
obligations of the Pledgee as holder of the Collateral and interests therein and
with respect to the disposition thereof, and otherwise under this Agreement, are
only those expressly set forth in this Agreement. The Pledgee shall act
hereunder on the terms and conditions set forth herein and in Section 11 of the
Credit Agreement.
14. TRANSFER BY THE PLEDGORS. No Pledgor will sell or otherwise
------------------------
dispose of, grant any option with respect to, or mortgage, pledge or otherwise
-13-
encumber any of the Collateral or any interest therein (except in accordance
with the terms of this Agreement and the other Secured Debt Agreements).
15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS. (a)
----------------------------------------------------------
Each Pledgor represents, warrants and covenants that:
(i) it is, or at the time when pledged hereunder will be, the
legal, beneficial and record owner of, and has (or will have) good and
marketable title to, all Securities pledged by it hereunder, subject to no
pledge, lien, mortgage, hypothecation, security interest, charge, option or
other encumbrance whatsoever, except (x) the liens and security interests
created by this Agreement and (y) liens permitted by Section 7.03(a) of the
Credit Agreement;
(ii) it has full power, authority and legal right to pledge all the
Securities pledged by it pursuant to this Agreement;
(iii) this Agreement has been duly authorized, executed and delivered
by such Pledgor and constitutes a legal, valid and binding obligation of
such Pledgor enforceable in accordance with its terms, except to the extent
that the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws generally
affecting creditors' rights and by equitable principles (regardless of
whether enforcement is sought in equity or at law);
(iv) except to the extent already obtained or made, no consent of
any other party (including, without limitation, any stockholder, limited or
general partner, member or creditor of such Pledgor or any of its
Subsidiaries) and no consent, license, permit, approval or authorization
of, exemption by, notice or report to, or registration, filing or
declaration with, any governmental authority is required to be obtained by
such Pledgor in connection with (a) the execution, delivery or performance
of this Agreement, (b) the validity or enforceability of this Agreement,
(c) the perfection or enforceability of the Pledgee's security interest in
the Collateral or (d) except for compliance with or as may be required by
applicable securities laws, the exercise by the Pledgee of any of its
rights or remedies provided herein;
(v) the execution, delivery and performance of this Agreement by
such Pledgor will not violate any provision of any applicable law or
regulation or of any order, judgment, writ, award or decree of any court,
arbitrator or governmental authority, domestic or foreign, applicable to
such Pledgor, or of the certificate of incorporation, certificate of
formation, by-laws, certificate of limited
-14-
partnership, partnership agreement or limited liability company agreement,
as the case may be, of such Pledgor or of any securities issued by such
Pledgor or any of its Subsidiaries, or of any mortgage, indenture, lease,
loan agreement, credit agreement or other material contract, agreement or
instrument or undertaking to which such Pledgor or any of its Subsidiaries
is a party or which purports to be binding upon such Pledgor or any of its
Subsidiaries or upon any of their respective assets and will not result in
the creation or imposition of (or the obligation to create or impose) any
lien or encumbrance on any of the assets of such Pledgor or any of its
Subsidiaries except as contemplated by this Agreement;
(vi) all the shares of the Stock have been duly and validly issued,
are fully paid and non-assessable and are subject to no options to purchase
or similar rights;
(vii) each of the Pledged Notes constitutes, or when executed by the
obligor thereof will constitute, the legal, valid and binding obligation of
such obligor, enforceable in accordance with its terms, except to the
extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law);
(viii) the pledge, assignment and delivery to the Pledgee of the
Securities (other than uncertificated securities) pursuant to this
Agreement creates a valid and, assuming such Securities are held in the
continued possession of the Collateral Agent in the State of New York,
perfected first priority Lien in the Securities and the proceeds thereof,
subject to no other Lien or to any agreement purporting to grant to any
third party a Lien on the property or assets of such Pledgor which would
include the Securities (other than Liens permitted by Section 7.03(a) of
the Credit Agreement);
(ix) it has the unqualified right to pledge and grant a security
interest in the Partnership Interests and Membership Interests as herein
provided without the consent of any other Person, firm, association or
entity which has not been obtained;
(x) the Partnership Interests and the Membership Interests pledged
by it pursuant to this Agreement have been validly acquired and are fully
paid for and are duly and validly pledged hereunder;
(xi) it is not in default in the payment of any portion of any
mandatory capital contribution, if any, required to be made under any
partnership agreement
-15-
or limited liability company agreement to which such Pledgor is a party,
and such Pledgor is not in violation of any other material provisions of
any partnership agreement or limited liability company agreement to which
such Pledgor is a party, or otherwise in default or violation thereunder,
no Partnership Interest or Membership Interest is subject to any defense,
offset or counterclaim, nor have any of the foregoing been asserted or
alleged against such Pledgor by any Person with respect thereto and as of
the Closing Date, there are no certificates, instruments, documents or
other writings (other than the partnership agreements and certificates, if
any, delivered to the Collateral Agent) which evidence any Partnership
Interest or Membership Interest of such Pledgor;
(xii) the pledge and assignment of the Partnership Interests and the
Membership Interests pursuant to this Agreement, together with the relevant
filings, consents or recordings (which filings, consents and recordings
have been made or obtained), creates a valid, perfected and continuing
first security interest in such Partnership Interests and Membership
Interest and the proceeds thereof, subject to no prior lien or encumbrance
or to any agreement purporting to grant to any third party a lien or
encumbrance on the property or assets of such Pledgor which would include
the Collateral;
(xiii) there are no currently effective financing statements under
the UCC covering any property which is now or hereafter may be included in
the Collateral and such Pledgor will not, without the prior written consent
of the Pledgee, execute and, until the Termination Date (as hereinafter
defined), there will not ever be on file in any public office, any
enforceable financing statement or statements covering any or all of the
Collateral, except financing statements filed or to be filed in favor of
the Pledgee as secured party;
(xiv) it shall give the Pledgee prompt notice of any written claim
relating to the Collateral and shall deliver to the Pledgee a copy of each
other demand, notice or document received by it which may adversely affect
the Pledgee's interest in the Collateral promptly upon, but in any event
within 10 days after, such Pledgor's receipt thereof;
(xv) it shall not withdraw as a partner of any Pledged Partnership
or member of any Pledged LLC, or file or pursue or take any action which
may, directly or indirectly, cause a dissolution or liquidation of or with
respect to any Pledged Partnership or Pledged LLC or seek a partition of
any property of any Pledged Partnership or Pledged LLC, except as permitted
by the Credit Agreement;
-16-
(xvi) a notice in the form set forth in Annex E attached hereto and
by this reference made a part hereof (such notice, the "Pledge Notice"),
appropriately completed, notifying each Pledged Partnership and Pledged LLC
of the existence of this Agreement and attached thereto a copy of this
Agreement have been delivered by such Pledgor to the relevant Pledged
Partnership or Pledged LLC, and such Pledgor has received and delivered to
the Pledgee an acknowledgment in the form set forth in Annex F attached
hereto (such acknowledgement, the "Pledge Acknowledgement"), duly executed
by the relevant Pledged Partnership or Pledged LLC;
(xvii) as of the date hereof, all of its Partnership Interests and
Membership Interests are uncertificated and each Pledgor covenants and
agrees that it will not approve of any action by any Pledged Partnership or
Pledged LLC to convert such uncertificated interests into certificated
interests; and
(xviii) it will take no action which would violate or be inconsistent
with any of the terms of any Secured Debt Agreement, or which would have
the effect of impairing the position or interests of the Pledgee or any
other Secured Creditor under any Secured Debt Agreement except as permitted
by the Credit Agreement.
16. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of each
------------------------------------
Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever, including, without limitation:
(i) any renewal, extension, amendment or modification of, or
addition or supplement to or deletion from any of the Secured Debt
Agreements, or any other instrument or agreement referred to therein, or
any assignment or transfer of any thereof;
(ii) any waiver, consent, extension, indulgence or other action or
inaction under or in respect of any such agreement or instrument or this
Agreement;
(iii) any furnishing of any additional security to the Pledgee or
its assignee or any acceptance thereof or any release of any security by
the Pledgee or its assignee;
(iv) any limitation on any party's liability or obligations under
any such instrument or agreement or any invalidity or unenforceability, in
whole or in part, of any such instrument or agreement or any term thereof;
or
-17-
(v) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to
such Pledgor or any Subsidiary of such Pledgor, or any action taken with
respect to this Agreement by any trustee or receiver, or by any court, in
any such proceeding, whether or not such Pledgor shall have notice or
knowledge of any of the foregoing.
17. REGISTRATION, ETC. (a) If an Event of Default shall have
------------------
occurred and be continuing and any Pledgor shall have received from the Pledgee
a written request or requests that such Pledgor cause any registration,
qualification or compliance under any Federal or state securities law or laws to
be effected with respect to all or any part of the Pledged Stock, such Pledgor
as soon as practicable and at its expense will use its best efforts to cause
such registration to be effected (and be kept effective) and will use its best
efforts to cause such qualification and compliance to be effected (and be kept
effective) as may be so requested and as would permit or facilitate the sale and
distribution of such Pledged Stock, including, without limitation, registration
under the Securities Act of 1933, as then in effect (or any similar statute then
in effect), appropriate qualifications under applicable blue sky or other state
securities laws and appropriate compliance with any other governmental
requirements, provided that the Pledgee shall furnish to such Pledgor such
--------
information regarding the Pledgee as such Pledgor may request in writing and as
shall be required in connection with any such registration, qualification or
compliance. Each Pledgor will cause the Pledgee to be kept reasonably advised
in writing as to the progress of each such registration, qualification or
compliance and as to the completion thereof, will furnish to the Pledgee such
number of prospectuses, offering circulars and other documents incident thereto
as the Pledgee from time to time may reasonably request, and will indemnify, to
the extent permitted by law, the Pledgee, each other Secured Creditor and all
others participating in the distribution of such Pledged Stock against all
claims, losses, damages or liabilities caused by any untrue statement (or
alleged untrue statement) of a material fact contained therein (or in any
related registration statement, notification or the like) or by any omission (or
alleged omission) to state therein (or in any related registration statement,
notification or the like) a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as the
same may have been caused by an untrue statement or omission based upon
information furnished in writing to such Pledgor by the Pledgee or such other
Secured Creditor expressly for use therein.
(b) If at any time when the Pledgee shall determine to exercise its
right to sell all or any part of the Pledged Securities pursuant to Section 7,
and such Pledged Securities or the part thereof to be sold shall not, for any
reason whatsoever, be effectively registered under the Securities Act of 1933,
as then in effect, the Pledgee may, in its sole and absolute discretion, sell
such Pledged Securities or part thereof by private sale in such manner and under
such circumstances as the Pledgee may deem necessary or
-18-
advisable in order that such sale may legally be effected without such
registration. Without limiting the generality of the foregoing, in any such
event the Pledgee, in its sole and absolute discretion, (i) may proceed to make
such private sale notwithstanding that a registration statement for the purpose
of registering such Pledged Securities or part thereof shall have been filed
under such Securities Act, (ii) may approach and negotiate with a single
possible purchaser to effect such sale and (iii) may restrict such sale to a
purchaser who will represent and agree that such purchaser is purchasing for its
own account, for investment, and not with a view to the distribution or sale of
such Pledged Securities or part thereof. In the event of any such sale, the
Pledgee shall incur no responsibility or liability for selling all or any part
of the Pledged Securities at a price which the Pledgee, in its sole and absolute
discretion, may in good xxxxx xxxx reasonable under the circumstances,
notwithstanding the possibility that a substantially higher price might be
realized if the sale were deferred until the registration as aforesaid.
18. TERMINATION; RELEASE. (a) After the Termination Date (as
--------------------
defined below), this Agreement shall terminate (provided that all indemnities
set forth herein including, without limitation, in Section 11 hereof shall
survive any such termination) and the Pledgee, at the request and expense of the
respective Pledgor, will execute and deliver to such Pledgor a proper instrument
or instruments acknowledging the satisfaction and termination of this Agreement
as provided above, and will duly assign, transfer and deliver to such Pledgor
(without recourse and without any representation or warranty) such of the
Collateral as may be in the possession of the Pledgee and as has not theretofore
been sold or otherwise applied or released pursuant to this Agreement, together
with any moneys at the time held by the Pledgee hereunder. As used in this
Agreement, "Termination Date" shall mean the date upon which the Total
Commitment and all Secured Interest Rate Agreements have been terminated, no
Note under the Credit Agreement is outstanding (and all Loans have been paid in
full) and all other Obligations have been paid in full (other than arising from
indemnities for which no request has been made).
(b) In the event that any part of the Collateral is sold or otherwise
disposed of in connection with a sale or other disposition permitted by Section
7.02 of the Credit Agreement or is otherwise released at the direction of the
Required Lenders (or all the Lenders if required by Section 11.12 of the Credit
Agreement), and the proceeds of such sale or other disposition or from such
release are applied in accordance with the terms of the Credit Agreement to the
extent required to be so applied, the Pledgee, at the request and expense of the
respective Pledgor, will release such Collateral from this Agreement, duly
assign, transfer and deliver to such Pledgor (without recourse and without any
representation or warranty) such of the Collateral as is then being (or has
been) so sold, disposed of or released and as may be in possession of the
Pledgee and has not theretofore been released pursuant to this Agreement.
-19-
(c) At any time that any Pledgor desires that Collateral be released
as provided in the foregoing Section 18(a) or (b), it shall deliver to the
Pledgee a certificate signed by a principal executive officer stating that the
release of the respective Collateral is permitted pursuant to Section 18(a) or
(b). The Pledgee shall have no liability whatsoever to any Secured Creditor as
the result of any release of Collateral by it as permitted by this Section 18.
19. NOTICES, ETC. All notices and other communications hereunder
-------------
shall be in writing (including telegraphic, telex, telecopier, facsimile or
cable communication) and shall be delivered, telegraphed, telexed, telecopied,
faxed, cabled, or mailed (by first class mail, postage prepaid):
(i) if to any Pledgor, at its address set forth opposite its
signature below;
(ii) if to the Pledgee, at:
Bankers Trust Company
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
(iii) if to any Bank Creditor (other than the Pledgee), either (x)
to the Administrative Agent, at the address of the Administrative Agent
specified in the Credit Agreement or (y) at such address as such Bank
Creditor shall have specified in the Credit Agreement;
(iv) if to any Interest Rate Creditor, at such address as such
Interest Rate Creditor shall have specified in writing to the Pledgors and
the Pledgee;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
20. WAIVER; AMENDMENT. None of the terms and conditions of this
-----------------
Agreement may be changed, waived, modified or varied in any manner whatsoever
unless in writing duly signed by the Pledgee (with the consent of the Required
Lenders or, to the extent required by Section 11.12 of the Credit Agreement, all
of the Lenders) and each Pledgor affected thereby, provided that (i) no such
--------
change, waiver, modification or
-20-
variance shall be made to Section 9 hereof or this Section 20 without the
consent of each Secured Creditor adversely affected thereby and (ii) any change,
waiver, modification or variance affecting the rights and benefits of a single
Class (as defined below) of Secured Creditors (and not all Secured Creditors in
a like or similar manner) shall require the written consent of the Requisite
Creditors (as defined below) of such Class of Secured Creditors. For the purpose
of this Agreement, the term "Class" shall mean each class of Secured Creditors,
i.e., whether (x) the Lender Creditors as holders of the Credit Document
----
Obligations or (y) the Interest Rate Creditors as holders of the Interest Rate
Obligations. For the purpose of this Agreement, the term "Requisite Creditors"
of any Class shall mean each of (x) with respect to each of the Credit Document
Obligations, the Required Lenders and (y) with respect to the Interest Rate
Obligations, the holders of at least a majority of all obligations outstanding
from time to time under the Secured Interest Rate Agreements.
21. PLEDGEE NOT BOUND. (a) Nothing herein shall be construed to
-----------------
make the Pledgee or any other Secured Creditor liable as a general partner or
limited partner of any Pledged Partnership or a member of any Pledged LLC or a
shareholder of any corporation, and neither the Pledgee nor any Secured Creditor
by virtue of this Agreement or otherwise (except as referred to in the following
sentence) shall have any of the duties, obligations or liabilities of a general
partner or limited partner of any Pledged Partnership or a member of any Pledged
LLC or a stockholder of any corporation. The parties hereto expressly agree
that, unless the Pledgee shall become the absolute owner of a Partnership
Interest, a Membership Interest or Stock pursuant hereto, this Agreement shall
not be construed as creating a partnership or joint venture or membership
agreement among the Pledgee, any other Secured Creditor and/or a Pledgor.
(b) Except as provided in the last sentence of paragraph (a) of this
Section 21, the Pledgee, by accepting this Agreement, did not intend to become a
general partner or limited partner of any Pledged Partnership or a member of any
Pledged LLC or a shareholder of any corporation or otherwise be deemed to be a
co-venturer with respect to any Pledgor or any Pledged Partnership or a member
of any Pledged LLC or a shareholder of any corporation either before or after an
Event of Default shall have occurred. The Pledgee shall have only those powers
set forth herein and shall assume none of the duties, obligations or liabilities
of a general partner or limited partner of any Pledged Partnership or of a
member of any Pledged LLC or of a Pledgor.
(c) The Pledgee shall not be obligated to perform or discharge any
obligation of a Pledgor as a result of the collateral assignment hereby
effected.
(d) The acceptance by the Pledgee of this Agreement, with all the
rights, powers, privileges and authority so created, shall not at any time or in
any event obligate
-21-
the Pledgee to appear in or defend any action or proceeding relating to the
Collateral to which it is not a party, or to take any action hereunder or
thereunder, or to expend any money or incur any expenses or perform or discharge
any obligation, duty or liability under the Collateral.
22. MISCELLANEOUS. This Agreement shall create a continuing security
-------------
interest in the Collateral and shall (i) remain in full force and effect,
subject to release and/or termination as set forth in Section 18, (ii) be
binding upon each Pledgor, its successors and assigns; provided that no Pledgor
--------
shall assign any of its rights or obligations hereunder without the prior
written consent of the Pledgee (with the prior written consent of the Required
Lenders or to the extent required by Section 11.12 of the Credit Agreement, all
of the Lenders), and (iii) inure, together with the rights and remedies of the
Pledgee hereunder, to the benefit of the Pledgee, the other Secured Creditors
and their respective successors, transferees and assigns. The headings of the
several sections and subsections in this Agreement are for purposes of reference
only and shall not limit or define the meaning hereof. This Agreement may be
executed in any number of counterparts, each of which shall be an original, but
all of which together shall constitute one instrument. In the event that any
provision of this Agreement shall prove to be invalid or unenforceable, such
provision shall be deemed to be severable from the other provisions of this
Agreement which shall remain binding on all parties hereto.
23. GOVERNING LAW, ETC. (a) THIS AGREEMENT AND THE RIGHTS AND
------------------
OBLIGATIONS OF THE SECURED CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK
WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS. Any legal action or
proceeding with respect to this Agreement or any other Credit Document may be
brought in the courts of the State of New York or of the United States of
America for the Southern District of New York, and, by execution and delivery of
this Agreement, each Pledgor which is not a Subsidiary Guarantor (each, an "NSG
Pledgor") hereby irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts. Each
NSG Pledgor hereby irrevocably designates, appoints and empowers CT Corporation
System with offices on the date hereof at 0000 Xxxxxxxx, Xxx Xxxx, XX 00000, as
its designee, appointee and agent to receive, accept and acknowledge for and on
its behalf, and in respect of its property, service of any and all legal
process, summons, notices and documents which may be served in any such action
or proceeding. If for any reason such designee, appointee and agent shall cease
to be available to act as such, each NSG Pledgor agrees to designate a new
designee, appointee and agent in New York City on the terms and for the purposes
of this provision satisfactory to the Collateral Agent under this Agreement.
Each NSG Pledgor further irrevocably consents to the service of process out of
any of the aforementioned courts in any such action or proceeding by the mailing
of copies thereof by registered or certified mail, postage prepaid, to each NSG
Pledgor at its address set forth opposite its signature
-22-
below, such service to become effective 30 days after such mailing. Nothing
herein shall affect the right of any of the Secured Creditors to serve process
in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against any Pledgor in any other jurisdiction.
(b) Each NSG Pledgor hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid actions
or proceedings arising out of or in connection with this Agreement or any other
Credit Document brought in the courts referred to in clause (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any such court
that such action or proceeding brought in any such court has been brought in an
inconvenient forum.
(c) Each Pledgor and the Pledgee hereby irrevocably waive all right
to a trial by jury in any action, proceeding or counterclaim arising out of or
relating to this Agreement, the other Credit Documents or the transactions
contemplated hereby or thereby.
24. ADDITIONAL PLEDGORS. It is understood and agreed that any
-------------------
Subsidiary of the Borrower that is required to execute a counterpart of this
Agreement pursuant to the Credit Agreement shall become a Pledgor hereunder by
executing a counterpart hereof and delivering the same to the Pledgee and
Annexes A, B, C and D will be modified at such time in a manner acceptable to
the Pledgee to give effect to such additional Pledgor.
25. AUTHORIZATION AND DIRECTION. Each Pledged Partnership and each
---------------------------
Pledged LLC is hereby authorized and directed to register the respective
Pledgor's pledge to the Pledgee on behalf of the Secured Creditors of the
interest of such Pledgor on such entity's books. Each Pledgor agrees to give
the respective Pledged Partnership or Pledged LLC, as the case may be, a Pledge
Notice, and to cause each such Pledged Partnership or Pledged LLC, as the case
may be, to acknowledge such notice with a Pledge Acknowledgement.
* * *
-23-
IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused this
Agreement to be executed and delivered by their duly authorized officers as of
the date first above written.
MJD COMMUNICATIONS, INC.,
as a Pledgor
By /s/ Xxxxxx Xxxxx
-------------------------------------------
Title: Vice President, Secretary and
Chief Financial Officer
ST ENTERPRISES, LTD.,
as a Pledgor
By /s/ Xxxxxx Xxxxx
-------------------------------------------
Title: Vice President, Secretary and
Chief Financial Officer
MJD HOLDINGS CORP.,
as a Pledgor
By /s/ Xxxxxx Xxxxx
-------------------------------------------
Title: Vice President, Secretary and
Chief Financial Officer
MJD SERVICES CORP.,
as a Pledgor
-24-
By /s/ Xxxxxx Xxxxx
-------------------------------------------
Title: Vice President, Secretary and
Chief Financial Officer
MJD VENTURES, INC.,
as a Pledgor
By /s/ Xxxxxx Xxxxx
-------------------------------------------
Title: Vice President, Secretary and
Chief Financial Officer
C-R COMMUNICATIONS, INC.,
as a Pledgor
By /s/ Xxxxxx Xxxxx
-------------------------------------------
Title: Vice President, Secretary and
Chief Financial Officer
BANKERS TRUST COMPANY,
as Collateral Agent, as Pledgee
By /s/ Xxxxxx Xxxxx
---------------------------------------------
Title: Vice President
-25-
ANNEX A
-------
LIST OF PLEDGED SUBSIDIARIES
----------------------------
A. [PLEDGOR]
Name Jurisdiction of Incorporation
---- -----------------------------
B. [PLEDGOR]
Name Jurisdiction of Incorporation
---- -----------------------------
ANNEX B
-------
LIST OF STOCK
-------------
A. [PLEDGOR]
Name of
Issuing Type of Number of Certificate Percentage
Corporation Shares Shares No. Owned
----------- ------- --------- ----------- ----------
B. [PLEDGOR]
Name of
Issuing Type of Number of Certificate Percentage
Corporation Shares Shares No. Owned
----------- ------- --------- ----------- ----------
[TO BE PROVIDED BY THE BORROWER]
ANNEX C
-------
LIST OF NOTES
-------------
A. [PLEDGOR]
Obligor Amount (if any) Maturity Date (if any)
------- --------------- ----------------------
B. [PLEDGOR]
Obligor Amount (if any) Maturity Date (if any)
------- --------------- ----------------------
[TO BE PROVIDED BY THE BORROWER]
ANNEX D
-------
PART I.
------
LIST OF PARTNERSHIP INTERESTS
-----------------------------
A. [PLEDGOR]
-------
Type of
Pledged Partnership
Percentage
Entities Interest
--------- ------------
Owned
----------
B. [PLEDGOR]
-------
Type of
Pledged Partnership
Percentage
Entities Interest
--------- ------------
Owned
---------
PART II.
-------
LIST OF MEMBERSHIP INTERESTS
----------------------------
A. [PLEDGOR]
-------
Type of
Pledged Membership
Percentage
Entities Interest
--------- ------------
Owned
---------
B. [PLEDGOR]
-------
ANNEX D
Page 2
Type of
Pledged Membership
Percentage
Entities Interest
--------- ------------
Owned
---------
ANNEX E
-------
FORM OF PLEDGE NOTICE
---------------------
[Letterhead of Pledgor]
[Date]
TO: [Name of Pledged Entity]
Notice is hereby given that, pursuant to the Pledge Agreement (a true
and correct copy of which is attached hereto), dated as of March __, 1998 (as
amended, amended and restated, modified or supplemented from time to time in
accordance with the terms thereof, the "Pledge Agreement"), between [NAME OF
PLEDGOR] (the "Pledgor"), the other pledgors from time to time party thereto and
Bankers Trust Company (the "Pledgee") on behalf of the Secured Creditors
described therein, the Pledgor has pledged and assigned to the Pledgee for the
benefit of the Secured Creditors, and granted to the Pledgee for the benefit of
the Secured Creditors a continuing security interest in, all right, title and
interest of the Pledgor, whether now existing or hereafter arising or acquired,
as a [[limited] [general] partner] [member] in [NAME OF PLEDGED ENTITY] (the
["Partnership"] ["LLC"]), and in, to and under the [TITLE OF APPLICABLE
AGREEMENT] (the "[Partnership] [LLC] Agreement"), including, without limitation:
(i) all the capital of the [Partnership] [LLC] and the Pledgor's
interest in all profits, losses, and other distributions to which the
Pledgor shall at any time be entitled in respect of such interest;
(ii) all other payments due or to become due to the Pledgor in
respect of such partnership interest, whether under the [Partnership] [LLC]
Agreement or otherwise, whether as contractual obligations, damages,
insurance proceeds or otherwise;
(iii) all of its claims, rights, powers, privileges, authority,
options, security interest, liens and remedies, if any, under the
[Partnership] [LLC] Agreement or at law or otherwise in respect of such
interest;
ANNEX E
Page 2
(iv) all present and future claims, if any, of the Pledgor against
the [Partnership] [LLC] for moneys loaned or advanced, for services
rendered or otherwise;
(v) all of the Pledgor's rights under the [Partnership] [LLC]
Agreement or at law to exercise and enforce every right, power, remedy,
authority, option and privilege of the Pledgor relating to the
[Partnership] [Membership] Interest, including any power to terminate,
cancel or modify the [Partnership] [LLC] Agreement, to execute any
instruments and to take any and all other action on behalf of and in the
name of the Pledgor in respect of the [Partnership] [Membership] Interest
and the [Partnership] [LLC] to make determinations, to exercise any
election (including, but not limited, election of remedies) or option or to
give or receive any notice, consent, amendment, waiver or approval,
together with full power and authority to demand, receive, enforce, collect
or receipt for any of the foregoing, to enforce or execute any checks, or
other instruments or orders, to file any claims and to take any action in
connection with any of the foregoing;
(vi) all other property hereafter delivered in substitution for or in
addition to any of the foregoing, all certificates and instruments
representing or evidencing such other property and all cash, securities,
interest, dividends, rights and other property at any time and from time to
time received, receivable or otherwise distributed in respect of or in
exchange for any or all thereof; and
(vii) to the extent not otherwise included, all proceeds of any or
all of the foregoing.
Pursuant to the Pledge Agreement, the [Partnership] [LLC] is hereby
authorized and directed to register the Pledgor's pledge to the Pledgee on
behalf of the Secured Creditors of the interest of the Pledgor on the
[Partnership's] [LLC's] books.
ANNEX E
Page 3
The Pledgor hereby requests the [Partnership] [LLC] to indicate the
[Partnership's] [LLC's] acceptance of this Notice and consent to and
confirmation of its terms and provisions by signing a copy hereof where
indicated on the attached page and returning the same to the Pledgee on behalf
of the Secured Creditors.
[NAME OF PLEDGOR]
By_________________________________
Title:
ANNEX F
-------
FORM OF PLEDGE ACKNOWLEDGMENT
-----------------------------
[NAME OF PLEDGED ENTITY] (the ["Partnership"] ["LLC"]) hereby
acknowledges receipt of a copy of the assignment by [NAME OF PLEDGOR]
("Pledgor") of its interest under the [TITLE OF APPLICABLE AGREEMENT] (the
"[Partnership] [LLC] Agreement") pursuant to the terms of the Pledge Agreement,
dated as of March __, 1998, (as the same may be amended, amended and restated,
modified or supplemented) from time to time, between Pledgor, the other pledgors
from time to time party thereto, and Bankers Trust Company (the "Pledgee") on
behalf of the Secured Creditors described therein. The undersigned hereby
further confirms the registration of the Pledgor's pledge of its interest to the
Pledgee on behalf of the Secured Creditors on the [Partnership's] [LLC's] books.
Dated: ______________ __, 199_
[NAME OF PLEDGED ENTITY]
By____________________________
Title:
EXHIBIT H
---------
OFFICER'S SOLVENCY CERTIFICATE
------------------------------
To the Agents and each of the Lenders party
to the Credit Agreement referred to below:
I, the undersigned, the Chief Financial Officer of MJD Communications,
Inc., a Delaware corporation (the "Borrower"), do hereby certify that:
1. This Certificate is furnished to the Lenders pursuant to Section
4.01(j) of the Credit Agreement, dated as of March 30, 1998, among the Borrower,
the lenders from time to time party thereto (each, a "Lender" and, collectively,
the "Lenders"), NationsBank of Texas, N.A., as Syndication Agent, and Bankers
Trust Company, as Administrative Agent. Unless otherwise defined herein,
capitalized terms used in this Certificate shall have the meanings set forth in
the Credit Agreement.
2. For purposes of this Certificate, the terms below shall have the
following definitions:
(a) "Fair Value"
The amount at which the assets, in their entirety, of the Borrower and
its Subsidiaries taken as whole would change hands between a willing
buyer and a willing seller, within a commercially reasonable period of
time, each having reasonable knowledge of the relevant facts, with
neither being under any compulsion to act.
(b) "Present Fair Salable Value"
The amount that could be obtained by an independent willing seller
from an independent willing buyer if the assets of the Borrower and
its Subsidiaries taken as a whole are sold with reasonable promptness
in an arm's length transaction under present conditions for the sale
of comparable business enterprises.
EXHIBIT H
Page 2
(c) "New Financing"
The Indebtedness incurred or to be incurred by the Borrower and its
Subsidiaries under the Credit Documents (assuming the full utilization
by the Borrower of the Commitments under the Credit Agreement) and all
other financings contemplated by the Credit Documents and the
Applicable Acquisition Documents, in each case after giving effect to
the Transaction and the incurrence of all financings in connection
therewith.
(d) "Stated Liabilities"
The recorded liabilities (including contingent liabilities that would
be recorded in accordance with generally accepted accounting
principles ("GAAP")) of the Borrower and its Subsidiaries taken as a
whole as of the date hereof after giving effect to the consummation of
the Transaction, determined in accordance with GAAP consistently
applied, together with the amount of all New Financing.
(e) "Identified Contingent Liabilities"
The maximum estimated amount of liabilities reasonably likely to
result from pending litigation, asserted claims and assessments,
guaranties, uninsured risks and other contingent liabilities of the
Borrower and its Subsidiaries taken as a whole after giving effect to
the Transaction (including all fees and expenses related thereto but
exclusive of such contingent liabilities to the extent reflected in
Stated Liabilities), as identified and explained to me as the Chief
Financial Officer in terms of their nature and estimated magnitude by
responsible officers of the Borrower or that have been identified to
me as the Chief Financial Officer as such by an officer of the
Borrower.
(f) "Will be able to pay its Stated Liabilities, including Identified
Contingent Liabilities, as they mature"
For the period from the date hereof through the stated maturity of all
New Financing, the Borrower and its Subsidiaries taken as a whole will
have sufficient assets and cash flow to pay their respective Stated
Liabilities and
EXHIBIT H
Page 3
Identified Contingent Liabilities as those liabilities mature or
otherwise become payable.
(g) "Does not have Unreasonably Small Capital"
For the period from the date hereof through the stated maturity of all
New Financing, the Borrower and its Subsidiaries taken as a whole
after consummation of the Transaction and all Indebtedness (including
the Loans) being incurred or assumed and Liens created by the Borrower
and its Subsidiaries in connection therewith, is a going concern and
has sufficient capital to ensure that it will continue to be a going
concern for such period and to remain a going concern.
3. For purposes of this Certificate, I, or senior officers of the
Borrower with whom I have consulted ("Designated Officers"), have performed the
following procedures as of and for the periods set forth below.
(a) I have reviewed the financial statements referred to in Section
5.10(b) of the Credit Agreement.
(b) I and/or certain Designated Officers have made inquiries of certain
officers of the Borrower and its Subsidiaries and the Acquired
Companies who have responsibility for financial and accounting matters
regarding the existence and amount of Identified Contingent
Liabilities associated with the Borrower and its Subsidiaries and the
Acquired Companies.
(c) I have knowledge of and have reviewed to my satisfaction the Credit
Documents and the Applicable Acquisition Documents, and the respective
Schedules and Exhibits thereto.
(d) With respect to Identified Contingent Liabilities, I and/or Designated
Officers:
1. inquired of certain officers of each of the Borrower and its
Subsidiaries and the Acquired Companies who have responsibility
for legal, financial and accounting matters as to the existence
and estimated liability with respect to all contingent liabilities
associated
EXHIBIT H
Page 4
with each of the Borrower and its Subsidiaries and the
Acquired Companies;
2. confirmed with officers of each of the Borrower and its
Subsidiaries and the Acquired Companies that to such officers'
knowledge, (i) all appropriate items were included in Stated
Liabilities or Identified Contingent Liabilities and (ii) the
amounts relating thereto were the maximum estimated amount of
liabilities reasonably likely to result therefrom as of the date
hereof; and
3. hereby certify that, to my knowledge, all material Identified
Contingent Liabilities that may arise from any pending litigation,
asserted claims and assessments, guarantees, uninsured risks and
other Identified Contingent Liabilities of each of the Borrower
and its Subsidiaries and the Acquired Companies (exclusive of such
Identified Contingent Liabilities to the extent reflected in
Stated Liabilities) have been considered (after giving effect to
the consummation of the Transaction and the incurrence of all
financings in connection therewith) in making the certification
set forth in paragraph 4 below, and with respect to each such
Identified Contingent Liability, the estimable maximum amount of
liability with respect thereto was used in making such
certification.
(e) I have had the projections relating to the Borrower and its
Subsidiaries (the "Projections") which have been previously delivered
to the Lenders, prepared under my direction, and have re-examined the
Projections on the date hereof and considered the effect thereon of
any changes since the date of the preparation thereof on the results
projected therein. After such review, I hereby certify that in my
opinion the Projections are reasonable.
(f) I and/or Desiganted Officers have made inquiries of certain officers
of each of the Borrower and its Subsidiaries and the Acquired
Companies who have responsibility for financial reporting and
accounting matters regarding whether they were aware of any events or
conditions that, as of the date hereof, would cause the Borrower and
its Subsidiaries taken as a whole, after giving effect to the
consummation of the Transaction and the related financing transactions
(including the incurrence of the New Financing), to (i) have assets
with a Fair Value or Present Fair Salable
EXHIBIT H
Page 5
Value that are less than the sum of Stated Liabilities and Identified
Contingent Liabilities; (ii) have Unreasonably Small Capital; or (iii)
not be able to pay their respective Stated Liabilities and Identified
Contingent Liabilities as they mature or otherwise become payable.
4. Based on and subject to the foregoing, I hereby certify on behalf
of the Borrower that, after giving effect to the consummation of the Transaction
and the related financing transactions (including the incurrence of the New
Financing), it is my opinion that (i) the Fair Value and Present Fair Salable
Value of the assets of the Borrower and its Subsidiaries taken as a whole exceed
their Stated Liabilities and Identified Contingent Liabilities taken as a whole;
(ii) the Borrower and its Subsidiaries taken as a whole do not have Unreasonably
Small Capital; and (iii) the Borrower and its Subsidiaries taken as a whole will
be able to pay their respective Stated Liabilities and Identified Contingent
Liabilities as they mature or otherwise become payable.
EXHIBIT H
Page 6
IN WITNESS WHEREOF, I have hereto set my hand this ______ day of March, 1998.
MJD COMMUNICATIONS, INC.
----------------------------------
Name:
Title:
By accepting this certificate, the Administrative Agent acknowledges, on
its own behalf and on the behalf of the Lenders from time to time party to the
Credit Agreement, that (i) the foregoing certification is rendered solely in the
executing party's capacity as an officer of the Borrower and its Subsidiaries
and (ii) in the absence of fraud on the part of the executing party, no claim
shall be asserted against the executing party in its individual capacity in
connection with or arising out of this certificate or its execution or delivery.
ACKNOWLEDGED:
BANKERS TRUST COMPANY,
as Administrative Agent
on behalf of the Lenders
----------------------------------
Name:
Title:
CAPITAL CONTRIBUTION AGREEMENT
CAPITAL CONTRIBUTION AGREEMENT, (the "Agreement"), dated as of
March 27, 1998, among Xxxxx Investment Associates V, L.P., a Delaware limited
partnership, and Xxxxx Equity Partners V, L.P., a Delaware limited partnership
(collectively, "Xxxxx"), Carousel Capital Partners, L.P., a Delaware limited
partnership ("Carousel"), MJD Communications, Inc., a Delaware corporation (the
"Borrower") and Bankers Trust Company, as Administrative Agent (the
"Administrative Agent") for the Lenders (as defined below).
W I T N E S S E T H:
WHEREAS, Xxxxx, Carousel and the Borrower desire that the
Lenders and the Administrative Agent enter into a Credit Agreement dated as of
March 27, 1998 (as amended, amended and restated, supplemented or modified from
time to time in accordance with the terms thereof, the "Credit Agreement") among
the Borrower, the lenders named therein (together with their respective
successors and assigns, the "Lenders"), the Administrative Agent and NationsBank
of Texas, N.A., as Syndication Agent ;
WHEREAS, Xxxxx and Carousel, as a result of their ownership of
capital stock of the Borrower, and the Borrower will derive substantial benefits
from the consummation of the transactions contemplated by the Credit Agreement
and the making of Loans thereunder, including the making of the Loans to effect
the Acquisitions; and
WHEREAS, the execution and delivery of this Agreement is a
condition precedent to the Lenders' obligation to make Loans (as defined in the
Credit Agreement).
NOW, THEREFORE, IT IS AGREED:
1. Definitions. All capitalized terms used herein and not
otherwise defined herein shall have the respective meanings ascribed to such
terms in the Credit Agreement.
2. Required Investments. (a) Subject to Section 2(b) hereof,
if as of June 30, 1999 the Senior Leverage Ratio, as evidenced in the Officer's
Certificate required pursuant to Section 6.01(e) of the Credit Agreement to be
delivered in respect of
the fiscal quarter ended June 30, 1999, is greater than 5.5 to 1, then each of
Xxxxx and Carousel shall purchase for cash in equal proportions (the "Required
Investment"), not later than the fifteenth Business Day after the date such
Officer's Certificate has been or should have been delivered pursuant to the
Credit Agreement (such earlier date, the "Notice Date"), additional shares of
Common Stock of the Borrower at a price per share of $342.51, and the Borrower
agrees to issue and sell such shares of Common Stock, for an amount which when
applied to outstanding indebtedness of the Borrower would cause the Senior
Leverage Ratio to be reduced to (but not below) 5.5 to 1 as of June 30, 1999.
Neither Xxxxx nor Carousel shall have any obligation under this Agreement to
make or cause to be made any investment in the Borrower other than the Required
Investment.
(b) Notwithstanding any provision herein to the contrary, (i)
neither Xxxxx nor Carousel shall be obligated to make any Required Investments
pursuant to Section 2(a) of this Agreement in an amount in excess of $7,500,000
and (ii) neither Xxxxx nor Carousel shall be obligated to make any Required
Investments pursuant to Section 2(a) of this Agreement in excess of the Required
Investments made by the other.
3. Officers' Certificate. The Borrower will deliver to each
of Xxxxx and Carousel on the Notice Date (with a copy to the Administrative
Agent) an Officers' Certificate setting forth the calculations for determining
whether any Required Investments are required pursuant to Section 2(a) hereof
(the "Contribution Certificate"), which calculations shall be in substantially
similar detail as in a Compliance Certificate, and, if applicable, setting forth
the Required Investments to be made by Xxxxx and Carousel pursuant to the terms
of Section 2 hereof. If for any reason the Borrower shall fail to deliver the
Officer's Certificates required under this Section 3, the Administrative Agent
shall have the right to deliver any such notice or certificate (an "Agent's
Notice") which, if applicable, shall demand that Xxxxx and Carousel make a
Required Investment in accordance herewith.
4. Representations and Warranties. In order to induce the
Lenders to enter into the Credit Agreement and to make the Loans provided for
therein, each of Xxxxx, Carousel and the Borrower represents and warrants to the
Administrative Agent and the Lenders as follows (with respect to each Person, as
to itself only):
(i) it is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization or
incorporation, as the case may be, and has full power, authority and
legal right to own its property and assets, and to transact the
business in which it is engaged;
(ii) it has the full partnership or corporate power, authority
and legal right to execute, deliver and perform each of its obligations
under this Agreement and has taken all necessary partnership or
corporate and other actions to authorize the execution, delivery and
performance of each of its obligations under this
-2-
Agreement and this Agreement constitutes the legal, valid and binding
obligation of such Person, enforceable against such Person in
accordance with its terms, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or similar laws relating to or limiting creditors' rights
generally or by equitable principles relating to enforceability;
5. No Guarantee of Indebtedness. Neither this Agreement, nor
anything herein contained, nor any obligation performed or to be performed
pursuant hereto by Xxxxx or Carousel shall be construed or deemed to constitute,
a direct or indirect guarantee by Xxxxx or Carousel to any person or entity of
the payment of the interest, principal or premium of any indebtedness, liability
or obligation whatsoever of the Borrower or any Subsidiary of the Borrower,
including without limitation the Loans.
6. Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing and
mailed, faxed, sent by a nationally recognized express courier or delivered by
hand, if to Xxxxx at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, Attention: Xxxxx X.
Xxxxxxx, XX, Vice-President & General Counsel; if to Carousel at 0000 Xxxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000, Attention: Xxxx X. Xxxxxxx; if to the
Borrower, at 000 Xxxx Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000, Attention:
Xxxxxx X. Xxxxx, Xx. (with a copy to Paul, Hastings, Xxxxxxxx & Xxxxxx LLP, 000
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx X. Xxxxxx); if to any
Lender or the Administrative Agent in the manner specified in the Credit
Agreement; or, at such other address as shall be designated by any party in a
written notice to the other parties hereto as provided in this Section 7. All
such notices and communications shall be effective at the earliest to occur of
receipt, three business days after deposit in the United States mail, one
Business Day after delivery to a nationally recognized express courier, delivery
to a telegraph or cable company and telephone confirmation of receipt of fax
communication; provided, however, that notices and communications to the
Administrative Agent shall not be effective until received by the Administrative
Agent.
7. No Waiver; Remedies Cumulative. No failure or delay on the
part of any of the Lenders or the Administrative Agent in exercising any right,
power or privilege hereunder and no course of dealing between Xxxxx, Carousel or
the Borrower, on the one hand, and any of the Lenders or the Administrative
Agent, on the other, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power, or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege hereunder. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which any of the Lenders
or the Administrative Agent would otherwise have. No notice to or demand on
Xxxxx, Carousel or the Borrower in any case shall entitle any of them to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of the
-3-
rights of any of the Lenders or the Administrative Agent to any other or further
action in any circumstances without notice or demand.
8. Counterparts. This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all of which shall together constitute one and the same instrument.
9. Headings Descriptive. The headings of the several sections
of this Agreement are inserted for convenience only and shall not in any way
affect the meaning or construction of any provision of this Agreement.
10. Amendment or Waiver. Neither this Agreement nor any of the
terms hereof may be amended, modified, supplemented, waived, discharged or
terminated unless such amendment, modification, supplement, waiver, discharge or
termination is in writing signed by Xxxxx, Carousel, the Borrower and the
Administrative Agent. Any waiver or consent shall be effective only in the
specific instance or for the specific purpose for which it was given.
11. Successors and Assigns. This Agreement shall remain in
full force and effect and be binding in accordance with and to the extent of its
terms upon each of Xxxxx and Carousel and the successors and assigns thereof,
and shall inure to the benefit of the Lenders, and their respective successors
and assigns, notwithstanding that from time to time during the term of the
Credit Agreement there may be no obligations outstanding.
12. Survival. All agreements, representations and warranties
made herein shall survive the execution and delivery of this Agreement, the
making of the Loans and the execution and delivery of the Notes.
13. Termination. The obligations of Xxxxx and Carousel under
this Agreement shall terminate upon the earliest to occur of (i) payment in full
of all of the Loans and termination of the Commitments under the Credit
Agreement (ii) the closing of the proposed sale and issuance by the Borrower of
Senior Subordinated Notes due 2008 and Floating Interest Rate Senior
Subordinated Notes due 2008 to a group of initial purchasers led by Xxxxxxx
Xxxxx Barney, BT Alex. Xxxxx, NationsBanc, Xxxxxxxxxx Securities LLC and
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, or (iii) the Senior
Leverage Ratio being, at any time after the date hereof, 4.0 to 1 or less.
-4-
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this agreement to be duly executed and delivered as of the date
first above written .
MJD COMMUNICATIONS, INC.
By: ________________________________
Name:
Title:
XXXXX EQUITY PARTNERS V, L.P.
By: ________________________________
Name:
Title:
XXXXX INVESTMENT ASSOCIATES V,
L.P.
By: Xxxxx Partners V, L.P., its
General Partner
-----------------------------
Name:
Title:
BANKERS TRUST COMPANY,
as Administrative Agent
By: ________________________________
Name:
Title:
-5-
CAROUSEL CAPITAL PARTNERS,
L.P.
By: Carousel Capital Company, L.L.C.,
its General Partner
--------------------------------
Name:
Title:
-6-
EXHIBIT J
---------
[LETTERHEAD OF AGENT FOR SERVICE OF PROCESS]
------------------------------------------
[Date]
To the Administrative Agent
and the Lenders party to the Credit
Agreement referred to below,
the Administrative Agent under
the Subsidiary Guaranty referred
to below and the Collateral Agent
under the Pledge Agreement referred
to below:
Ladies and Gentlemen:
Reference is made to (i) the Credit Agreement, dated as of March 30, 1998,
among MJD Communications, Inc. (the "Borrower"), the lenders from time to time
party thereto (the "Lenders"), NationsBank of Texas, N.A., as Syndication Agent,
and Bankers Trust Company, as Administrative Agent (the "Administrative Agent")
(as such Credit Agreement may be modified, supplemented, amended or amended and
restated from time to time, the "Credit Agreement"), (ii) the Subsidiary
Guaranty, dated as of March 30, 1998, made by each Subsidiary Guarantor (as such
Subsidiary Guaranty may be amended, amended and restated, modified or
supplemented from time to time, the "Subsidiary Guaranty") and (iii) the Pledge
Agreement, dated as of March 30, 1998, made by the Borrower and certain
Subsidiaries of the Borrower (as such Pledge Agreement may be amended, amended
and restated, modified or otherwise supplemented from time to time, the "Pledge
Agreement"). Unless otherwise defined herein, capitalized terms used in this
letter shall have the meanings set forth in the Credit Agreement.
EXHIBIT J
Page 2
Pursuant to (x) Section 11.08 of the Credit Agreement, the Borrower, (y)
Section 20 of the Subsidiary Guaranty, each Subsidiary Guarantor, and (z)
Section 23 of the Pledge Agreement, each Subsidiary party thereto that is not a
Subsidiary Guarantor (each, an "NSG Pledgor") has irrevocably designated,
appointed and empowered the undersigned, CT Corporation System, with offices
currently located at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, as its authorized
designee, appointee and agent to receive, accept and acknowledge for and on its
behalf, and in respect of its property, service of any and all legal process,
summons, notices and documents which may be served in any such action or
proceeding brought in the courts of the State of New York or of the United
States of America for the Southern District of New York with respect to (i) in
the case of the Borrower, the Credit Agreement and each other Credit Document to
which it is a party, (ii) in the case of any Subsidiary Guarantor, the
Subsidiary Guaranty and each other Credit Document to which it is a party and
(iii) in the case of any NSG Pledgor, the Pledge Agreement.
The undersigned hereby informs you that it irrevocably accepts such
appointment as agent as set forth in Section 11.08 of the Credit Agreement,
Section 20 of the Subsidiary Guaranty and Section 23 of the Pledge Agreement and
agrees with you that the undersigned (i) shall inform the Administrative Agent
promptly in writing of any change of its address in New York City, (ii) shall
perform its obligations as such process agent in accordance with the provisions
of Section 11.08 of the Credit Agreement, Section 20 of the Subsidiary Guaranty
and Section 23 of the Pledge Agreement and (iii) shall forward promptly to the
Borrower, the relevant Subsidiary Guarantor or the relevant NSG Pledgor, as the
case may be, any legal process, summons, notices and documents received by the
undersigned in its capacity as process agent.
As process agent, the undersigned, and its successor or successors, agree
to discharge the above-mentioned obligations and will not refuse fulfillment of
such obligations under Section 11.08 of the Credit Agreement, Section 20 of the
Subsidiary Guaranty or Section 23 of the Pledge Agreement, as the case may be.
Very truly yours,
CT CORPORATION SYSTEM
By____________________________
Title:
EXHIBIT J
Page 3
EXHIBIT K
---------
FORM OF ASSIGNMENT AGREEMENT
----------------------------
DATE: ________, __
Reference is made to the Credit Agreement described in Item 2 of Annex I
annexed hereto (as such Credit Agreement may hereafter be amended, amended and
restated, modified or supplemented from time to time, the "Credit Agreement").
Unless defined in Annex I attached hereto, terms defined in the Credit Agreement
are used herein as therein defined. _____________ (the "Assignor") and
______________ (the "Assignee") hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee without recourse
and without representation or warranty (other than as expressly provided
herein), and the Assignee hereby purchases and assumes from the Assignor, that
interest in and to all of the Assignor's rights and obligations under the Credit
Agreement as of the date hereof which represents the percentage interest
specified in Item 4 of Annex I (the "Assigned Share") of all of the outstanding
rights and obligations under the Credit Agreement relating to the Facilities
indicated in Item 4 of Annex I, including, without limitation, [(u) in the case
of any assignment of all or any portion of the Total B Term Commitment, all
rights and obligations with respect to the Assigned Share of the Total B Term
Commitment,]/1/ (v) in the case of any assignment of outstanding B Term Loans,
all rights and obligations with respect to the Assigned Share of all then
outstanding B Term Loans, (w) in the case of any assignment of outstanding C
Term Loans-Floating Rate, all rights and obligations with respect to the
Assigned Share of all then outstanding C Term Loans, (x) in the case of any
assignment of outstanding C Term Loans-Fixed Rate, all rights and obligations
with respect to the Assigned Share of all then outstanding C Term Loans-Fixed
Rate, (y) in the case of any assignment of all or any portion of the Total
Revolving Commitment, all rights and obligations with respect to the Assigned
Share of the Total Revolving Commitment and of all then outstanding RF Loans and
(z) in the case of any assignment of all or any portion of the Total Acquisition
Commitment, all rights and obligations with respect to the Assigned Share of the
Total
__________________________
/1/ Delete bracketed language in Assignment Agreements executed after the
termination of the Total B Term Commitment.
EXHIBIT K
Page 2
Acquisition Commitment and of all then outstanding AF Loans. After giving
effect to such sale and assignment, the Assignee's [B Term Commitment,]/2/
Revolving Commitment and Acquisition Commitment and the amount of the
outstanding B Term Loans, C Term Loans-Floating Rate and C Term Loans-Fixed Rate
owing to the Assignee will be as set forth in Item 4 of Annex I hereto.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any liens or security interests; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the other Credit Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or the other Credit Documents or any other instrument or document
furnished pursuant thereto; and (iii) makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower or any of its Subsidiaries or the performance or observance by the
Borrower or any other Credit Party of any of its obligations under the Credit
Agreement or the other Credit Documents or any other instrument or document
furnished pursuant thereto.
3. The Assignee (i) represents and warrants that it is duly authorized to
enter into and perform the terms of this Assignment Agreement; (ii) confirms
that it has received a copy of the Credit Agreement and the other Credit
Documents, together with copies of the financial statements referred to therein
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment Agreement;
(iii) agrees that it will, independently and without reliance upon the
Administrative Agent, the Syndication Agent, the Assignor or any other Lender
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Agreement; (iv) appoints and authorizes the Administrative
Agent, the Syndication Agent and the Collateral Agent to take such action as
agent on its behalf and to exercise such powers under the Credit Agreement and
the other Credit Documents as are delegated to the Administrative Agent, the
Syndication Agent and the Collateral Agent by the terms thereof, together with
such powers as are reasonably incidental thereto; (v) makes the representations
and warranties required to be made by the Assignee under Section 11.04(b) of the
Credit Agreement; [and] (vi) agrees that it will perform in accordance with
their terms all of the obligations which by the
__________________________
/2/ Delete bracketed language in Assignment Agreements executed after the
termination of the Total B Term Commitment.
EXHIBIT K
Page 3
terms of the Credit Agreement are required to be performed by it as a Lender;
and (viii) attaches the forms described in Section 11.04(b) of the Credit
Agreement]./3/
4. Following the execution of this Assignment Agreement by the Assignor
and the Assignee, an executed original hereof (together with all attachments)
will be delivered to the Administrative Agent. The effective date of this
Assignment Agreement shall be (x) the date upon which all of the following
conditions have been satisfied: (i) the execution hereof by the Assignor and
the Assignee, (ii) to the extent required by Section 11.04(b) of the Credit
Agreement, the consent hereto by the Administrative Agent and the Borrower
(which consent, in either case, shall not be unreasonably withheld), (iii) the
receipt by the Administrative Agent of the assignment fee referred to in Section
11.04(b) of the Credit Agreement and (iv) the recordation of the assignment
effected hereby by the Administrative Agent in the Lender Register as provided
in Section 11.16 of the Credit Agreement or (y) such later date as is otherwise
specified in Item 5 of Annex I hereto (the "Settlement Date").
5. Upon the delivery of a fully executed original hereof to the
Administrative Agent, as of the Settlement Date, (i) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment
Agreement, have the rights and obligations of a Lender thereunder and under the
other Credit Documents and (ii) the Assignor shall, to the extent provided in
this Assignment Agreement, relinquish its rights and be released from its
obligations under the Credit Agreement and the other Credit Documents.
6. It is agreed that upon the effectiveness hereof, the Assignee shall be
entitled to (w) all interest on the Assigned Share of the B Term Loans, C Term
Loans-Floating Rate, C Term Loans-Fixed Rate, RF Loans and/or AF Loans at the
rates specified in Item 6 of Annex I, (x) all TF Commitment Commission (if
applicable) on the Assigned Share of the Total B Term Commitment at the rate
specified in Item 7 of Annex I, (y) all RF Commitment Commission (if applicable)
on the Assigned Share of the Total Revolving Commitment at the rate specified in
Item 8 of Annex I and (z) all AF Commitment Commission (if applicable) on the
Assigned Share of the Total Acquisition Commitment at the rate specified in Item
9 of Annex I, which, in each case, accrue on and after the Settlement Date, such
interest and, if applicable, TF Commitment Commission, RF Commitment Commission
and/or AF Commitment Commission, to be paid by the Administrative Agent, upon
receipt thereof from the Borrower, directly to the Assignee. It is further
agreed that all payments of principal made by the Borrower on the Assigned Share
of the B Term Loans, C Term Loans-Floating Rate, C Term Loans-Fixed Rate, RF
Loans
________________________
/3/ If the Assignee is organized under the laws of a jurisdiction outside the
United States.
EXHIBIT K
Page 4
and/or AF Loans which occur on and after the Settlement Date will be paid
directly by the Administrative Agent to the Assignee. Upon the Settlement Date,
the Assignee shall pay to the Assignor an amount specified by the Assignor in
writing which represents the Assignee's Assigned Share of the principal amount
of the B Term Loans, C Term Loans-Floating Rate, C Term Loans-Fixed Rate, RF
Loans and/or AF Loans which are outstanding on the Settlement Date, net of any
closing costs. The Assignor and the Assignee shall make all appropriate
adjustments in payments under the Credit Agreement for periods prior to the
Settlement Date directly between themselves.
7. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICT OF LAWS.
* * *
EXHIBIT K
Page 5
IN WITNESS WHEREOF, the parties hereto have caused this Assignment Agreement
to be executed by their respective officers thereunto duly authorized, as of the
date first above written.
[NAME OF ASSIGNOR],
as Assignor
By____________________________
Title:
[NAME OF ASSIGNEE],
as Assignee
By____________________________
Title:
Acknowledged and Agreed:
[BANKERS TRUST COMPANY
as Administrative Agent
By____________________________
Title:
MJD COMMUNICATIONS, INC.,
as Borrower
By____________________________
Title]:/4/
____________________
/4/ The consent of the Administrative Agent and, so long as no Default or Event
of Default is then in existence, the Borrower is required in connection with any
assignment to an Eligible Transferee pursuant to clause (y) of Section 11.04(b)
of the Credit
(continued...)
ANNEX I
-------
ANNEX FOR ASSIGNMENT AGREEMENT
ANNEX I
1. The Borrower: MJD Communications, Inc.
2. Name and Date of Credit Agreement:
Credit Agreement, dated as of March 30, 1998,
among the Borrower, the lenders from time to time
party thereto, NationsBank of Texas, N.A., as
Syndication Agent, and Bankers Trust Company, as
Administrative Agent.
3. Date of Assignment Agreement:
_________ ___, ___
4. Amounts (as of date of item #3 above):
Outstanding
Outstanding Principal of
Total Outstanding Principal of C C Term Total Total
B Term Principal of B Term Loans- Loans- Revolving Acquisition
Commitment Term Loans Floating Rate Fixed Rate Commitment Commitment
----------- ---------- ------------- ---------- ---------- ----------
a. Aggregate
Amount for all
Lenders $_________ $_________ $____________ $__________ $___________ $___________
b. Assigned
Share __________% __________% _____________% ___________% ____________% ____________%
c. Amount of
Assigned Share $_________]/5/ $_________ $____________ $__________ $___________ $___________
_________________________
/4/ (...continued)
Agreement (which consent, in either case, shall not be unreasonaly withheld).
/5/ To be included in an Assignment Agreement entered into prior to the
termination of the Total B Term Commitment.
ANNEX I
Page 2
5. Settlement Date:
_________ ___, ___
6. Rate of Interest As set forth in Section 1.08 of the Credit Agreement
to the Assignee: (unless otherwise agreed to by the Assignor and the
Assignee)./6/
7. TF Commitment As set forth in Section 2.01(a) of the Credit
Commission to the Agreement (unless otherwise agreed to by the Assignor
Assignee: and the Assignee)./7/
8. RF Commitment As set forth in Section 2.01(b) of the Credit Agreement
Commission to the (unless otherwise agreed to by the Assignor and the
Assignee: Assignee)./8/
9. AF Commitment As set forth in Section 2.01(c) of the Credit Agreement
Commission to the (unless otherwise agreed to by the Assignor and the
______________________
/6/ The Borrower and the Administrative Agent shall direct the entire amount
of the interest to the Assignee at the rate set forth in Section 1.08 of the
Credit Agreement, with the Assignor and the Assignee effecting any agreed upon
sharing of interest through payments by the Assignee to the Assignor.
/7/ Insert "Not Applicable" in lieu of text if no portion of the Total B Term
Commitment is being assigned. Otherwise, the Borrower and the Administrative
Agent shall direct the entire amount of the TF Commitment Commission to the
Assignee at the rate set forth in Section 2.01(a) of the Credit Agreement, with
the Assignor and the Assignee effecting any agreed upon sharing of the TF
Commitment Commission through payment by the Assignee to the Assignor.
/8/ Insert "Not Applicable" in lieu of text if no portion of the Total
Revolving Commitment is being assigned. Otherwise, the Borrower and the
Administrative Agent shall direct the entire amount of the RF Commitment
Commission to the Assignee at the rate set forth in Section 2.01(b) of the
Credit Agreement, with the Assignor and the Assignee effecting any agreed upon
sharing of the RF Commitment Commission through payment by the Assignee to the
Assignor.
ANNEX I
Page 3
Assignee: Assignee)./9/
10. Notices:
ASSIGNOR:
___________________
___________________
___________________
___________________
Attention:
Telephone No.:
Facsimile No.:
Reference:
ASSIGNEE:
___________________
___________________
___________________
___________________
Attention:
Telephone No.:
Facsimile No.:
Reference:
11. Payment Instructions:
_____________________
/9/ Insert "Not Applicable" in lieu of text if no portion of the Total
Acquisition Commitment is being assigned. Otherwise, the Borrower and the
Administrative Agent shall direct the entire amount of the AF Commitment
Commission to the Assignee at the rate set forth in Section 2.01(c) of the
Credit Agreement, with the Assignor and the Assignee effecting any agreed upon
sharing of the AF Commitment Commission through payment by the Assignee to the
Assignor.
ANNEX I
Page 4
ASSIGNOR:
___________________
___________________
___________________
___________________
ABA No.:
Account No.:
Reference:
Attention:
ASSIGNEE:
___________________
___________________
___________________
___________________
ABA No.:
Account No.:
Reference:
Attention:
ANNEX I
Page 5
Accepted and Agreed:
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By: ________________________ By: ________________________
Name: Name:
Title: Title:
