Exhibit 10.40
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AMENDED AND RESTATED
CREDIT AGREEMENT
among
FAIRPOINT COMMUNICATIONS CORP.,
VARIOUS LENDING INSTITUTIONS,
and
BANK OF AMERICA, N.A.,
as ADMINISTRATIVE AGENT
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BANC OF AMERICA SECURITIES LLC, DEUTSCHE
BANK SECURITIES INC., FIRST UNION SECURITIES, INC.
and COBANK, ACB,
as CO-ARRANGERS
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Dated as of October 20, 1999
and Amended and Restated as
of March 27, 2000
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$165,000,000
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TABLE OF CONTENTS
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SECTION 1. Definitions......................................................1
SECTION 2. Amount and Terms of Credit......................................23
2.01 Commitment......................................................23
2.02 Minimum Borrowing Amounts, etc..................................23
2.03 Notice of Borrowing.............................................23
2.04 Disbursement of Funds...........................................24
2.05 Register........................................................25
2.06 Conversions.....................................................25
2.07 Pro Rata Borrowings.............................................26
2.08 Interest........................................................26
2.09 Interest Periods................................................26
2.10 Increased Costs, Illegality, etc................................27
2.11 Compensation....................................................29
2.12 Change of Lending Office........................................30
2.13 Replacement of Lenders..........................................30
SECTION 3. Letters of Credit...............................................31
3.01 Letters of Credit...............................................31
3.02 Maximum Letter of Credit Outstandings; Final Maturities.........32
3.03 Letter of Credit Requests; Minimum Stated Amount................33
3.04 Letter of Credit Participations.................................33
3.05 Agreement to Repay Letter of Credit Drawings....................35
3.06 Increased Costs.................................................36
SECTION 4. Commitment Commission; Fees; Reductions of Commitment...........37
4.01 Fees............................................................37
4.02 Voluntary Termination of Commitments............................38
4.03 Mandatory Reductions of Commitments, etc........................39
SECTION 5. Payments........................................................40
5.01 Voluntary Prepayments...........................................40
5.02 Mandatory Repayments............................................41
5.03 Method and Place of Payment.....................................42
5.04 Net Payments....................................................43
SECTION 6. Conditions Precedent............................................45
(i)
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6.01 Conditions Precedent to Restatement Effective Date..............45
6.02 Conditions Precedent to all Credit Events.......................49
SECTION 7. Representations, Warranties and Agreements......................50
7.01 Company Status..................................................50
7.02 Company Power and Authority.....................................50
7.03 No Violation....................................................50
7.04 Litigation......................................................51
7.05 Use of Proceeds; Margin Regulations.............................51
7.06 Governmental Approvals..........................................51
7.07 Investment Company Act..........................................51
7.08 Public Utility Holding Company Act..............................51
7.09 True Disclosure.................................................51
7.10 Financial Condition; Financial Statements.......................52
7.11 The Security Documents..........................................52
7.12 Tax Returns and Payments........................................53
7.13 Compliance with ERISA...........................................53
7.14 Subsidiaries....................................................54
7.15 Intellectual Property...........................................54
7.16 Environmental Matters...........................................55
7.17 Labor Relations.................................................55
7.18 Compliance with Statutes, etc...................................55
7.19 Indebtedness....................................................55
7.20 Insurance.......................................................55
7.21 Year 2000.......................................................56
SECTION 8. Affirmative Covenants...........................................56
8.01 Information Covenants...........................................56
8.02 Books, Records and Inspections..................................58
8.03 Insurance.......................................................58
8.04 Payment of Taxes................................................58
8.05 Corporate Franchises............................................58
8.06 Compliance with Statutes, etc...................................58
8.07 ERISA...........................................................59
8.08 Good Repair.....................................................60
8.09 End of Fiscal Years; Fiscal Quarters............................60
8.10 Approvals.......................................................60
SECTION 9. Negative Covenants..............................................60
9.01 Business........................................................60
9.02 Consolidation, Merger, Sale or Purchase of Assets, etc..........61
9.03 Liens...........................................................62
9.04 Indebtedness....................................................64
9.05 Capital Expenditures............................................65
(ii)
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9.06 Advances, Investments and Loans.................................66
9.07 Limitation on Creation of Subsidiaries..........................67
9.08 Modifications...................................................67
9.09 Dividends, etc..................................................67
9.10 Transactions with Affiliates....................................69
9.11 Minimum Consolidated Revenue....................................69
9.12 Minimum Consolidated EBITDA.....................................70
9.13 Consolidated Senior Debt to Capitalization Ratio................70
9.14 Consolidated Debt to Capitalization Ratio.......................70
9.15 Interest Coverage Ratio.........................................71
9.16 Leverage Ratio..................................................71
9.17 Fixed Charge Ratio..............................................71
9.18 Limitation On Issuance of Subsidiary Stock......................71
9.19 Limitation on Assets of the Unrestricted Subsidiary.............71
SECTION 10. Events of Default..............................................72
10.01 Payments.......................................................72
10.02 Representations, etc...........................................72
10.03 Covenants......................................................72
10.04 Default Under Other Agreements.................................72
10.05 Bankruptcy, etc................................................73
10.06 ERISA..........................................................73
10.07 Amended and Restated Pledge Agreement..........................74
10.08 Amended and Restated Subsidiary Guaranty.......................74
10.09 Amended and Restated Preferred Stock Issuance and
Capital Contribution Agreement................................74
10.10 Judgments......................................................74
10.11 Change of Control..............................................74
SECTION 11. The Administrative Agent.......................................76
11.01 Appointment....................................................76
11.02 Nature of Duties...............................................76
11.03 Lack of Reliance on the Administrative Agent...................76
11.04 Certain Rights of the Administrative Agent.....................77
11.05 Reliance.......................................................77
11.06 Indemnification................................................77
11.07 The Administrative Agent in its Individual Capacity............77
11.08 Holders of Revolving Notes.....................................78
11.09 Resignation by the Administrative Agent........................78
SECTION 12. Miscellaneous..................................................78
12.01 Payment of Expenses, etc.......................................78
12.02 Right of Setoff................................................79
12.03 Notices........................................................80
(iii)
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12.04 Benefit of Agreement; Assignments and Participants........... 80
12.05 No Waiver; Remedies Cumulative............................... 82
12.06 Payments Pro Rata............................................ 82
12.07 Calculations; Computations................................... 83
12.08 Governing Law; Submission to Jurisdiction; Venue;
Waiver of Jury Trial......................................... 83
12.09 Counterparts................................................. 84
12.10 Effectiveness................................................ 84
12.11 Headings Descriptive......................................... 84
12.12 Amendment or Waiver.......................................... 84
12.13 Survival..................................................... 85
12.14 Domicile of Revolving Loans.................................. 85
12.15 Confidentiality.............................................. 85
12.16 Lender Register.............................................. 86
12.17 Amendment and Restatement of Existing Credit Agreement....... 86
ANNEX I -- Commitments
ANNEX II -- Addresses
ANNEX III -- ERISA
ANNEX IV -- Subsidiaries
ANNEX V -- Existing Indebtedness
ANNEX VI -- Insurance
ANNEX VII -- Existing Liens
ANNEX VIII -- Existing Investments
ANNEX IX -- Affiliate Transactions
ANNEX X -- Existing Letters of Credit
ANNEX XI -- Approvals
EXHIBIT A -- Form of Notice of Borrowing/Conversion
EXHIBIT B -- Form of Revolving Note
EXHIBIT C -- Form of Letter of Credit Request
EXHIBIT D -- Form of Section 5.04 Certificate
EXHIBIT E -- Form of Opinion of Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
EXHIBIT F -- Form of Officer's Certificate
EXHIBIT G -- Form of Amended and Restated Subsidiary Guaranty
EXHIBIT H -- Form of Amended and Restated Pledge Agreement
EXHIBIT I -- Form of Amended and Restated Security Agreement
EXHIBIT J -- Form of Solvency Certificate
EXHIBIT K -- Form of Amended and Restated Preferred Stock Issuance and Capital
Contribution Agreement
EXHIBIT L -- Form of Amended and Restated Tax Sharing Agreement
EXHIBIT M -- Form of Assignment Agreement
EXHIBIT N -- Form of MJD Preferred Stock Certificate of Designation
EXHIBIT O -- Form of Compliance Certificate
(iv)
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of October 20, 1999
and amended and restated as of March 27, 2000 among FAIRPOINT COMMUNICATIONS
CORP., a Delaware corporation (the "Borrower"), the lenders from time to time
party hereto (each, a "Lender" and, collectively, the "Lenders"), BANC OF
AMERICA SECURITIES LLC, DEUTSCHE BANK SECURITIES INC., FIRST UNION SECURITIES,
INC. and COBANK, ACB, as Co-Arrangers (each a "Co-Arranger" and together the
"Co-Arrangers") and BANK OF AMERICA, N.A., as Administrative Agent (the
"Administrative Agent"). Unless otherwise defined herein, all capitalized terms
used herein and defined in Section 1 are used herein as so defined.
W I T N E S S E T H :
WHEREAS, the Borrower, the Lenders, the Co-Arrangers and the
Administrative Agent are party to a Credit Agreement, dated as of October 20,
1999 and amended as of January 11, 2000 (as the same has been amended, modified
or supplemented to, but not including, the Restatement Effective Date, the
"Existing Credit Agreement"); and
WHEREAS, the parties hereto wish to further amend and restate the
Existing Credit Agreement as herein provided;
NOW, THEREFORE, the parties hereto agree that the Existing Credit
Agreement shall be and is hereby amended and restated in its entirety as
follows:
NOW, THEREFORE, IT IS AGREED:
SECTION 1. 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:
"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 11.09.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (which may include, but is 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.
"Agreement" shall mean this Amended and Restated Credit Agreement,
as the same may be from time to time further modified, amended, amended and
restated and/or supplemented.
"Amended and Restated Pledge Agreement" shall have the meaning
provided in Section 6.01(i).
"Amended and Restated Preferred Stock Issuance and Capital
Contribution Agreement" shall have the meaning provided in Section 6.01(n).
"Amended and Restated Security Agreement" shall have the meaning
provided in Section 6.01(j).
"Amended and Restated Subsidiary Guaranty" shall have the meaning
provided in Section 6.01(h).
"Amended and Restated Tax Sharing Agreement" shall have the meaning
provided in Section 6.01(o)
"Applicable CC Percentage" shall mean the applicable percentage per
annum set forth below based on the Pricing Level ("Pricing Level") then in
effect:
Applicable CC
Commitment
Pricing Level Percentage
Level I 1.50%
Level II 1.25%
Level III .75%
For purposes of the foregoing table:
"Pricing Level I" shall mean any fiscal quarter when the sum of (A)
the average aggregate principal amount of all Revolving Loans outstanding
during such fiscal quarter and (B) the average Letter of Credit
Outstandings during such quarter is less than 33 1/3% of the Total
Revolving Commitment at the end of such fiscal quarter.
"Pricing Level II" shall mean any fiscal quarter when the sum of (A)
the average aggregate principal amount of all Revolving Loans outstanding
during such fiscal quarter and (B) the average Letter of Credit
Outstandings during such fiscal quarter is equal to or greater than 33
1/3% and less than 66 2/3% of the Total Revolving Commitment at the end of
such fiscal quarter.
"Pricing Level III" shall mean any fiscal quarter when the sum of
(A) the average aggregate principal amount of all Revolving Loans
outstanding during such fiscal quarter and (B) the average Letter of
Credit Outstandings during such fiscal quarter is equal to or
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greater than 66 2/3% of the Total Revolving Commitment at the end of such
fiscal quarter.
"Applicable Margin" shall mean (i) during Phase I, a percentage per
annum equal to, in the case of (A) Base Rate Loans, 3.25% or (B) Eurodollar
Loans, 4.25% and (ii) after Phase I, from and after each day of delivery of any
certificate delivered in accordance with the first sentence of the following
paragraph indicating a different margin than that described in the immediately
preceding clause (i) above (each, a "Start Date") to and including the
applicable End Date described below, the Applicable Margin shall (subject to any
adjustment pursuant to the immediately succeeding paragraph) be that set forth
below opposite the Leverage Ratio indicated to have been achieved in any
certificate delivered in accordance with the following sentence:
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APPLICABLE MARGIN APPLICABLE MARGIN
FOR EURODOLLAR FOR BASE RATE LOANS
LEVERAGE RATIO LOANS
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greater than or
equal to
5.50:1.00 3.75% 2.75%
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greater than or
equal to
4.50:1.00 but
less than
5.50:1.00 3.50% 2.50%
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greater than or
equal to
3.50:1.00 but
less than
4.50:1.00 3.25% 2.25%
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less than
3.50:1.00 3.00% 2.00%
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The Leverage Ratio shall be determined based on the delivery of a
certificate of the Borrower by a senior financial officer of the Borrower to the
Administrative Agent and the Lenders, within 45 days of the last day of any
fiscal quarter of the Borrower, which certificate shall set forth the
calculation of the Leverage Ratio as at the last day of the Test Period ended
immediately prior to the relevant Start Date (but determined on a pro forma
basis to give effect to any Permitted Acquisition effected on or prior to the
date of the delivery of such certificate) and the Applicable Margins which shall
be thereafter applicable (until same are changed or cease to apply in accordance
with the following sentences); provided that at the time of the consummation of
any Permitted Acquisition or disposition of a business, a senior financial
officer of the
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Borrower shall deliver to the Administrative Agent a certificate setting forth
the calculation of the Leverage Ratio on a pro forma basis as of the last day of
the last Test Period ended prior to the date on which such Permitted Acquisition
is consummated for which financial statements have been made available (or were
required to be made available) pursuant to Section 8.01(a) or (b), as the case
may be, and the date of such consummation shall be deemed to be a Start Date and
the Applicable Margins which shall be thereafter applicable (until same are
changed or cease to apply in accordance with the following sentence) shall be
based upon the Leverage Ratio as so calculated. The Applicable Margins so
determined shall apply, except as set forth in the succeeding sentence, from the
relevant Start Date to the earliest of (x) the date on which the next
certificate is delivered to the Administrative Agent, (y) the date on which the
next Permitted Acquisition is consummated or (z) the date which is 45 days
following the last day of the Test Period in which the previous Start Date
occurred (such earliest date, the "End Date"), at which time, if no certificate
has been delivered to the Administrative Agent indicating an entitlement to new
Applicable Margins (and thus commencing a new Start Date), the Applicable
Margins shall be those set forth in the table above determined as if the
Leverage Ratio were greater than 5.50:1.00 (such Applicable Margins as so
determined, the "Highest Applicable Margins"). Notwithstanding anything to the
contrary contained above in this definition, the Applicable Margins shall be the
Highest Applicable Margins (subject to further adjustment to the extent provided
in Section 2.08(d)) at all times during which there shall exist any Default or
Event of Default.
"Approved Bank" shall have the meaning provided in the definition of
Cash Equivalents.
"Asset Sale" shall mean and include 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), 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 M (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.
"Bank of America" shall mean Bank of America, N.A., in its
individual capacity, and any successor corporation thereto by merger,
consolidation or otherwise.
"Bankruptcy Code" shall have the meaning provided in Section 10.05.
"Base Rate" at any time shall mean the higher of (i) the Reference
Rate and (ii) the rate which is 1/2 of 1% in excess of the Federal Funds Rate.
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"Base Rate Loan" shall mean each Revolving Loan designated or deemed
designated as such by the Borrower at the time of the incurrence thereof or
conversion thereto.
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrowing" shall mean the borrowing (including, without limitation,
with respect to any Existing Revolving Loan converted to a Revolving Loan
hereunder, a borrowing under the Existing Credit Agreement) of one Type of
Revolving Loan from all the Lenders on a given date (or resulting from a
conversion or conversions on such date) having in the case of Eurodollar Loans
the same Interest Period, provided that Base Rate Loans incurred pursuant to
Section 2.10(b) shall be considered part of the related Borrowing of Eurodollar
Loans.
"Business" shall have the meaning provided in Section 9.01.
"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 the New York interbank Eurodollar market.
"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.
"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
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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 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. ss. 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 MJD'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 MJD or (ii)
during any period of two consecutive years individuals who at the beginning of
such period constituted the Board of Directors of MJD (together with any new
directors whose election by such Board of Directors or whose nomination for
election by the stockholders of MJD was approved by a vote of a majority of the
directors of MJD 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 MJD then in office, (c) a "change of control" or similar event
shall occur as provided in any other agreement governing or evidencing material
Indebtedness (i) of the Borrower or (ii) of MJD resulting in an event of default
thereunder or entitling any holder thereof to require repayment prior to its
stated maturity or (d) MJD, together with the managers, officers, directors and
employees of the Borrower and MJD, shall cease to directly or indirectly own 75%
of the capital stock of the Borrower (although for purposes of this clause (d),
the aggregate amount of capital stock of the Borrower permitted to be held by
all such managers, officers, directors and employees may not exceed 15%).
"CLEC" shall mean one or more competitive local exchange carriers.
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"Co-Arranger" shall have the meaning provided in the first paragraph
of this Agreement.
"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 property (whether real or personal) with
respect to which any security interests have been granted (or purported to be
granted) pursuant to any Security Document, including, without limitation, all
Pledge Agreement Collateral, all Security Agreement Collateral and all cash and
Cash Equivalents delivered as collateral pursuant to Section 5.02 or 10.
"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Lenders.
"Comdisco Sale and Leaseback Transaction" shall mean the sale and
leaseback transaction entered into by the Borrower pursuant to (i) the Master
Technology Services Agreement, dated December 14, 1999, by and between Comdisco,
Inc. ("Comdisco") and the Borrower and (ii) the Purchase and Installed Equipment
Agreement, dated December 14, 1999, between Comdisco and the Borrower.
"Commitment Commission" shall have the meaning provided in Section
4.01(a).
"Company" shall mean any corporation, limited liability company,
partnership or other business entity (or the adjectival form thereof, where
appropriate).
"Company Documents" shall mean, with respect to any Company, such
Company's certificate of incorporation, certificate of formation, by-laws,
limited liability company agreement, partnership agreement or equivalent
organizational documents of such Company.
"Compliance Certificate" shall mean a certificate duly executed in
the form of Exhibit O.
"Consolidated Annualized EBITDA" shall mean, as of the last day of
any fiscal quarter, (x) Consolidated EBITDA for the six months then ended
multiplied by (y) two.
"Consolidated Annualized Fixed Charges" shall mean, as of the last
day of any fiscal quarter, (x) Consolidated Fixed Charges for the six months
then ended multiplied by (y) two.
"Consolidated Annualized Interest Expense" shall mean, as of the
last day of any fiscal quarter, (x) Consolidated Interest Expense for the six
months then ended multiplied by (y) two.
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"Consolidated Capital Expenditures" shall mean, for any period, the
aggregate of all cash expenditures (including all amounts expended under Capital
Leases 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 a
Permitted Acquisition whether or not allocable to property, plant and equipment
and (y) exclude amounts expended with insurance proceeds.
"Consolidated Cash Equity" shall mean, with respect to each issuance
or sale of any equity by the Borrower or any capital contribution to the
Borrower on or after October 20, 1999, the cash proceeds (net of underwriting
discounts and commissions and other costs associated therewith) received by the
Borrower from the respective sale or issuance of its equity or from the
respective capital contribution, including any income taxes recoverable by MJD
pursuant to the Amended and Restated Tax Sharing Agreement, which are recorded
by the Borrower on its balance sheet as a receivable owed by MJD to the Borrower
and paid in cash to the Borrower within 90 days thereof.
"Consolidated Debt" shall mean, as of any date of determination,
without duplication (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) plus all contingent
reimbursement obligations in respect of letters of credit (including Letters of
Credit).
"Consolidated Debt to Capitalization Ratio" shall mean, at any date
of determination, the ratio of the (x) remainder of (i) Consolidated Debt on
such date less (ii) the amount, if positive, of cash or Cash Equivalents held by
the Borrower and its Subsidiaries on such date in an amount greater than
$250,000 to (y) Total Capitalization on such date.
"Consolidated EBITDA" shall mean, for any period, 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) the non-cash
portion of any retirement or pension plan expense incurred by the Borrower or
any of its Subsidiaries, (v) depreciation expense and (vi) amortization expense
including any amortization or write-off related to the write-up of any assets as
a result of purchase accounting less 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, provided that Consolidated EBITDA for any such period during which a
Permitted Acquisition was consummated or a disposition of a business was
effected shall be determined on a pro forma basis as if such Permitted
Acquisition were consummated or disposition effected, as the case may be, on the
first day of such period.
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"Consolidated Fixed Charges" shall mean, for any period, the sum,
without duplication, of (i) Consolidated Interest Expense for such period, (ii)
the scheduled principal amount of all amortization payments on all Indebtedness
(including, without limitation, the principal component of all Capitalized Lease
Obligations) of the Borrower and its Subsidiaries for such period (as determined
on the first day of such period), (iii) the amount of all cash payments made by
the Borrower and its Subsidiaries in respect of income taxes or income tax
liabilities for such period, (iv) the amount of all Consolidated Capital
Expenditures made by the Borrower and its Subsidiaries for such period and (v)
the amount of all cash earn-out payments, deferred purchase price payments and
similar payments made (or required to be made) by the Borrower and its
Subsidiaries for such period in respect of acquisitions effected prior to the
Restatement Effective Date.
"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).
"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 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 and
(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.
"Consolidated Revenue" shall mean, for any period, the aggregate
stated Statement of Operations amount of all revenue of the Borrower and its
Subsidiaries on a consolidated basis as determined in accordance with GAAP.
"Consolidated Senior Debt" shall mean, at any time, (i) Consolidated
Debt at such time less (ii) any such Consolidated Debt that constitutes
Permitted Subordinated Debt and/or Permitted Refinancing Indebtedness.
-9-
"Consolidated Senior Debt to Capitalization Ratio" shall mean, at
any date of determination, the ratio of the (x) remainder of (i) Consolidated
Senior Debt on such date, less (ii) the amount, if positive, of cash or Cash
Equivalents held by the Borrower and its Subsidiaries on such date in an amount
greater than $250,000 to (y) Total Capitalization.
"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.
"Conversion/Contribution Certificate" shall have the meaning
provided in Section 5.02(e).
"Conversion Option" shall have the meaning provided in Section
5.02(d).
"Credit Documents" shall mean this Agreement and after the execution
and delivery thereof pursuant to the terms of this Agreement, each Revolving
Note, the Amended and Restated Preferred Stock Issuance and Capital Contribution
Agreement, the Amended and Restated Subsidiary Guaranty and each Security
Document.
"Credit Event" shall mean the making of any Revolving Loans or the
issuance of any Letters of Credit.
"Credit Party" shall mean MJD, the Borrower and each Subsidiary of
the Borrower 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.
-10-
"Dividends" shall have the meaning provided in Section 9.09.
"Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States.
"Drawing" shall have the meaning provided in Section 3.05(b).
"EBITDA Cure" shall have the meaning provided in Section 10.
"Eligible Transferee" shall mean and include a commercial bank,
financial institution or other institutional "accredited investor" as defined in
SEC Regulation D.
"End Date" shall have the meaning provided in the definition of
Applicable Margin.
"Environmental Claims" shall mean 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 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" shall mean 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 X.X.X.xx. 1251 et seq.;
the Toxic Substances Control Act, 15 X.X.X.xx. 7401 et seq.; the Clean Air Act,
as amended, 42 X.X.X.xx. 7601 et seq.; the Safe Drinking Water Act, 42 X.X.X.xx.
300F et seq.; the Oil Pollution Act of 1990, 33 X.X.X.xx. 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.
-11-
"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 Loan" shall mean each Revolving Loan designated or
deemed designated as such by the Borrower at the time of the incurrence thereof
or conversion thereto.
"Eurodollar Rate" shall mean (a) the offered quotation to
first-class banks in the New York interbank Eurodollar market by Bank of America
for Dollar deposits of amounts in immediately available funds comparable to the
outstanding principal amount of the relevant Eurodollar Loan with maturities
comparable to the Interest Period applicable to such Eurodollar Loan commencing
two Business Days thereafter as of 11:00 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 nearest 1/16 of 1%) by (b) 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 required by applicable law) applicable to any member bank of the
Federal Reserve System in respect of Eurocurrency funding or 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 10.
"Excess Cash Flow" shall mean, for any period, the remainder of (a)
the sum of (i) Consolidated EBITDA for such period, minus (b) the sum of (i)
provisions for cash income taxes based on income, (ii) Consolidated Interest
Expense, (iii) Consolidated Capital Expenditures made by the Borrower and its
Subsidiaries during such period, and (iv) the aggregate amount of required
principal payments of Indebtedness for borrowed money of the Borrower and its
Subsidiaries during such period (other than repayments of Revolving Loans,
provided that repayments of Revolving Loans shall be deducted in determining
Excess Cash Flow if such repayments were made as a voluntary prepayment with
internally generated funds (but only to the extent accompanied by a voluntary
reduction to the Total Revolving Commitment)).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Existing Credit Agreement" shall have the meaning provided in the
recitals to this Agreement, as in effect immediately prior to the Restatement
Effective Date.
"Existing Credit Documents" shall mean the Existing Credit
Agreement, each promissory note executed and delivered pursuant to the Existing
Credit Agreement, the Existing Preferred Stock Issuance and Capital Contribution
Agreement, the Existing Subsidiary Guaranty and each Existing Security Document.
"Existing Indebtedness" shall have the meaning provided in Section
7.19.
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"Existing Lender" shall mean each of the lenders party to the
Existing Credit Agreement on the Restatement Effective Date.
"Existing Letter of Credit" shall have the meaning provided in
section 3.01(c).
"Existing Pledge Agreement" shall mean the Pledge Agreement executed
and delivered pursuant to the Existing Credit Agreement, as in effect
immediately prior to the Restatement Effective Date.
"Existing Preferred Stock Issuance and Capital Contribution
Agreement" shall mean the Preferred Stock Issuance and Capital Contribution
Agreement executed and delivered pursuant to the Existing Credit Agreement, as
in effect immediately prior to the Restatement Effective Date.
"Existing Revolving Loan" shall mean each "Revolving Loan" under,
and as defined in, the Existing Credit Agreement outstanding on the Restatement
Effective Date.
"Existing Subsidiary Guaranty" shall mean the Subsidiary Guaranty
executed and delivered pursuant to the Existing Credit Agreement, as in effect
immediately prior to the Restatement Effective Date.
"Existing Security Agreement" shall mean the Security Agreement
executed and delivered pursuant to the Existing Credit Agreement, as in effect
immediately prior to the Restatement Effective Date.
"Existing Security Document" shall mean and include each of the
Existing Security Agreement and the Existing Pledge Agreement.
"FCC" shall mean the Federal Communications Commission and any
successor regulatory body.
"Federal Funds 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 4.01.
"Final Maturity Date" shall mean 364 days from the Restatement
Effective Date; provided that upon receiving the approvals to be obtained
pursuant to Section 8.10(i), the Final Maturity Date shall be extended to
October 20, 2004.
"Fronting Fee" shall have the meaning provided in Section 4.01(c).
-13-
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time; it being understood and
agreed that determinations in accordance with GAAP for purposes of Sections 9.11
through 9.17, including defined terms as used therein, are subject (to the
extent provided therein) to Section 12.07(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.
"Highest Applicable Margin" shall have the meaning provided in the
definition of Applicable Margin.
"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 unreimbursed drafts drawn thereunder, (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 lesser
of the fair market value of such property and the amount of such indebtedness),
(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, (viii) all
accounts payable of the Borrower and its Subsidiaries not paid within 90 days of
the date such amounts are due and payable and not contested by the Borrower or
its Subsidiaries and (ix) 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.
"Information Systems and Equipment" shall mean all computer
hardware, firmware and software, as well as other information processing
systems, or any equipment containing embedded microchips, whether directly
owned, licensed, leased, operated or otherwise controlled by the Borrower or any
of its Subsidiaries, including through third-party service providers, and which,
in whole or in part, are used, operated, relied upon, or integral to, the
Borrower's or any of its Subsidiaries' conduct of their business.
"Interest Period" with respect to any Revolving Loan shall mean the
interest period applicable thereto, as determined pursuant to Section 2.09.
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"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.
"Issuing Lender" shall mean Bank of America.
"L/C Supportable Obligations" shall mean obligations for which a
Letter of Credit may be issued in accordance with Section 7.05(a).
"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
Borrowing or to fund its portion of any unreimbursed payment under Section
3.04(c) or (ii) a Lender having notified the Administrative Agent and/or the
Borrower that it does not intend to comply with its obligations under Section 2
or 3.
"Lender Register" shall have the meaning provided in Section 12.16.
"Letter of Credit" shall have the meaning provided in Section
3.01(a).
"Letter of Credit Fee" shall have the meaning provided in Section
4.01(b).
"Letter of Credit Outstandings" shall mean, at any time, the sum of
(i) the aggregate Stated Amount of all outstanding Letters of Credit and (ii)
the amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in
Section 3.03(a).
"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 the aggregate amount of cash or Cash Equivalents held by the
Borrower and its Subsidiaries on such date in an amount greater than $250,000 to
(y) Consolidated Annualized EBITDA as of the last day of the fiscal quarter then
or last ended.
"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).
"Management Services Agreement" shall mean the management agreement
dated as of October 20, 1999 between the Borrower and MJD.
"Margin Stock" shall have the meaning provided in Regulation U.
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"Material Adverse Effect" shall mean a material adverse effect on
the business, property, assets, liabilities or condition (financial or
otherwise) (i) of the Borrower and its Subsidiaries taken as a whole or (ii) of
MJD on a stand-alone basis; provided that the definition of Material Adverse
Effect shall only include clause (ii) for the purposes of Section 6.01(e).
"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 for such period.
"Minimum Borrowing Amount" shall mean in the case of Revolving
Loans, $1,000,000.
"MJD" shall mean MJD Communications, Inc., a Delaware corporation.
"MJD Credit Agreement" shall mean the credit agreement among MJD
Communications, Inc., various Lenders party thereto, Bank of America, N.A., as
Syndication Agent and Bankers Trust Company, as Administrative Agent, dated as
of March 30, 1998 (as such agreement may be amended, supplemented or modified
from time to time).
"MJD Preferred Stock" shall mean preferred stock of MJD issued
pursuant to the Certificate of Designation attached hereto as Exhibit N.
"Xxxxx'x" shall have the meaning provided in the definition of Cash
Equivalents.
"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, any such Subsidiary or ERISA Affiliate
contributed to or had an obligation to contribute to such plan.
"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.
"Net Debt Proceeds" shall mean, with respect to any incurrence of
Indebtedness for borrowed money, the cash proceeds (net of underwriting
discounts and commissions and other reasonable costs associated therewith)
received by the respective Person from the respective incurrence of such
Indebtedness for borrowed money.
"Net Insurance Proceeds" shall mean, with respect to any Recovery
Event, the cash proceeds (net of reasonable costs and taxes incurred in
connection with such Recovery Event) received by the respective Person in
connection with the respective Recovery Event.
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"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-Defaulting Lender" shall mean a Lender that is not a Defaulting
Lender.
"Notice of Borrowing" shall have the meaning provided in Section
2.03.
"Notice of Conversion" shall have the meaning provided in Section
2.06.
"Notice Office" shall mean the office of the Administrative Agent at
000 Xxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxx 00000-0000 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 Agent, the Collateral Agent, or any Lender pursuant to the
terms of this Agreement or any other Credit Document.
"Participant" shall have the meaning provided in Section 3.04.
"Payment Office" shall mean the office of the Administrative Agent
located at 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxx 00000-0000 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 Restatement Effective 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 10%
of the Consolidated Senior Debt at 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
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States if (i) at least 10 Business Days prior to the consummation of such
acquisition, the Borrower shall deliver to the Administrative Agent a
certificate of the Borrower's Chief Financial Officer certifying that (and
showing calculations in reasonable detail) immediately prior to, and after
giving effect to, such acquisition all the covenants contained in this Agreement
(including Sections 9.11 through 9.17, inclusive), 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 (in the case of a business, division or
product line) is owned by a Subsidiary.
"Permitted Holders" shall have the meaning provided in the MJD
Credit Agreement as amended from time to time.
"Permitted Liens" shall mean Liens described in clauses (a) through
(n), inclusive, of Section 9.03.
"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 9.04(f), (g), (h), (i) and (j) or any 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 (plus interest then due and payable plus any fees
incurred in connection with incurring such Indebtedness) 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 favorable 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
required to be reasonably satisfactory to the Administrative Agent.
"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.
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"Phase I" shall mean the period from the Restatement Effective Date
through the date on which the Borrower submits a Compliance Certificate
indicating that the Borrower has achieved two consecutive fiscal quarters of
positive Consolidated EBITDA.
"Phase II" shall mean all times after the conclusion of Phase I.
"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 Collateral" shall mean "Collateral" as defined in
the Amended and Restated Pledge Agreement.
"Pledged Securities" shall mean all the Pledged Securities as
defined in the Amended and Restated Pledge Agreement.
"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 MJD generating proceeds of at least $75,000,000.
"RCRA" shall mean the Resource Conservation and Recovery Act, as
amended, 42 U.S.C.ss.6901 et seq.
"Recovery Event" shall mean the receipt by the Borrower or any of
its Subsidiaries of any cash insurance proceeds or condemnation awards payable
(i) by reason of theft, loss, physical destruction, damage, taking or any other
similar event with respect to any property or assets of the Borrower or any of
its Subsidiaries and (ii) under any policy of insurance required to be
maintained under Section 8.03.
"Reference Rate" shall mean the rate of interest publicly announced
from time to time by Bank of America as its "reference rate." It is a rate set
by Bank of America based upon various factors, including Bank of America's costs
and desired return, general economic conditions and other factors, and is used
as a reference point for pricing some loans, which may be priced at, above, or
below such announced rate. Any change in the Reference Rate announced by Bank of
America shall take effect at the opening of business on the day specified in the
public announcement of such change.
"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.
-19-
"Regulation T" shall mean Regulation T 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.
"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.
"Regulation X" shall mean Regulation X 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.
"Regulation Y" shall mean Regulation Y of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or portion thereof.
"Replaced Lender" shall have the meaning provided in Section 2.13.
"Replacement Assets" shall have the meaning provided in Section
4.03(b).
"Replacement Lender" shall have the meaning provided in Section
2.13.
"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 Lenders" shall mean Non-Defaulting Lenders the sum of
whose Revolving Commitments (or after the termination thereof, outstanding
Revolving Loans and RL Percentages of Letter of Credit Outstandings) represent
an amount greater than the Required Percentage of the sum of the Total Revolving
Commitment less the Revolving Commitments of all Defaulting Lenders (or after
the termination thereof, the sum of the then total outstanding Revolving Loans
of Non-Defaulting Lenders and the aggregate RL Percentages of all Non-Defaulting
Lenders of the total Letter of Credit Outstandings at such time).
"Required Percentage" shall mean (i) 66 2/3% at any time there are
four Lenders or less and (ii) 50.1% at any time there are greater than four
Lenders.
"Restatement Effective Date" shall have the meaning provided in
Section 12.10.
"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 4.02, 4.03 and/or 10 or (y)
adjusted from time to time as a result of assignments to or from such Lender
pursuant to Section 2.13 and/or 12.04.
"Revolving Loan" shall have the meaning provided in Section 2.01.
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"Revolving Note" shall have the meaning provided in Section 2.05(a).
"RL Percentage" of any Lender at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Revolving Commitment
of such Lender at such time and the denominator of which is the Total Revolving
Commitment at such time, provided that if the RL Percentage of any Lender is to
be determined after the Total Revolving Commitment has been terminated, then the
RL Percentages of the Lenders shall be determined immediately prior (and without
giving effect) to such termination.
"SEC" shall have the meaning provided in Section 8.01(g).
"S&P" shall have the meaning provided in the definition of Cash
Equivalents.
"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 5.04 Certificate" shall have the meaning provided in
Section 5.04(b)(ii).
"Secured Creditor" shall have the meaning assigned the term in the
respective Security Documents.
"Security Agreement Collateral" shall mean all "Collateral" as
defined in the Amended and Restated Security Agreement.
"Security Document" shall mean and include each of the Amended and
Restated Security Agreement and the Amended and Restated Pledge Agreement.
"Standby Letter of Credit" shall have the meaning provided in
Section 3.01(a).
"Start Date" shall have the meaning provided in the definition of
Applicable Margin.
"Stated Amount" of each Letter of Credit shall mean, at any time,
the maximum amount available to be drawn thereunder (in each case determined
without regard to whether any conditions to drawing could then be met).
"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. Notwithstanding
the foregoing, the Unrestricted Subsidiary shall not be considered a Subsidiary
of the Borrower except for the purposes of Sections 7.04, 7.12, 7.13, 8.01(f),
8.04, 8.07, 9.10, 10.05, 10.06 and 10.10. Unless otherwise expressly provided,
all references herein to "Subsidiary" shall mean a Subsidiary of the Borrower.
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"Subsidiary Guarantors" shall mean each Subsidiary party to the
Amended and Restated Subsidiary Guaranty.
"Taxes" shall have the meaning provided in Section 5.04(a).
"Test Period" shall mean the four consecutive fiscal quarters of the
Borrower then last ended (in each case taken as one accounting period).
"Total Capitalization" shall mean, at any date of determination, the
sum of Consolidated Debt on such date plus the sum of (x) $22,400,000 and (y)
Consolidated Cash Equity received by the Borrower on or after October 20, 1999
and until and including the date of determination.
"Total Revolving Commitment" shall mean, at any time, the sum of the
Revolving Commitments of each of the Lenders.
"Total Unutilized Revolving Commitment" shall mean, at any time, an
amount equal to the remainder of (x) the Total Revolving Commitment then in
effect less (y) the sum of the aggregate principal amount of all Revolving Loans
then outstanding plus the then aggregate amount of all Letter of Credit
Outstandings.
"Trade Letter of Credit" shall have the meaning provided in Section
3.01(a).
"Trigger Event" shall have the meaning provided in Section 5.02(d).
"Type" shall mean any type of Revolving 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.
"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.
"Unpaid Drawing" shall have the meaning provided in Section 3.05(a).
"Unrestricted Subsidiary" shall mean a Subsidiary of the Borrower
(whether existing on or after the Restatement Effective Date) which shall have
as its sole asset the Borrower's membership interest at any time in Northeast
Captive Access Providers, LLC.
"Unutilized Revolving Commitment" shall mean, with respect to any
Lender at any time, such Lender's Revolving Commitment at such time less the sum
of (i) the aggregate outstanding principal amount of all Revolving Loans made by
such Lender at such time and (ii) such Lender's RL Percentage of the Letter of
Credit Outstandings at such time.
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"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 2. Amount and Terms of Credit.
2.01 Commitment. Subject to and upon the terms and conditions set
forth herein, each Lender severally agrees to (x) convert (to the extent
permitted to remain outstanding in compliance with Section 6.01(m)(ii), on the
Restatement Effective Date, the Existing Revolving Loans made by such Lender
pursuant to the Existing Credit Agreement into Revolving Loans hereunder and (y)
make, at any time and from time to time on and after the Restatement Effective
Date and prior to the Final Maturity Date, a revolving loan or revolving loans
(each, a "Revolving Loan" and, collectively, the "Revolving Loans") to the
Borrower, which Revolving Loans (i) shall, at the option of the Borrower, be
incurred and maintained as, and/or converted into, Base Rate Loans or Eurodollar
Loans, provided that except as otherwise specifically provided in Section
2.10(b), all Revolving Loans comprising the same Borrowing shall at all times be
of the same Type, (ii) may be repaid and reborrowed in accordance with the
provisions hereof, (iii) may not be incurred by the Borrower unless if, after
giving effect thereto, (A) the Consolidated Senior Debt to Capitalization Ratio
is not greater than (I) 67% during Phase I and (II) 75% during Phase II and (B)
the Consolidated Debt to Capitalization Ratio is not greater than 75%, (iv)
shall not exceed for any Lender at any time outstanding that aggregate principal
amount which, when added to the product of (x) such Lender's RL Percentage and
(y) the aggregate amount of all Letter of Credit Outstandings (exclusive of
Unpaid Drawings which are repaid with the proceeds of, and simultaneously with
the incurrence of, the respective incurrence of Revolving Loans) at such time,
equals the Revolving Commitment of such Lender at such time and (v) shall not
exceed for all Lenders at any time outstanding that aggregate principal amount
which, when added to the aggregate amount of all Letter of Credit Outstandings
(exclusive of Unpaid Drawings which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of Revolving
Loans) at such time, equals the Total Revolving Commitment at such time.
2.02 Minimum Borrowing Amounts, etc. The aggregate principal amount
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 5 Borrowings of Eurodollar Loans.
2.03 Notice of Borrowing. (a) Whenever the Borrower desires to incur
Revolving Loans hereunder, 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
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notice promptly confirmed in writing) of each proposed incurrence of Base Rate
Loans (other than Revolving Loans made pursuant to Section 3.05(a)(ii)). Each
such notice (each, a "Notice of Borrowing") shall be in the form of Exhibit A
and shall specify (i) the aggregate principal amount of the Revolving Loans to
be made pursuant to such incurrence, (ii) the date of incurrence (which shall be
a Business Day) and (iii) whether the respective Borrowing shall consist of Base
Rate Loans or, to the extent permitted hereunder, Eurodollar 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
Revolving Loans and of such Lender's proportionate share thereof and of the
other matters covered by the Notice of Borrowing.
(b) The Borrower irrevocably agrees, by accepting the issuance of
any Letter of Credit, to the incurrence of Revolving Loans as set forth in
Section 3.05(a)(ii).
(c) 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.
2.04 Disbursement of Funds. (a) No later than 1:00 P.M. (New York
time) on the date specified in each Notice of Borrowing, each Lender will make
available its pro rata share of each Borrowing requested to be made on such
date. 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 (but in no event later than 4:00 P.M. (New York
time)) will make available to the Borrower by depositing to its account at the
Payment Office or as otherwise directed in the applicable 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 available 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 pay such corresponding amount to the
Administrative Agent as promptly as practicable. 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
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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 Rate
or (y) if paid by the Borrower, the then applicable rate of interest, calculated
in accordance with Section 2.08, for the respective Revolving 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.
2.05 Register. (a) The Borrower's obligation to pay the principal
of, and interest on, the Revolving Loans made to it by each Lender shall be set
forth in the Lender Register maintained by the Administrative Agent pursuant to
Section 12.16, and if requested by any Lender shall be evidenced by a promissory
note substantially in the form of Exhibit B with blanks appropriately completed
in conformity herewith (each such note, a "Revolving Note" and, collectively,
the "Revolving Notes").
(b) Each Lender will note on its internal records the amount of each
Revolving Loan made by it and each payment in respect thereof and will, prior to
any transfer of any of its Revolving Notes, endorse on the reverse side thereof
the outstanding principal amount of Revolving Loans evidenced thereby. Failure
to make any such notation shall not affect the Borrower's obligations in respect
of such Revolving Loans.
2.06 Conversions. The Borrower shall have the option to convert on
any Business Day all or a portion at least equal to the applicable Minimum
Borrowing Amount of the outstanding principal amount of Revolving Loans made
pursuant to one or more Borrowings of one or more Types of Revolving Loans into
a Borrowing of another Type of Revolving Loans 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) Revolving Loans which
are Base Rate Loans may not be converted into Eurodollar Loans when a Default
under Section 10.01 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
and (iii) Borrowings of Eurodollar Loans resulting from this Section 2.06 shall
be limited in number as provided in Section 2.02. Each such conversion 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") which shall be in the form of Exhibit A and shall specify the
Revolving Loans to be so converted, the Type of Revolving Loans to be converted
into and, if to be converted into a Borrowing of Eurodollar Loans, the Interest
Period to be initially applicable thereto. The Administrative Agent shall give
each Lender prompt notice of any such proposed conversion affecting any of its
Revolving Loans. Upon any such conversion the proceeds thereof will be deemed to
be applied directly on the day of such conversion to prepay the outstanding
principal amount of the Revolving Loans being converted.
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2.07 Pro Rata Borrowings. All Borrowings of Revolving Loans under
this Agreement shall be incurred by the Lenders pro rata on the basis of their
Revolving Commitments. It is understood that no Lender shall be responsible for
any default by any other Lender in its obligation to make Revolving Loans
hereunder and that each Lender shall be obligated to make the Revolving Loans
provided to be made by it hereunder, regardless of the failure of any other
Lender to fulfill its commitments hereunder.
2.08 Interest. (a) The unpaid principal amount of each Base Rate
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
Margin for Base Rate Loans 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 Margin for Eurodollar
Loans plus the relevant Eurodollar Rate.
(c) Interest in respect of any overdue amount payable hereunder
shall accrue at a rate per annum equal to the greater of (i) the Base Rate in
effect from time to time plus the sum of (i) 2% and (ii) the rate which is 2% in
excess of the rate borne by such Revolving Loans. Interest which accrues under
this Section 2.08(c) shall be payable on demand.
(d) 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, (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 of three months, on each date
occurring at three month intervals after the first day of such Interest Period
and, on any prepayment or conversion (on the amount prepaid or converted) and
(iii) in respect of each such Revolving Loan at maturity (whether by
acceleration or otherwise) and, after such maturity, on demand.
(e) All computations of interest hereunder shall be made in
accordance with Section 12.07(b).
(f) 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.
2.09 Interest Periods. (a) At the time the Borrower gives a Notice
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) the Interest Period applicable to such Borrowing, which Interest Period
shall, at the option of the
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Borrower, be a one, two, three, or six 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;
(iv) no Interest Period in respect of any Borrowing of Eurodollar
Loans shall be selected which extends beyond the Final Maturity Date;
(v) no Interest Period may be elected at any time when a Default
under Section 10.01 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; and
(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.
2.10 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 Restatement Effective Date which
materially and adversely affects the interbank Eurodollar market;
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(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 5.04 and any
increased cost or reduction in the amount received or receivable resulting
from the imposition of or a change in the rate of taxes or similar charges
or determined by reference to the net income or profits of such Lender
pursuant to the laws of the jurisdiction in which it is organized or in
which its principal office or applicable lending office is located or any
subdivision thereof or therein) because of (x) any change since the
Restatement 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 Conversion 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 hereunder (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 2.10(b) as promptly as
possible and, in any event, within the time period required by law.
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(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 2.10(a)(ii), the Borrower may (and in the
case of a Eurodollar Loan affected pursuant to Section 2.10(a)(iii), the
Borrower shall within the time period required 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 2.10(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 2.10(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 2.10(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 Restatement 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 Restatement 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 2.10(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
2.10(c) upon the subsequent receipt of such notice.
2.11 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 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
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Borrower or deemed withdrawn pursuant to Section 2.10(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 2.10(b).
(b) Notwithstanding anything in this Agreement to the contrary, to
the extent any notice or request required by Section 2.10, 2.11, 3.06 or 5.04 of
this Agreement is given by any Lender more than 90 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 2.10, 2.11, 3.06 or 5.04 of
this Agreement for any amounts incurred or accruing prior to the giving of such
notice to the Borrower.
2.12 Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 2.10(a)(ii) or
(iii), 2.10(c), 3.06 or 5.04 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
Revolving 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 2.12 shall affect or postpone any of the obligations of
the Borrower or the right of any Lender provided in Section 2.10, 3.06 or 5.04.
2.13 Replacement of Lenders. (w) If any Lender becomes a Defaulting
Lender or otherwise defaults in its obligations to make Revolving Loans, (x)
upon the occurrence of an event giving rise to the operation of Section
2.10(a)(ii) or (iii), Section 2.10(c), Section 3.06 or Section 5.04 with respect
to any Lender which results in such Lender charging to the Borrower increased
costs in excess of those being generally charged by the other Lenders, (y) upon
the occurrence of an event giving rise to the operation of Section 5.02(d) with
respect to any Lender which results in such Lender exercising its Conversion
Option or (z) in the case of a refusal by a Lender to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Lenders as (and to the
extent) provided in Section 12.12(b), the Borrower shall have the right, if no
Default or Event of Default then exists (or, (I) in the case of the preceding
clause (y) whether or not a Default or an Event of Default exists and (II) in
the case of preceding clause (z), no Default or Event of Default will exist
immediately after giving effect to such replacement), to replace such Lender
(the "Replaced Lender") with one or more other Eligible Transferees, none of
whom shall constitute a Defaulting Lender at the time of such replacement
(collectively, the "Replacement Lender") and each of whom shall be required to
be reasonably acceptable to the Administrative Agent, provided that (i) at the
time of any replacement pursuant to this Section 2.13, the Replacement Lender
shall enter into one or more Assignment Agreements pursuant to Section 12.04(b)
(and with all fees payable pursuant to said Section 12.04(b) to be paid by the
Replacement Lender)
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pursuant to which the Replacement Lender shall acquire the entire Revolving
Commitment and outstanding Revolving Loans of, and in each case participations
in Letters of Credit by, the Replaced Lender and, in connection therewith, shall
pay to (x) the Replaced Lender in respect thereof an amount equal to the sum of
(I) an amount equal to the principal of, and all accrued interest on, all
outstanding Revolving Loans of the Replaced Lender, (II) an amount equal to all
Unpaid Drawings that have been funded by (and not reimbursed to) such Replaced
Lender, together with all then unpaid interest with respect thereto at such time
and (III) an amount equal to all accrued, but theretofore unpaid, Fees owing to
the Replaced Lender pursuant to Section 4.01 and (y) the Issuing Lender an
amount equal to such Replaced Lender's RL Percentage of any Unpaid Drawing
(which at such time remains an Unpaid Drawing) to the extent such amount was not
theretofore funded by such Replaced Lender to such Issuing Lender and (ii) all
obligations of the Borrower due and owing to the Replaced Lender at such time
(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 concurrently with such replacement and any
Revolving Notes which have been issued shall be returned or indemnities will be
provided therefor. Upon the execution of the respective Assignment Agreement,
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 Revolving Note 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
under this Agreement (including, without limitation, Sections 2.10, 2.11, 3.06,
5.04, 11.06 and 12.01), which shall survive as to such Replaced Lender.
SECTION 3. Letters of Credit.
3.01 Letters of Credit. (a) Subject to and upon the terms and
conditions set forth herein, the Borrower may request that the Issuing Lender
issue, at any time and from time to time on and after the Restatement Effective
Date and prior to the 30th day prior to the Final Maturity Date, (x) for the
account of the Borrower and for the benefit of any holder (or any trustee, agent
or other similar representative for any such holders) of L/C Supportable
Obligations of the Borrower or any of its Subsidiaries, an irrevocable standby
letter of credit, in a form customarily used by the Issuing Lender
or in such other form as has been approved by the Issuing Lender (each such
standby letter of credit, a "Standby Letter of Credit"), in support of such L/C
Supportable Obligations and (y) for the account of the Borrower, an irrevocable
sight commercial letter of credit in a form customarily used by the Issuing
Lender or in such other form as has been approved by the Issuing Lender (each
such commercial letter of credit, a "Trade Letter of Credit," and each such
Trade Letter of Credit and each Standby Letter of Credit, a "Letter of Credit"),
in support of customary commercial transactions of the Borrower and its
Subsidiaries. All Letters of Credit shall be denominated in Dollars and shall be
issued on a sight basis only.
(b) Subject to and upon the terms and conditions set forth herein,
the Issuing Lender agrees that it will, at any time and from time to time on and
after the Restatement Effective Date and prior to the 30th day prior to the
Final Maturity Date, following its receipt of the respective Letter of Credit
Request, issue for the account of the Borrower, one or more
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Letters of Credit (x) in the case of Standby Letters of Credit, in support of
such L/C Supportable Obligations of the Borrower or any of its Subsidiaries as
are permitted to remain outstanding without giving rise to a Default or an Event
of Default, hereunder and (y) in the case of Trade Letters of Credit, in support
of customary commercial transactions of the Borrower or any of its Subsidiaries,
provided that the Issuing Lender shall be under no obligation to issue any
Letter of Credit of the types described above if at the time of such issuance:
(i) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain the Issuing
Lender from issuing such Letter of Credit or any requirement of law
applicable to the Issuing Lender or any request or directive (whether or
not having the force of law) from any governmental authority with
jurisdiction over the Issuing Lender shall prohibit, or request that the
Issuing Lender refrain from, the issuance of letters of credit generally
or such Letter of Credit in particular or shall impose upon the Issuing
Lender with respect to such Letter of Credit any restriction or reserve or
capital requirement (for which the Issuing Lender is not otherwise
compensated under Section 3.06 or otherwise) not in effect on the date
hereof, or any unreimbursed loss, cost or expense which was not applicable
or in effect with respect to the Issuing Lender as of the date hereof and
which the Issuing Lender reasonably and in good xxxxx xxxxx material to
it;
(ii) the Issuing Lender shall have received notice from the
Borrower, any other Credit Party or the Required Lenders prior to the
issuance of such Letter of Credit of the type described in the second
sentence of Section 3.03(b);
(iii) a Lender Default exists, unless the Issuing Lender has entered
into arrangements satisfactory to it and the Borrower to eliminate the
Issuing Lender's risk with respect to the Defaulting Lender's or Lenders'
participations in Letters of Credit; or
(iv) the (A) Consolidated Senior Debt to Capitalization Ratio is
greater than (I) 67% during Phase I and (II) 75% during Phase II or (B)
the Consolidated Debt to Capitalization Ratio is greater than 75%, after
giving effect to such issuances of any Letters of Credit.
(c) Annex X contains a description of all letters of credit issued
by the Issuing Lender pursuant to the Existing Credit Agreement and which are to
remain outstanding on the Restatement Effective Date. Each such letter of
credit, including any extension thereof (each, an "Existing Letter of Credit")
shall constitute a "Letter of Credit" for all purposes of this Agreement. Each
Existing Letter of Credit shall be deemed issued for purposes of Sections
3.01(a), 3.01(b), 3.04(a), 4.01(b) and 4.01(c) on the Restatement Effective
Date.
3.02 Maximum Letter of Credit Outstandings; Final Maturities.
Notwithstanding anything to the contrary contained in this Agreement, (i) no
Letter of Credit shall be issued the Stated Amount of which, when added to the
Letter of Credit Outstandings (exclusive of Unpaid Drawings which are repaid on
the date of, and prior to the issuance of, the respective Letter of Credit) at
such time would exceed either (x) $10,000,000 or (y) when added to the aggregate
principal amount of all Revolving Loans then outstanding, an amount equal to the
Total
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Revolving Commitment at such time and (ii) each Letter of Credit shall by its
terms terminate on or before the earlier of (x) (A) in the case of Standby
Letters of Credit, the date which occurs 12 months after the date of the
issuance thereof (although any such Standby Letter of Credit may be extendable
for successive periods of up to 12 months, but not beyond the third Business Day
prior to the Final Maturity Date, on terms acceptable to the Issuing Lender) and
(B) in the case of Trade Letters of Credit, the date which occurs 180 days after
the date of issuance thereof and (y) three Business Days prior to the Final
Maturity Date.
3.03 Letter of Credit Requests; Minimum Stated Amount. (a) Whenever
the Borrower desires that a Letter of Credit be issued for its account, the
Borrower shall give the Administrative Agent and the Issuing Lender at least
three Business Days' (or such shorter period as is acceptable to the Issuing
Lender) written notice thereof. Each notice shall be in the form of Exhibit C
appropriately completed (each a "Letter of Credit Request").
(b) The making of each Letter of Credit Request shall be deemed to
be a representation and warranty by the Borrower that such Letter of Credit may
be issued in accordance with, and will not violate the requirements of, Section
3.02. Unless the Issuing Lender has received notice from the Borrower, any other
Credit Party or the Required Lenders before it issues a Letter of Credit that
one or more of the conditions specified in Section 6.02 (and, if such Letter of
Credit is the first extension of credit under this Agreement, Section 6.01) are
not then satisfied, or that the issuance of such Letter of Credit would violate
Section 3.02, then the Issuing Lender may, subject to the terms and conditions
of this Agreement, issue the requested Letter of Credit for the account of the
Borrower in accordance with the Issuing Lender's usual and customary practices.
Upon its issuance of or amendment or modification to any Standby Letter of
Credit, the Issuing Lender shall promptly notify the Borrower and the
Administrative Agent of such issuance, amendment or modification and such
notification shall be accompanied by a copy of the issued Letter of Credit or
amendment or modification.
(c) The initial Stated Amount of each Letter of Credit shall not be
less than $100,000 or such lesser amount as is reasonably acceptable to the
Issuing Lender.
3.04 Letter of Credit Participations. (a) Immediately upon the
issuance by the Issuing Lender of any Letter of Credit, the Issuing Lender shall
be deemed to have sold and transferred to each Lender, other than the Issuing
Lender (each such Lender, in its capacity under this Section 3.04, a
"Participant"), and each such Participant shall be deemed irrevocably and
unconditionally to have purchased and received from the Issuing Lender, without
recourse or warranty, an undivided interest and participation, to the extent of
such Participant's RL Percentage, in such Letter of Credit, each drawing or
payment made thereunder and the obligations of the Borrower under this Agreement
with respect thereto, and any security therefor or guaranty pertaining thereto.
Upon any change in the Revolving Commitments or RL Percentages of the Lenders
pursuant to Section 2.13 or 12.04, it is hereby agreed that, with respect to all
outstanding Letters of Credit and Unpaid Drawings, there shall be an automatic
adjustment to the participations pursuant to this Section 3.04 to reflect the
new RL Percentages of the assignor and assignee Lender, as the case may be.
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(b) In determining whether to pay under any Letter of Credit, the
Issuing Lender shall not have an obligation relative to the other Lenders other
than to confirm that any documents required to be delivered under such Letter of
Credit appear to have been delivered and that they appear to substantially
comply on their face with the requirements of such Letter of Credit. Any action
taken or omitted to be taken by the Issuing Lender under or in connection with
any Letter of Credit if taken or omitted in the absence of gross negligence or
willful misconduct (as finally determined by a court of competent jurisdiction),
shall not create for the Issuing Lender any resulting liability to the Borrower,
any other Credit Party, any Lender or any other Person.
(c) In the event that the Issuing Lender makes any payment under any
Letter of Credit and the Borrower shall not have reimbursed such amount in full
to the Issuing Lender pursuant to Section 3.05(a), the Issuing Lender shall
promptly notify the Administrative Agent, which shall promptly notify each
Participant of such failure, and each Participant shall promptly and
unconditionally pay to the Issuing Lender the amount of such Participant's RL
Percentage of such unreimbursed payment in Dollars and in same day funds. If the
Administrative Agent so notifies, prior to 11:00 A.M. (New York time) on any
Business Day, any Participant required to fund a payment under a Letter of
Credit, such Participant shall make available to the Issuing Lender in Dollars
such Participant's RL Percentage of the amount of such payment on such Business
Day in same day funds. If and to the extent such Participant shall not have so
made its RL Percentage of the amount of such payment available to the Issuing
Lender, such Participant agrees to pay to the Issuing Lender, forthwith on
demand such amount, together with interest thereon, for each day from such date
until the date such amount is paid to the Issuing Lender at the overnight
Federal Funds Rate for the first three days and at the interest rate applicable
to Revolving Loans maintained as Base Rate Loans for each day thereafter. The
failure of any Participant to make available to the Issuing Lender its RL
Percentage of any payment under any Letter of Credit shall not relieve any other
Participant of its obligation hereunder to make available to the Issuing Lender
its RL Percentage of any Letter of Credit on the date required, as specified
above, but no Participant shall be responsible for the failure of any other
Participant to make available to the Issuing Lender such other Participant's RL
Percentage of any such payment.
(d) Whenever the Issuing Lender receives a payment of a
reimbursement obligation as to which it has received any payments from the
Participants pursuant to clause (c) above, the Issuing Lender shall pay to each
Participant which has paid its RL Percentage thereof, in Dollars and in same day
funds, an amount equal to such Participant's share (based upon the proportionate
aggregate amount originally funded by such Participant to the aggregate amount
funded by all Participants) of the principal amount of such reimbursement
obligation and interest thereon accruing after the purchase of the respective
participations.
(e) Upon the request of any Participant, the Issuing Lender shall
furnish to such Participant copies of any Letter of Credit issued by it and such
other documentation as may reasonably be requested by such Participant.
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(f) The obligations of the Participants to make payments to the
Issuing Lender with respect to Letters of Credit issued by it shall be
irrevocable and not subject to any qualification or exception whatsoever and
shall be made in accordance with the terms and conditions of this Agreement
under all circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement or any
of the other Credit Documents;
(ii) the existence of any claim, setoff, defense or other right
which the Borrower or any of its Subsidiaries may have at any time against
a beneficiary named in a Letter of Credit, any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), the
Administrative Agent, any Participant, or any other Person, whether in
connection with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any
underlying transaction between the Borrower or any Subsidiary of the
Borrower and the beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or any other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Credit Documents; or
(v) the occurrence of any Default or Event of Default.
3.05 Agreement to Repay Letter of Credit Drawings. (a) The Borrower
agrees to reimburse the Issuing Lender, by making payment to the Administrative
Agent in immediately available funds at the Payment Office, for any payment or
disbursement made by the Issuing Lender under any Letter of Credit (each such
amount, so paid until reimbursed, an "Unpaid Drawing"), not later than one
Business Day following receipt by the Borrower of notice of such payment or
disbursement (provided that no such notice shall be required to be given if a
Default or an Event of Default under Section 10.05 shall have occurred and be
continuing, in which case the Unpaid Drawing shall be due and payable
immediately without presentment, demand, protest or notice of any kind (all of
which are hereby waived by the Borrower)), with interest on the amount so paid
or disbursed by the Issuing Lender, to the extent not reimbursed prior to 1:00
P.M. (New York time) on the date of such payment or disbursement (or to the
extent such Unpaid Drawing is repaid with a Borrowing of Revolving Loans
constituting Base Rate Loans pursuant to clause (ii) of the proviso below), from
and including the date paid or disbursed to but excluding the date the Issuing
Lender was reimbursed by the Borrower therefor at a rate per annum which shall
be the Base Rate in effect from time to time plus the Applicable Margin for Base
Rate Loans; provided, however, (i) to the extent such amounts are not reimbursed
prior to 1:00 P.M. (New York time) on the third Business Day following the
receipt by the Borrower of notice of such payment or disbursement or following
the occurrence of a Default or an Event of Default under Section 10.05, interest
shall thereafter accrue on the amounts so paid or disbursed
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by the Issuing Lender (and until reimbursed by the Borrower) at a rate per annum
which shall be the Base Rate in effect from time to time plus the Applicable
Margin for Base Rate Loans plus 2%, in each such case, with interest to be
payable on demand and (ii) (x) unless the Borrower shall have notified the
Administrative Agent and the Issuing Bank prior to 1:00 P.M. (New York time) on
the date of such payment or disbursement that the Borrower intends to reimburse
the Issuing Lender for the amount of such Drawing with funds other than the
proceeds of Revolving Loans, then so long as all of the conditions precedent set
forth in Section 6.01 or 6.02(b), as the case may be, are satisfied, the
Borrower shall be deemed to have given a timely Notice of Borrowing to the
Administrative Agent for a Borrowing of Revolving Loans constituting Base Rate
Loans to be made on the immediately succeeding Business Day in the amount of
such Drawing and (y) so long as all of the conditions precedent set forth in
Section 6.01 or 6.02(b), as the case may be, are satisfied, each Lender shall,
in accordance with Section 2.04, make available to the Administrative Agent its
pro rata portion of such Borrowing on such immediately succeeding Business Day
(and with the proceeds thereof to be applied directly by the Administrative
Agent to reimburse the Issuing Lender for the amount of such Drawing), provided
further, however, that if for any reason proceeds of Revolving Loans are not so
received by the Issuing Lender in an amount equal to such Drawing, the Borrower
shall reimburse the Issuing Lender, on demand, in an amount equal to the excess
of the amount of such Drawing over the aggregate amount of such Revolving Loans,
if any, which are so received.
(b) The obligations of the Borrower under this Section 3.05 to
reimburse the Issuing Lender with respect to Unpaid Drawings (including, in each
case, interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which the Borrower may have or have had against any Lender (including in its
capacity as issuer of the Letter of Credit or as Participant), including,
without limitation, any defense based upon the failure of any drawing under a
Letter of Credit (each a "Drawing") to conform to the terms of the Letter of
Credit or any nonapplication or misapplication by the beneficiary of the
proceeds of such Drawing; provided, however, that the Borrower shall not be
obligated to reimburse the Issuing Lender for any wrongful payment made by the
Issuing Lender under a Letter of Credit as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of the Issuing
Lender (as finally determined by a court of competent jurisdiction).
3.06 Increased Costs. If at any time after the date of this
Agreement, the introduction of or any change in any applicable law, rule,
regulation, order, guideline or request or in the interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by the Issuing Lender or
any Participant with any request or directive by any such authority (whether or
not having the force of law), shall either (i) impose, modify or make applicable
any reserve, deposit, capital adequacy or similar requirement against letters of
credit issued by the Issuing Lender or participated in by any Participant, or
(ii) impose on the Issuing Lender or any Participant any other conditions
relating, directly or indirectly, to this Agreement; and the result of any of
the foregoing is to increase the cost to the Issuing Lender or any Participant
of issuing, maintaining or participating in any Letter of Credit, or reduce the
amount of any sum received or receivable by the Issuing Lender or any
Participant hereunder or reduce the rate of return on its capital with respect
to Letters of Credit
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(except for changes in the rate of tax on, or determined by reference to, the
net income or profits of the Issuing Lender or such Participant pursuant to the
laws of the jurisdiction in which it is organized or in which its principal
office or applicable lending office is located or any subdivision thereof or
therein), then, within 30 days after the delivery of the certificate referred to
below to the Borrower by the Issuing Lender or any Participant (a copy of which
certificate shall be sent by the Issuing Lender or such Participant to the
Administrative Agent), the Borrower shall pay to the Issuing Lender or such
Participant such additional amount or amounts as will compensate such Lender for
such increased cost or reduction in the amount receivable or reduction on the
rate of return on its capital. The Issuing Lender or any Participant, upon
determining that any additional amounts will be payable pursuant to this Section
3.06, will give prompt written notice thereof to the Borrower, which notice
shall include a certificate submitted to the Borrower by the Issuing Lender or
such Participant (a copy of which certificate shall be sent by the Issuing
Lender or such Participant to the Administrative Agent), setting forth in
reasonable detail the basis for the calculation of such additional amount or
amounts necessary to compensate the Issuing Lender or such Participant. The
certificate required to be delivered pursuant to this Section 3.06 shall, absent
manifest error, be final and conclusive and binding on the Borrower.
SECTION 4. Commitment Commission; Fees; Reductions of Commitment.
4.01 Fees. (a) The Borrower agrees to pay to the Administrative
Agent a commitment commission (the "Commitment Commission") for the account of
each Lender that is a Non-Defaulting Lender for the period from and including
the Restatement Effective 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 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.
(b) The Borrower agrees to pay to the Administrative Agent for
distribution to each Non-Defaulting Lender (based on each such Lender's
respective RL Percentage) a fee (the "Letter of Credit Fee") for the period from
and including the date of issuance of such Letter of Credit to and including the
date of termination or expiration of such Letter of Credit, computed at a rate
per annum equal to the Applicable Margin then in effect with respect to
Revolving Loans maintained as Eurodollar Loans on the daily Stated Amount of
each such Letter of Credit. Accrued Letter of Credit Fees shall be due and
payable quarterly in arrears on the last Business Day of each calendar quarter
and on the first day after the termination of the Total Revolving Commitment
upon which no Letters of Credit remain outstanding.
(c) The Borrower agrees to pay to the Issuing Lender, for its own
account, a fronting fee in respect of each Letter of Credit (the "Fronting Fee")
for the period from and including the date of issuance of such Letter of Credit
to and including the date of termination or expiration of such Letter of Credit,
computed at a rate per annum equal to 1/4 of 1% on the daily Stated Amount of
such Letter of Credit; provided that in any event the minimum amount of the
Fronting Fee payable in any 12-month period shall be $500; it being agreed that,
on the date of
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issuance of any Letter of Credit and on each anniversary thereof prior to the
termination of such Letter of Credit, if $500 will exceed the amount of Fronting
Fees that will accrue with respect to such Letter of Credit for the immediately
succeeding 12-month period, the full $500 shall be payable on the date of
issuance of such Letter of Credit and on each such anniversary thereof. Accrued
Fronting Fees shall be payable in arrears on the last Business Day of each
calendar quarter and upon the first day after the termination of the Total
Revolving Commitment upon which no Letters of Credit remain outstanding.
(d) The Borrower agrees to pay to the Issuing Lender, for its own
account, upon each payment under, issuance of, or amendment to, any Letter of
Credit, such amount as shall at the time of such event be the administrative
nominal charge which the Issuing Lender is generally imposing in connection with
such occurrence with respect to letters of credit.
(e) The Borrower agrees to pay to the Administrative Agent, for its
own account, such other fees as have been agreed to in writing by the Borrower
and the Administrative Agent.
(f) The Borrower agrees to pay all fees (including commitment fees)
owing under the Existing Credit Agreement through the Restatement Effective
Date, which fees shall be calculated and paid in accordance with the terms of
the Existing Credit Agreement.
(g) All computations of Fees shall be made in accordance with
Section 12.07(b).
4.02 Voluntary Termination 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 Total Unutilized Revolving Commitment,
provided that (w) any such partial reduction shall apply to proportionately and
permanently reduce the Revolving Commitment of each Lender, (x) no such
reduction shall reduce any Non-Defaulting Lender's Revolving Commitment in an
amount greater than the then Unutilized Revolving Commitment of such Lender and
(y) any partial reduction pursuant to this Section 4.02 shall be in the amount
of at least $1,000,000.
(b) In the event of a refusal by a Lender to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Lenders as (and to the
extent) provided in Section 12.12(b), the Borrower may, subject to its
compliance with the requirements of Section 12.12(b), upon five Business Days'
prior written notice to the Administrative Agent at the Notice Office (which
notice the Administrative Agent shall promptly transmit to each of the Lenders)
terminate the entire Revolving Commitment of such Lender, so long as (A) all
Revolving Loans, together with accrued and unpaid interest, Fees and all other
amounts, owing to such Lender are repaid concurrently with the effectiveness of
such termination pursuant to Section 5.01(b) (at which time Schedule I shall be
deemed modified to reflect such changed amounts), and (B) the consent required
under Section 12.12(b) in connection therewith shall have been attained at such
time, and such Lender shall no longer constitute a "Lender" for purposes of this
Agreement, except
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with respect to indemnifications under this Agreement (including, without
limitation, Sections 2.10, 2.11, 3.06, 5.04, 11.06 and 12.01), which shall
survive as to such repaid Lender.
4.03 Mandatory Reductions of Commitments, etc. (a) In addition to
any other mandatory commitment reductions pursuant to this Section 4.03, on each
date on or after the Restatement Effective Date upon which the Borrower or any
of its Subsidiaries receives any cash proceeds from any incurrence by the
Borrower or any of its Subsidiaries of Indebtedness for borrowed money (other
than Indebtedness for borrowed money permitted to be incurred pursuant to
Section 9.04 as such Section is in effect on the Restatement Effective Date),
the Total Revolving Commitment shall be permanently reduced on such date by an
amount equal to 100% of the Net Debt Proceeds of the respective incurrence of
Indebtedness.
(b) In addition to any other mandatory commitment reductions
pursuant to this Section 4.03, within two Business Days after each date on or
after the Restatement Effective Date upon which the Borrower or any of its
Subsidiaries receives any cash proceeds from any Asset Sale (including any sale
by the Borrower or its Subsidiaries of capital stock of any of the Subsidiaries
of the Borrower), the Total Revolving Commitment shall be permanently reduced on
such date by an amount equal to 100% of the Net Cash Proceeds from such Asset
Sale; provided that with respect to any such Asset Sales in any fiscal year of
the Borrower, such Net Cash Proceeds therefrom shall not give rise to a
reduction to the Total Revolving Commitment pursuant to this Section 4.03(b) on
such date to the extent that no Default or Event of Default then exists and the
Borrower has delivered a certificate to the Administrative Agent on or prior to
such date stating that such Net Cash Proceeds shall be used to purchase assets
that replace the assets that were the subject of such Asset Sale or assets that
will be used in the business of the Borrower or its Subsidiaries (collectively,
"Replacement Assets") within 364 days following the date of such Asset Sale
(which certificate shall set forth the estimates of the proceeds to be so
expended), and provided further, that if all or any portion of such Net Cash
Proceeds are not so reinvested in Replacement Assets within such 364 day period,
the Total Revolving Commitment shall be permanently reduced on the last day of
such period (or such earlier date as may be designated by the Borrower) by an
amount equal to such remaining portion.
(c) In addition to any other mandatory commitment reductions
pursuant to this Section 4.03, within 10 days following each date on or after
the Restatement Effective Date upon which the Borrower or any of its
Subsidiaries receives any cash proceeds from any Recovery Event, the Total
Revolving Commitment shall be permanently reduced by an amount equal to 100% of
the Net Insurance Proceeds from such Recovery Event, provided that so long as no
Default or Event of Default then exists Net Insurance Proceeds shall not be
required to reduce the Total Revolving Commitment on such date to the extent
that the Borrower has delivered a certificate to the Administrative Agent on or
prior to such date stating that such Net Insurance Proceeds shall be used to
replace or restore any properties or assets in respect of which such Net
Insurance Proceeds were paid within 180 days following the date of the receipt
of such Net Insurance Proceeds (which certificate shall set forth the estimates
of the proceeds to be so expended) and provided further, if all or any portion
of such Net Insurance Proceeds are not so used within 180 days after the date of
the receipt of such Net Insurance Proceeds, the Total Revolving Commitment shall
be permanently reduced on the last day of such period (or such
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earlier date as may be designated by the Borrower) by an amount equal to such
remaining portion.
(d) In addition to any mandatory commitment reductions pursuant to
this Section 4.03, the Total Revolving Commitment shall be permanently reduced
by an amount equal to 100% of Consolidated Cash Equity in excess of $1,000,000
received by the Borrower or any of its Subsidiaries (other than any Consolidated
Cash Equity received by the Borrower from MJD, so long as the proceeds thereof
are not used for the payment of Dividends) on each date on or after the
Restatement Effective Date.
(e) In addition to any other mandatory commitment reductions
pursuant to this Section 4.03, the Total Revolving Commitment (and the Revolving
Commitment of each Lender) shall terminate in its entirety on the earlier of (i)
the Final Maturity Date and (ii) unless the Required Lenders otherwise consent,
the date on which a Change of Control occurs.
(f) Each reduction to the Total Revolving Commitment pursuant to
this Section 4.03 shall be applied proportionately to permanently reduce the
Revolving Commitment of each Lender.
SECTION 5. Payments.
5.01 Voluntary Prepayments. (a) The Borrower shall have the right to
prepay the Revolving Loans, without premium or penalty, in whole or in part at
any time and from time to time on the following terms and conditions: (i) the
Borrower shall give the Administrative Agent prior to 1:00 P.M. (New York time)
at the Notice Office (x) at least one Business Day's prior written notice (or
telephonic notice promptly confirmed in writing) of its intent to prepay Base
Rate Loans and (y) at least three Business Days' prior written notice (or
telephonic notice promptly confirmed in writing) of its intent to prepay
Eurodollar Loans, the amount of such prepayment and the Types of Revolving Loans
to be prepaid and, in the case of Eurodollar Loans, the specific Borrowing or
Borrowings pursuant to which made, which notice the Administrative Agent shall
promptly transmit to each of the Lenders; (ii) each partial prepayment of
Revolving Loans pursuant to this Section 5.01(a) shall be in an aggregate
principal amount of at least $5,000,000, provided that if any partial prepayment
of Eurodollar Loans made pursuant to any Borrowing shall reduce the outstanding
principal amount of Eurodollar Loans made pursuant to such Borrowing to an
amount less than the Minimum Borrowing Amount applicable thereto, then such
Borrowing may not be continued as a Borrowing of Eurodollar Loans and any
election of an Interest Period with respect thereto given by the Borrower shall
have no force or effect; (iii) each prepayment pursuant to this Section 5.01(a)
in respect of any Revolving Loans made pursuant to a Borrowing shall be applied
pro rata among the Lenders which made such Revolving Loans, provided that at the
Borrower's election in connection with any prepayment of Revolving Loans
pursuant to this Section 5.01(a), such prepayment shall not, so long as no
Default or Event of Default then exists, be applied to any Revolving Loan of a
Defaulting Lender; and (iv) in the case of prepayment of Borrowings maintained
as Eurodollar Loans, the Borrower shall reimburse, at the Borrower's sole cost
and expense, each Lender's reasonable
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breakage and redeployment costs, other than on the last day of an Interest
Period applicable thereto.
(b) In the event of a refusal by a Lender to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Lenders as (and to the
extent) provided in Section 12.12(b), the Borrower may, upon five Business Days'
prior written notice to the Administrative Agent at the Notice Office (which
notice the Administrative Agent shall promptly transmit to each of the Lenders)
repay all Revolving Loans of, together with accrued and unpaid interest, Fees
and other amounts owing to, such Lender in accordance with, and subject to the
requirements of, said Section 12.12(b) so long as (A) the entire Revolving
Commitment of such Lender is terminated concurrently with such repayment
pursuant to Section 4.02(b) (at which time Schedule I shall be deemed modified
to reflect the changed Revolving Commitments) and (B) the consents required
under Section 12.12(b) in connection therewith have been obtained.
5.02 Mandatory Repayments. (a) (i) On any day on which the sum of
the aggregate outstanding principal amount of the Revolving Loans and the Letter
of Credit Outstandings exceeds the Total Revolving Commitment as then in effect,
the Borrower shall prepay on such day Revolving Loans in an amount equal to such
excess. If, after giving effect to the prepayment of all outstanding Revolving
Loans, the aggregate amount of the Letter of Credit Outstandings exceeds the
Total Revolving Commitment as then in effect, the Borrower shall pay to the
Administrative Agent at the Payment Office on such day an amount of cash and/or
Cash Equivalents equal to the amount of such excess (up to a maximum amount
equal to the Letter of Credit Outstandings at such time), such cash and/or Cash
Equivalents to be held as security for all obligations of the Borrower to the
Issuing Lender and the Lenders hereunder in a cash collateral account to be
established by the Administrative Agent.
(ii) If on any date the aggregate outstanding principal amount of
the Revolving Loans made by a Defaulting Lender exceeds the Revolving Commitment
of such Defaulting Lender, the Borrower shall repay principal of Revolving Loans
of such Defaulting Lender in an amount equal to such excess.
(b) With respect to each repayment of Revolving Loans required by
this Section 5.02 (including repayments resulting from the reduction of the
Total Revolving Commitment pursuant to Section 4.03), the Borrower may designate
the Types of Revolving Loans which are to be repaid and, in the case of
Eurodollar Loans, the specific Borrowing or Borrowings pursuant to which made,
provided that: (i) repayments of Eurodollar Loans pursuant to this Section 5.02
may only be made on the last day of an Interest Period applicable thereto unless
all Eurodollar Loans with Interest Periods ending on such date of required
repayment and all Base Rate Loans have been paid in full; (ii) if any repayment
of Eurodollar Loans made pursuant to a single Borrowing shall reduce the
outstanding Eurodollar Loans made pursuant to such Borrowing to an amount less
than the Minimum Borrowing Amount applicable thereto, such Borrowing shall be
converted at the end of the then current Interest Period into a Borrowing of
Base Rate Loans; and (iii) each repayment of any Revolving Loans made pursuant
to a Borrowing shall be applied pro rata among the Lenders which made such
Revolving Loans. In the absence of a designation by
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the Borrower as described in the preceding sentence, the Administrative Agent
shall, subject to the above, make such designation in its sole discretion.
(c) Notwithstanding anything to the contrary contained in this
Agreement or in any other Credit Document, (i) except as provided in clause (d)
below, all then outstanding Revolving Loans shall be repaid in full on the Final
Maturity Date and (ii) all then outstanding Revolving Loans shall be repaid in
full on the date on which a Change of Control occurs (unless the Required
Lenders otherwise agree in writing).
(d) Subject to Section 2.13, (i) upon the occurrence of the Final
Maturity Date and the failure of such Lender (or the Administrative Agent on its
behalf) to have received on such date payment in full of the Revolving Loans
(and interest and fees thereon) outstanding on such date, (ii) after the
occurrence and during the continuance of an Event of Default under Sections
10.01, 10.05 or 10.11 or (iii) after the occurrence and during the continuance
of any Event of Default that occurs due to noncompliance with Sections 9.11
through 9.17 and such Event of Default (including if such Event of Default is a
Specified Event of Default under and defined in the Amended and Restated
Preferred Stock Issuance and Capital Contribution Agreement) shall continue for
a period of 30 or more Business Days after notice thereof from the Borrower
(each a "Trigger Event"), each Lender shall have the option, at its sole
discretion, in accordance with the Amended and Restated Preferred Stock Issuance
and Capital Contribution Agreement to convert (the "Conversion Option") all or a
portion of such Lender's outstanding Revolving Loans (and accrued and unpaid
interest and Fees thereon) into MJD Preferred Stock having a liquidation
preference equal to the aggregate principal amount of such Revolving Loans (and
interest and Fees thereon accrued and unpaid to the date of conversion).
(e) To the extent MJD makes an MJD Investment under and as defined
in the Amended and Restated Preferred Stock Issuance and Capital Contribution
Agreement, the Borrower agrees to issue and sell its common stock of the
Borrower to MJD at a price per share to be determined in good faith by the
Borrower and MJD, for an aggregate cash purchase price equal to the Capital
Contribution Amount (as defined in the Amended and Restated Preferred Stock
Issuance and Capital Contribution Agreement). The Borrower also agrees to
deliver to MJD on the Notice Date (as defined in the Amended and Restated
Preferred Stock Issuance and Capital Contribution Agreement), an Officer's
Certificate (with a copy to the Administrative Agent) setting forth the
calculations of the Capital Contribution Amount (as defined in the Amended and
Restated Preferred Stock Issuance and Capital Contribution Agreement) pursuant
to Section 2.1 of the Amended and Restated Preferred Stock Issuance and Capital
Contribution Agreement (the "Conversion/Contribution Certificate"), which
calculations shall be in substantially similar detail as in a Compliance
Certificate, and, if applicable, setting forth the Capital Contribution Amount
that may be made by MJD pursuant to the terms of Section 2 of the Amended and
Restated Preferred Stock Issuance and Capital Contribution Agreement in order to
cure any Specified Events of Default thereunder.
5.03 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
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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.
5.04 Net Payments. (a) All payments made by the Borrower hereunder
and/or under any Revolving Note will be made without setoff, counterclaim or
other defense. Except as provided in Section 5.04(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, 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 Revolving 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 Administrative 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
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Borrower and the Administrative Agent on or prior to the Restatement Effective
Date, or in the case of a Lender that is an assignee or transferee of an
interest under this Agreement pursuant to Section 2.13 or 12.04 (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 W-8ECI or Form W-8BEN (with respect to a complete exemption under
an income tax treaty) (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 Revolving
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
W-8ECI or Form W-8BEN pursuant to clause (i) above, (x) a certificate
substantially in the form of Exhibit D (any such certificate, a "Section 5.04
Certificate") and (y) two accurate and complete original signed copies of
Internal Revenue Service Form W-8ECI or Form W-8BEN (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 Revolving Note. In addition, each Lender agrees
that from time to time after the Restatement 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
Administrative Agent two new accurate and complete original signed copies of
Internal Revenue Service Form W-8ECI, or Form W-8BEN and a Section 5.04
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 Revolving 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 5.04(b).
Notwithstanding anything to the contrary contained in Section 5.04(a), but
subject to Section 12.04(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 subdivision 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 5.04(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 5.04(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 5.04 and except as set forth in Section
12.04(b), the Borrower agrees to pay any additional amounts and to indemnify
each Lender in the manner set forth in Section 5.04(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 Restatement Effective
Date in any applicable law,
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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
5.04 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.
SECTION 6. Conditions Precedent.
6.01 Conditions Precedent to Restatement Effective Date. The
occurrence of the Restatement Effective Date is subject to the satisfaction of
each of the following conditions at such time:
(a) Effectiveness. The parties to this Agreement shall have executed
a copy hereof as required by Section 12.10(i).
(b) Opinion of Counsel. The Administrative Agent shall have received
opinions, addressed to the Administrative Agent and each of the Lenders and
dated the Restatement Effective Date, from Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
(and/or other counsel reasonably acceptable to the Administrative Agent),
special counsel to the Credit Parties, which opinion shall cover the matters
contained in Exhibit E hereto and shall be in form and substance reasonably
satisfactory to the Administrative Agent.
(c) Corporate Proceedings. (i) The Administrative Agent shall have
received a certificate, dated the Restatement Effective Date, signed by an
Authorized Officer of the Borrower in the form of Exhibit F with appropriate
insertions and deletions, together with (x) copies of the Company Documents of
each Credit Party and (y) the resolutions of each Credit Party referred to in
such certificate and all of the foregoing shall be reasonably satisfactory to
the Administrative Agent and (z) a statement that all of the applicable
conditions set forth in Section 6 have been satisfied as of such date.
(ii) On the Restatement Effective 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, if
any, which the Administrative Agent may have reasonably requested in connection
therewith, such documents and papers, where appropriate, to be certified by
proper corporate or governmental authorities.
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(d) Plans; etc. On or prior to the Restatement Effective Date, there
shall have been made available to the Administrative Agent upon its request:
(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 December 31, 1998, nothing shall have
occurred, and the Administrative Agent shall have become aware of no facts or
conditions not previously known, which the Administrative Agent shall reasonably
determine (i) has had, or is reasonably likely to have, a material adverse
effect on the rights or remedies of the Lenders or the Administrative Agent
hereunder or under any other Credit Document, or on the ability of the Credit
Parties taken as a whole or MJD to perform their respective obligations under
the Credit Documents or (ii) 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 in writing against any
Credit Party (a) with respect to (i) this Agreement or any other Credit Document
or (ii) the Existing Credit Agreement or any
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other Existing Credit Document or (b) which the Administrative 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 Administrative Agent hereunder or under any other Credit
Document or on the ability of the Credit Parties taken as a whole or MJD to
perform their respective obligations under the Credit Documents.
(g) Approvals. Except as set forth in Annex XI, all necessary
material governmental and third party approvals in connection with the Credit
Documents (including, without limitation, all necessary material approvals
required by the FCC and the applicable PUCs) required to be obtained by any
Credit Party shall have been obtained and remain in effect.
(h) Amended and Restated Subsidiary Guaranty. On the Restatement
Effective Date, each Subsidiary Guarantor shall have duly authorized, executed
and delivered an Amended and Restated Subsidiary Guaranty in the form of Exhibit
G hereto (as modified, amended, amended and restated or supplemented from time
to time in accordance with the terms hereof and thereof, the "Amended and
Restated Subsidiary Guaranty"), and the Amended and Restated Subsidiary Guaranty
shall be in full force and effect.
(i) Amended and Restated Pledge Agreement. On the Restatement
Effective Date, each Credit Party (other than MJD) shall have duly authorized,
executed and delivered an Amended Pledge Agreement in the form of Exhibit H (as
modified, amended, amended and restated or supplemented from time to time in
accordance with the terms thereof and hereof, the "Amended and Restated 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 Amended and Restated Pledge Agreement shall be in full force and
effect.
(j) Amended and Restated Security Agreement. On the Restatement
Effective Date, each Credit Party (other than MJD) shall have duly authorized,
executed and delivered the Amended and Restated Security Agreement in the form
of Exhibit I (as modified, supplemented or amended from time to time, the
"Amended and Restated Security Agreement") covering all of such Credit Party's
present and future Security Agreement Collateral, together with:
(i) proper Financing Statements (Form UCC-1 or the equivalent) fully
executed for filing under the UCC or other appropriate filing offices of
each jurisdiction as may be necessary or, in the reasonable opinion of the
Collateral Agent, desirable to perfect the security interests purported to
be created by the Amended and Restated Security Agreement;
(ii) certified copies of Requests for Information or Copies (Form
UCC-11), or equivalent reports, listing all effective financing statements
that name any Credit Party (other than MJD) or any of its Subsidiaries as
debtor and that are filed in the jurisdictions referred to in clause (i)
above, together with copies of such other financing statements that name
any Credit Party (other than MJD) or any of its Subsidiaries as debtor
(none of which shall cover the Collateral except to the extent evidencing
Permitted Liens or in
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respect of which the Collateral Agent shall have received termination
statements (Form UCC-3 or the equivalent) as shall be required by local
law fully executed for filing);
(iii) evidence of the completion of all other recordings and filings
of, or with respect to, the Amended and Restated Security Agreement as may
be necessary to perfect the security interests intended to be created by
the Amended and Restated Security Agreement; and
(iv) evidence that all other actions necessary to perfect and
protect the security interests purported to be created by the Amended and
Restated Security Agreement have been taken.
(k) Solvency. The Borrower shall have delivered to the
Administrative Agent, a solvency certificate, dated the Restatement Effective
Date and in the form of Exhibit J hereto which solvency certificate shall be in
form and substance reasonably satisfactory to the Administrative Agent and shall
set forth the conclusions that, after giving effect to the entering into of the
Credit Documents, the Borrower and its Subsidiaries taken as a whole, is not
insolvent, will not be rendered insolvent by the indebtedness incurred in
connection therewith, will not be left with unreasonably small capital with
which to engage in their business and will not have incurred debts beyond their
ability to pay debts as they mature.
(l) Insurance. The Borrower shall have delivered to the
Administrative Agent, on or before the Restatement Effective Date updated
certificates of insurance complying with the requirements of Section 8.03 for
the business and properties of the Borrower and its Subsidiaries, in form and
substance reasonably satisfactory to the Administrative Agent and naming the
Collateral Agent as an additional insured and as loss payee, and stating that
such insurance shall not be cancelled without at least 30 days prior written
notice by the insurer to the Collateral Agent (or such shorter period of time as
a particular insurance company generally provides).
(m) Existing Credit Agreement. (i) On the Restatement Effective
Date, (A) each Existing Lender shall have surrendered to the Administrative
Agent for cancellation any promissory notes issued to it pursuant to the
Existing Credit Agreement in respect of its Existing Revolving Loans and (B) the
Borrower shall have paid all interest owing under the Existing Credit Agreement
through the Restatement Effective Date (whether or not due and payable at such
time under the Existing Credit Agreement, other than interest on Existing
Revolving Loans converted into Revolving Loans on the Restatement Effective
Date).
(ii) If on the Restatement Effective Date, the aggregate amount of
Consolidated Cash Equity contributed to the Borrower by MJD under paragraph (p)
below is less than $75,000,000, the Borrower shall repay on such date all of the
principal of Existing Revolving Loans outstanding on such date, if any.
(n) Amended and Restated Preferred Stock Issuance and Capital
Contribution Agreement. MJD shall have duly authorized, executed and delivered
an agreement (the "Amended and Restated Preferred Stock Issuance and Capital
Contribution Agreement") in the
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form of Exhibit K hereto and such Amended and Restated Preferred Stock Issuance
and Capital Contribution Agreement shall be in full force and effect.
(o) Amended and Restated Tax Sharing Agreement. On the Restatement
Effective Date, the Borrower, the Unrestricted Subsidiary and MJD shall have
duly authorized, executed and delivered the Amended and Restated Tax Sharing
Agreement in the form of Exhibit L (as amended, modified or supplemented from
time to time, the "Amended and Restated Tax Sharing Agreement").
(p) MJD Equity Infusion. On or before the Restatement Effective
Date, the Borrower shall have received from MJD at least $50,000,000 of
Consolidated Cash Equity on terms and conditions reasonably satisfactory to the
Administrative Agent.
(q) Fees. The Borrower shall have paid to the Administrative Agent
and the Lenders all Fees and expenses agreed upon by such parties to be paid on
or prior to the Restatement Effective Date (for which, in the case of legal fees
and expenses, the Borrower shall have received in advance a written invoice in
reasonable detail).
6.02 Conditions Precedent to all Credit Events. The obligation of
each Lender to make or maintain Revolving Loans and the obligation of the
Issuing Lender to issue Letters of Credit (other than Existing Letters of
Credit) are subject, at the time of the making of each such Credit Event
(including on the Restatement Effective Date to the extent that there is a
Credit Event on such date), to the satisfaction of the following conditions:
(a) Notice of Borrowing; Letter of Credit Request. The
Administrative Agent shall have received a Notice of Borrowing meeting the
requirements of Section 2.03 or a Letter of Credit Request meeting the
requirements of 3.03, as the case may be.
(b) No Default; Representations and Warranties. At the time of each
Credit Event 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
Credit Event, 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.
(c) MJD Equity Infusion. At the time of such Credit Event (other
than the issuance of any Letter of Credit), the Borrower shall have received
from MJD Consolidated Cash Equity (including amounts received under Section
6.01(p)) of at least $75,000,000 on terms and conditions reasonably satisfactory
to the Administrative Agent.
The acceptance of the benefits of each Credit Event shall constitute
a representation and warranty by the Borrower that all of the applicable
conditions specified in Section 6.01 (in the case of Credit Events on the
Restatement Effective Date), and/or 6.02 (in the case of all Credit Events), 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 6.01 and
6.02, unless
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otherwise specified, shall be delivered to the Administrative Agent for the
benefit of each of the Lenders and shall be reasonably satisfactory in form and
substance to the Administrative Agent.
SECTION 7. Representations, Warranties and Agreements. In order to
induce the Lenders to enter into this Agreement and to make the Revolving Loans
and the Issuing Lenders to issue Letters of Credit, the Borrower makes the
following representations and warranties to, and agreements with, the Lenders
(with such representations, warranties and agreements with respect to MJD made
by the Borrower to the best of its knowledge), all of which shall survive the
execution and delivery of this Agreement and the making of the Revolving Loans
and issuance of Letters of Credit:
7.01 Company Status. Each of the Borrower and its Subsidiaries (i)
is a duly organized and validly existing Company and is in good standing, in
each case under the laws of the jurisdiction of its organization and has the
Company 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 would be reasonably likely to
have a Material Adverse Effect.
7.02 Company Power and Authority. Each Credit Party has the Company
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 against such Person in accordance with its terms, except to the
extent that the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance 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).
7.03 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 known by it to
be applicable to it, (ii) will conflict 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 Security Documents) result in the creation
or imposition of (or the obligation to create or impose) any Lien upon any of
the property or assets of such Credit Party or any of its Subsidiaries pursuant
to the terms of any indenture, mortgage, deed of trust or other material
agreement (including the MJD Credit Agreement) or instrument to which such
Credit Party 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 Company Documents of such Credit Party or any of its
Subsidiaries.
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7.04 Litigation. There are no actions, suits or proceedings pending
or, to the knowledge of the Borrower, threatened in writing against any Credit
Party 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
or MJD to perform their respective obligations under the Credit Documents.
7.05 Use of Proceeds; Margin Regulations. (a) The proceeds of
Revolving Loans and Letters of Credit shall be used for working capital and
capital expenditure requirements of the Borrower and its Subsidiaries and to pay
fees and expenses incurred in connection with the Credit Documents.
(b) Neither the making of any Revolving Loan hereunder, nor the use
of the proceeds thereof, will violate the provisions of Regulation T, U or X of
the Board of Governors of the Federal Reserve System and no part of the proceeds
of any Revolving 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.
7.06 Governmental Approvals. Except for such consents, approvals and
filings as have been obtained or made on or prior to the Restatement Effective
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 of any Credit Party to authorize or is required of any
Credit Party in connection with (i) the execution, delivery and performance of
any Credit Document or (ii) the legality, validity, binding effect on or
enforceability against any Credit Party of any Credit Document.
7.07 Investment Company Act. Neither the Borrower nor any of its
Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
7.08 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.
7.09 True Disclosure. All factual information (taken as a whole)
heretofore or contemporaneously furnished by or on behalf of the Borrower in
writing to the Administrative Agent 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. 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 projections as to future events are not to be viewed as facts
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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).
7.10 Financial Condition; Financial Statements. (a) On and as of the
Restatement Effective Date, on a pro forma basis after giving effect to all
Indebtedness incurred, and to be incurred (including, without limitation, the
Revolving Loans or Letters of Credit 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
unreasonably small capital with which to conduct their business. For purposes of
this Section 7.10, "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) The consolidated statement of operations of the Borrower for the
twelve months ending December 31, 1999 and the consolidated balance sheet of the
Borrower as of December 31, 1999, copies of which have heretofore been furnished
to each Lender, fairly present the consolidated financial condition of the
Borrower as at the dates thereof. Nothing has occurred since December 31, 1998
that has had or is reasonably likely to have a Material Adverse Effect.
(c) Except as reflected in the financial statements described in
Section 7.10(b) or in the footnotes thereto, there were as of the Restatement
Effective Date no liabilities or obligations with respect to the Borrower or any
of its Subsidiaries required in accordance with GAAP to be disclosed in such
financial statements of a nature (whether absolute, accrued, contingent or
otherwise and whether or not due) which, either individually or in the
aggregate, is reasonably likely to be material to the Borrower and its
Subsidiaries taken as a whole, except as incurred in the ordinary course of
business consistent with past practices.
7.11 The Security Documents. (a) The provisions of the Amended and
Restated Security Agreement are effective to create in favor of the Collateral
Agent for the benefit of the Secured Creditors a legal, valid and enforceable
security interest in all right, title and interest of the Credit Parties in the
Security Agreement Collateral described therein to the extent that a security
interest can be created therein under the UCC, and the Collateral Agent, for the
benefit of the Secured Creditors, has a fully perfected first lien on, and
security interest in, all right, title and interest of the Credit Parties in all
of the Security Agreement Collateral described therein (to the extent such
security interest can be perfected by filing a UCC-1 financing statement or, to
the extent required by the Amended and Restated Security Agreement, by taking
possession of the respective Security Agreement Collateral), subject to no other
Liens other than Permitted Liens. In addition, the recordation of the Grant of
Security Interest in U.S. Patents and Trademarks in
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the form attached to the Amended and Restated Security Agreement in the United
States Patent and Trademark Office, together with filings on Form UCC-1 made
pursuant to the Amended and Restated Security Agreement, will create, as may be
perfected by such filing and recordation, a perfected security interest in the
United States trademarks and patents covered by the Amended and Restated
Security Agreement and specifically identified in such Grant and the recordation
of the Grant of Security Interest in U.S. Copyrights in the form attached to the
Amended and Restated Security Agreement with the United States Copyright Office,
together with filings on Form UCC-1 made pursuant to the Amended and Restated
Security Agreement, will create, as may be perfected by such filing and
recordation, a perfected security interest in the United States copyrights
covered by the Amended and Restated Security Agreement and specifically
identified in such Grant.
(b) The security interests created in favor of the Collateral Agent,
as pledgee, for the benefit of the Secured Creditors, under the Amended and
Restated Pledge Agreement constitute perfected security interests in the Pledge
Agreement Collateral described therein, subject to no security interests of any
other Person. Except to the extent made on or prior to the Restatement Effective
Date, no filings or recordings are required to perfect (or maintain the
perfection of) the security interests created in the Pledge Agreement
Collateral.
7.12 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 Subsidiaries has at all
times paid, or has provided adequate reserves (in the good faith judgment of the
management of 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 in writing by any authority regarding any taxes owing
by the Borrower or any of its Subsidiaries which is reasonably likely to have a
Material Adverse Effect.
7.13 Compliance with ERISA. (i) Annex III sets forth each Plan and
Multiemployer Plan; (ii) except as set forth on Annex III, 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 III, 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 III, 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
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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; except as set
forth on Annex III, no proceedings have been instituted to terminate or appoint
a trustee to administer any Plan; 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 Revolving Loan incurrence, would not exceed $15,000; except
as would not result in a material liability, each group health plan (as defined
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.
7.14 Subsidiaries. On and as of the Restatement Effective Date the
Borrower has no Subsidiaries other than those Subsidiaries listed on Annex IV,
which correctly sets forth, as of the Restatement Effective 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.
7.15 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.
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7.16 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 in writing, against the Borrower or any of its Subsidiaries wherein
any decision, ruling or finding would be reasonably likely to have a Material
Adverse Effect.
7.17 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 labor practice complaint pending against any Credit Party or, to
the Borrower's knowledge, threatened in writing 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 in writing
against any of them, (ii) no strike, labor dispute, slowdown or stoppage pending
against any Credit Party or, to the Borrower's knowledge, threatened in writing
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.
7.18 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 ownership
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.
7.19 Indebtedness. Annex V sets forth a true and complete list of
all Indebtedness (including Contingent Obligations) of the Borrower and its
Subsidiaries as of the Restatement Effective Date and which is to remain
outstanding after giving effect to the entering into of the Credit Documents
(excluding the Revolving Loans and the Letters of Credit, the "Existing
Indebtedness"), in each case showing the aggregate principal amount thereof and
the name of the respective borrower and any Credit Party or any of its
Subsidiaries which directly or indirectly guarantees such debt.
7.20 Insurance. Annex VI sets forth a true and complete listing of
all insurance maintained by the Borrower and its Subsidiaries as of the
Restatement Effective Date, and with the amounts insured (and any deductibles)
set forth therein.
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7.21 Year 2000. The Year 2000 date change has not resulted in the
disruption of either the Borrower's and its Subsidiaries' (i) Information
Systems and Equipment, (ii) operations or business systems or (iii) to the
Borrower's and its Subsidiaries' knowledge, to the operations or business
systems of the Borrower's major vendors, customers, suppliers and
counterparties. Neither the Borrower nor its Subsidiaries has reason to believe
that liabilities and expenditures related to the Year 2000 date-change
(including, without limitation, costs caused by reprogramming errors, the
failure of others' systems or equipment, and the potential liability, if any, of
the Borrower or its Subsidiaries for Year 2000 related costs incurred or
disruption experienced by others) will (x) result in a Default or an Event of
Default or (y) result in a Material Adverse Effect.
SECTION 8. Affirmative Covenants. The Borrower hereby covenants and
agrees that until the Total Revolving Commitment and all Letters of Credit have
terminated, no Revolving Notes are outstanding and the Revolving Loans and
Unpaid Drawings, together with interest, Fees and all other Obligations (other
than any indemnities described in Section 12.13 which are not then owing)
incurred hereunder, are paid in full:
8.01 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 its Subsidiaries, 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 its Subsidiaries, 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.
(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, 2000, the consolidated and consolidating balance sheet of
the Borrower and its Subsidiaries, 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 vice president of finance of the Borrower,
subject to changes resulting from audit and normal year-end audit adjustments.
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(c) Monthly Reports. Commencing March 31, 2000 during Phase I,
within 45 days after the end of each monthly accounting period (other than the
last monthly accounting period in any fiscal year), the internally prepared
consolidating income statements and operating statistics report of the Borrower
and its Subsidiaries for such period, setting forth in the consolidating income
statements, the budgeted figures for such months and the variance, if any,
between the budgeted amounts and actual amounts, all of which shall be certified
by the chief financial officer or vice president of finance 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 December 31, 1999, 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 8.01(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 8.01(a) and (b), a Compliance
Certificate of the chief financial officer, vice president of finance 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 8.01(a) and (b), shall set forth the calculations
required to establish whether the Borrower and its Subsidiaries were in
compliance with the provisions of Sections 9.11 through 9.17, inclusive, as at
the end of such 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 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.
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8.02 Books, Records and Inspections. The Borrower will, and will
cause its Subsidiaries to, permit, upon reasonable notice to the chief financial
officer, vice president of finance 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.
8.03 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 Restatement
Effective Date and thereafter annually, upon request of the Administrative
Agent, a summary of the insurance carried.
8.04 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
good faith judgment of the management of the Borrower) with respect thereto in
accordance with GAAP.
8.05 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 9.02 or conducted in compliance with
Section 4.03(b) will not constitute a breach of this Section 8.05.
8.06 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.
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8.07 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 subsection
.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 all other
Plans, exceeds the aggregate amount of such Unfunded Current Liabilities that
existed on the Restatement Effective 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; that a proceeding has been instituted pursuant to
Section 515 of ERISA to collect a delinquent contribution to a Multiemployer
Plan; that the Borrower, except as set forth on Annex III 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 Restatement Effective 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 (other than any
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PBGC Form 1), 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.
8.08 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 9.05, 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.
8.09 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.
8.10 Approvals. The Borrower will use reasonable best efforts to
obtain as promptly as practicable after (i) the Restatement Effective Date, the
approvals set forth in Annex XI 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 8.10 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 above, 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 Permitted Acquisition, which opinion
shall be in form and substance reasonably satisfactory to the Administrative
Agent.
SECTION 9. Negative Covenants. The Borrower hereby covenants and
agrees that until the Total Revolving Commitment and all Letters of Credit have
terminated, no Revolving Notes are outstanding and the Revolving Loans and,
Unpaid Drawings, together with interest, Fees and all other Obligations (other
than any indemnities described in Section 12.13 which are not then owing)
incurred hereunder, are paid in full:
9.01 Business. The Borrower and its Subsidiaries shall engage only
in business operations which shall permit them to qualify as CLEC companies
under and as declared in the MJD Credit Agreement. The Borrower will not permit
at any time the business activities taken as a whole conducted by the Borrower
and its Subsidiaries to be materially different from the business activities
taken as a whole (including incidental activities) conducted by the Borrower
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and its Subsidiaries on the Restatement Effective Date and businesses reasonably
related thereto (the "Business").
9.02 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 and (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 Amended and Restated Pledge Agreement the stock of
the surviving entity or the transferee entity, as the case may be, shall
also be pledged pursuant to a Amended and Restated Pledge Agreement;
(b) capital expenditures to the extent within the limitations set
forth in Section 9.05 hereof;
(c) the investments, acquisitions and transfers or dispositions of
properties permitted pursuant to Section 9.06;
(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 9.04(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) Asset Sales to the extent that the aggregate Net Cash Proceeds
received from all such sales and dispositions permitted by this clause (f)
shall not exceed $3,000,000 in the aggregate and $1,000,000 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
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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 Revolving Loans or reinvested in Replacement Assets to the extent
required by Section 4.03(b), 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) leases and subleases permitted under Section 9.03(d) and (g);
(h) Asset Sales pursuant to the Comdisco Sale and Leaseback
Transaction, so long as the cash proceeds thereof (net of any amounts that
Comdisco will retain to be used to reduce the principal obligations of the
Borrower in connection with the Comdisco Sale and Leaseback Transaction)
are used to repay the outstanding principal amount of Revolving Loans
(without a reduction in the Total Revolving Commitment); and
(i) Permitted Acquisitions.
9.03 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:
(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 Capital Leases in respect of
Capitalized Lease Obligations permitted by Section 9.04(c);
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(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 10.10;
(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 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 ordinary 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 Restatement Effective Date which are listed, and the property
subject thereto described in, Annex VII, 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 (other than
interest and fees to be financed in connection with such Indebtedness)
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
Restatement Effective 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)
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all Indebtedness secured by Liens created pursuant to this clause (m)
shall not exceed $4,000,000 at any time outstanding; and
(n) 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.
9.04 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 Amended and Restated
Pledge Agreement;
(c) Capitalized Lease Obligations, provided that the aggregate
Capitalized Lease Obligations outstanding at any time under all Capital
Leases entered into shall not exceed $10,000,000;
(d) Indebtedness under Interest Rate Agreements entered into with
respect to Indebtedness under this Agreement and other Indebtedness
permitted under this Section 9.04, provided that management of the
Borrower or such Subsidiary as the case may be, has determined in good
faith that the entering into such Agreements are bona fide hedging
activities and are not for speculative purposes;
(e) Indebtedness incurred pursuant to purchase money mortgages
permitted by Section 9.03(m);
(f) Existing Indebtedness, without giving effect to any subsequent
extension, renewal or refinancing thereof, except as permitted pursuant to
clause (i) below;
(g) Indebtedness of the Borrower or any of its Subsidiaries which
may be deemed to exist in connection with agreements providing for
indemnification, purchase price
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adjustments and similar obligations in connection with Permitted
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, other
than the Borrower or any of its Subsidiaries);
(h) Permitted Acquired Debt;
(i) 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;
(j) Permitted Subordinated Debt, 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; and
(k) additional unsecured Indebtedness of the Borrower and the
Subsidiary Guarantors not to exceed an aggregate outstanding principal
amount of $5,000,000 at any time.
9.05 Capital Expenditures. (a) During Phase I, the Borrower will
not, and will not permit any of its Subsidiaries to, make any Consolidated
Capital Expenditures, except that during Phase I during any period of the
Borrower set forth below (taken as one accounting period), the Borrower and its
Subsidiaries may make Consolidated Capital Expenditures so long as the aggregate
amount of all such Consolidated Capital Expenditures does not exceed in any
period set forth below the amount set forth opposite such period below:
Period Amount
------ ------
Fiscal year ending
December 31, 2000 $91,397,000
Fiscal year ending
December 31, 2001 $75,714,000
Fiscal year ending
December 31, 2002 $46,746,000
6 months ending
June 30, 2003 $68,475,000
(b) In the event that the maximum amount which is permitted to be
expended in respect of Consolidated Capital Expenditures during any fiscal year
pursuant to Section 9.05(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 9.05(a) shall
be increased by such unutilized amount.
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9.06 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) 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 $1,000,000 at any time outstanding shall be
permitted;
(d) 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;
(e) Interest Rate Agreements entered into with respect to
Indebtedness under this Agreement and other Indebtedness permitted under
Section 9.04, provided that management of the Borrower or such Subsidiary
as the case may be, has determined in good faith that entering into such
Agreements are bona fide hedging activities and are not for speculative
purposes.
(f) advances, loans and investments in existence on the Restatement
Effective Date and listed on Annex VIII, without giving effect to any
additions thereto or replacements thereof, shall be permitted;
(g) the Borrower and each Subsidiary may make capital contributions
to any of their Subsidiaries to the extent such Subsidiary is a Subsidiary
Guarantor;
(h) Subsidiaries may be established or created in accordance with
the provisions of Section 9.07;
(i) Permitted Acquisitions shall be permitted;
(j) loans and investments not otherwise permitted by the foregoing
clauses (a) through (i), provided that the aggregate amount of the loans
and investments made pursuant to this clause (j) shall not exceed
$2,000,000; and
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(k) 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 9.02(f).
9.07 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 (i) establish, create or acquire Wholly-Owned Subsidiaries and (ii) acquire
90%-Owned Subsidiaries pursuant to a Permitted Acquisition, so long as in the
case of clauses (i) and (ii) above, as the case may be, (A) 100% of the capital
stock of such new Wholly-Owned Subsidiary or at least 90% of the capital stock
of such new 90%-Owned Subsidiary is pledged pursuant to the Amended and Restated
Pledge Agreement and the certificates representing such stock, together with
stock powers duly executed in blank, are delivered to the Collateral Agent and
(B) such new Wholly-Owned Subsidiary or 90%-Owned Subsidiary executes a
counterpart of the Amended and Restated Subsidiary Guaranty and/or the Amended
and Restated Pledge Agreement and the Amended and Restated Security Agreement,
in each case on the same basis (and to the same extent) as such Wholly-Owned
Subsidiary or 90%-Owned Subsidiary would have executed such Credit Documents if
it were a Credit Party on the Restatement Effective Date.
9.08 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, prepayment, redemption, 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 Permitted
Subordinated Debt, any Permitted Refinancing Indebtedness, provided that
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;
(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 Subordinated Debt or any Permitted
Refinancing Indebtedness; or
(c) amend, modify or change in any manner, taken as a whole, adverse
to the interests of the Lenders the Company Documents of any Credit Party,
or enter into any new agreement in any manner materially adverse to the
interests of the Lenders with respect to the capital stock of the
Borrower; or
(d) amend, modify or change in any manner materially adverse to the
interests of the Lenders, the Amended and Restated Tax Sharing Agreement.
9.09 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
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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 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) any 90%-Owned Subsidiary of the Borrower may pay cash Dividends
to the holders of its capital stock, so long as the Borrower or its
respective Subsidiary which owns the capital stock in the 90%
Owned-Subsidiary paying such Dividends receives at least its pro rata
share thereof;
(iii) during Phase II, so long as (a) no Default or Event of Default
then exists or would result therefrom and (b) the Leverage Ratio on the
date of payment thereof (calculated on a pro forma basis after giving
effect to the incurrence of any Credit Event on such date) is less than
3.50:1.00, the Borrower may pay Dividends in an amount not to exceed 50%
of the Borrower's Excess Cash Flow for the immediately preceding four
fiscal quarters prior to the payment of such Dividends pursuant to this
Section 9.09(a)(iii); and
(iv) 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 $1,000,000.
(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
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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) 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 9.03(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.
9.10 Transactions with Affiliates. The Borrower will not, and will
not permit any Subsidiary to, enter into any transaction or series of
transactions after the Restatement Effective 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 or Wholly-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 and expenses paid to MJD during any fiscal year pursuant to the
Management Services Agreement, (v) arrangements with directors, officers and
employees not otherwise prohibited by this Agreement, (vi) the Amended and
Restated Tax Sharing Agreement, (vii) the Amended and Restated Preferred Stock
Issuance and Capital Contribution Agreement, (viii) payment of customary legal
fees and expenses to Paul, Hastings, Xxxxxxxx & Xxxxxx LLP and (ix) the
transactions set forth on Annex X hereto.
9.11 Minimum Consolidated Revenue. During Phase I, the Borrower will
not permit Consolidated Revenue for any six-month period ending on the date set
forth below to be less than the amount set forth opposite such six-month period
below:
Six-Month Period Ending On Amount
-------------------------- ------
March 31, 2000 $9,410,000
June 30, 2000 $14,272,000
September 30, 2000 $20,831,000
December 31, 2000 $29,042,000
March 31, 2001 $41,707,000
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June 30, 2001 $56,060,000
September 30, 2001 $68,453,000
December 31, 2001 $80,846,000
March 31, 2002 $97,422,000
June 30, 2002 $114,227,000
September 30, 2002 $127,077,000
December 31, 2002 $139,926,000
March 31, 2003 $162,474,000
June 30, 2003 $184,544,000
9.12 Minimum Consolidated EBITDA. During Phase I, the Borrower will
not permit Consolidated EBITDA for any six-month period ending on the date set
forth below to be less than the amount set forth opposite such six-month period
below:
March 31, 2000 $(26,021,000)
June 30, 2000 $(35,321,000)
September 30, 2000 $(41,478,000)
December 31, 2000 $(50,155,000)
March 31, 2001 $(54,928,000)
June 30, 2001 $(50,601,000)
September 30, 2001 $(45,230,000)
December 31, 2001 $(40,323,000)
March 31, 2002 $(28,433,000)
June 30, 2002 $(13,963,000)
September 30, 2002 $ (5,147,000)
December 31, 2002 $ 2,741,000
March 31, 2003 $ 19,161,000
June 30, 2003 $ 35,313,000
9.13 Consolidated Senior Debt to Capitalization Ratio. The Borrower
will not permit the Consolidated Senior Debt to Capitalization Ratio to exceed
(i) 0.67 during Phase I and (ii) 0.75 during Phase II.
9.14 Consolidated Debt to Capitalization Ratio. The Borrower will
not permit the Consolidated Debt to Capitalization Ratio to exceed 0.75.
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9.15 Interest Coverage Ratio. During Phase II, for any fiscal
quarter ending on any date set forth below, the Borrower will not permit the
ratio of (i) Consolidated Annualized EBITDA to (ii) Consolidated Annualized
Interest Expense to be less than the ratio set forth opposite such date:
Fiscal Quarter Ending Ratio
--------------------- -----
March 31, 2003 1.50 to 1
June 30 2003 2.00 to 1
September 30, 2003 and thereafter 2.50 to 1
9.16 Leverage Ratio. During Phase II, the Borrower will not permit
the Leverage Ratio determined as at the end of the last day of any fiscal
quarter ending on any date set forth below to be more than the ratio set forth
opposite such date:
Fiscal Quarter Ending Ratio
--------------------- -----
March 31, 2003 6.50 to 1
June 30, 2003 and thereafter 3.50 to 1
9.17 Fixed Charge Ratio. During Phase II, for any fiscal quarter
ending on any date set forth below, the Borrower will not permit the ratio of
(i) Consolidated Annualized EBITDA to (ii) Consolidated Annualized Fixed Charges
to be less than the ratio set forth opposite such date:
Fiscal Quarter Ending Ratio
--------------------- -----
September 30, 2003 1.25 to 1
December 31, 2003 1.50 to 1
March 31, 2004 and thereafter 2.00 to 1
9.18 Limitation On Issuance of Subsidiary 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 9.07 and (iv) to qualify directors to the extent
required by applicable law.
9.19 Limitation on Assets of the Unrestricted Subsidiary. The
Borrower shall not permit the Unrestricted Subsidiary to own any asset other
than the Borrower's membership interest at any time in Northeast Captive Access
Providers, LLC.
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SECTION 10. Events of Default. Upon the occurrence of any of the
following specified events (each, an "Event of Default"):
10.01 Payments. The Borrower shall (i) default in the payment when
due of any principal of the Revolving 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 Revolving Loans, Unpaid Drawing or any Fees or any other amounts
owing hereunder or under any other Credit Document; or
10.02 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
10.03 Covenants. Any Credit Party shall (a) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 8.09 or 9 (other than Sections 9.11 and 9.12), (b) default in the due
performance or observance by it of any term, covenant or agreement contained in
Sections 9.11 or 9.12, and such default shall continue for a period of 30 or
more Business Days, or (c) default in the due performance or observance by it of
any term, covenant or agreement (other than those referred to in Section 10.01,
10.02, 10.09 or clause (a) or (b) of this Section 10.03) 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
10.04 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 10.04 unless the aggregate principal
amount of all Indebtedness referred to in clauses (a) and (b) above exceeds
$3,000,000 in the aggregate at any one time or (c) MJD shall (i) default in any
payment of interest or principal beyond the period of grace, if any, applicable
thereto under the MJD Credit Agreement or (ii) the Indebtedness of MJD under the
MJD Credit Agreement 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.
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10.05 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, 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
10.06 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
subparagraph (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
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aggregate, in the opinion of the Required Lenders, has had, or is reasonably
likely to have, a Material Adverse Effect; or
10.07 Amended and Restated 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 under the Amended and Restated
Pledge Agreement, any of the Security Documents 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, rights, 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
any of the Security Documents and such default shall continue for 30 or more
days after written notice to the respective Credit Party by the Administrative
Agent; or
10.08 Amended and Restated Subsidiary Guaranty. Any Amended and
Restated 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 Amended and Restated Subsidiary Guaranty; or
10.09 Amended and Restated Preferred Stock Issuance and Capital
Contribution Agreement. The Preferred Stock Issuance and Capital Contribution
Agreement or any material provision thereof shall cease to be in full force and
effect or MJD shall deny or disaffirm its obligations thereunder or default in
the performance of its agreements and conditions thereunder; or
10.10 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 $3,000,000 in the
aggregate at any time outstanding 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; or
10.11 Change of Control. A Change of Control shall occur;
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 10.05
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 Revolving Commitment terminated, whereupon the Revolving
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
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of and any accrued interest in respect of all Revolving 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; (iii) terminate any Letter
of Credit which may be terminated in accordance with its terms; (iv) direct the
Borrower to pay (and the Borrower agrees that upon receipt of such notice, or
upon the occurrence of an Event of Default specified in Section 10.05 with
respect to the Borrower, it will pay) to the Collateral Agent at the Payment
Office such additional amount of cash or Cash Equivalents, to be held as
security by the Collateral Agent, as is equal to the aggregate Stated Amount of
all Letters of Credit issued for the account of the Borrower and then
outstanding; and (v) enforce, as Collateral Agent (or direct the Collateral
Agent to enforce), any and all of the Liens and security interests created
pursuant the Credit Documents (including with respect to any cash collateral
held pursuant to this Agreement); provided that (A) within three Business Days
after the date of any Event of Default that occurs due to noncompliance with
Section 9.05, MJD may cure such an event of Default by making a cash
contribution in the amount equal to the margin of such noncompliance so long as
Borrower shall have received Consolidated Cash Equity contributions from MJD in
an aggregate amount of not less than (I) $100,000,000 by the end of the fiscal
year of the Borrower ending on December 31, 2000, in the event that such Event
of Default occurs for the fiscal year ending December 31, 2000 or (II)
$150,000,000 by the end of the fiscal year of the Borrower ending on December
31, 2001, in the event that Event of Default occurs for the fiscal year ending
December 31, 2001 and (B) within three Business Days after the date of any Event
of Default that occurs due to noncompliance with Section 9.12, MJD may cure such
an Event of Default by making a cash contribution in an amount equal to the
margin of such noncompliance (the "EBITDA Cure"), provided that the EBITDA Cure
may only be used (I) two times during the term of this Agreement, if the
Borrower's Consolidated Debt to Capitalization Ratio (at all times measured at
the end of the most recently reported fiscal quarter of the Borrower) is less
than .40 at the time of such Event of Default and not in two consecutive fiscal
quarters and (II) only one time during the term of this Agreement, if at the
time of such Event of Default the Borrower's Consolidated Debt to Capitalization
Ratio is greater than or equal to .40 but less than or equal to .50, except that
if the Borrower has already exercised the EBITDA Cure once in accordance with
clause B (I) above, the Borrower may exercise the EBITDA Cure once more pursuant
to this clause B (II) (but only if such EBITDA Cure is not exercised in two
consecutive fiscal quarters). Notwithstanding anything contained in clause (B)
above, MJD may not make an EBITDA Cure at any time if the Borrower's
Consolidated Debt to Capitalization Ratio is greater than .50 at the time of an
Event of Default due to noncompliance with Section 9.12; provided further that
to the extent that MJD makes an MJD Investment as defined in and pursuant to the
Amended and Restated Preferred Stock Issuance and Capital Contribution
Agreement, the Default or Event of Default that gave rise to the right of MJD to
make an MJD Investment shall automatically be deemed cured; except that (x)
after two MJD Investments have been made (which can be made regardless of the
percentage that the margin of noncompliance exceeds a Specified Event of Default
as defined in the Preferred Stock Issuance and Capital Contribution Agreement)
MJD may not make MJD Investments as described in the above proviso to cure such
Specified Events of Default in which the margin of noncompliance therewith
exceeds 15% and (y) MJD may not make MJD Investments to cure Specified Events of
Default as described in the above proviso in two consecutive reporting periods
of the Borrower until after such time that two MJD Investments have been made.
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SECTION 11. The Administrative Agent.
11.01 Appointment. The Lenders hereby designate Bank of America as
Administrative Agent (for purposes of this Section 11, the terms "Administrative
Agent" shall include Bank of America in its capacity as Collateral Agent
pursuant to the Amended and Restated Pledge Agreement and as representative on
behalf of the Lenders) to act as specified herein and in the other Credit
Documents. Each Lender hereby irrevocably authorizes, and each holder of any
Revolving Loan shall be deemed irrevocably to authorize, the Administrative
Agent 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
Administrative Agent by the terms hereof and thereof and such other powers as
are reasonably incidental thereto. The Administrative Agent may perform any of
its duties hereunder by or through its respective officers, directors, agents,
employees or affiliates.
11.02 Nature of Duties. The Administrative Agent shall not have any
duties or responsibilities except those expressly set forth in this Agreement
and the other Credit Documents. Neither the Administrative 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 Administrative Agent
shall be mechanical and administrative in nature; the Administrative 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 Revolving Loan; 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 the Administrative Agent
any obligations in respect of this Agreement or any other Credit Document except
as expressly set forth herein or therein.
11.03 Lack of Reliance on the Administrative Agent. Independently
and without reliance upon the Administrative Agent, each Lender and the holder
of each Revolving Loan, 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 Revolving 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 and the Administrative Agent shall not have any duty
or responsibility, either initially or on a continuing basis, to provide any
Lender or the holder of any Revolving Loan with any credit or other information
with respect thereto, whether coming into its possession before the making of
the Revolving Loans or at any time or times thereafter. The Administrative Agent
shall not be responsible to any Lender or the holder of any Revolving Loan 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
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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.
11.04 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 Revolving Loan shall have any right of action whatsoever against
the Administrative Agent as a result of the Administrative Agent acting or
refraining from acting hereunder or under any other Credit Document in
accordance with the instructions of the Required Lenders.
11.05 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 (which may include
counsel to the Borrower).
11.06 Indemnification. To the extent the Administrative 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 Revolving Loans and
Revolving 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 the Administrative 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 the Administrative
Agent.
11.07 The Administrative Agent in its Individual Capacity. With
respect to its obligation to make Revolving Loans under this Agreement, the
Administrative 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 Revolving Loans" or any similar terms shall, unless the
context clearly otherwise indicates, include the Administrative Agent in its
individual capacity. The Administrative 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
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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.
11.08 Holders of Revolving Notes. The Administrative Agent may deem
and treat the payee of any Revolving 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 Revolving Note shall be conclusive and binding on any subsequent
holder, transferee, assignee or indorsee, as the case may be, of such Revolving
Note or of any Revolving Note or Revolving Notes issued in exchange therefor.
11.09 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 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.
SECTION 12. Miscellaneous.
12.01 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 Administrative Agent 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 the Administrative Agent and each of
the Lenders in connection with the enforcement following an Event of Default of
the Credit Documents and the documents and instruments referred to therein
(including, without limitation, the reasonable fees and disbursements of counsel
for each of the Lenders); (ii) pay and hold each
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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 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 Administrative 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 the
Administrative Agent or any Lender is a party thereto and whether or not any
such investigation, litigation or other proceeding is between or among the
Administrative 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 Revolving Loans hereunder 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).
Notwithstanding the forgoing in no event shall the Borrower be obligated under
this Section to indemnify any Lender (i) for a loss in value of MJD Preferred
Stock taken by such Lender pursuant to the MJD Conversion Option and (ii) for
such Lender's failure to comply with Regulation Y.
12.02 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 12.06(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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12.03 Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including facsimile communication) and mailed, faxed 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 effective
when received.
12.04 Benefit of Agreement; Assignments and Participants. (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
Revolving Loans 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 2.10 and 5.04 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 Revolving Loan 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 Revolving 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 the Total Revolving 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 Revolving Commitment or a
mandatory prepayment shall not constitute a change in the terms of any Revolving
Commitment), (ii) release all or substantially all of the Collateral or
Subsidiary Guarantors or (iii) consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this Agreement.
(b) Notwithstanding the foregoing, with the consent of the
Administrative Agent and, if no Default under Section 10.01, 10.05 or 10.03(b)
or Event of Default exists, the Borrower (which consents shall not be
unreasonably withheld), (x) any Lender may assign all or a portion of its
Revolving Commitment and its rights and obligations hereunder 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
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and/or advised by the same investment advisor of such Lender or by an Affiliate
of such investment advisor, and (y) any Lender may assign all or a portion of
its Revolving 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 Revolving Commitment and Revolving 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 Revolving Notes, any reference in this Agreement or the
Revolving 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 12.04(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, (ii) Annex I shall be deemed to be amended to reflect the Revolving
Commitments and Revolving Loans of the respective assignee (which shall result
in a direct reduction to the Revolving Commitment of the assigning Lender) and
of the other Lenders, and (iii) upon surrender of any related old Revolving
Notes the Borrower will, at its own expense, issue new Revolving Notes to the
respective assignee and to the assigning Lender in conformity with the
requirements of Section 2.05, provided further that such transfer or assignment
will not become effective until recorded by the Administrative Agent on the
Lender Register pursuant to Section 12.16. To the extent of any assignment
pursuant to this Section 12.04(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 5.04
Certificate) described in Section 5.04(b). To the extent that an assignment
pursuant to this Section 12.04(b) would, at the time of such assignment, result
in increased costs under Section 2.10 or 5.04 from those 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 Revolving
Notes or Revolving 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
Revolving Loans and Revolving Notes to its trustee in support of its obligations
to its trustee.
(c) Notwithstanding any other provisions of this Section 12.04, 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 Revolving 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.
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(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 12 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 Revolving 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.
12.05 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.
12.06 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 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 Revolving Loans, Unpaid Drawings, Commitment Commission or Letter of
Credit Fees or other 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 12.06(a) and (b) shall be subject to the
express provisions of this
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Agreement which require, or permit, differing payments to be made to
Non-Defaulting Lenders as opposed to Defaulting Lenders.
12.07 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 9.11 through 9.17, inclusive, including definitions used therein, shall
utilize accounting principles and policies in conformity with those used to
prepare the historical financial statements of the Borrower referred to in
Section 7.10 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).
12.08 Governing Law; Submission to Jurisdiction; Venue; Waiver of
Jury Trial. (a) This Agreement and the other Credit Documents and the 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 12.03, such
service to become effective 30 days after such mailing. 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.
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(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.
12.09 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.
12.10 Effectiveness. This Agreement shall become effective on the
date (the "Restatement Effective Date") on which (i) the Borrower and the
Required 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 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 and (ii) the conditions
set forth in Section 6.01 shall have been satisfied in accordance with the terms
thereof. The Administrative Agent will give the Borrower and each Lender prompt
written notice of the occurrence of the Restatement Effective Date.
12.11 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.
12.12 Amendment or Waiver. (a) 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 and the Required 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 final scheduled maturity date of any Revolving Loan or Revolving Note or
extend the stated expiration date of any Letter of Credit beyond the Final
Maturity Date, 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 Revolving Commitment of such 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 Revolving Commitment shall not constitute
a change in the terms of the Revolving Commitment of any Lender), (ii) amend,
modify or waive any provision of this Section 12.12 (except to give effect to
additional facilities hereunder), (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 (except as set forth in the
Credit Documents) or (vi) release all or substantially all of the Subsidiary
Guaranties; provided further, that no such change, waiver, discharge or
termination shall, (w) without the consent of the Issuing Lender, amend, modify
or waive any provision of Section 3 or alter its rights or obligations with
respect to Letters of Credit, (x) without the consent of the
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Administrative Agent, amend, modify or waive any provision of Section 11 or any
other provision as same relates to the rights or obligations of the
Administrative Agent or (y) without the consent of the Collateral Agent, amend,
modify or waive any provision relating to the rights or obligations of the
Collateral Agent.
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by
clauses (i) through (v), inclusive, of the first proviso to Section 12.12(a),
the consent of the Required Lenders is obtained but the consent of one or more
of such other Lenders whose consent is required is not obtained, then the
Borrower shall have the right, so long as all non-consenting Lenders whose
individual consent is required are treated as described in either clauses (A) or
(B) below, to either (A) replace each such non-consenting Lender or Lenders with
one or more Replacement Lenders pursuant to Section 2.13 so long as at the time
of such replacement, each such Replacement Lender consents to the proposed
change, waiver, discharge or termination or (B) terminate such non-consenting
Lender's Revolving Commitment and/or repay the outstanding Revolving Loans of
such Lender in accordance with Sections 4.02(b) and/or 5.01(b), provided that,
unless the Revolving Commitment that is terminated, and Revolving Loans repaid,
pursuant to preceding clause (B) are immediately replaced in full at such time
through the addition of new Lenders or the increase of the Revolving Commitments
and/or outstanding Revolving Loans of existing Lenders (who in each case must
specifically consent thereto), then in the case of any action pursuant to
preceding clause (B) each Lender (determined after giving effect to the proposed
action) shall specifically consent thereto, provided further, that in any event
the Borrower shall not have the right to replace a Lender, terminate its
Revolving Commitment or repay its Revolving Loans solely as a result of the
exercise of such Lender's rights (and the withholding of any required consent by
such Lender) not to increase its Revolving Commitment.
12.13 Survival. All indemnities set forth herein including, without
limitation, in Section 2.10, 2.11, 5.04, 11.06 or 12.01 shall survive the
execution and delivery of this Agreement and the making and repayment of the
Revolving Loans.
12.14 Domicile of Revolving Loans. Each Lender may transfer and
carry its Revolving 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 2.10 or 5.04 resulting from any such
transfer (other than a transfer pursuant to Section 2.12) to the extent not
otherwise applicable to such Lender prior to such transfer.
12.15 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 submitted to any municipal,
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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 organizations (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 Revolving
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 12.15 shall not relieve the
Credit Parties of any of their obligations to such Lender under this Agreement
and the other Credit Documents.
12.16 Lender Register. The Borrower hereby designates the
Administrative Agent to serve as the Borrower's agent, solely for purposes of
this Section 12.16, to maintain a register (the "Lender Register") on which it
will record the Revolving Commitment from time to time of each of the Lenders,
the Revolving Loans made by each of the Lenders and each repayment in respect of
the principal amount of the Revolving 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 Revolving Loans. With respect to any
Lender, the transfer of such Revolving Commitments and the rights to the
principal of, and interest on, such Revolving Loans made pursuant to such
Revolving 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 Revolving Commitments and Revolving Loans and prior to such
recordation all amounts owing to the transferor with respect to such Revolving
Commitment and Revolving Loans shall remain owing to the transferor. The
registration of assignment or transfer of all or part of any Revolving
Commitment and Revolving 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
12.04(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 12.16 (but excluding such
losses, claims, liabilities or liabilities incurred by reason of the
Administrative Agent's gross negligence or willful misconduct).
12.17 Amendment and Restatement of Existing Credit Agreement. On and
as of the occurrence of the Restatement Effective Date in accordance with
Section 12.10, the Existing Credit Agreement shall each be deemed to be amended
and restated in its entirety, and superseded by this Agreement.
* * * * *
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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.
FAIRPOINT COMMUNICATIONS CORP.
By /s/ Xxxxxxx X. Xxxxx
--------------------------------
Title: Vice President of Finance
BANK OF AMERICA, N.A.
Individually and as Administrative Agent
By /s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Title: Principal
BANKERS TRUST COMPANY
By /s/ Xxxxxxx Xxxxxxx
--------------------------------
Title: Principal
FIRST UNION NATIONAL BANK
By /s/ C. Brand Xxxxxxx
--------------------------------
Title: Vice-President
COBANK, ACB
By /s/ Xxxx Xxxxxxx
--------------------------------
Title: Vice President
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THE CIT GROUP/EQUIPMENT FINANCING, INC.
By /s/ Xxxxx Xxxxxxxx
--------------------------------
Title: Assistant Vice President/Credit
DLJ CAPITAL FUNDING, INC.
By /s/ Xxxxxx X. Xxxxxx
--------------------------------
Title: Senior Vice President
CITICORP USA, INC.
By /s/ J. Xxxxxxx Xxxxxx
--------------------------------
Title: Managing Director
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ANNEX I
-------
COMMITMENTS
-----------
Lender Revolving Commitment
------------------------- --------------------
Bank of America, N.A. $ 25,000,000
Bankers Trust Company $ 25,000,000
First Union National Bank $ 25,000,000
CoBank, ACB $ 25,000,000
______________
TOTAL: $100,000,000
ANNEX II
ADDRESSES
Lender Address
------ -------
Bank of America, N.A. 000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000-0000
Attn: Xxx Xxxxxxxx
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
Bankers Trust Company 000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxx
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
First Union National Bank 000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Brand Xxxxxxx
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
CoBank, ACB 000 Xxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxx Xxxxxxx
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
Attn: Xxxxx Xxxxxxxx
Tel. No.: (1-800) 872-8841 ext. 5864
Fax No.: (000) 000-0000
Citicorp USA, Inc. 000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: J. Xxxxxxx Xxxxxx
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
DLJ Capital Funding, Inc. 000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxx
Tel. No.: (000) 000-0000
Fax No.: (000) 000-0000
The CIT Group/ Equipment Financing, 000 Xxxxxxx Xxxxxxx
Inc. Xxxxxxx, Xxxxxxx 00000
Attn. Xxxx Xxxxxx
Tel.: (000) 000-0000
Fax No.: (000) 000-0000
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ANNEX III
ERISA
I. STE/NE Acquisition Corp. Pension Plan for Vermont Employees of Transferred
GTE Operations: Plan has been terminated and all benefits have been
distributed.
II. Retirement Plan for Employees of the Ellensburg Telephone Company: Plan
has been terminated all assets have been distributed.
III. Chautauqua & Erie Telephone Corporation Management Pension Plan: Plan has
been terminated and all assets have been distributed.
IV. Chautauqua & Erie Telephone Corporation Union Pension Plan: Plan has been
terminated and all assets have been distributed.
V. Retirement Plan of Utilities, Inc and Associated Employers for Utilities,
Inc.: Plan is in the termination process. The plan is over-funded and the
excess funding may result in a reversion of plan assets. If the reversion
occurs, the plan's sponsor will pay an excise tax under section 4980 of
the Code.
VI. Retirement Plan of Utilities, Inc and Associated Employers for Xxxxxxxx
Telephone Company and China Telephone Company: Plan is in the termination
process. The plan is over-funded and the excess funding may result in a
reversion of plan assets. If the reversion occurs, the plan's sponsor will
pay an excise tax under section 4980 of the Code.
VII. Retirement Plan of Utilities. Inc. and Associated Employers for Telephone
Service Company: Plan is in the termination process. The plan is
over-funded and the excess funding may result in a reversion of plan
assets. If the reversion occurs, the plan's sponsor will pay an excise tax
under section 4980 of the Code.
VIII. Taconic Telephone Corp Union Employee Defined Benefit Plan: Plan has been
terminated and all assets have been distributed.
IX. Taconic Telephone Corp. Management Employee Defined Benefit Plan: Plan has
been terminated and all assets have been distributed
ANNEX IV
SUBSIDIARIES
FairPoint Communications Corp. -- New York
00 Xxxx Xxxx
Xxxxx 000
Xxxx Xxxxxxxxx, XX 00000
100 shares of Common Stock, par value $0.01 per share, authorized;
100 shares issued and outstanding to FairPoint Communications Corp.,
having its principal office at 0000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxx,
XX 00000.
FairPoint Communications Corp. -- Virginia
0000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
25,000 shares of Common Stock, par value $1.00 per share, authorized;
100 shares issued and outstanding to FairPoint Communications Corp.,
having its principal office at 0000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxx,
XX 00000.
FairPoint Communications Investments, LLC
0000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
100% of membership interests owned by FairPoint Communications Corp.,
having its principal office at 0000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxx,
XX 00000.
ANNEX V
EXISTING INDEBTEDNESS
None.
ANNEX VI
INSURANCE
See attached.
MJD COMMUNICATIONS, INC.
2000
INSURANCE SCHEDULE
Policy Coverage
------ --------
Line Insurance Co Policy No Policy Period Premium Deductible Limits Applies to
---- ------------ --------- ------------- ------- ---------- ------ ----------
Package Policy St. Xxxx TE03200900 11/8/99 - $ 86,983
----------------------
General Liability 5/1/2000 1 MM / 2 MM
--------------------------------------------------------------------------------------------------------------
Excess Liability 10,000 20 MM / 20 MM
--------------------------------------------------------------------------------------------------------------
Technology E&O 10,000 5 MM / 5 MM
--------------------------------------------------------------------------------------------------------------
Employee Benefit 1,000 1 MM / 3MM
--------------------------------------------------------------------------------------------------------------
Employee Dishonesty 1,000 1 MM / 1 MM Increased Limit/
Additional
Premium
--------------------------------------------------------------------------------------------------------------
Property (1 25,000 80,565,000 Blanket Limits
--------------------------------------------------------------------------------------------------------------
Boiler & Machinery 2,500 10 MM / 10 MM
--------------------------------------------------------------------------------------------------------------
EDP Equipment 15,434,830 Blanket Limit
--------------------------------------------------------------------------------------------------------------
Business Auto (2 500 1 MM CSL
--------------------------------------------------------------------------------------------------------------
Workers' Compensation
& Employers Liability Xxxxxx National 3BR 019849-00 1/1/2000 - $ 81,666 Statutory /
---------------------- 7/1/2000 $500,000
Fiduciary Liability National Union 008606302 2/15/00-01 $ 14,500 10,000 5 MM / 5 MM +$2.5MM Defense
---------------------- Cost
Directors & Officers
& EPLI National Union 8598861 10/31/99-00 $ 42,133 (3 50,000 (4 5 MM / 5 MM Directors &
Officers
($50,560)
------------------------------------------------------------------------------------------------------------------------------------
National Union 8598803 10/31/99-00 $ 35,948 50,000 5 MM / 5 MM Employment
Practices
($43,138)
--------------------------------------------------------------------------------------------------------------
National Union 8598877 10/31/99-00 $ 35,000 0 10 MM / 10 MM Excess D&O and
EPLI ($42,000)
--------------------------------------------------------------------------------------------------------------
Run-Off D&O Executive Risk 000-000000-00 03/30/98-04 25,000 1 MM / 1 MM Taconic
Telephone
($18,500)
------------------------------------------------------------------------------------------------------------------------------------
Gulf Ins. Group GU 6080630 04/30/98-04 75,000 1 MM / 1 MM Ellensburg
Telephone
($17,800)
--------------------------------------------------------------------------------------------------------------
Executive Risk 000-000000-00 11/06/98-04 25,000 1 MM / 1 MM Utilities, Inc.
($18,500)
--------------------------------------------------------------------------------------------------------------
Executive Risk 000-000000-00 02/01/99-02 25,000 1 MM / 1 MM Ravenswood
($15,000)
--------------------------------------------------------------------------------------------------------------
Total Premium: $296,231
NOTES
(1) Earthquake and Flood Deductible is $50,000. Property Coverage includes
Contractors & EDP Equipment
(2) $500 Deductible for both Comprehensive and Collision
(3) Premium pro-rated for 1/1/00 - 10/31/99 (Total premium in Parens)
(4) Securities Claims and Y2K Third Party Claims have a $100,000 Retention
MJD also holds several Surety Bonds through St. Paul, Kemper and Western Surety
ANNEX VII
EXISTING LIENS
None.
ANNEX VIII
EXISTING INVESTMENTS
1. FairPoint Communications Corp. contributed $135,000 to Northeast
Competitive Access Providers, LLC, a Delaware limited liability company,
having its principal office at c/o Northland Telephone Company of Maine,
Inc., 0000 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxx 00000, for the purpose of
developing, maintaining and providing a high quality telecommunication
infrastructure for the provision of distribution and/or transport services
for long distance and local exchange carries and others at competitive
rates, and to do any and all things that may be necessary, incidental or
convenient thereto.(1) FairPoint Communications Corp. subsequently
contributed its membership interest in Northeast Competitive Access
Providers, LLC to FairPoint Communications Investments, LLC, which is an
unrestricted subsidiary.
----------
(1) This investment is not being pledged due to the fact that the operating
agreement prohibits the pledging of any interests hereunder.
ANNEX IX
AFFILIATE TRANSACTIONS
1. Lease Agreement dated July 22, 1999 by and between Taconic Telephone
Corp., with offices at Xxx Xxxxxxx Xxxxx, Xxxxxxx, XX 00000, and FairPoint
Communications Corp., having its principal office at 000 Xxxx Xxxxxxxx
Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000, leasing local switching service on
Taconic's DMS 100/200 switch sufficient to accommodate Lessee's Forecasted
Usage for lease, for a term of ten (10) years.
2. Lease Agreement dated September 16, 1999 by and between Northland
Telephone Company of Maine, Inc., with offices at 0000 Xxxxxxxx Xxxxxx,
Xxxxxxxx, Xxxxx 00000, and FairPoint Communications Corp., having its
principal office at 000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxxx, XX
00000, leasing local switching service on EWSD switch sufficient to
accommodate Lessee's Forecasted Usage for Leased Services, including all
core switch functionality for a term of five (5) years.
3. Various management service agreements of various dates between ST
Enterprises, Ltd. and FairPoint Communications Corp.
4. Expectation to enter into future switching contracts by and among
FairPoint Communications Corp. and MJD Communications, Inc.'s independent
telcos.
ANNEX X
EXISTING LETTERS OF CREDIT
None.
ANNEX XI
--------
APPROVALS
---------
1. FairPoint Communications Corp. - New York filed an application on March 23,
2000 with the New York Public Service Commission to obtain consent for the
incurrence of certain debt obligations beyond 364 days, in connection with a
Credit Agreement entered into by its sole parent FairPoint Communications Corp.,
including the pledge of FairPoint Communications Corp. - New York's stock and
assets.
2. FairPoint Communications Corp. ("FairPoint") filed an application on March
23, 2000 with the New Hampshire Public Utilities Commission to obtain consent
for the incurrence of certain debt obligations beyond 364 days, including the
pledge of FairPoint's assets and the capital stock and assets of FairPoint's
subsidiaries.
3. FairPoint Communications Corp. ("FairPoint") filed an application on March
23, 2000 with the Pennsylvania Public Utility Commission to obtain consent for
the incurrence of certain debt obligations beyond 364 days, including the pledge
of FairPoint's assets and the capital stock and assets of FairPoint's
subsidiaries.
EXHIBIT A
FORM OF NOTICE OF [BORROWING] [CONVERSION]
___________ ___, _____
Bank of America, N.A.,
as Administrative Agent for the
Lenders party to the Credit Agreement
referred to below
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000-0000
Attention: _____
Ladies and Gentlemen:
The undersigned, FairPoint Communications Corp. (the "Borrower"),
refers to the Amended and Restated Credit Agreement, dated as of October 20,
1999 and amended and restated as of March 27, 2000 (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")
Banc of America Securities LLC, as Co-Arranger, Deutsche Bank Securities Inc.,
as Co-Arranger, First Union Securities, Inc., as Co-Arranger, CoBank, ACB, as
Co-Arranger (each a "Co-Arranger" and together the "Co-Arrangers") and you, as
Administrative Agent, and, pursuant to Section [2.03(a)] [2.06] of the Credit
Agreement, hereby gives you irrevocable notice that the undersigned hereby
requests [a Borrowing] [a conversion] under the Credit Agreement, and in that
connection sets forth below the information relating to such [Borrowing (the
"Proposed Borrowing")] [conversion (the "Proposed Conversion")] as required by
Section [2.03(a)] [2.06] of the Credit Agreement:
(i) The [aggregate principal amount of the Proposed Borrowing is
____________] [[Base Rate Loans] [Eurodollar Loans] to be converted include the
following: _________ and are to be converted into [Base Rate Loans] [Eurodollar
Loans]].
(ii) The Business Day of the [Proposed Conversion is _________](1)
[Proposed Borrowing is ____________].(2)
----------
1 Shall be a Business Day which (x) in the case of a conversion of
Eurodollar Loans into Base Rate Loans, shall be at least one Business Day
after the date hereof if this Notice of Conversion is delivered to the
Administrative Agent prior to 12:00 Noon (New York time) on the date
hereof or (y) in the case of a conversion of Base Rate Loans into
Eurodollar Loans, shall be at least three Business Days after the date
hereof if this Notice of Conversion
(continued...)
Exhibit A
Page 2
[(iii) The Revolving Loans to be made pursuant to the Proposed Borrowing
shall be initially maintained as [Base Rate Loans] [Eurodollar Loans].]
(iv) The initial Interest Period for the [Proposed Borrowing] [Proposed
Conversion] shall be [one month] [two months] [three months] [six months].(3)
[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.](4)
Very truly yours,
FAIRPOINT COMMUNICATIONS CORP..
By:_________________________________
Name:
Title:
----------
(...continued)
is delivered to the Administrative Agent prior to 12:00 Noon (New York
time) on the date hereof.
2 Shall be a Business Day which (x) in the case of Base 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 if this Notice of
Borrowing is delivered to the Administrative Agent prior to 12:00 Noon
(New York time) on the date hereof.
3 To be included for a [Proposed Borrowing of] [Proposed Conversion into]
Eurodollar Loans.
4 To be included for a Notice of Borrowing.
EXHIBIT B
FORM OF REVOLVING NOTE
$_________ New York, New York
__________ __, ____
FOR VALUE RECEIVED, FAIRPOINT COMMUNICATIONS CORP., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of
_______________________ (the "Lender"), in lawful money of the United States of
America in immediately available funds, at the Payment Office (as defined in the
Agreement referred to below) initially located at 000 Xxxx Xxxxxx, 00xx Xxxxx,
Xxxxxx, Xxxxx 00000-0000, on the Final Maturity Date (as defined in the
Agreement) the principal sum of _________________ DOLLARS ($_________) or, if
less, the then unpaid principal amount of all Revolving 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 2.08 of the Agreement.
This Revolving Note is one of the Revolving Notes referred to in the
Amended and Restated Credit Agreement, dated as of October 20, 1999 and amended
and restated as of March 27, 2000, among the Borrower, the lenders from time to
time party thereto (including the Lender), Banc of America Securities LLC, as
Co-Arranger, Deutsche Bank Securities Inc., as Co-Arranger, First Union
Securities, Inc., as Co-Arranger, CoBank, ACB, as Co-Arranger (each a
"Co-Arranger" and together the "Co-Arrangers"), and Bank of America, N.A., 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 Revolving Note
is secured pursuant to the Security Documents (as defined in the Agreement). As
provided in the Agreement, this Revolving Note is subject to voluntary
prepayment and mandatory repayment prior to the Final 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 Revolving
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 Revolving Note.
Exhibit B
Page 2
THIS REVOLVING 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.
FAIRPOINT COMMUNICATIONS CORP.
By_____________________________
Title:
EXHIBIT C
LETTER OF CREDIT REQUEST
No. (1) Dated (2)
Bank of America, N.A., individually as Issuing Lender and
as Administrative Agent under
the Amended and Restated Credit Agreement
(the "Credit Agreement"),
dated as of October 20, 1999 and amended and restated
as of March 27, 2000, among
FairPoint Communications Corp., the lenders from time
to time party thereto, Banc of America Securities LLC,
as Co-Arranger, Deutsche Bank Securities Inc., as Co-Arranger,
First Union Securities, Inc., as Co-Arranger, CoBank, ACB,
as Co-Arranger (each a "Co-Arranger" and together the
"Co-Arrangers"), and Bank of America, N.A., as Administrative Agent
000 Xxxx Xxxxxx
00xx Xxxxx
Xxxxxx, Xxxxx 00000-0000
Attention:
Dear Sir or Madam:
The undersigned hereby requests that Bank of America, N.A., in its
individual capacity, issue a [standby][trade]Letter of Credit for the account of
the undersigned on (3) , ____ (the "Date of Issuance") in the aggregate Stated
Amount of $ (4).
----------
1 Letter of Credit Request Number.
2 Date of Letter of Credit Request.
3 Date of Issuance which shall be at least three Business Days from the date
hereof (or such shorter period as is acceptable to the Issuing Lender).
4 Aggregate initial Stated Amount of Letter of Credit, which shall not be
less than $100,000 or such lesser amount as is reasonably acceptable to
the Issuing Lender.
Exhibit C
Page 2
For purposes of this Letter of Credit Request, unless otherwise
defined herein, all capitalized terms used herein which are defined in the
Credit Agreement shall have the respective meaning provided therein.
The beneficiary of the requested Letter of Credit will be (5), and
such Letter of Credit will be in support of working capital and capital
expenditure requirements of the Borrower and will have a stated expiration date
of (6).
The undersigned hereby certifies that:
(1) the representations and warranties contained in the Credit
Agreement and in the other Credit Documents are and will be true and
correct in all material respects, both before and after giving effect to
the issuance of the Letter of Credit requested hereby, on the Date of
Issuance as though made on such date, unless stated to relate to a
specific earlier date, in which case such representations and warranties
shall have been true and correct in all material respects as of such
earlier date;
(2) no Default or Event of Default has occurred and is continuing or
would result after giving effect to the issuance of the Letter of Credit
requested hereby.
----------
5 Insert name and address of beneficiary.
6 Insert the last date upon which drafts may be presented which may not be
later than the earlier of (A) in the case of standby Letters of Credit, (x)
12 months after the Date of Issuance and (y) the third Business Day prior to
the Final Maturity Date or (B) in the case of trade Letters of Credit, (x)
180 days after the Date of Issuance and (y) the third Business Day prior to
the Final Maturity Date.
Exhibit C
Page 3
Copies of all documentation with respect to the transaction to be
supported by the requested Letter of Credit are attached hereto.
FAIRPOINT COMMUNICATIONS CORP.
By_____________________________
Name:
EXHIBIT D
FORM OF SECTION 5.04 CERTIFICATE
Reference is hereby made to the Amended and Restated Credit
Agreement, dated as of October 20, 1999 and amended and restated as of March 27,
2000, among FairPoint Communications Corp., various lenders from time to time
party thereto (the "Lenders") Banc of America Securities LLC, as Co-Arranger,
Deutsche Bank Securities Inc., as Co-Arranger, First Union Securities, Inc., as
Co-Arranger, CoBank, ACB, as Co-Arranger (each a "Co-Arranger" and together the
"Co-Arrangers"), and Bank of America, N.A., 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 5.04(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 the Borrower 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: _______________, ____
Exhibit E
March 27, 2000
To the Administrative Agent,
the Collateral Agent and each of
the Lenders party to the
Amended and Restated Credit
Agreement referred to below
Ladies and Gentlemen:
We have acted as special New York counsel to FairPoint
Communications Corp. (the "Borrower"), its parent, MJD Communications, Inc.
("MJD"), a Delaware corporation, and the Borrower's subsidiaries, FairPoint
Communications Corp. - New York, a Delaware corporation, and FairPoint
Communications Corp. - Virginia, a Virginia corporation (the "Subsidiaries")
(the Borrower, MJD and the Subsidiaries, collectively, the "Credit Parties"), in
connection with the execution and delivery of the Amended and Restated Credit
Agreement, dated as of October 20, 1999, and amended and restated as of March
27, 2000 (the "Amended and Restated Credit Agreement"), among the Borrower, the
financial institutions party thereto (the "Lenders"), Bank of America, N.A., as
Administrative Agent, and Banc of America Securities LLC, Deutsche Bank
Securities Inc., First Union Securities, Inc. and CoBank ACB, as Co-Arrangers,
and the transactions contemplated thereby. This opinion is delivered to you
pursuant to Section 6.01(b) of the Amended and Restated Credit Agreement. Unless
otherwise indicated, capitalized terms used herein but not otherwise defined
herein shall have the respective meanings set forth in the Amended and Restated
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
March 27, 2000
To the Administrative Agent,
the Collateral Agent and each of
the Lenders party to the Amended
and Restated Credit Agreement
referred to below
Page 2
limitation, the following (collectively, other than the documents referred to in
clause (g) below, the "Documents"): (a) the Amended and Restated Credit
Agreement, (b) each Revolving Note, (c) the Amended and Restated Preferred Stock
Issuance and Capital Contribution Agreement, (d) the Amended and Restated
Subsidiary Guaranty, (e) the Amended and Restated Pledge Agreement, (f) the
Amended and Restated Security Agreement and (g) such other public 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) that all parties to the
Documents, other than the Credit Parties, have the requisite power and authority
to execute, deliver and perform such Documents, (e) that 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,
(f) that the Documents are the legal, valid, binding and enforceable obligations
of the parties thereto (other than the Credit Parties), and (g) that the
Borrower or the applicable Subsidiary, as the case may be, is the legal and
beneficial owner of the collateral in which it has granted a security interest
(and, with respect to rights under contracts, that such contracts are
enforceable in accordance with their terms). 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
March 27, 2000
To the Administrative Agent,
the Collateral Agent and each of
the Lenders party to the Amended
and Restated Credit Agreement
referred to below
Page 3
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 MJD; 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 State of Delaware, (ii) has
the corporate power and authority to own its property and assets and to transact
the business in which it is engaged and presently proposes to engage and (iii)
in the case of MJD, is duly qualified and is authorized to do business and is in
good standing in Delaware and North Carolina; in the case of the Borrower, is
duly qualified and is authorized to do business and is in good standing in
Delaware, Connecticut, Maine, New Hampshire, New York, Oregon, Pennsylvania,
Vermont and Washington; in the case of FairPoint Communications Corp. - New
York, is duly qualified and is authorized to do business and is in good standing
in Delaware and New York; and, in the case of FairPoint Communications Corp. -
Virginia, is duly qualified and is authorized to do business and is in good
standing in Virginia.
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.
March 27, 2000
To the Administrative Agent,
the Collateral Agent and each of
the Lenders party to the Amended
and Restated Credit Agreement
referred to below
Page 4
3. Neither the execution, delivery or performance by any Credit
Party of the Documents to which it is a party, nor compliance by it 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 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 Security Documents) result in the creation or
Imposition of (or the obligation to create or impose) any Lien upon any of the
property or assets of any of the Credit Parties pursuant to the terms of any
indenture, mortgage, deed of trust, debt agreement, debt instrument or other
material contract known to us to which any of the Credit Parties 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
or by-laws of such Credit Party.
4. There are no actions, suits or proceedings pending or, to our
knowledge, threatened in writing, against the Borrower or either of its
Subsidiaries (i) with respect to any Documents and the transactions contemplated
thereby 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
governmental or public body or authority (other than the Federal Communications
Commission and any applicable state public utility or similar commission 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 of any Credit Party 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.
March 27, 2000
To the Administrative Agent,
the Collateral Agent and each of
the Lenders party to the Amended
and Restated Credit Agreement
referred to below
Page 5
6. No Credit Party is an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
7. Neither the Borrower nor either of the Subsidiaries 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 Amended and Restated
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 Amended and Restated 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 Stock (as each such
term is defined in the Amended and Restated Pledge Agreement), the security
interest created in favor of the Collateral Agent under the Amended and Restated
Pledge Agreement constitutes a valid and enforceable perfected security interest
in such pledged Stock (and the proceeds thereof) in favor of the Collateral
Agent for the benefit of the Secured Creditors. Delivery to the Collateral Agent
of the stock certificates representing the pledged Stock and the stock powers
relating thereto is effective to confer upon the Collateral Agent with respect
to the pledged Stock "control" ("Control") within the meaning of Section 8-106
of the Uniform Commercial Code as adopted in New York (the "New York UCC"). So
long as the pledged Stock remains subject to the Control of the Collateral Agent
and is not subject to the Control of any other Person, the security interest in
the pledged Stock will have priority over any other security interest in the
pledged Stock which is created or perfected under Article 9 of the New York UCC.
Assuming the Administrative Agent, the Collateral Agent and the Lenders acquire
their interests in the pledged Stock in good faith and without "notice of an
adverse claim" as defined in Section 8-105 of the New York UCC, then the
Collateral Agent will be a "protected
March 27, 2000
To the Administrative Agent,
the Collateral Agent and each of
the Lenders party to the Amended
and Restated Credit Agreement
referred to below
Page 6
purchaser" within the meaning of Section 8-303 of the New York UCC and will
acquire its interest in the pledged Stock free of any adverse claim as defined
in Section 8-102(1) of the New York UCC. No other filings or recordings are
required in order to perfect (or maintain the perfection of) the security
interest in the pledged Stock created under the Amended and Restated Pledge
Agreement.
9. The Amended and Restated Security Agreement creates a valid and
enforceable security interest in favor of the Collateral Agent in that portion
of the collateral purported to be governed thereby as to which Article 9 of the
New York UCC applies. Upon filing of the appropriate financing statements with
the offices of the Secretary of the State of New York and the counties listed on
Annex I hereto, the security interests in the Collateral (as defined in the
Amended and Restated Security Agreement) granted pursuant to the Amended and
Restated Security Agreement will be perfected to the extent that a security
interest therein may be perfected by the filing of a Form UCC-1 financing
statement in New York under the New York UCC.
The opinions set forth above are subject to the following
qualifications and exceptions:
(a) Our opinions 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.
March 27, 2000
To the Administrative Agent,
the Collateral Agent and each of
the Lenders party to the Amended
and Restated Credit Agreement
referred to below
Page 7
(d) 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.
(e) We express no opinion as to the enforceability of (i) choice of
law or thrum 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.
(f) Our opinions in paragraph 2 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, 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.
(g) 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.
(h) 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.
March 27, 2000
To the Administrative Agent,
the Collateral Agent and each of
the Lenders party to the Amended
and Restated Credit Agreement
referred to below
Page 8
(i) 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.
(j) The rights of debtors, guarantors and other secured parties to
receive notices under Sections 9-504 and 9-505 of the New York 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.
(k) The rights of debtors, guarantors and other secured parties to
redeem collateral under Section 9-506 of the New York UCC may not be waived
prior to default.
(l) 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 New
York UCC or other applicable law may not be disclaimed by agreement, waived or
released prior to a default.
(m) Notwithstanding certain language of the Documents relating to
the recovery of expenses, attorney's fees and legal expenses, the
Administrative Agent, the Collateral Agent and the Lenders may be limited to
recovery of any reasonable expenses or attorney's fees and legal expenses with
respect to the enforcement of the Documents or the liens and security
interests created thereunder.
(n) 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
March 27, 2000
To the Administrative Agent,
the Collateral Agent and each of
the Lenders party to the Amended
and Restated Credit Agreement
referred to below
Page 9
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.
(o) Except as expressly provided in paragraph 8 we express no
opinion with respect to a security interest in money, securities or instruments.
(p) With respect to the security interests created under the Amended
and Restated 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) none of the Stock consists of uncertificated securities;
and
(ii) that the laws of the State of New York exclusively govern
the pledge of the Stock and the realization of any rights thereto
under the Amended and Restated Pledge Agreement regardless of the
jurisdiction of incorporation or organization of any issuer of such
Stock.
(r) We express no opinion as to the right, title or interest of any
Person to any property or, except as expressly provided in paragraphs 8 and 9,
perfection of any security interest in respect of any collateral or, except as
expressly provided in paragraphs 8 and 9, the creation of a security interest in
or other lien on any property.
(s) We express no opinion as to (i) the validity or perfection of
the security interests created by each of the Security Documents as they relate
to any interest in or claim in, or under, any policy of insurance, (ii) the
validity or perfection of the security interests in any property or assets
located in or deemed located in any jurisdiction other than the State of New
York, (iii) the creation or perfection of a security interest in any trademarks,
patents, intellectual property, computer programs, computer data bases, other
computer related property, tangible property embodying or incorporating
copyrights or copyright registrations, or copyright registrations, or any
agreements, documents or
March 27, 2000
To the Administrative Agent,
the Collateral Agent and each of
the Lenders party to the Amended
and Restated Credit Agreement
referred to below
Page 10
instruments relating thereto or (iv) the factual accuracy of the description of
the Collateral in the Security Documents and the financing statements being
filed.
(t) The opinions set forth in paragraphs 8 and 9 with respect to
security interests under the New York UCC, are subject to the qualifications and
assumptions listed above and the following additional qualifications: (i) such
opinion applies only to collateral to the extent specifically described in
paragraphs 8 and 9; (ii) no opinion is expressed with respect to any deposit
accounts; (iii) for your information, a security interest in proceeds is limited
to the extent set forth in Section 9-306 of the New York UCC, and the perfection
of a security interest in proceeds may require additional filings of financing
statements or other action thereunder; and (iv) perfection of the applicable
security interests will be terminated (a) as to any collateral acquired by the
applicable debtor more than four months after it changes its name, identity or
corporate structure so as to make the applicable financing statement seriously
misleading, unless a new appropriate financing statement indicating the new
name, identity or corporate structure of the applicable debtor is properly filed
before the expiration of such four month period; (b) as to any collateral
consisting of receivables, general intangibles or chattel paper in which there
is a non-possessory security interest and as to goods which are mobile and are
of a type normally used in more than one jurisdiction, four months after the
applicable debtor changes its chief executive office to a new jurisdiction
outside of the state in which such debtor was located at the time the security
interest was perfected (or if earlier when perfection under the laws of the
State of New York would have ceased as set forth above) unless such security
interests are perfected in such new jurisdiction prior to such termination, and
(c) as to any collateral perfected by possession, upon a lapse in possession.
(u) 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 Amended and Restated 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
March 27, 2000
To the Administrative Agent,
the Collateral Agent and each of
the Lenders party to the Amended
and Restated Credit Agreement
referred to below
Page 11
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 either of
its Subsidiaries is insolvent and that neither the Borrower nor either of its
Subsidiaries will be rendered insolvent by the transactions contemplated by the
Amended and Restated Credit Agreement and the other Credit Documents and that,
after giving effect to such transactions, neither the Borrower nor either of its
Subsidiaries will be left with unreasonably small capital with which to engage
in its anticipated business and that neither the Borrower nor either 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.
We note that the New York UCC provides that perfection, the effect
of perfection and non-perfection, and priority of security interests are
governed by the laws of the jurisdiction in which collateral or the debtor is
located, and we are not opining as to whether New York substantive law would
apply in any such other jurisdiction.
March 27, 2000
To the Administrative Agent,
the Collateral Agent and each of
the Lenders party to the Amended
and Restated Credit Agreement
referred to below
Page 12
This opinion is being furnished only to the addressees 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,
EXHIBIT F
---------
FORM OF OFFICERS' CERTIFICATE
-----------------------------
I, the undersigned, [Chairman/Vice Chairman/President/Vice President]
of [Name of Credit Party], a [corporation] [limited liability company] organized
and existing under the laws of the State of ________________ (the "Company"), do
hereby certify on behalf of the Company that:
1. This Certificate is furnished pursuant to Section 6.01(c)(i) of
the Amended and Restated Credit Agreement, dated as of October 20, 1999 and
amended and restated as of March 27, 2000, among FairPoint Communications Corp.,
(the "Borrower"), as Borrower, the lenders from time to time party thereto (the
"Lenders"), Banc of America Securities LLC, as Co-Arranger, Deutsche Bank
Securities Inc, as Co-Arranger, First Union Securities, Inc., as Co-Arranger,
CoBank, ACB, as Co-Arranger, and Bank of America, N.A., as Administrative Agent
(such Amended and Restated 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 officers of the
Company, each holds the office of the Company 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/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 the Company, as filed in the Office of the Secretary
of State of the State of _________________ on ___________, 19__, together with
all amendments thereto adopted through the date hereof.
---------------
/1/ Insert a date prior to the time of any corporate action relating to the
Credit Documents or related documentation.
/2/ Include name, office and signature of each officer who will sign any Credit
Document, including the officer who will sign the certification at the end
of this Certificate or related documentation.
EXHIBIT F
Page 2
4. Attached hereto as Exhibit B is a true and correct copy of the
[By-Laws] [Limited Liability Company Agreement] or equivalent organizational
document of the Company which [were] [was] duly adopted, [are] [is] in full
force and effect on the date hereof, and [have] [has] been in effect since
_____________, 19__.
5. Attached hereto as Exhibit C is a true and correct copy of
resolutions which were duly adopted on __________, 2000 [by unanimous written
consent of the [Board of Directors] [Members] of the Company] [by a meeting of
the [Board of Directors] [Members] of the Company 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] [Members] of the Company which deal with the
execution, delivery or performance of the Credit Documents.
[6. On the date hereof, all of the applicable conditions set forth in
Sections 6.01(e), (f), (g), and (p) have been satisfied.
7. On the date hereof, the representations and warranties contained
in the Credit Agreement or in the other Credit Documents to which the Company is
a party 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 Revolving 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.
8. On the date hereof, no Default or Event of Default has occurred
and is continuing or would result from the Borrowing to occur on the date hereof
or from the application of the proceeds thereof.]/3/
[6][9]. There is no proceeding for the dissolution or liquidation of
the Company or threatening its existence.
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of
___________, 2000.
[NAME OF CREDIT PARTY]
----------------------------------------
Name:
Title:
---------------
/3/ Insert bracketed items 6 through 8 only in the Officer's Certificate of the
Borrower.
EXHIBIT F
Page 3
I, the undersigned, [Secretary/Assistant Secretary] of the Company, do
hereby certify on behalf of the Company that:
1. [Name of Person making above certifications] is the duly elected
and qualified [Chairman/Vice Chairman/President/Vice President or LLC
Equivalent] of the Company and the signature above is his genuine signature.
2. The certification made by [name of Person making above
certifications] on behalf of the Company in Item [6][9] above is true and
correct.
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of
___________, 2000.
[NAME OF CREDIT PARTY]
----------------------------------------
Name:
Title:
[CONFORMED AS EXECUTED]
EXHIBIT G
AMENDED AND RESTATED SUBSIDIARY GUARANTY
AMENDED AND RESTATED SUBSIDIARY GUARANTY, dated as of October 20,
1999 and amended and restated as of March 27, 2000 (as amended, 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.
WITNESSETH:
WHEREAS FairPoint Communications Corp. (the "Borrower"), the lenders
from time to time party thereto (the "Lenders"), Banc of America Securities LLC,
as Co-Arranger, Deutsche Bank Securities Inc., as Co-Arranger, First Union
Securities, Inc., as Co-Arranger, CoBank, ACB, as Co-Arranger (each a
"Co-Arranger" and together the "Co-Arrangers") and Bank of America, N.A., as
Administrative Agent (the "Administrative Agent", together with the Lenders, the
Issuing Lender, the Co-Arrangers and the Collateral Agent, the "Lender
Creditors"), have entered into an Amended and Restated Credit Agreement, dated
as of October 20, 1999 and amended and restated as of March 27, 2000 (as
amended, amended and restated, modified or supplemented from time to time, the
"Credit Agreement"), providing for the making of Revolving Loans to, and the
issuance of Letters of Credit for the account of, the Borrower 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 Bank
of America, N.A., in its individual capacity ("Bank of America"), any Lender or
a syndicate of financial institutions organized by Bank of America or such
Lender or an affiliate of Bank of America or such Lender (even if Bank of
America 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 Revolving Loans to, and
the issuance of Letters of Credit for the account of, the Borrower 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
Revolving Loans by, and the issuance of Letters of Credit for the account of,
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 Revolving Loans to the Borrower, the Issuing Lender
to issue Letters of Credit for the account of 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 Revolving Notes issued by, and the
Revolving Loans made to, the Borrower under the Credit Agreement, and all
reimbursement obligations and Unpaid Drawings with respect to Letters of
Credit issued 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").
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
2
by each Guarantor under this Guaranty shall be made on the same basis as
payments by the Borrower under Sections 5.03 and 5.04 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 10.05 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 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
3
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
(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
4
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) 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
5
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 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 Revolving Commitment and all Secured Interest Rate
Agreements have been terminated, no Revolving Note or Letter of Credit 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 8 or 9 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 12.01 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 12.12 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
6
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 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.
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
7
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
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 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 Revolving Commitment and all Secured Interest
Rate Agreements have been terminated, no Revolving Note or Letter of Credit
issued under the Credit Agreement is outstanding (and all Revolving Loans and
all reimbursement obligations and
8
Unpaid Drawings with respect to Letters of Credit 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 9.02 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 12.12 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 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
9
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.
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.
FAIRPOINT COMMUNICATIONS CORP.
- NEW YORK
as a Guarantor
By /s/ Xxxxxxx X. Xxxxx
----------------------------------
Title: Vice President of Finance
FAIRPOINT COMMUNICATIONS CORP.
- VIRGINIA
as a Guarantor
By /s/ Xxxxxxx X. Xxxxx
----------------------------------
Title: Vice President of Finance
Accepted and Agreed to:
BANK OF AMERICA, N.A.,
as Administrative Agent for the Lenders
By /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
Title: Principal
10
[CONFORMED AS EXECUTED]
EXHIBIT H
AMENDED AND RESTATED PLEDGE AGREEMENT
AMENDED AND RESTATED PLEDGE AGREEMENT, dated as of October 20, 1999
and amended and restated as of March 27, 2000 (as same may be further amended,
amended and restated, modified or supplemented from time to time, this
"Agreement"), made by FairPoint Communications Corp., a Delaware corporation
(the "Borrower"), the Subsidiary Guarantors (as defined in the Credit Agreement
referred to below) and each other Subsidiary of the Borrower that is required to
execute a counterpart hereof pursuant to Section 25 of this Agreement (the
"Pledgors", and each, a "Pledgor"), and Bank of America, N.A., not in its
individual capacity but solely as Collateral Agent (including any successor
collateral agent, the "Pledgee") for the benefit of (x) the Lenders, the
Co-Arrangers, the Issuing Lender and the Administrative Agent under, and any
other lenders from time to time party to, the Credit Agreement hereinafter
referred to (such Lenders, Co-Arrangers, the Issuing Lender, the Administrative
Agent and other lenders, if any, are hereinafter called the "Lender Creditors")
and (y) if Bank of America, N.A., in its individual capacity ("Bank of
America"), any Lender or any Affiliate of a Lender enters into one or more
Interest Rate Agreements relating to the Revolving Loans with, or guaranteed by,
any of the Pledgors, Bank of America, any such Lender or Lenders or a syndicate
of financial institutions organized by Bank of America or an affiliate of Bank
of America (even if Bank of America or the respective Lender subsequently ceases
to be a Lender under the Credit Agreement for any reason) so long as any such
Lender or Affiliate participates in the extension of such Interest Rate
Agreements and their subsequent assigns, if any (collectively, the "Interest
Rate Creditors", and the Interest Rate Creditors together with the Lender
Creditors, are hereinafter called the "Secured Creditors"). Except as otherwise
defined herein, terms used herein and defined in the Credit Agreement shall be
used herein as so defined.
W I T N E S S E T H:
WHEREAS, FairPoint Communications Corp. (the "Borrower"), the
financial institutions from time to time party thereto (the "Lenders"), Banc of
America LLC, as Co-Arranger, Deutsche Bank Securities Inc., as Co-Arranger,
First Union Securities, Inc., as Co-Arranger, CoBank, ACB, as Co-Arranger (each
a "Co-Arranger" and together, the "Co-Arrangers") and Bank of America, N.A. as
Issuing Lender and Administrative Agent, have entered into an Amended and
Restated Credit Agreement, dated as of October 20, 1999 and amended and restated
as of March 27, 2000, providing for the making of Revolving Loans to the
Borrower and the issuance of, and participation in, Letters of Credit as
contemplated therein (as used herein, the term "Credit Agreement" means the
Credit Agreement described above in this paragraph, as the same may be amended,
modified or supplemented from time to time, and including any successor
agreement extending the maturity of, or restructuring (including, but not
limited to, the inclusion of additional borrowers thereunder that are
Subsidiaries of the Borrower and whose obligations are guaranteed by the
Subsidiary Guarantors thereunder or any increase in
the amount borrowed) of all or any portion of the Indebtedness under such
agreement or any successor agreements);
WHEREAS, the Borrower may from time to time be party to one or more
Interest Rate Agreements with the Interest Rate Creditors;
WHEREAS, pursuant to an Amended and Restated Subsidiary Guaranty,
dated as of October 20, 1999 and amended and restated as of March 27, 2000 (as
amended, modified or supplemented from time to time, the "Subsidiary Guaranty"),
each Pledgor (other than the Borrower) has jointly and severally guaranteed to
the Secured Creditors the payment when due of all obligations and liabilities of
the Borrower under or with respect to the Credit Documents and the Interest Rate
Agreements;
WHEREAS, it is a condition precedent to the making of Revolving
Loans to the Borrower and the issuance of, and participation in, Letters of
Credit for the account of the Borrower under the Credit Agreement that each
Pledgor shall have executed and delivered to the Pledgee this Agreement; and
WHEREAS, each Pledgor will obtain benefits from the incurrence of
Revolving Loans by the Borrower and the issuance of Letters of Credit for the
account of the Borrower under the Credit Agreement and the Borrower's entering
into Interest Rate Agreements and, accordingly, desires to execute this
Agreement in order to satisfy the conditions precedent described in the
preceding paragraph and to induce the Lenders to make Revolving Loans to the
Borrower and participate in Letters of Credit, to induce the Issuing Lender to
issue Letters of Credit for the account of the Borrower, and to induce the
Interest Rate Creditors to enter into Interest Rate Agreements with the
Borrower;
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, liabilities
and indebtedness (including, without limitation, indemnities, Fees and
interest thereon) of such Pledgor owing to the Lender Creditors, whether
now existing or hereafter incurred under, arising out of, or in connection
with the Credit Agreement and the other Credit Documents to which such
Pledgor is a party (including all such obligations, liabilities and
indebtedness under the Subsidiary Guaranty to which such Pledgor is a
party) and the due performance and compliance by such Pledgor with all of
the terms, conditions and agreements contained in the Credit Agreement and
such other Credit Documents (all such obligations, liabilities and
indebtedness under this clause (i), except to the extent guaranteeing
obligations of the Borrower under Interest Rate Agreements, being herein
collectively called the "Credit
2
Agreement Obligations");
(ii) the full and prompt payment when due (whether at stated
maturity, by acceleration or otherwise) of all obligations, liabilities
and indebtedness (including, without limitation, indemnities, fees and
interest thereon) of such Pledgor owing to the Interest Rate Creditors,
now existing or hereafter incurred under, arising out of or in connection
with any Interest Rate Agreements, whether such Interest Rate Agreement is
now in existence or hereinafter arising, including, in the case of
Pledgors other than the Borrower, all obligations, liabilities and
indebtedness under the Subsidiary Guaranty (as applicable), in each case,
in respect of the Interest Rate Agreements (all such obligations,
liabilities and indebtedness under this clause (ii) being herein
collectively called the "Interest Rate Obligations");
(iii) any and all sums advanced by the Pledgee in order to preserve
the Collateral (as hereinafter defined) and/or preserve 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, and as defined in, the Credit Agreement or any
payment default under any Interest Rate Agreements and shall in any event
include, without limitation, any payment default (after the expiration of
any applicable grace period) on any of the Obligations) 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 Indemnitee to which such Indemnitee has
the right to reimbursement under Section 11 of this Agreement.
all such obligations, liabilities, indebtedness, sums and expenses set forth in
clauses (i) through (v) of this Section 1 being collectively called the
"Obligations", it being acknowledged and agreed that the "Obligations" shall
include extensions of credit of the types described above, whether outstanding
on the date of this Agreement or extended from time to time after the date of
this Agreement.
2. DEFINITIONS; ANNEXES. (a) Unless otherwise defined herein, all
capitalized terms used herein and defined in the Credit Agreement shall be used
herein as therein defined. Reference to singular terms shall include the plural
and vice versa.
(b) The following capitalized terms used herein shall have the
definitions specified below:
"Administrative Agent" has the meaning set forth in the Recitals
hereto.
"Adverse Claim" has the meaning given such term in Section
8-102(a)(l) of the UCC.
3
"Agreement" has the meaning set forth in the first paragraph hereof.
"Bank of America" has the meaning set forth in the first paragraph
hereof.
"Borrower" has the meaning set forth in the Recitals thereto.
"Certificated Security" has the meaning given such term in Section
8-102(a)(4) of the UCC.
"Class" has the meaning set forth in Section 22 hereof.
"Clearing Corporation" has the meaning given such term in Section
8-102(a)(5) of the UCC.
"Collateral" has the meaning set forth in Section 3.1 hereof.
"Collateral Accounts" means all, if any, accounts established and
maintained by the Pledgee in the name of any Pledgor to which Collateral may be
credited.
"Credit Agreement" has the meaning set forth in the Recitals hereto.
"Credit Agreement Obligations" has the meaning set forth in Section
1 hereof.
"Event of Default" has the meaning set forth in Section 1 hereof.
"Financial Asset" has the meaning given such term in Section
8-102(a)(9) of the UCC.
"Indemnitees" has the meaning set forth in Section 11 hereof.
"Instrument" has the meaning given such term in Section 9-105(l)(i)
of the UCC.
"Interest Rate Creditors" has the meaning set forth in the first
paragraph hereof.
"Interest Rate Obligations" has the meaning set forth in Section 1
hereof.
"Investment Property" has the meaning given such term in Section
9-115(f) of the UCC.
"Lenders" has the meaning set forth in the Recitals thereto.
"Lender Creditors" has the meaning set forth in the first paragraph
hereof.
"Limited Liability Company Assets" means all assets, whether
tangible or intangible and whether real, personal or mixed (including, without
limitation, all limited liability company capital and interest in other limited
liability companies), at any time owned or represented by any Limited Liability
Company Interest.
"Limited Liability Company Interests means the entire limited
liability company
4
membership interest at any time owned by any Pledgor in any limited liability
company.
"Notes" mean (x) all intercompany notes at any time issued to each
Pledgor and (y) all other promissory notes from time to time issued to, or held
by, each Pledgor.
"Obligations" has the meaning set forth in Section 1 hereof.
"Partnership Assets" means all assets, whether tangible or
intangible and whether real, personal or mixed (including, without limitation,
all partnership capital and interest in other partnerships), at any time owned
or represented by any Partnership Interest.
"Partnership Interest" means the entire general partnership interest
or limited partnership interest at any time owned by any Pledgor in any general
partnership or limited partnership.
"Pledged Notes" has the meaning set forth in Section 3.5 hereof.
"Pledged Securities" shall mean all Securities pledged pursuant to
Section 3.1(b) hereof.
"Pledgee" has the meaning set forth in the first paragraph hereof.
"Pledgor" has the meaning set forth in the first paragraph hereof.
"Proceeds" has the meaning given such term in Section 9-306(1) of
the UCC.
"Requisite Creditors" has the meaning set forth in Section 22
hereof.
"Secured Creditors" has the meaning set forth in the first paragraph
hereof.
"Secured Debt Agreements" has the meaning set forth in Section 5
hereof.
"Securities Account" has the meaning given such term in Section
8-501(a) of the UCC.
"Securities Act" means the Securities Act of 1933, as amended, as in
effect from time to time.
"Security" and "Securities" has the meaning given such term in
Section 8-102(a)(15) of the UCC and shall in any event include all Stock and
Notes (to the extent same constitute "Securities" under Section 8-102(a)(15)).
"Security Entitlement" has the meaning given such term in Section
8-102(a)(17) of the UCC.
"Stock" means (x) all of the issued and outstanding shares of
capital stock of any corporation incorporated under the laws of the United
States or any state or territory thereof at any time owned by any Pledgor.
5
"Termination Date" has the meaning set forth in Section 19 hereof.
"UCC" means the Uniform Commercial Code as in effect in the State of
New York from time to time; provided that all references herein to specific
sections or subsections of the UCC are references to such sections or
subsections, as the case may be, of the Uniform Commercial Code as in effect in
the State of New York on the date hereof.
"Uncertificated Security" has the meaning given such term in Section
8-102(a)(18) of the UCC.
3. PLEDGE OF SECURITY INTEREST, ETC.
3.1 Pledge. To secure the Obligations now or hereafter owed or to be
performed by such Pledgor, each Pledgor does hereby grant, pledge and assign to
the Pledgee for the benefit of the Secured Creditors, and does hereby create a
continuing security interest (subject to those Liens permitted to exist with
respect to the Collateral pursuant to the terms of all Secured Debt Agreements
then in effect) in favor of the Pledgee for the benefit of the Secured Creditors
in, all of the right, title and interest in and to the following, whether now
existing or hereafter from time to time acquired (collectively, the
"Collateral"):
(a) each of the Collateral Accounts (to the extent a security
interest therein is not created pursuant to the Security Agreement),
including any and all assets of whatever type or kind deposited by such
Pledgor in such Collateral Account, whether now owned or hereafter
acquired, existing or arising, including, without limitation, all
Financial Assets, Investment Property, moneys, checks, drafts,
Instruments, Securities or interests therein of any type or nature
deposited or required by the Credit Agreement or any other Secured Debt
Agreement to be deposited in such Collateral Account, and all investments
and all certificates and other Instruments (including depository receipts,
if any) from time to time representing or evidencing the same, and all
dividends, interest, distributions, cash and other property from time to
time received, receivable or otherwise distributed in respect of or in
exchange for any or all of the foregoing;
(b) all Securities of such Pledgor from time to time;
(c) all Limited Liability Company Interests of such Pledgor from
time to time and all of its right, title and interest in each limited
liability company to which each such interest relates, whether now
existing or hereafter acquired, including, without limitation:
(A) all the capital thereof and its interest in all profits,
losses, Limited Liability Company Assets and other distributions to
which such Pledgor shall at any time be entitled in respect of such
Limited Liability Company Interests;
(B) all other payments due or to become due to such Pledgor in
respect of Limited Liability Company Interests, whether under any
limited liability company agreement or otherwise, whether as
contractual obligations, damages, insurance proceeds or otherwise;
6
(C) all of its claims, rights, powers, privileges, authority,
options, security interests, liens and remedies, if any, under any
limited liability company agreement or operating agreement, or at
law or otherwise in respect of such Limited Liability Company
Interests;
(D) all present and future claims, if any, of such Pledgor
against any such limited liability company for moneys loaned or
advanced, for services rendered or otherwise;
(E) all of such Pledgor's rights under any limited liability
company agreement or operating agreement or at law to exercise and
enforce every right, power, remedy, authority, option and privilege
of such Pledgor relating to such Limited Liability Company
Interests, including any power to terminate, cancel or modify any
limited liability company agreement or operating agreement, to
execute any instruments and to take any and all other action on
behalf of and in the name of any of such Pledgor in respect of such
Limited Liability Company Interests and any such limited liability
company, 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 or for any
Limited Liability Company Asset, 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; and
(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;
(d) all Partnership Interests of such Pledgor from time to time and
all of its right, title and interest in each partnership to which each
such interest relates, whether now existing or hereafter acquired,
including, without limitation:
(A) all the capital thereof and its interest in all profits,
losses, Partnership Assets and other distributions to which such
Pledgor shall at any time be entitled in respect of such Partnership
Interests;
(B) all other payments due or to become due to such Pledgor in
respect of Partnership Interests, whether under any partnership
agreement or otherwise, whether as contractual obligations, damages,
insurance proceeds or otherwise;
(C) all of its claims, rights, powers, privileges, authority,
options, security interests, liens and remedies, if any, under any
partnership agreement or operating agreement, or at law or otherwise
in respect of such Partnership Interests;
7
(D) all present and future claims, if any, of such Pledgor
against any such partnership for moneys loaned or advanced, for
services rendered or otherwise;
(E) all of such Pledgor's rights under any partnership
agreement or operating agreement or at law to exercise and enforce
every right, power, remedy, authority, option and privilege of such
Pledgor relating to such Partnership Interests, including any power
to terminate, cancel or modify any partnership agreement or
operating agreement, to execute any instruments and to take any and
all other action on behalf of and in the name of any of such Pledgor
in respect of such Partnership Interests and any such partnership,
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 or for any Partnership Asset, 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; and
(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;
(e) all Security Entitlements of such Pledgor from time to time in
any and all of the foregoing;
(f) all Financial Assets and Investment Property of such Pledgor
from time to time; and
(g) all Proceeds of any and all of the foregoing.
3.2 Procedures. (a) To the extent that any Pledgor at any time or
from time to time owns, acquires or obtains any right, title or interest in any
Collateral, such Collateral shall automatically (and without the taking of any
action by the respective Pledgor) be pledged pursuant to Section 3.1 of this
Agreement and, in addition thereto, such Pledgor shall (to the extent provided
below) take the following actions as set forth below (as promptly as practicable
and, in any event, within 10 days after it obtains such Collateral) for the
benefit of the Pledgee and the Secured Creditors:
(i) with respect to a Certificated Security (other than a
Certificated Security credited on the books of a Clearing Corporation),
the respective Pledgor shall physically deliver such Certificated Security
to the Pledgee, with undated stock or other powers duly executed in blank
by such Pledgor;
(ii) with respect to an Uncertificated Security (other than an
Uncertificated Security credited on the books of a Clearing Corporation),
the respective Pledgor shall
8
cause the issuer of such Uncertificated Security to duly authorize and
execute, and deliver to the Pledgee, an agreement for the benefit of the
Pledgee and the Secured Creditors substantially in the form of Annex G
hereto (appropriately completed to the satisfaction of the Pledgee and
with such modifications, if any, as shall be satisfactory to the Pledgee)
pursuant to which such issuer agrees to comply with any and all
instructions originated by the Pledgee without further consent by the
registered owner and not to comply with instructions regarding such
Uncertificated Security (and any Partnership Interests and Limited
Liability Company Interests issued by such issuer) originated by any other
Person other than a court of competent jurisdiction;
(iii) with respect to a Certificated Security, Uncertificated
Security, Partnership Interest or Limited Liability Company Interest
credited on the books of a Clearing Corporation (including a Federal
Reserve Bank, Participants Trust Company or The Depository Trust Company),
the respective Pledgor shall promptly notify the Pledgee thereof and shall
promptly take all actions required (i) to comply with the applicable rules
of such Clearing Corporation and (ii) to perfect the security interest of
the Pledgee under applicable law (including, in any event, under Sections
9-115 (4)(a) and (b), 9-115 (1)(e) and 8-106 (d) of the UCC). The Pledgor
further agrees to take such actions as the Pledgee deems necessary or
desirable to effect the foregoing;
(iv) with respect to a Partnership Interest or a Limited Liability
Company Interest (other than a Partnership Interest or Limited Liability
Interest credited on the books of a Clearing Corporation), (1) if such
Partnership Interest or Limited Liability Company Interest is represented
by a certificate, the procedure set forth in Section 3.2(a)(i), and (2) if
such Partnership Interest or Limited Liability Company Interest is not
represented by a certificate, the procedure set forth in Section
3.2(a)(ii);
(v) with respect to any Note, physical delivery of such Note to the
Pledgee, endorsed to the Pledgee or endorsed in blank; and
(vi) with respect to cash, to the extent not otherwise provided in
the Security Agreement, (i) establishment by the Pledgee of a cash account
in the name of such Pledgor over which the Pledgee shall have exclusive
and absolute control and dominion (and no withdrawals or transfers may be
made therefrom by any Person except with the prior written consent of the
Pledgee) and (ii) deposit of such cash in such cash account.
(b) In addition to the actions required to be taken pursuant to
proceeding Section 3.2(a), each Pledgor shall take the following additional
actions with respect to the Securities and Collateral (as defined below):
(i) with respect to all Collateral of such Pledgor whereby or with
respect to which the Pledgee may obtain "control" thereof within the
meaning of Section 8-106 of the UCC (or under any provision of the UCC as
same may be amended or supplemented from time to time, or under the laws
of any relevant State other than the State of New York), the respective
Pledgor shall take all actions as may be requested from time to time by
the Pledgee so that "control" of such Collateral is obtained and at all
times held
9
by the Pledgee; and
(ii) each Pledgor shall from time to time cause appropriate
financing statements (on Form UCC-1 or other appropriate form) under the
Uniform Commercial Code as in effect in the various relevant States,
covering all Collateral hereunder (with the form of such financing
statements to be satisfactory to the Pledgee), to be filed in the relevant
filing offices so that at all times the Pledgee has a security interest in
all Investment Property and other Collateral which is perfected by the
filing of such financing statements (in each case to the maximum extent
perfection by filing may be obtained under the laws of the relevant
States, including, without limitation, Section 9-115(4)(b) of the UCC).
3.3 Subsequently Acquired Collateral. If any Pledgor shall acquire
(by purchase, stock dividend or otherwise) any additional Collateral at any time
or from time to time after the date hereof, such Collateral shall automatically
(and without any further action being required to be taken) be subject to the
pledge and security interests created pursuant to Section 3.1 and, furthermore,
the Pledgor will promptly thereafter take (or cause to be taken) all action with
respect to such Collateral in accordance with the procedures set forth in
Section 3.2, and will promptly thereafter deliver to the Pledgee (i) a
certificate executed by a principal executive officer of such Pledgor describing
such Collateral and certifying that the same has been duly pledged in favor of
the Pledgee (for the benefit of the Secured Creditors) hereunder and (ii)
supplements to Annexes A through F hereto as are necessary to cause such annexes
to be complete and accurate at such time.
3.4 Transfer Taxes. Each pledge of Collateral under Section 3.1 or
Section 3.3 shall be accompanied by any transfer tax stamps required in
connection with the pledge of such Collateral.
3.5 Definition of Pledged Notes. All Notes at any time pledged or
required to be pledged hereunder are hereinafter called the "Pledged Notes".
3.6 Certain Representations and Warranties Regarding the Collateral.
Each Pledgor represents and warrants that on the date hereof (i) each Subsidiary
of such Pledgor, and the direct ownership thereof, is listed in Annex A hereto;
(ii) 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; (iii) such Stock
constitutes that percentage of the issued and outstanding capital stock of the
issuing corporation as is set forth in Annex B hereto; (iv) the Notes held by
such Pledgor consist of the promissory notes described in Annex C hereto where
such Pledgor is listed as the lender; (v) the Limited Liability Company
Interests held by such Pledgor consist of the number and type of interests of
the Persons described in Annex D hereto; (vi) each such Limited Liability
Company Interest constitutes that percentage of the issued and outstanding
equity interest of the issuing Person as set forth in Annex D hereto; (vii) the
Partnership Interests held by such Pledgor consist of the number and type of
interests of the Persons described in Annex E hereto; (viii) each such
Partnership Interest constitutes that percentage or portion of the entire
partnership interest of the Partnership as set forth in Annex E hereto; (ix) the
Pledgor has complied with the respective procedure set forth in Section 3.2(a)
with respect to each item of Collateral described
10
in Annexes A through E hereto; and (x) on the date hereof, such Pledgor owns no
other Securities, Limited Liability Company Interests or Partnership Interests.
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 Collateral, 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.
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until there
shall have occurred and be continuing an Event of Default (or a Default under
Section 10.05 of the Credit Agreement), each Pledgor shall be entitled to
exercise all voting rights attaching to any and all Collateral 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 Interest Rate Agreements (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 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 (or a Default under Section 10.05 of the Credit Agreement) shall occur
and be continuing and Section 7 hereof shall become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless and until an Event of
Default (or a Default under Section 10.05 of the Credit Agreement) shall have
occurred and be continuing, all cash dividends, cash distributions, cash
Proceeds and other cash amounts payable in respect of the Collateral shall be
paid to the respective Pledgor. Subject to Section 3.2 hereof, the Pledgee shall
be entitled to receive directly, and to retain as part of the Collateral:
(i) all other or additional stock, notes, limited liability company
interests, partnership interests, instruments or other securities or
property (other than cash as set forth above) paid or distributed by way
of dividend or otherwise in respect of the Collateral;
(ii) all other or additional stock, notes, limited liability company
interests, partnership interests, instruments or other securities or
property (other than cash as set forth above) 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, notes, limited liability
company interests, partnership interests, instruments or other securities
or property (other than cash as set forth above) 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.
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
11
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 OR CERTAIN DEFAULTS. 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 by 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 commercially
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 Collateral (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 outright 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);
(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 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 each Pledgor,
and each Pledgor hereby waives and releases to the full 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
12
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 any of
them be under any obligation to take any action whatsoever with regard
thereto; and
(vi) to set-off any and all Collateral against any and all
Obligations, and to withdraw any and all cash or other Collateral from any
and all Collateral Accounts and to apply such cash and other Collateral to
the payment of any and all Obligations;
provided that, upon the occurrence of a Default under Section 10.05 of the
Credit Agreement, the Pledgee may exercise the rights specified in clause (i)
above.
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 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 Secured Creditor of all
such other rights, powers or remedies, and no failure or delay on the part of
the Pledgee or any 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 such
Pledgor 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 Secured
Creditor to any other or 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 Pledgee, acting upon the instructions of the Required Lenders
(or, after the date on which all Credit Agreement Obligations have been paid in
full, the holders of at least a majority of the Interest Rate Obligations) and
that no other Secured 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 Pledgee or the holders of at least a majority of the
Interest Rate Obligations, as the case may be, for the benefit of the Secured
Creditors upon the terms of this Agreement and the other Credit Documents.
9. APPLICATION OF PROCEEDS. (a) All moneys collected by the Pledgee
upon any sale or other disposition of the Collateral pursuant to the terms of
this Agreement, together with all other moneys received by the Pledgee
hereunder, shall be applied to the payment of the Obligations in the manner
provided in Section 7.4 of the Security Agreement.
(b) It is understood and agreed that the Pledgors shall remain
jointly and severally liable to the extent of any deficiency between the amount
of proceeds of the Collateral hereunder and the aggregate amount of the
Obligations.
13
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, each Secured Creditor and their
respective successors, assigns, employees, agents and servants (individually an
"Indemnitee", and collectively, the "Indemnitees") 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 each Indemnitee
for all reasonable costs and expenses, including reasonable attorneys' fees, in
each case arising out of or resulting from this Agreement or the exercise by any
Indemnitee of any right or remedy granted to it hereunder or under any other
Secured Debt Agreement (but excluding any claims, demands, losses, judgments and
liabilities (including liabilities for penalties); costs and expenses of
whatsoever kind or nature to the extent incurred or arising by reason of gross
negligence or willful misconduct of such Indemnitee). In no event shall any
Indemnitee hereunder 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 monies 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, each Pledgor hereby agrees to make the maximum contribution to the
payment and satisfaction of such obligations which is permissible under
applicable law. The indemnity obligations of each Pledgor contained in this
Section 11 shall continue in full force and effect notwithstanding the full
payment of all the Notes issued under the Credit Agreement, the termination of
all Interest Rate Agreements and Letters of Credit, and the payment of all other
Obligations and notwithstanding the discharge thereof
12. FURTHER ASSURANCES; POWER OF ATTORNEY. (a) Each Pledgor agrees
that it will join with the Pledgee in executing and, at such Pledgors own
expense, file and refile under the UCC or other applicable law such financing
statements, continuation statements and other documents in such offices as the
Pledgee (acting on its own or on the instructions of the Required Lenders) may
reasonably deem necessary or appropriate and wherever required or permitted by
law in order to perfect and preserve the Pledgees 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
14
an Event of Default, in the Pledgee's discretion to take any action and to
execute any instrument which the Pledgee may 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
encumber any of the Collateral or any interest therein (except in accordance
with the terms of this Agreement and the Credit Documents).
15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS. (a)
Each Pledgor represents, warrants and covenants that:
(i) it is the legal, beneficial and record owner of, and has good
and marketable title to, all Collateral consisting of one or more
Securities and that it has sufficient interest in all Collateral in which
a security interest is purported to be created hereunder for such security
interest to attach (subject, in each case, to no pledge, lien, mortgage,
hypothecation, security interest, charge, option, Adverse Claim or other
encumbrance whatsoever, except the liens and security interests created by
this Agreement and liens permitted by Section 9.03(a) of the Credit
Agreement);
(ii) it has full power, authority and legal right to pledge all the
Collateral 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 against such Pledgor in accordance
with its terms, except to the extent that the enforceability thereof may
be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance 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 or
creditor of such Pledgor or any of their 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 (except as set forth in
clause (iii) above), (c) the perfection or enforceability of the Pledgee's
security interest in the Collateral or (d)
15
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 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 instrumentality, domestic or foreign, known to be applicable
to such Pledgor, or of the certificate of incorporation, operating
agreement, limited liability company agreement or by-laws of such Pledgor
or of any securities issued by such Pledgor or any of its Subsidiaries, or
of any mortgage, deed of trust, indenture, lease, loan agreement, credit
agreement or other 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 of the Collateral (consisting of Securities, Limited
Liability Company Interests or Partnership Interests) has been duly and
validly issued, is fully paid and non-assessable and is 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); and
(viii) the pledge, collateral assignment and delivery to the Pledgee
of the Collateral consisting of certificated securities pursuant to this
Agreement creates a valid and perfected first priority security interest
in such Securities, 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 Securities (other than Permitted Liens) and the Pledgee is
entitled to all the rights, priorities and benefits afforded by the UCC or
other relevant law as enacted in any relevant jurisdiction to perfect
security interests in respect of such Collateral; and
(ix) "control" (as defined in Section 8-106 of the UCC) has been
obtained by the Pledgee over all Collateral consisting of Securities
(including Notes which are Securities) with respect to which such
"control" may be obtained pursuant to Section 8-106 of the UCC.
(b) Each Pledgor covenants and agrees that it will defend the
Pledgee's right, title and security interest in and to the Securities and the
proceeds thereof against the claims and demands of all persons whomsoever; and
each Pledgor covenants and agrees that it will have like title to and right to
pledge any other property at any time hereafter pledged to the Pledgee as
Collateral hereunder and will likewise defend the right thereto and security
interest therein of the
16
Pledgee and the Secured Creditors.
(c) Each Pledgor covenants and agrees that it will take no action
which would violate any of the terms of any Secured Debt Agreement.
16. CHIEF EXECUTIVE OFFICE; RECORDS. The chief executive office of
each Pledgor is located at the address specified in Annex F hereto. Each Pledgor
will not move its chief executive office except to such new location as such
Pledgor may establish in accordance with the last sentence of this Section 16.
The originals of all documents in the possession of such Pledgor evidencing all
Collateral, including but not limited to all Limited Liability Company Interests
and Partnership Interests, and the only original books of account and records of
the Pledgor relating thereto are, and will continue to be, kept at such chief
executive office at the location specified in Annex F hereto, or at such new
locations as the Pledgor may establish in accordance with the last sentence of
this Section 16. All Limited Liability Company Interests and Partnership
Interests are, and will continue to be, maintained at, and controlled and
directed (including, without limitation, for general accounting purposes) from,
such chief executive office location specified in Annex F hereto, or such new
locations as the Pledgor may establish in accordance with the last sentence of
this Section 16. No Pledgor shall establish a new location for such offices
until (i) it shall have given to the Collateral Agent not less than 30 days'
prior written notice of its intention so to do, clearly describing such new
location and providing such other information in connection therewith as the
Collateral Agent may reasonably request and (ii) with respect to such new
location, it shall have taken all action, satisfactory to the Collateral Agent,
to maintain the security interest of the Collateral Agent in the Collateral
intended to be granted hereby at all times fully perfected and in full force and
effect. Promptly after establishing a new location for such offices in
accordance with the immediately preceding sentence, the respective Pledgor shall
deliver to the Pledgee a supplement to Annex F hereto so as to cause such Annex
F hereto to be complete and accurate.
17. 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 (other than termination of this Agreement pursuant to
Section 19 hereof), including, without limitation:
(i) any renewal, extension, amendment or modification of or addition
or supplement to or deletion from any Secured Debt Agreement (other than
this Agreement in accordance with its terms), 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
17
such instrument or agreement or any term thereof; or
(v) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to
such Pledgor or any Subsidiary of any 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.
18. 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 Collateral consisting of
Securities, Limited Liability Company Interests or Partnership Interests, 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 Collateral consisting of Securities, Limited
Liability Company Interests or Partnership Interests, including, without
limitation, registration under the Securities Act, 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 and all other
Secured Creditors participating in the distribution of such Collateral
consisting of Securities, Limited Liability Company Interests or Partnership
Interests against all claims, losses, damages and 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 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 Collateral consisting of Securities,
Limited Liability Company Interests or Partnership Interests pursuant to Section
7, and such Collateral or the part thereof to be sold shall not, for any reason
whatsoever, be effectively registered under the Securities Act, as then in
effect, the Pledgee may, in its sole and absolute discretion, sell such
Collateral or part thereof by private sale in such manner and under such
circumstances as the Pledgee may deem necessary or 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 Collateral or
part thereof shall have
18
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 Collateral 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 Collateral 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.
19. TERMINATION; RELEASE. (a) On 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
(including, without limitation, UCC termination statements and instruments of
satisfaction, discharge and/or reconveyance), 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 or any
of its sub-agents hereunder and, with respect to any Collateral consisting of an
Uncertificated Security (other than an Uncertificated Security credited on the
books of a Clearing Corporation), a Partnership Interest or a Limited Liability
Company Interest, a termination of the agreement relating thereto executed and
delivered by the issuer of such Uncertificated Security pursuant to Section
3.2(a)(ii) or by the respective partnership or limited liability company
pursuant to Section 3.2(a)(iv). As used in this Agreement, "Termination Date"
shall mean the date upon which the Total Revolving Commitments and all Interest
Rate Agreements have been terminated, no Letter of Credit or Note is outstanding
(and all Revolving Loans have been paid in full), all Letters of Credit have
been terminated, and all other Obligations then due and payable have been paid
in full.
(b) In the event that any part of the Collateral is sold or
otherwise disposed of in connection with a sale or disposition permitted by
Section 9.02 of the Credit Agreement or is otherwise released at the direction
of the Required Lenders (or all the Lenders if required by Section 12.12 of the
Credit Agreement), and the proceeds of such sale or sales 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 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 or released and as may be in
possession of the Pledgee and has not theretofore been released pursuant to this
Agreement.
(c) At any time that any Pledgor desires that Collateral be released
as provided in the foregoing Section 19(a) or (b), it shall deliver to the
Pledgee a certificate signed by a principal executive officer of such Pledgor
stating that the release of the respective Collateral is permitted pursuant to
Section 19(a) or (b). If reasonably requested by the Pledgee (although the
Pledgee shall have no obligation to make any such request), the relevant Pledgor
shall furnish appropriate legal opinions (from counsel reasonably acceptable to
the Pledgee) to
19
the effect set forth in the immediately preceding sentence.
(d) The Pledgee shall have no liability whatsoever to any Secured
Creditor as the result of any release of Collateral by it in accordance with
this Section 19.
20. NOTICES, ETC. All notices and other communications hereunder
shall be in writing and shall be delivered or mailed by first class mail,
postage prepaid, addressed:
(i) if to any Pledgor, at its address set forth opposite its
signature below;
(ii) if to the Pledgee, at:
Bank of America, N.A.
000 Xxxx Xxxxxx
00xx Xxxxx
Xxxxxx, Xxxxx 00000-0000
Attention: Xxx Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
(iii) if to any Lender (other than the Pledgee), at such address as
such Lender 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 Borrower and
the Pledgee;
or at such address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
21. THE PLEDGEE. The Pledgee will hold, directly or indirectly in
accordance with this Agreement, all items of the Collateral at any time received
by it under this Agreement. It is expressly understood and agreed that the
obligations of the Pledgee with respect to the Collateral, interests therein and
the disposition thereof and otherwise under this Agreement, are only those
expressly set forth in the UCC and this Agreement.
22. WAIVER; AMENDMENT. Except as contemplated in Section 25 hereof
none of the terms and conditions of this Agreement may be changed, waived,
discharged or terminated in any manner whatsoever unless such change, waiver,
discharge or termination is in writing duly signed by each Pledgor to be bound
thereby and the Collateral Agent (with the consent of the Required Lenders or,
to the extent required by Section 12.12 of the Credit Agreement, all of the
Lenders), provided, however, that no such change, waiver, modification or
variance shall be made to Section 9 hereof or this Section 22 without the
consent of each Secured Creditor adversely affected thereby, provided further
that 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 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 Agreement
Obligations or (y) the
20
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 Agreement 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 Interest Rate Agreements.
23. 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 19, (ii) be
binding upon each Pledgor, its successors and assigns; provided, however, 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 12.12 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 Secured
Creditors and their respective successors, transferees and assigns. THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK. 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.
24. WAIVER OF JURY TRIAL. Each Pledgor hereby irrevocably waives all
right to a trial by jury in any action, proceeding or counterclaim arising out
of or relating to this agreement or the transactions contemplated hereby.
25. ADDITIONAL PLEDGORS. It is understood and agreed that any
Subsidiary of the Borrower that is required to execute a counterpart of this
Agreement after the date hereof pursuant to the Credit Agreement shall
automatically become a Pledgor hereunder by executing a counterpart hereof and
delivering the same to the Pledgee.
26. RECOURSE. This Agreement is made with full recourse to the
Pledgors and pursuant to and upon all the representations, warranties, covenants
and agreements on the part of the Pledgors contained herein and in the other
Secured Debt Agreements and otherwise in writing in connection herewith or
therewith.
27. LIMITED OBLIGATIONS. It is the desire and intent of each Pledgor
and the Secured Creditors that this Agreement shall be enforced against each
Pledgor to the fullest extent permissible under the laws and public policies
applied in each jurisdiction in which enforcement is sought. Notwithstanding
anything to the contrary contained herein, in furtherance of the foregoing, it
is noted that the obligations of each Pledgor constituting a Subsidiary
Guarantor have been limited as provided in the Subsidiary Guaranty.
28. PLEDGEE NOT A PARTNER OR LIMITED LIABILITY COMPANY MEMBER. (a)
Nothing herein shall be construed to make the Pledgee or any other Secured
Creditor liable as a member of any limited liability company or partnership and
neither the
21
Pledgee nor any other 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 member of any limited liability company or
partnership. The parties hereto expressly agree that, unless the Pledgee shall
become the absolute owner of Collateral consisting of a Limited Liability
Company Interest or Partnership Interest pursuant hereto, this Agreement shall
not be construed as creating a partnership or joint venture among the Pledgee,
any other Secured Creditor and/or any Pledgor.
(b) Except as provided in the last sentence of paragraph (a) of this
Section 28, the Pledgee, by accepting this Agreement, did not intend to become a
member of any limited liability company or partnership or otherwise be deemed to
be a co-venturer with respect to any Pledgor or any limited liability company or
partnership either before or after an Event of Default shall have occurred. The
Pledgee shall have only those powers set forth herein and the Secured Creditors
shall assume none of the duties, obligations or liabilities of a member of any
limited liability company or partnership or any Pledgor except as provided in
the last sentence of paragraph (a) of this Section 28.
(c) The Pledgee and the other Secured Creditors shall not be
obligated to perform or discharge any obligation of any Pledgor as a result of
the pledge 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 the Pledgee or any other Secured Creditor 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
IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused this
Agreement to be executed by their duly elected officers duly authorized as of
the date first above written.
Addresses:
c/o MJD Communications, Inc. FAIRPOINT COMMUNICATIONS CORP.
000 Xxxx Xxxxxxxx Xxxxxx as Pledgor
Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxx
Tel: (000) 000-0000 Ext. 107 -------------------------------------
Fax: (000)000-0000 Title: Vice President of Finance
c/o MJD Communications, Inc. FAIRPOINT COMMUNICATIONS CORP. - NEW YORK
000 Xxxx Xxxxxxxx Xxxxxx as Pledgor
Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxx
Tel: (000) 000-0000 Ext. 107 -------------------------------------
Fax: (000)000-0000 Title: Vice President of Finance
c/o MJD Communications, Inc. FAIRPOINT COMMUNICATIONS CORP. - VIRGINIA
000 Xxxx Xxxxxxxx Xxxxxx as Pledgor
Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxx
Tel: (000) 000-0000 Ext. 107 -------------------------------------
Fax: (000) 000-0000 Title: Vice President of Finance
Accepted and agreed to:
BANK OF AMERICA, N.A.,
not in its individual capacity but solely
as Collateral Agent and Pledgee
By /s/ Xxxxxx X. Xxxxxxxx
----------------------------------
Title: Principal
23
ANNEX A
LIST OF SUBSIDIARIES
[TO BE PROVIDED BY THE BORROWER]
ANNEX B
LIST OF STOCK
Name of
Issuing Type of Number of Certificate Percentage Sub-clause of Section 3.2(a)
Corporation Shares Shares No. Owned of Pledge Agreement
----------- ------ ------ --- ----- -------------------
[TO BE PROVIDED BY THE BORROWER]
ANNEX C
LIST OF NOTES
Sub-clause of Section 3.2(a)
Amount Maturity Date Obligor of Pledge Agreement
------ ------------- ------- -------------------
[TO BE PROVIDED BY THE BORROWER]
ANNEX D
LIST OF LIMITED LIABILITY COMPANY INTERESTS
Name of Type of Sub-clause of Section 3.2(a)
Partnership Interest Percentage Owned of Pledge Agreement
----------- -------- ---------------- -------------------
[TO BE PROVIDED BY THE BORROWER]
ANNEX E
LIST OF PARTNERSHIP INTERESTS
Name of Type of Sub-clause of Section 3.2(a)
Partnership Interest Percentage Owned of Pledge Agreement
----------- -------- ---------------- -------------------
[TO BE PROVIDED BY THE BORROWER]
ANNEX F
LIST OF CHIEF EXECUTIVE OFFICES
[TO BE PROVIDED BY THE BORROWER]
ANNEX G
Form of Agreement Regarding Uncertificated Securities, Limited Liability
Company Interests and Partnership Interests
AGREEMENT (as amended, modified or supplemented from time to time,
this "Agreement"), dated as of _______, _____, among each of the undersigned
pledgors (each a "Pledgor" and, collectively, the "Pledgors"), Bank of America,
N.A., not in its individual capacity but solely as Collateral Agent (the
"Pledgee"), and ___________, as the issuer of the Uncertificated Securities,
Limited Liability Company Interests and/or Partnership Interests (each as
defined below) (the "Issuer").
W I T N E S S E T H:
WHEREAS, each Pledgor and the Pledgee are entering into an Amended
and Restated Pledge Agreement, dated as of October 20, 1999 and amended and
restated as of March 27, 2000 (as amended, amended and restated, modified or
supplemented from time to time, the "Pledge Agreement"), under which, among
other things, in order to secure the payment of the Obligations (as defined in
the Pledge Agreement), each Pledgor will pledge to the Pledgee for the benefit
of the Secured Creditors (as defined in the Pledge Agreement), and grant a
security interest in favor of the Pledgee for the benefit of the Secured
Creditors in, all of the right, title and interest of such Pledgor in and to any
and all (1) "uncertificated securities" (as defined in Section 8-102(a)(18) of
the Uniform Commercial Code, as adopted in the State of New York)
("Uncertificated Securities"), (2) Partnership Interests (as defined in the
Pledge Agreement) and (3) Limited Liability Company Interests (as defined in the
Pledge Agreement), in each case issued from time to time by the Issuer, whether
now existing or hereafter from time to time acquired by such Pledgor (with all
of such Uncertificated Securities, Partnership Interests and Limited Liability
Company Interests being herein collectively called the "Issuer Pledged
Interests"); and
WHEREAS, each Pledgor desires the Issuer to enter into this
Agreement in order to perfect the security interest of the Pledgee under the
Pledge Agreement in the Issuer Pledged Interests, to vest in the Pledgee control
of the Issuer Pledge Interests and to provide for the rights of the parties
under this Agreement;
NOW THEREFORE, in consideration of the premises and the mutual
promises and agreements contained herein, and for other valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Each Pledgor hereby irrevocably authorizes and directs the
Issuer, and the Issuer hereby agrees, to comply with any and all instructions
and orders originated by the Pledgee (and its successors and assigns) regarding
any and all of the Issuer Pledged Interests without the further consent by the
registered owner (including the respective Pledgor), and not to comply with any
instructions or orders regarding any or all of the Issuer Pledged Interests
Annex G
Page 2
originated by any person or entity other than the Pledgee (and its successors
and assigns) or a court of competent jurisdiction.
2. The Issuer hereby certifies that (i) no notice of any security
interest, lien or other encumbrance or claim affecting the Issuer Pledged
Interests (other than the security interest of the Pledgee) has been received by
it, and (ii) the security interest of the Pledgee in the Issuer Pledged
Interests has been registered in the books and records of the Issuer.
3. The Issuer hereby represents and warrants that (i) the pledge by
the Pledgors of, and the granting by the Pledgors of a security interest in, the
Issuer Pledged Interests to the Pledgee, for the benefit of the Secured
Creditors, does not violate the charter, by-laws, partnership agreement,
membership agreement or any other agreement governing the Issuer or the Issuer
Pledged Interests, and (ii) the Issuer Pledged Interests are fully paid and
nonassessable.
4. All notices, statements of accounts, reports, prospectuses,
financial statements and other communications to be sent to any Pledgor by the
Issuer in respect of the Issuer will also be sent to the Pledgee at the
following address:
Bank of America, N.A.,
000 Xxxx Xxxxxx
00xx Xxxxx
Xxxxxx, Xxxxx 00000-0000
Attention: Xxx Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
5. Until the Pledgee shall have delivered written notice to the
Issuer that all of the Obligations have been paid in full and this Agreement is
terminated, the Issuer will send any and all redemptions, distributions,
interest or other payments in respect of the Issuer Pledged Interests from the
Issuer for the account of the Pledgor only by wire transfers to the following
address:
____________________________
____________________________
____________________________
____________________________
[Account Information]
ABA No.: ________________________
Account in the Name of: _________
Account No.: ____________________
6. Except as expressly provided otherwise in Sections 4 and 5, all
notices, instructions, orders and communications hereunder shall be sent or
delivered by mail, telex, telecopy or overnight courier service and all such
notices and communications shall, when mailed, telexed, telecopied or sent by
overnight courier, be effective when deposited in the mails or delivered to the
overnight courier, prepaid and properly addressed for delivery on such or the
Annex G
Page 3
next Business Day, or sent by telex or telecopier, except that notices and
communications to the Pledgee shall not be effective until received by the
Pledgee. All notices and other communications shall be in writing and addressed
as follows:
(a) if to any Pledgor, at:
c/o MJD Communications, Inc.
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Tel: (000) 000-0000 Ext. 108
Fax: (000) 000-0000
(b) if to the Pledgee, at:
Bank of America, N.A.,
000 Xxxx Xxxxxx
00xx Xxxxx
Xxxxxx, Xxxxx 00000-0000
Attention: Xxx Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
(c) if to the Issuer, at:
____________________________
____________________________
____________________________
Attention: _________________
Tel: ______________
Fax: ______________
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. As used in this
Section 6, "Business Day" means any day other than a Saturday, Sunday, or other
day in which banks in New York are authorized to remain closed.
7. This Agreement shall be binding upon the successors and assigns
of each Pledgor and the Issuer and shall inure to the benefit of and be
enforceable by the Pledgee and its successors and assigns. This Agreement may be
executed in any number of counterparts, each of which shall be an original, but
all of which 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. None of the terms and conditions of
this Agreement may be changed,
Annex G
Page 4
waived, modified or varied in any manner whatsoever except in writing signed by
the Pledgee, the Issuer and any Pledgor which at such time owns any Issuer
Pledged Interests.
8. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without regard to its principles of
conflict of laws.
IN WITNESS WHEREOF, each Pledgor, the Pledgee and the Issuer have
caused this Agreement to be executed by their duly elected officers duly
authorized as of the date first above written.
[ ]
as a Pledgor
By_______________________________________
Name:
Title:
[ ]
as a Pledgor
By_______________________________________
Name:
Title:
[ ]
as a Pledgor
By_______________________________________
Name:
Title:
BANK OF AMERICA, N.A.,
not in its individual capacity but solely
as Collateral Agent and Pledgee
By_______________________________________
Name:
Title:
ANNEX A
LIST OF SUBSIDIARIES
FairPoint Communications Corp. -- New York
00 Xxxx Xxxx
Xxxxx 000
Xxxx Xxxxxxxxx, XX 00000
100 shares of Common Stock, par value $0.01 per share, authorized;
100 shares issued and outstanding to FairPoint Communications Corp.,
having its principal office at 0000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxx,
XX 00000.
FairPoint Communications Corn. -- Virginia
0000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
25,000 shares of Common Stock, par value $1.00 per share, authorized;
100 shares issued and outstanding to FairPoint Communications Corp.,
having its principal office at 0000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxx,
XX 00000.
FairPoint Communications Investments, LLC
0000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
100% of membership interests owned by FairPoint Communications Corp.,
having its principal office at 0000 Xxxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxx,
XX 00000.
ANNEX B
LIST OF STOCK
Name of
Issuing Type of Number of Certificate Percentage Sub-clause of SS.3.2(a)
Corporation Shares Shares No. Owned of Pledge Agreement
----------- ------ ------ --- ----- -------------------
FairPoint Common Stock 100 1 100% yes
Communications
Corp. - New York
FairPoint Common Stock 100 1 100% yes
Communications
Corp. - Virginia
ANNEX C
LIST OF NOTES
None.
ANNEX D
LIST OF LIMITED LIABILITY COMPANY INTERESTS
FairPoint Communications Investments, LLC, a Delaware limited liability company.
c/o FairPoint Communications Investments, LLC
0000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
ANNEX E
LIST OF PARTNERSHIP INTERESTS
None.
ANNEX F
LIST OF CHIEF EXECUTIVE OFFICES
1. FairPoint Communications Corp.
0000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
2. FairPoint Communications Corp. -- New York
00 Xxxx Xxxx
Xxxxx 000
Xxxx Xxxxxxxxx, XX 00000
3. FairPoint Communications Corp. -- Virginia
0000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
[CONFORMED AS EXECUTED]
EXHIBIT I
================================================================================
AMENDED AND RESTATED SECURITY AGREEMENT
among
FAIRPOINT COMMUNICATIONS CORP.,
SUBSIDIARIES
OF FAIRPOINT COMMUNICATIONS CORP.
and
BANK OF AMERICA, N.A.,
as Collateral Agent
Dated as of October 20, 1999
and Amended and Restated as of March 27, 2000
================================================================================
AMENDED AND RESTATED SECURITY AGREEMENT
AMENDED AND RESTATED SECURITY AGREEMENT, dated as of October 20,
1999 and amended and restated as of March 27, 2000, among each of the
undersigned assignors (each, an "Assignor" and, together with any other entity
that becomes a party hereto pursuant to Section 10.11 hereof, the "Assignors")
and Bank of America, N.A., as Collateral Agent (the "Collateral Agent") for the
benefit of the Secured Creditors (as defined below). Except as otherwise defined
herein, capitalized 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, FairPoint Communications Corp. (the "Borrower"), the
lenders from time to time party thereto (the "Lenders"), Banc of America
Securities LLC, as Co-Arranger, Deutsche Bank Securities Inc., as Co-Arranger,
First Union Securities, Inc., as Co-Arranger, CoBank, ACB, as Co-Arranger (each
a "Co-Arranger" and together, the "Co-Arrangers") and Bank of America, N.A., as
Administrative Agent (together with any successor agent, the "Administrative
Agent," and together with the Collateral Agent and the Lenders, the "Lender
Creditors"), have entered into an Amended and Restated Credit Agreement, dated
as of October 20, 1999 and amended and restated as of March 27, 2000 (as
amended, modified or supplemented from time to time, the "Credit Agreement"),
providing for the making of Revolving Loans to the Borrower and the issuance of,
and participation in, Letters of Credit for the account of the Borrower, all as
contemplated therein;
WHEREAS, the Borrower may at any time and from time to time enter
into one or more Interest Rate Agreements with one or more Lenders or affiliates
thereof (each such Lender or affiliate, even if the respective Lender
subsequently ceases to be a Lender under the Credit Agreement for any reason,
together with such Lender's or affiliate's successors and assigns, if any,
collectively, the "Other Creditors", and together with the Lender Creditors, are
herein called the "Secured Creditors");
WHEREAS, pursuant to the Amended and Restated Subsidiary Guaranty,
each Subsidiary Guarantor has jointly and severally guaranteed to the Secured
Creditors the payment when due of all obligations and liabilities of the
Borrower under or with respect to the Credit Documents and the Interest Rate
Agreements;
WHEREAS, it is a condition precedent to the making of Revolving
Loans to the Borrower and the issuance of Letters of Credit for the account of
the Borrower under the Credit Agreement that the Assignors shall have executed
and delivered to the Collateral Agent this Agreement; and
WHEREAS, each Assignor desires to execute this Agreement to satisfy
the conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to each
Assignor, the receipt and sufficiency of which are hereby acknowledged, each
Assignor hereby makes the following representations and warranties to the
Collateral Agent and hereby covenants and agrees with the Collateral Agent as
follows:
ARTICLE I
SECURITY INTERESTS
1.1. Grant of Security Interests. (a) As security for the prompt and
complete payment and performance when due of all of its Obligations, each
Assignor does hereby assign and transfer unto the Collateral Agent, and does
hereby pledge and grant to the Collateral Agent for the benefit of the Secured
Creditors, a continuing security interest of first priority in, all of the
right, title and interest of such Assignor in, to and under all of the
following, whether now existing or hereafter from time to time acquired: (i)
each and every Receivable, (ii) all Contracts, together with all Contract Rights
arising thereunder (other than Contracts which would be breached by the grant of
the security interests created therein pursuant to the terms of this Agreement),
(iii) all Inventory, (iv) all Equipment, (v) all Marks, together with the
registrations and right to all renewals thereof, and the goodwill of the
business of such Assignor symbolized by the Marks, (vi) all Patents and
Copyrights, (vii) all computer programs of such Assignor and all intellectual
property rights therein and all other proprietary information of such Assignor,
including, but not limited to, trade secrets, (viii) all other Goods, General
Intangibles, Chattel Paper, Documents and Instruments, (ix) the Cash Collateral
Account and all monies, securities and instruments deposited or required to be
deposited in such Cash Collateral Account, (x) Books, (xi) Investment Property
and (xii) all Proceeds and products of any and all of the foregoing (all of the
above, collectively, the "Collateral").
(b) The security interest of the Collateral Agent under this
Agreement extends to all Collateral of the kind which is the subject of this
Agreement which any Assignor may acquire at any time during the continuation of
this Agreement.
1.2. Power of Attorney. Each Assignor hereby constitutes and
appoints the Collateral Agent its true and lawful attorney, irrevocably, with
full power after the occurrence of and during the continuance of an Event of
Default (in the name of such Assignor or otherwise) to act, require, demand,
receive, compound and give acquittance for any and all monies and claims for
monies due or to become due to such Assignor under or arising out of the
Collateral, to endorse any checks or other instruments or orders in connection
therewith and to file any claims or take any action or institute any proceedings
which the Collateral Agent may deem to be reasonably necessary or advisable to
protect the interests of the Secured Creditors, which appointment as attorney is
coupled with an interest.
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ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants, which
representations, warranties and covenants shall survive execution and delivery
of this Agreement, as follows:
2.1. Necessary Filings. All filings, registrations and recordings
necessary or appropriate to create, preserve and perfect the security interest
granted by such Assignor to the Collateral Agent hereby in respect of the
Collateral have been accomplished (or will have been accomplished on the
Business Day immediately following the Effective Date) and the security interest
granted to the Collateral Agent pursuant to this Agreement in and to the
Collateral creates a perfected security interest therein prior to the rights of
all other Persons therein and subject to no other Liens (other than Permitted
Liens) and is entitled to all the rights, priorities and benefits afforded by
the UCC or other relevant law as enacted in any relevant jurisdiction to
perfected security interests, in each case to the extent that the Collateral
consists of the type of property in which a security interest may be perfected
by filing a financing statement under the UCC as enacted in any relevant
jurisdiction or in the PTO or United States Copyright Office.
2.2. No Liens. Such Assignor is, and as to Collateral acquired by it
from time to time after the date hereof such Assignor will be, the owner of, or
has rights in, all Collateral free from any Lien or other right, title or
interest of any Person (other than Permitted Liens), and such Assignor shall
defend the Collateral to the extent of its rights therein against all claims and
demands of all Persons at any time claiming the same or any interest therein
adverse to the Collateral Agent.
2.3. Other Financing Statements. As of the date hereof, there is no
financing statement (or similar statement or instrument of registration under
the law of any jurisdiction) covering or purporting to cover any interest of any
kind in the Collateral (other than financing statements filed in respect of
Permitted Liens), and so long as the Termination Date has not occurred, such
Assignor will not execute or authorize to be filed in any public office any
financing statement (or similar statement or instrument of registration under
the law of any jurisdiction) or statements relating to the Collateral, except
(a) financing statements filed or to be filed in respect of and covering the
security interests granted hereby by such Assignor or as permitted by the Credit
Agreement and (b) financing statements with respect to Permitted Liens.
2.4. Chief Executive Office; Records. The chief executive office of
such Assignor is located at the address or addresses indicated on Annex A hereto
for such Assignor. Such Assignor will not move its chief executive office except
to such new location as such Assignor may establish in accordance with the last
sentence of this Section 2.4. The originals of all documents evidencing all
Receivables and Contract Rights of such Assignor and the only original books of
account and records of such Assignor relating thereto are, and will continue to
be, kept at such chief executive office, at one or more of the locations set
forth on Annex A hereto or at such new locations as such Assignor may establish
in accordance with the last sentence of this Section 2.4. All Receivables and
Contract Rights of such Assignor are, and will
3
continue to be, maintained at, and controlled and directed (including, without
limitation, for general accounting purposes) from, the office locations
described above or such new location established in accordance with the last
sentence of this Section 2.4. No Assignor shall establish new locations for such
offices until it shall have given to the Collateral Agent notice of its
intention to do so unless (i) such Assignor shall give to the Collateral Agent
written notice of any such relocation of its chief executive office within 10
days following such relocation, clearly describing such new location and
providing such other information in connection therewith as the Collateral Agent
may reasonably request and (ii) with respect to such new location, it shall take
all action, reasonably satisfactory to the Collateral Agent, to maintain the
security interest of the Collateral Agent in the Collateral intended to be
granted hereby at all times fully perfected and in full force and effect.
2.5. Location of Inventory and Equipment. All Inventory and
Equipment held on the date hereof by each Assignor is located at one of the
locations shown on Annex B hereto for such Assignor (other than (i) immaterial
portions of Inventory (x) sold on consignment or held on display for
demonstration purposes or (y) transferred to another location in connection with
a sale of such Inventory in the ordinary course of business, so long as such
sale occurs within 60 days from the date of such transfer and (ii) various spare
parts held for maintenance or repair of Equipment). Each Assignor agrees that
all Inventory and Equipment now held or subsequently acquired by it shall be
kept at (or shall be in transport to) any one of the locations shown on Annex B
hereto, or such new location as such Assignor may establish in accordance with
the last sentence of this Section 2.5 (other than (i) immaterial portions of
Inventory (x) sold on consignment or held on display for demonstration purposes
or (y) may be transferred to another location in connection with a sale of such
Inventory in the ordinary course of business, so long as such sale occurs within
30 days from the date of such transfer and (ii) various spare parts held for
maintenance or repair of Equipment). Any Assignor may establish a new location
for Inventory and Equipment only if (i) it shall have given to the Collateral
Agent written notice within 10 days following any such relocation clearly
describing such new location and providing such other information in connection
therewith as the Collateral Agent may request and (ii) with respect to such new
location, it shall have taken all action reasonably satisfactory to the
Collateral Agent to maintain the security interest of the Collateral Agent in
the Collateral intended to be granted hereby at all times fully perfected and in
full force and effect.
2.6. Recourse. This Agreement is made with full recourse to each
Assignor and pursuant to and upon all the warranties, representations, covenants
and agreements on the part of such Assignor contained herein, in the other
Credit Documents, in the Interest Rate Agreements and otherwise in writing in
connection herewith or therewith.
2.7. Trade Names; Change of Name. No Assignor has or operates in any
jurisdiction under, or in the preceding 12 months has had or has operated in any
jurisdiction under, any trade names, fictitious names or other names except its
legal name and such other trade or fictitious names as are listed on Annex C
hereto. No Assignor shall change its legal name or assume or operate in any
jurisdiction under any trade, fictitious or other name except those names listed
on Annex C hereto and new names established in accordance with the last sentence
of this Section 2.7. No Assignor shall assume or operate in any jurisdiction
under any
4
new trade, fictitious or other name unless (i) it shall have given to the
Collateral Agent written notice within 10 days following any assumption of, or
operation under, such new name clearly describing such new name and the
jurisdictions in which such new name shall be used and providing such other
information in connection therewith as the Collateral Agent may reasonably
request and (ii) with respect to such new name, it shall have taken all action
requested by the Collateral Agent, to maintain the security interest of the
Collateral Agent in the Collateral intended to be granted hereby at all times
fully perfected and in full force and effect.
ARTICLE III
SPECIAL PROVISIONS CONCERNING
RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS
3.1. Additional Representations and Warranties. As of the time when
each of its Receivables arises, each Assignor shall be deemed to have
represented and warranted that such Receivable, and all records, papers and
documents relating thereto (if any) are what they purport to be, and that all
papers and documents (if any) relating thereto will be the only original
writings evidencing and embodying such obligation of the account debtor named
therein (other than copies or originals created for general accounting
purposes).
3.2. Maintenance of Records. Each Assignor will keep and maintain at
its own cost and expense accurate records of its Receivables and Contracts,
records of all payments received, all credits granted thereon, all merchandise
returned and all other dealings therewith, and such Assignor will make the same
available on such Assignor's premises to the Collateral Agent for inspection, at
such Assignor's own cost and expense, at any and all reasonable times upon prior
notice to an Authorized Officer of such Assignor. Upon the occurrence and during
the continuance of an Event of Default and at the request of the Collateral
Agent, such Assignor shall, at its own cost and expense, deliver all tangible
evidence of its Receivables and Contract Rights (including, without limitation,
all documents evidencing the Receivables and all Contracts) and such books and
records to the Collateral Agent or to its representatives (copies of which
evidence and books and records may be retained by such Assignor). Upon the
occurrence and during the continuance of an Event of Default and if the
Collateral Agent so directs, such Assignor shall legend, in form and manner
reasonably satisfactory to the Collateral Agent, the Receivables and the
Contracts, as well as books, records and documents (if any) of such Assignor
evidencing or pertaining to such Receivables and Contracts with an appropriate
reference to the fact that such Receivables and Contracts have been assigned to
the Collateral Agent and that the Collateral Agent has a security interest
therein.
3.3. Direction to Account Debtors; Contracting Parties; etc. Upon
the occurrence and during the continuance of an Event of Default, and if the
Collateral Agent so directs any Assignor, such Assignor agrees (x) to cause all
payments on account of the Receivables and Contracts to be made directly to the
Cash Collateral Account, (y) that the Collateral Agent may, at its option,
directly notify the obligors with respect to any Receivables and/or under any
Contracts to make payments with respect thereto as provided in the preceding
clause (x) and (z)
5
that the Collateral Agent may enforce collection of any such Receivables and
Contracts and may adjust, settle or compromise the amount of payment thereof, in
the same manner and to the same extent as such Assignor. Without notice to or
assent by any Assignor, the Collateral Agent may apply any or all amounts then
in, or thereafter deposited in, the Cash Collateral Account which application
shall be effected in the manner provided in Section 7.4 of this Agreement. The
costs and expenses (including reasonable attorneys' fees) of collection, whether
incurred by the Assignor or the Collateral Agent, shall be borne by the relevant
Assignor. The Collateral Agent shall simultaneously deliver a copy of each
notice referred to in the preceding clause (y) to the relevant Assignor;
provided, that the failure by the Collateral Agent to so notify such Assignor
shall not affect the effectiveness of such notice or the other rights of the
Collateral Agent created by this Section 3.3.
3.4. Modification of Terms; etc. No Assignor shall rescind or cancel
any indebtedness evidenced by any Receivable or under any Contract, or modify in
any material respect any term thereof or make any material adjustment with
respect thereto, or extend or renew the same, or compromise or settle any
material dispute, claim, suit or legal proceeding relating thereto, or sell any
Receivable or Contract, or interest therein, without the prior written consent
of the Collateral Agent, except as permitted by Section 3.5 hereof or in the
Credit Agreement. Each Assignor will duly fulfill all obligations on its part to
be fulfilled under or in connection with the Receivables and Contracts and will
do nothing to impair the rights of the Collateral Agent in the Receivables or
Contracts.
3.5. Collection. Each Assignor shall endeavor in accordance with
reasonable business practices to cause to be collected from the account debtor
named in each of its Receivables or obligor under any Contract, as and when due
(including, without limitation, amounts which are delinquent, such amounts to be
collected in accordance with generally accepted lawful collection procedures)
any and all amounts owing under or on account of such Receivable or Contract,
and apply forthwith upon receipt thereof all such amounts as are so collected to
the outstanding balance of such Receivable or under such Contract, except that,
prior to the occurrence and continuance of an Event of Default, any Assignor may
allow in the ordinary course of business as adjustments to amounts owing under
its Receivables and Contracts (i) an extension or renewal of the time or times
of payment, or settlement for less than the total unpaid balance, which such
Assignor finds appropriate in accordance with reasonable business judgment and
(ii) a refund or credit due as a result of returned or damaged merchandise or
improperly performed services or for other reasons which such Assignor finds
appropriate in accordance with reasonable business judgment. The reasonable
costs and expenses (including, without limitation, attorneys' fees) of
collection, whether incurred by an Assignor or the Collateral Agent, shall be
borne by the relevant Assignor.
3.6. Instruments. If any Assignor owns or acquires any Instrument
constituting Collateral (and not otherwise required to be pledged pursuant to
the Pledge Agreement), such Assignor will within 10 Business Days notify the
Collateral Agent thereof, and upon request by the Collateral Agent will promptly
deliver such Instrument to the Collateral Agent appropriately endorsed to the
order of the Collateral Agent as further security hereunder.
6
3.7. Assignors Remain Liable Under Receivables. Anything herein to
the contrary notwithstanding, the Assignors shall remain liable under each of
the Receivables to observe and perform all of the conditions and obligations to
be observed and performed by it thereunder, all in accordance with the terms of
any agreement giving rise to such Receivables. Neither the Collateral Agent nor
any other Secured Creditor shall have any obligation or liability under any
Receivable (or any agreement giving rise thereto) by reason of or arising out of
this Agreement or the receipt by the Collateral Agent or any other Secured
Creditor of any payment relating to such Receivable pursuant hereto, nor shall
the Collateral Agent or any other Secured Creditor be obligated in any manner to
perform any of the obligations of any Assignor under or pursuant to any
Receivable (or any agreement giving rise thereto), to make any payment, to make
any inquiry as to the nature or the sufficiency of any payment received by them
or as to the sufficiency of any performance by any party under any Receivable
(or any agreement giving rise thereto), to present or file any claim, to take
any action to enforce any performance or to collect the payment of any amounts
which may have been assigned to them or to which they may be entitled at any
time or times.
3.8. Assignors Remain Liable Under Contracts. Anything herein to the
contrary notwithstanding, the Assignors shall remain liable under each of the
Contracts to observe and perform all of the conditions and obligations to be
observed and performed by them thereunder, all in accordance with and pursuant
to the terms and provisions of each Contract. Neither the Collateral Agent nor
any other Secured Creditor shall have any obligation or liability under any
Contract by reason of or arising out of this Agreement or the receipt by the
Collateral Agent or any other Secured Creditor of any payment relating to such
contract pursuant hereto, nor shall the Collateral Agent or any other Secured
Creditor be obligated in any manner to perform any of the obligations of any
Assignor under or pursuant to any Contract, to make any payment, to make any
inquiry as to the nature or the sufficiency of any performance by any party
under any Contract, to present or file any claim, to take any action to enforce
any performance or to collect the payment of any amounts which may have been
assigned to them or to which they may be entitled at any time or times.
3.9. Further Actions. Each Assignor will, at its own expense, make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, reports and other assurances or instruments and take such further
steps relating to its Receivables, Contracts, Instruments and other property or
rights covered by the security interest hereby granted, as the Collateral Agent
may reasonably require.
ARTICLE IV
SPECIAL PROVISIONS CONCERNING TRADEMARKS
4.1. Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true and lawful owner of or otherwise has
the right to use the registered
7
Marks listed in Annex D hereto for such Assignor and that said listed Marks
constitute all the United States marks and applications for United States marks
registered in the PTO that such Assignor presently owns or uses in connection
with its business. Each Assignor further warrants that it has no knowledge of
any third party claim that any aspect of such Assignor's present or contemplated
business operations infringes or will infringe any trademark, service xxxx or
trade name. Each Assignor represents and warrants that it is the true and lawful
owner of or otherwise has the right to use all U.S. trademark registrations and
applications listed in Annex D hereto and that said registrations are valid,
subsisting, have not been cancelled and that such Assignor is not aware of any
third-party claim that any of said registrations is invalid or unenforceable, or
is not aware that there is any reason that any of said registrations is invalid
or unenforceable, or is not aware that there is any reason that any of said
applications will not pass to registration. Each Assignor represents and
warrants that upon the recordation of a Grant of Security Interest in United
States Trademarks and Patents in the form of Annex G hereto in the United States
Patent and Trademark Office, together with filings on Form UCC-l pursuant to
this Agreement, all filings, registrations and recordings necessary or
appropriate to perfect the security interest granted to the Collateral Agent in
the United States Marks covered by this Agreement under federal law will have
been accomplished. Each Assignor agrees to execute such a Grant of Security
Interest in United States Trademark and Patents covering all right, title and
interest in each United States Xxxx, and the associated goodwill, of such
Assignor, and to record the same. Each Assignor hereby grants to the Collateral
Agent an absolute power of attorney to sign, upon the occurrence and during the
continuance of an Event of Default, any document which may be required by the
United States Patent and Trademark Office in order to effect an absolute
assignment of all right, title and interest in each Xxxx, and record the same.
4.2. Licenses and Assignments. Except as otherwise permitted by the
Credit Agreement or this Agreement, each Assignor hereby agrees not to divest
itself of any right under any Xxxx absent prior written approval of the
Collateral Agent.
4.3. Infringements. Each Assignor agrees, promptly upon learning
thereof, to notify the Collateral Agent in writing of the name and address of,
and to furnish such pertinent information that may be available with respect to,
any party who such Assignor believes is infringing or diluting or otherwise
violating in any material respect any of such Assignor's rights in and to any
Xxxx, or with respect to any party claiming that such Assignor's use of any Xxxx
violates in any material respect any property right of that party. Each Assignor
further agrees, unless otherwise agreed by the Collateral Agent, to prosecute
any Person infringing any Xxxx in accordance with commercially reasonable
business practices.
4.4. Preservation of Marks. Each Assignor agrees to use its Marks in
interstate commerce during the time in which this Agreement is in effect,
sufficiently to preserve such Marks as trademarks or service marks under the
laws of the United States; provided, that, to the extent permitted by the Credit
Agreement, no Assignor shall be obligated to preserve any Xxxx in the event such
Assignor determines, in its reasonable business judgment, that the preservation
of such Xxxx is no longer desirable in the conduct of its business.
8
4.5. Maintenance of Registration. Each Assignor shall, at its own
expense, diligently process all documents required by the Trademark Act of 1946,
15 U.S.C. xx.xx. 1051 et seq. to maintain trademark registrations, including but
not limited to affidavits of use and applications for renewals of registration
in the United States Patent and Trademark Office for all of its registered Marks
pursuant to 15 U.S.C. xx.xx. 1058(a), 1059 and 1065, and shall pay all fees and
disbursements in connection therewith and shall not abandon any such filing of
affidavit of use or any such application of renewal prior to the exhaustion of
all administrative and judicial remedies without prior written consent of the
Collateral Agent; provided, that no Assignor shall be obligated to maintain
registration of any Xxxx in the event that such Assignor determines, in its
reasonable business judgment, that such maintenance of such Xxxx is no longer
necessary or desirable in the conduct of its business. Each Assignor agrees to
notify the Collateral Agent three (3) months prior to the dates on which the
affidavits of use or the applications for renewal registration are due with
respect to any registered Xxxx that the affidavits of use or the renewal is
being processed or being abandoned, as the case may be.
4.6. Future Registered Marks. If any Xxxx registration issues
hereafter to any Assignor as a result of any application now or hereafter
pending before the United States Patent and Trademark Office, within 30 days of
receipt of such certificate, such Assignor shall deliver to the Collateral Agent
a copy of such certificate, and a grant of security in such Xxxx, to the
Collateral Agent and at the expense of such Assignor, confirming the grant of
security in such Xxxx to the Collateral Agent hereunder, the form of such
security to be substantially the same as the form hereof or in such other form
as may be reasonably satisfactory to the Collateral Agent.
4.7. Remedies. If an Event of Default shall occur and be continuing,
the Collateral Agent may, by written notice to the relevant Assignor, take any
or all of the following actions: (i) declare the entire right, title and
interest of such Assignor in and to each of the Marks and the goodwill of the
business associated therewith, together with all trademark rights and rights of
protection to the same, vested in the Collateral Agent for the benefit of the
Secured Creditors, in which event such rights, title and interest shall
immediately vest in the Collateral Agent for the benefit of the Secured
Creditors, and the Collateral Agent shall be entitled to exercise the power of
attorney referred to in Section 4.1 hereof to execute, cause to be acknowledged
and notarized and record said absolute assignment with the applicable agency;
(ii) take and use or sell the Marks and the goodwill of such Assignor's business
symbolized by the Marks and the right to carry on the business and use the
assets of such Assignor in connection with which the Marks have been used; and
(iii) direct such Assignor to refrain, in which event such Assignor shall
refrain, from using the Marks in any manner whatsoever, directly or indirectly,
and, if requested by the Collateral Agent, change such Assignor's corporate name
to eliminate therefrom any use of any Xxxx and execute such other and further
documents that the Collateral Agent may request to further confirm this and to
transfer ownership of the Marks and registrations and any pending trademark
application in the United States Patent and Trademark Office to the Collateral
Agent.
ARTICLE V
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SPECIAL PROVISIONS CONCERNING
PATENTS, COPYRIGHTS AND TRADE SECRETS
5.1. Additional Representations and Warranties. Each Assignor
represents and warrants that it is the true and lawful owner of or otherwise has
the right to use (i) all material United States trade secrets and proprietary
information necessary to operate the business of the Assignor (the "Trade Secret
Rights"), (ii) the Patents listed in Annex E hereto for such Assignor and that
said Patents constitute all the United States patents and applications for
United States patents that such Assignor now owns or uses and (iii) the
Copyrights listed in Annex F hereto for such Assignor and that said Copyrights
all registrations of United States copyrights and applications for United States
include copyright registrations that such Assignor now owns or uses. Each
Assignor further warrants that it has no knowledge of any third party claim that
any aspect of such Assignor's present or contemplated business operations
infringes or will infringe any patent or any copyright of such Assignor has
misappropriated any trade secret or proprietary information. Each Assignor
represents and warrants that upon the recordation of a Grant of Security
Interest in United States Trademarks and Patents in the form of Annex G hereto
in the United States Patent and Trademark Office and the recordation of a Grant
of Security Interest in United States Copyrights in the form of Annex H hereto
in the United States Copyright Office, together with filings on Form UCC-l
pursuant to this Agreement, all filings, registrations and recordings necessary
or appropriate to perfect the security interest granted to the Collateral Agent
in the United States Patents and United States Copyrights covered by this
Agreement under federal law will have been accomplished. Each Assignor agrees to
execute such a Grant of Security Interest in United States Trademarks and
Patents covering all right, title and interest in each United States Patent of
such Assignor and to record the same, and to execute such a Grant of Security
Interest in United States Copyrights covering all right, title and interest in
each United States Copyright of such Assignor and to record the same. Each
Assignor hereby grants to the Collateral Agent an absolute power of attorney to
sign, upon the occurrence and during the continuance of any Event of Default,
any document which may be required by the United States Patent and Trademark
Office or the United States Copyright Office in order to effect an absolute
assignment of all right, title and interest in each Patent and Copyright, and to
record the same.
5.2. Licenses and Assignments. Except as otherwise permitted by the
Credit Agreement or this Agreement, each Assignor hereby agrees not to divest
itself of any right under any Patent or Copyright absent prior written approval
of the Collateral Agent.
5.3. Infringements. Each Assignor agrees, promptly upon learning
thereof, to furnish the Collateral Agent in writing with all pertinent
information available to such Assignor with respect to any infringement,
contributing infringement or active inducement to infringe any of such
Assignor's rights in and to any Patent or Copyright or to any claim that such
Assignor's practice of any Patent or use of any Copyright violates any property
right of a third party, or with respect to any misappropriation of any Trade
Secret Right or any claim that such Assignor's practice of any Trade Secret
Right violates any property right of a third party. Each Assignor further
agrees, absent direction of the Collateral Agent to the contrary, diligently to
prosecute any Person infringing any Patent or Copyright or any Person
misappropriating any Trade Secret Right in accordance with commercially
reasonable business practices.
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5.4. Maintenance of Patents. At its own expense, each Assignor shall
make timely payment of all post-issuance fees required pursuant to 35 U.S.C. ss.
41 to maintain in force rights under each Patent, absent prior written consent
of the Collateral Agent; provided, that, to the extent permitted by the Credit
Agreement, no Assignor shall be obligated to maintain any Patent in the event
such Assignor determines, in its reasonable business judgment, that the
maintenance of such Patent is no longer necessary or desirable in the conduct of
its business.
5.5. Prosecution of Patent Application. At its own expense, each
Assignor shall diligently prosecute all applications for United States Patents
listed in Annex E hereto for such Assignor and shall not abandon any such
application prior to exhaustion of all administrative and judicial remedies,
absent written consent of the Collateral Agent; provided, that, to the extent
permitted by the Credit Agreement, no Assignor shall be obligated to prosecute
any application in the event such Assignor determines, in its reasonable
business judgment, that the prosecuting of such application is no longer
necessary or desirable in the conduct of its business.
5.6. Other Patents and Copyrights. Within 30 days of the acquisition
or issuance of a United States Patent, registration of a Copyright, or
acquisition of a registered Copyright, or of filing of an application for a
United States Patent or registration of Copyright, the relevant Assignor shall
deliver to the Collateral Agent a copy of said Copyright or certificate or
registration of, or application therefor, said Patents, as the case may be, with
an assignment for security as to such Patent or Copyright, as the case may be,
to the Collateral Agent and at the expense of such Assignor, confirming the
assignment for security, the form of such assignment for security to be
substantially the same as the form hereof or in such other form as may be
reasonably satisfactory to the Collateral Agent.
5.7. Remedies. If an Event of Default shall occur and be continuing,
the Collateral Agent may by written notice to the relevant Assignor, take any or
all of the following actions: (i) declare the entire right, title, and interest
of such Assignor in each of the Patents and Copyrights vested in the Collateral
Agent for the benefit of the Secured Creditors, in which event such right,
title, and interest shall immediately vest in the Collateral Agent for the
benefit of the Secured Creditors, in which case the Collateral Agent shall be
entitled to exercise the power of attorney referred to in Section 5.1 hereof to
execute, cause to be acknowledged and notarized and to record said absolute
assignment with the applicable agency; (ii) take and practice or sell the
Patents and Copyrights; and (iii) direct such Assignor to refrain, in which
event such Assignor shall refrain, from practicing the Patents and using the
Copyrights directly or indirectly, and such Assignor shall execute such other
and further documents as the Collateral Agent may request further to confirm
this and to transfer ownership of the Patents and Copyrights to the Collateral
Agent for the benefit of the Secured Creditors.
ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL
6.1. Protection of Collateral Agent's Security. Each Assignor will
do nothing to impair the rights of the Collateral Agent in the Collateral except
to the extent such impairment
11
shall be waived in accordance with the terms of Section 10.2 hereof. Each
Assignor will at all times keep its Inventory and Equipment insured in favor of
the Collateral Agent, at such Assignor's own expense to the extent and in the
manner provided in the Credit Agreement; all policies or certificates with
respect to such insurance (and any other insurance maintained by such Assignor)
(i) shall be endorsed to the Collateral Agent's reasonable satisfaction for the
benefit of the Collateral Agent (including, without limitation, by naming the
Collateral Agent as additional insured and loss payee) and (ii) shall state that
such insurance policies shall not be cancelled or revised without 30 days' prior
written notice thereof by the insurer to the Collateral Agent; and certified
copies of such policies or certificates shall be deposited with the Collateral
Agent. If any Assignor shall fail to insure its Inventory and Equipment in
accordance with the preceding sentence, or if any Assignor shall fail to so
endorse and deposit all policies or certificates with respect thereto, the
Collateral Agent shall have the right following reasonable prior written notice
to such Assignor (but shall be under no obligation) to procure such insurance
and such Assignor agrees to promptly reimburse the Collateral Agent for all
costs and expenses of procuring such insurance. Except as otherwise permitted to
be retained by the relevant Assignor pursuant to the Credit Agreement, the
Collateral Agent shall, at the time such proceeds of such insurance are
distributed to the Secured Creditors, apply such proceeds in accordance with
Section 7.4 hereof. Each Assignor assumes all liability and responsibility in
connection with the Collateral acquired by it and the liability of such Assignor
to pay the Obligations shall in no way be affected or diminished by reason of
the fact that such Collateral may be lost, destroyed, stolen, damaged or for any
reason whatsoever unavailable to such Assignor.
6.2. Warehouse Receipts Non-Negotiable. Each Assignor agrees that if
any warehouse receipt or receipt in the nature of a warehouse receipt is issued
with respect to any of its Inventory, such warehouse receipt or receipt in the
nature thereof shall not be "negotiable" (as such term is used in Section 7-104
of the Uniform Commercial Code as in effect in any relevant jurisdiction or
under other relevant law) or, if any warehouse receipt or any receipt in the
nature of a warehouse receipt is "negotiable" (as such term is used in Section
7-104 of the Uniform Commercial Code as in effect in any relevant jurisdiction
or under other relevant law) then the respective Assignor shall promptly take
all action as may be required under the relevant jurisdiction to grant a
perfected security interest in such Collateral to the Collateral Agent for the
benefit of the Secured Creditors.
6.3. Further Actions. Each Assignor will, at its own expense, make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such lists, descriptions and designations of its Collateral,
warehouse receipts, receipts in the nature of warehouse receipts, bills of
lading, documents of title, vouchers, invoices, schedules, confirmatory
assignments, conveyances, financing statements, transfer endorsements, powers of
attorney, certificates, reports and other assurances or instruments and take
such further steps relating to the Collateral and other property or rights
covered by the security interest hereby granted, which the Collateral Agent
deems reasonably appropriate or advisable to perfect, preserve or protect its
security interest in the Collateral.
6.4. Financing Statements. Each Assignor agrees to execute and
deliver to the Collateral Agent such financing statements, in form reasonably
acceptable to the Collateral
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Agent, as the Collateral Agent may from time to time reasonably request or as
are necessary or desirable in the opinion of the Collateral Agent to establish
and maintain a valid, enforceable, first priority perfected security interest in
the Collateral as provided herein and the other rights and security contemplated
hereby all in accordance with the Uniform Commercial Code as enacted in any and
all relevant jurisdictions or any other relevant law. Each Assignor will pay any
applicable filing fees, recordation taxes and related expenses relating to its
Collateral. Each Assignor hereby authorizes the Collateral Agent to file any
such financing statements without the signature of such Assignor where permitted
by law.
ARTICLE VII
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
7.1. Remedies; Obtaining the Collateral Upon Default. Each Assignor
agrees that, if any Event of Default shall have occurred and be continuing, then
and in every such case, the Collateral Agent, in addition to any rights now or
hereafter existing under applicable law, shall have all rights as a secured
creditor under the UCC in all relevant jurisdictions and may:
(i) personally, or by agents or attorneys, immediately take
possession of the Collateral or any part thereof, from such Assignor or
any other Person who then has possession of any part thereof with or
without notice or process of law, and for that purpose may enter upon such
Assignor's premises where any of the Collateral is located and remove the
same and use in connection with such removal any and all services,
supplies, aids and other facilities of such Assignor;
(ii) instruct the obligor or obligors on any agreement, instrument
or other obligation (including, without limitation, the Receivables and
the Contracts) constituting the Collateral to make any payment required by
the terms of such agreement, instrument or other obligation directly to
the Collateral Agent;
(iii) withdraw all monies, securities and instruments in the Cash
Collateral Account for application to the Obligations in accordance with
Section 7.4 hereof;
(iv) sell, assign or otherwise liquidate any or all of the
Collateral or any part thereof in accordance with Section 7.2 hereof, or
direct the relevant Assignor to sell, assign or otherwise liquidate any or
all of the Collateral or any part thereof, and, in each case, take
possession of the proceeds of any such sale or liquidation;
(v) take possession of the Collateral or any part thereof, by
directing the relevant Assignor in writing to deliver the same to the
Collateral Agent at any place or places designated by the Collateral Agent
reasonably convenient to the Collateral Agent and the Borrower, in which
event such Assignor shall at its own expense:
(x) forthwith cause the same to be moved to the place or
places so designated by the Collateral Agent and there delivered to
the Collateral Agent;
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(y) store and keep any Collateral so delivered to the
Collateral Agent at such place or places pending further action by
the Collateral Agent as provided in Section 7.2 hereof; and
(z) while the Collateral shall be so stored and kept, provide
such guards and maintenance services as shall be necessary to
protect the same and to preserve and maintain them in good
condition; and
(vi) license or sublicense, whether on an exclusive or nonexclusive
basis, any Marks, Patents or Copyrights included in the Collateral for
such term and on such conditions and in such manner as the Collateral
Agent shall in its sole judgment determine (taking into account such
provisions as may be necessary to protect and preserve such Marks, Patents
or Copyrights);
it being understood that each Assignor's obligation so to deliver the Collateral
is of the essence of this Agreement and that, accordingly, upon application to a
court of equity having jurisdiction, the Collateral Agent shall be entitled to a
decree requiring specific performance by such Assignor of said obligation. The
Secured Creditors agree that this Agreement 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 Secured Creditors and that no other Secured
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 Collateral Agent, as the case maybe, for the benefit
of the Secured Creditors upon the terms of this Agreement.
7.2. Remedies; Disposition of the Collateral. Any Collateral
repossessed by the Collateral Agent under or pursuant to Section 7.1 hereof and
any other Collateral whether or not so repossessed by the Collateral Agent, may
be sold, assigned, leased or otherwise disposed of under one or more contracts
or as an entirety, and without the necessity of gathering at the place of sale
the property to be sold, and in general in such manner, at such time or times,
at such place or places and on such terms as the Collateral Agent may, in
compliance with any mandatory requirements of applicable law, determine to be
commercially reasonable. Any of the Collateral may be sold, leased or otherwise
disposed of, in the condition in which the same existed when taken by the
Collateral Agent or after any overhaul or repair at the expense of the relevant
Assignor which the Collateral Agent shall determine to be commercially
reasonable. Any such disposition which shall be a private sale or other private
proceedings permitted by such requirements shall be made upon not less than 10
days' written notice to the relevant Assignor specifying the time at which such
disposition is to be made and the intended sale price or other consideration
therefor, and shall be subject, for the 10 days after the giving of such notice,
to the right of the relevant Assignor or any nominee of such Assignor to acquire
the Collateral involved at a price or for such other consideration at least
equal to the intended sale price or other consideration so specified. Any such
disposition which shall be a public sale permitted by such requirements shall be
made upon not less than 10 days' written notice to the relevant Assignor
specifying the time and place of such sale and, in the absence of applicable
requirements of law, shall be by public auction (which may, at the Collateral
Agents option, be subject to reserve),
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after publication of notice of such auction not less than 10 days prior thereto
in two newspapers in general circulation in the City of New York and Charlotte,
North Carolina. To the extent permitted by any such requirement of law, the
Collateral Agent may bid for and become the purchaser of the Collateral or any
item thereof, offered for sale in accordance with this Section without
accountability to the relevant Assignor. If, under mandatory requirements of
applicable law, the Collateral Agent shall be required to make disposition of
the Collateral within a period of time which does not permit the giving of
notice to the relevant Assignor as hereinabove specified, the Collateral Agent
need give such Assignor only such notice of disposition as shall be reasonably
practicable in view of such mandatory requirements of applicable law.
7.3. Waiver of Claims. Except as otherwise provided in this
Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT'S
TAKING POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING
FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH SUCH ASSIGNOR
WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES
OR OF ANY STATE, and each Assignor hereby further waives, to the extent
permitted by law:
(i) all damages occasioned by such taking of possession except any
damages which are the direct result of the Collateral Agent's gross
negligence or willful misconduct;
(ii) all other requirements as to the time, place and terms of sale
or other requirements with respect to the enforcement of the Collateral
Agent's rights hereunder; and
(iii) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable law
in order to prevent or delay the enforcement of this Agreement or the
absolute sale of the Collateral or any portion thereof, and each Assignor,
for itself and all who may claim under it, insofar as it or they now or
hereafter lawfully may, hereby waives the benefit of all such laws.
Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of the relevant Assignor therein and
thereto, and shall be a perpetual bar both at law and in equity against such
Assignor and against any and all Persons claiming or attempting to claim the
Collateral so sold, optioned or realized upon, or any part thereof, from,
through and under such Assignor.
7.4. Application of Proceeds. (a) All moneys collected by the
Collateral Agent (or, to the extent the Pledge Agreement or the additional
Security Documents require proceeds of collateral under such Security Documents
to be applied in accordance with the provisions of this Agreement or the Pledgee
under such other Security Document) upon any sale or other
15
disposition of the Collateral, together with all other moneys received by the
Collateral Agent hereunder, shall be applied as follows:
(i) first, to the payment of all Obligations owing the Collateral
Agent of the type provided in clauses (iii) and (iv) of the definition of
Obligations;
(ii) second, to the extent proceeds remain after the application
pursuant to the preceding clause (i), an amount equal to the outstanding
Obligations shall be paid to the Secured Creditors as provided in Section
7.4(c) hereof with each Secured Creditor receiving an amount equal to its
outstanding 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; 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 10.8 hereof, to the
relevant Assignor or, to the extent directed by such Assignor 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,
that amount (expressed as a percentage) equal to a fraction the numerator of
which is the then unpaid amount of such Secured Creditor's Obligations and the
denominator of which is the then outstanding amount of all Obligations.
(c) All payments required to be made to the Lender Creditors
hereunder shall be made to the Administrative Agent under the Credit Agreement
for the account of the Lender Creditors and all payments required to be made to
the Other Creditors hereunder shall be made directly to the respective Other
Creditor.
(d) For purposes of applying payments received in accordance with
this Section 7.4, the Collateral Agent shall be entitled to rely upon (i) the
Administrative Agent under the Credit Agreement and (ii) the Other Creditors for
a determination (which the Administrative Agent, each Other Creditor and the
Secured Creditors agree (or shall agree) to provide upon request of the
Collateral Agent) of the outstanding Obligations owed to the Lender Creditors or
the Other Creditors, as the case may be. Unless it has actual knowledge
(including by way of written notice from a Lender Creditor or an Other Creditor)
to the contrary, the Administrative Agent under the Credit Agreement, in
furnishing information pursuant to the preceding sentence, 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 Interest Rate Agreements or Other
Obligations in respect thereof, are in existence.
(e) It is understood that the Assignors shall remain jointly and
severally liable to the extent of any deficiency between the amount of the
proceeds of the Collateral and the
16
aggregate amount of the sums referred to in clause (a) of this Section 7.4 with
respect to the relevant Assignor.
7.5. Remedies Cumulative. Each and every right, power and remedy
hereby specifically given to the Collateral Agent shall be in addition to every
other right, power and remedy specifically given under this Agreement, under the
other Secured Debt Agreements or now or hereafter existing at law, in equity or
by statute and each and every right, power and remedy whether specifically
herein given or otherwise existing may be exercised from time to time or
simultaneously and as often and in such order as may be deemed expedient by the
Collateral Agent. All such rights, powers and remedies shall be cumulative and
the exercise or the beginning of the exercise of one shall not be deemed a
waiver of the right to exercise any other or others. No delay or omission of the
Collateral Agent in the exercise of any such right, power or remedy and no
renewal or extension of any of the Obligations shall impair any such right,
power or remedy or shall be construed to be a waiver of any Default or Event of
Default or an acquiescence therein. No notice to or demand on any Assignor in
any case shall entitle it to any other or further notice or demand in similar or
other circumstances or constitute a waiver of any of the rights of the
Collateral Agent to any other or further action in any circumstances without
notice or demand. In the event that the Collateral Agent shall bring any suit to
enforce any of its rights hereunder and shall be entitled to judgment, then in
such suit the Collateral Agent may recover reasonable expenses, including
attorneys' fees, and the amounts thereof shall be included in such judgment.
7.6. Discontinuance of Proceedings. In case the Collateral Agent
shall have instituted any proceeding to enforce any right, power or remedy under
this Agreement by foreclosure, sale, entry or otherwise, and such proceeding
shall have been discontinued or abandoned for any reason or shall have been
determined adversely to the Collateral Agent, then and in every such case the
relevant Assignor, the Collateral Agent and each holder of any of the
Obligations shall be restored to their former positions and rights hereunder
with respect to the Collateral subject to the security interest created under
this Agreement, and all rights, remedies and powers of the Collateral Agent
shall continue as if no such proceeding had been instituted.
ARTICLE VIII
INDEMNITY
8.1. Indemnity. (a) Each Assignor jointly and severally agrees to
indemnify, reimburse and hold the Collateral Agent, each other Secured Creditor
and their respective successors, permitted assigns, employees, agents and
servants (hereinafter in this Section 8.1 referred to individually as
"Indemnitee," and collectively as "Indemnitees") harmless from any and all
liabilities, obligations, damages, injuries, penalties, claims, demands,
actions, suits, judgments and any and all reasonable costs, expenses or
disbursements (including reasonable attorneys' fees and expenses) (for the
purposes of this Section 8.1 the foregoing are collectively called "expenses")
of whatsoever kind and nature imposed on, asserted against or incurred by any of
the Indemnitees in any way relating to or arising out of this Agreement, any
other Secured
17
Debt Agreement or any other document executed in connection herewith or
therewith or in any other way connected with the administration of the
transactions contemplated hereby or thereby or the enforcement of any of the
terms of, or the preservation of any rights under any thereof, provided that no
Indemnitee shall be indemnified pursuant to this Section 8.1(a) for losses,
damages or liabilities to the extent caused by the gross negligence or willful
misconduct of such Indemnitee. Each Assignor agrees that upon written notice by
any Indemnitee of the assertion of such a liability, obligation, damage, injury,
penalty, claim, demand, action, suit or judgment, the relevant Assignor shall
assume full responsibility for the defense thereof. Each Indemnitee agrees to
use its best efforts to promptly notify the relevant Assignor of any such
assertion of which such Indemnitee has knowledge.
(b) Without limiting the application of Section 8.1(a) hereof, each
Assignor agrees, jointly and severally, to pay, or reimburse the Collateral
Agent for any and all reasonable fees, costs and expenses of whatever kind or
nature incurred in connection with the creation, preservation or protection of
the Collateral Agent's Liens on, and security interest in, the Collateral,
including, without limitation, all fees and taxes in connection with the
recording or filing of instruments and documents in public offices, payment or
discharge of any taxes or Liens upon or in respect of the Collateral, premiums
for insurance with respect to the Collateral and all other reasonable fees,
costs and expenses in connection with protecting, maintaining or preserving the
Collateral and the Collateral Agent's interest therein, whether through judicial
proceedings or otherwise, or in defending or prosecuting any actions, suits or
proceedings arising out of or relating to the Collateral.
(c) Without limiting the application of Section 8.1(a) or (b)
hereof, each Assignor agrees, jointly and severally, to pay, indemnify and hold
each Indemnitee harmless from and against any loss, costs, damages and expenses
which such Indemnitee may suffer, expend or incur in consequence of or growing
out of any misrepresentation by any Assignor in this Agreement, any other
Secured Debt Agreement or in any writing contemplated by or made or delivered
pursuant to or in connection with this Agreement or any other Secured Debt
Agreement.
(d) If and to the extent that the obligations of any Assignor under
this Section 8.1 are unenforceable for any reason, such Assignor hereby agrees
to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
8.2. Indemnity Obligations Secured by Collateral; Survival. Any
amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of each Assignor contained in this Article VIII shall
continue in full force and effect notwithstanding the full payment of all the
Revolving Notes issued under the Credit Agreement, the termination of all
Interest Rate Agreements and the payment of all other Obligations and
notwithstanding the discharge thereof.
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ARTICLE IX
DEFINITIONS
The following terms shall have the meanings herein specified. Such
definitions shall be equally applicable to the singular and plural forms of the
terms defined.
"Administrative Agent" shall have the meaning provided in the
recitals to this Agreement.
"Agreement" shall mean this Security Agreement as the same may be
modified, supplemented or amended from time to time in accordance with its
terms.
"Assignor" shall have the meaning provided in the first paragraph of
this Agreement.
"Books" shall mean all books, records and other written, electronic
or other documentation in whatever form maintained now or hereafter by or for
the Assignor in connection with the ownership of its assets or the conduct of
its business or evidencing or containing information relating to the Collateral,
including: (i) ledgers; (ii) records indicating, summarizing, or evidencing such
Assignor's assets, business operations or financial condition; (iii) computer
programs and software; (iv) computer discs, tapes, files, manuals, spreadsheets;
(v) computer printouts and output of whatever kind; (vi) any other computer
prepared or electronically stored, collected or reported information and
equipment of any kind; and (vii) any and all other rights now or hereafter
arising out of any contract or agreement between the Assignor and any service
bureau, computer or data processing company or other Person charged with
preparing or maintaining any of the Assignor's books or records or with credit
reporting, including with regard to the Assignor's Accounts.
"Borrower" shall have the meaning provided in the recitals to this
Agreement.
"Cash Collateral Account" shall mean a cash collateral account, if
any, maintained with, and in the sole dominion and control of, the Collateral
Agent for the benefit of the Secured Creditors.
"Chattel Paper" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Class" shall have the meaning provided in Section 10.2 of this
Agreement.
"Collateral" shall have the meaning provided in Section 1.1(a) of
this Agreement.
"Collateral Agent" shall have the meaning provided in the first
paragraph of this Agreement.
"Contract Rights" shall mean all rights of any Assignor (including,
without limitation, all rights to payment) under each Contract.
19
"Contracts" shall mean all contracts between any Assignor and one or
more additional parties (including, without limitation, each switch sharing
agreement with MJD, each interconnection agreement, each limited liability
company agreement or operating agreement, each partnership agreement and any
Interest Rate Agreements).
"Copyrights" shall mean any United States or foreign copyright owned
by any Assignor, including any registrations of any Copyrights, in the United
States Copyright Office or the equivalent thereof in any foreign country, other
than those countries outside the United States where the grant of a security
interest would invalidate such Copyrights, as well as any application for a
United States copyright registration now or hereafter made with the United
States Copyright Office or the equivalent thereof in any foreign country by any
Assignor.
"Credit Agreement" shall have the meaning provided in the recitals
to this Agreement.
"Credit Document Obligations" shall have the meaning provided in the
definition of "Obligations" in this Article IX.
"Default" shall mean any event which, with notice or lapse of time,
or both, would constitute an Event of Default.
"Documents" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Equipment" shall mean any "equipment," as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by any Assignor and, in any event, shall include,
but shall not be limited to, all machinery, equipment, furnishings, movable
trade fixtures and vehicles now or hereafter owned by any Assignor and any and
all additions, substitutions and replacements of any of the foregoing, wherever
located, together with all attachments, components, parts, equipment and
accessories installed thereon or affixed thereto.
"Event of Default" shall mean any Event of Default under, and as
defined in, the Credit Agreement and shall in any event, without limitation,
include any payment default on any of the Obligations after the expiration of
any applicable grace period.
"General Intangibles" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York and
shall in any event include all of any Assignor's claims, rights, powers,
privileges, authority, options, security interests, liens and remedies under any
limited liability company agreement, operating agreement or partnership
agreements to which such Assignor is a party or with respect to any limited
liability company of which such Assignor is a member or with respect to any
partnership of which such Assignor is a party.
"Goods" shall have the meaning provided in the Uniform Commercial
Code as in effect on the date hereof in the State of New York.
20
"Indemnitee" shall have the meaning provided in Section 8.1 of this
Agreement.
"Instrument" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Inventory" shall mean merchandise, inventory and goods, and all
additions, substitutions and replacements thereof, wherever located, together
with all goods, supplies, incidentals, packaging materials, labels, materials
and any other items used or usable in manufacturing, processing, packaging or
shipping same; in all stages of production -- from raw materials through
work-in-process to finished goods -- and all products and proceeds of whatever
sort and wherever located and any portion thereof which may be returned,
rejected, reclaimed or repossessed by the Collateral Agent from any Assignor's
customers, and shall specifically include all "inventory" as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York, now or hereafter owned by any Assignor.
"Investment Property" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Lender Creditors" shall have the meaning provided in the recitals
to this Agreement.
"Lenders" shall have the meaning provided in the recitals to this
Agreement.
"Liens" shall mean any security interest, mortgage, pledge, lien,
claim, charge, encumbrance, title retention agreement, lessor's interest in a
financing lease or analogous instrument, in, of, or on any Assignor's property.
"Marks" shall mean all right, title and interest in and to any
United States or foreign trademarks, service marks and trade names now held or
hereafter acquired by any Assignor, including any registration of any trademarks
and service marks in the United States Patent and Trademark Office, or the
equivalent thereof in any foreign country, other than those countries outside
the United States, where the grant of a security interest would invalidate such
Marks, and any trade dress including logos and/or designs used by any Assignor
in the United States or any foreign country.
"Obligations" shall mean (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 each
Assignor, now existing or hereafter incurred under, arising out of or in
connection with any Credit Document to which such Assignor is a party
(including, in the case of each Subsidiary Guarantor, all such obligations and
liabilities of such Subsidiary Guarantor under the Subsidiary Guaranty) and the
due performance and compliance by each Assignor with the terms of each such
Credit Document (all such obligations and liabilities under this clause (i),
except to the extent consisting of obligations or indebtedness with respect to
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
21
all obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities of each
Assignor now existing or hereafter incurred under, arising out of or in
connection with any Interest Rate Agreements including, in the case of each
Subsidiary Guarantor, all obligations of such Subsidiary Guarantor under the
Subsidiary Guaranty in respect of Interest Rate Agreements (all such obligations
and liabilities under this clause (ii) being herein collectively called the
"Other Obligations"); (iii) any and all sums advanced by the Collateral Agent in
order to preserve the Collateral or preserve its security interest in the
Collateral; (iv) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations, or liabilities of each Assignor
referred to in clauses (i) and (ii), after an Event of Default shall have
occurred and be continuing, the reasonable expenses of re-taking, holding,
preparing for sale or lease, selling or otherwise disposing of or realizing on
the Collateral, or of any exercise by the Collateral Agent of its rights
hereunder, together with reasonable attorneys' fees and court costs; and (v) all
amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement under Section 8.1 of this Agreement.
"Other Creditors" shall have the meaning provided in the recitals to
this Agreement.
"Other Obligations" shall have the meaning provided in the
definition of "Obligations" in this Article IX.
"Patents" shall mean any United States or foreign patent to which
any Assignor now or hereafter has title and any divisions or continuations
thereof, as well as any application for a United States or foreign patent now or
hereafter made by any Assignor, except as to (i) patents or patent applications
in those countries where the granting of a security interest in such patents is
not permissible under the laws of that country and (ii) any "intent to use"
application pending or approved before the United States Patent and Trademark
office (the "PTO") to the extent, and only to the extent that the grant of a
Lien thereon hereunder would render such application void as terminable by the
PTO.
"Proceeds" shall have the meaning provided in the Uniform Commercial
Code as in effect in the State of New York on the date hereof or under other
relevant law and, in any event, shall include, but not be limited to, (i) any
and all proceeds of any insurance, indemnity, warranty or guaranty payable to
the Collateral Agent or any Assignor from time to time with respect to any of
the Collateral, (ii) any and all payments (in any form whatsoever) made or due
and payable to any Assignor from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any governmental authority (or any person acting under
color of governmental authority) and (iii) any and all other amounts from time
to time paid or payable under or in connection with any of the Collateral.
"Pro Rata Share" shall have the meaning provided in Section 7.4(b)
of this Agreement.
"PTO" shall have the meaning provided in the definition of "Patents"
in this Article IX.
22
"Receivables" shall mean any "account" as such term is defined in
the Uniform Commercial Code as in effect on the date hereof in the State of New
York, now or hereafter owned by any Assignor and, in any event, shall include,
but shall not be limited to, all of such Assignor's rights to payment for goods
sold or leased or services performed by such Assignor, whether now in existence
or arising from time to time hereafter, including, without limitation, rights
evidenced by an account, note, contract, security agreement, chattel paper, or
other evidence of indebtedness or security, together with (a) all security
pledged, assigned, hypothecated or granted to or held by such Assignor to secure
the foregoing, (b) all of any Assignor's right, title and interest in and to any
goods, the sale of which gave rise thereto, (c) all guarantees, endorsements and
indemnifications on, or of, any of the foregoing, (d) all powers of attorney for
the execution of any evidence of indebtedness or security or other writing in
connection therewith, (e) all books, records, ledger cards, and invoices
relating thereto, (f) all evidences of the filing of financing statements and
other statements and the registration of other instruments in connection
therewith and amendments thereto, notices to other creditors or secured parties,
and certificates from filing or other registration officers, (g) all credit
information, reports and memoranda relating thereto and (h) all other writings
related in any way to the foregoing.
"Required Secured Creditors" shall mean (i) the Required Lenders
(or, to the extent required by Section 12.12 of the Credit Agreement, each of
the Lenders) under the Credit Agreement so long as any Credit Document
Obligations remain outstanding and (ii) in any situation not covered by
preceding clause (i), the holders of at least a majority of the outstanding
principal amount of the Other Obligations.
"Requisite Creditors" shall have the meaning provided in Section
10.2 of this Agreement.
"Secured Creditors" shall have the meaning provided in the recitals
to this Agreement.
"Secured Debt Agreements" shall mean and include this Agreement, the
other Credit Documents and the Interest Rate Agreements.
"Termination Date" shall have the meaning provided in Section 10.8
of this Agreement.
"Trade Secret Rights" shall have the meaning provided in Section 5.1
of this Agreement.
ARTICLE X
MISCELLANEOUS
10.1. Notices. Except as otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be deemed to
23
have been duly given or made when delivered to the party to which such notice,
request, demand or other communication is required or permitted to be given or
made under this Agreement, addressed:
(a) if to any Assignor, at its address set forth opposite its
signature below;
(b) if to the Collateral Agent:
Bank of America, N.A.
000 Xxxx Xxxxxx
00xx Xxxxx
Xxxxxx, Xxxxx 00000-0000
Attention: Xxx Xxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
(c) if to any Lender Creditor (other than the Collateral Agent), at
such address as such Lender Creditor shall have specified in the Credit
Agreement;
(d) if to any Other Creditor, at such address as such Other Creditor
shall have specified in writing to each Assignor and the Collateral Agent;
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.
10.2. 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 each Assignor directly affected thereby and the
Collateral Agent (with the consent of the Required Secured Creditors); provided,
that any change, waiver, modification or variance affecting the rights and
benefits of a single Class of Secured Creditors (and not all Secured Creditors
in a like or similar manner) shall require the written consent of the Requisite
Creditors 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
Other Creditors as the holders of the Other Obligations. For the purpose of this
Agreement, the term "Requisite Creditors" of any Class shall mean each of (x)
with respect to the Credit Document Obligations, the Required Lenders and (y)
with respect to the Other Obligations, the holders of at least a majority of all
obligations outstanding from time to time under the Interest Rate Agreements.
10.3. Obligations Absolute. The obligations of each Assignor
hereunder shall remain in full force and effect without regard to, and shall not
be impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of such Assignor; (b) any
exercise or non-exercise, or any waiver of, any right, remedy, power or
privilege under or in respect of this Agreement or any other Secured Debt
Agreement; or (c) any amendment to or modification of any Secured Debt Agreement
or any security for any
24
of the Obligations; whether or not any Assignor shall have notice or knowledge
of any of the foregoing.
10.4. Successors and Assigns. This Agreement shall be binding upon
each Assignor and its successors and assigns and shall inure to the benefit of
the Collateral Agent and the other Secured Creditors and its successors and
assigns; provided, that no Assignor may transfer or assign any or all of its
rights or obligations hereunder without the prior written consent of the
Collateral Agent. All agreements, statements, representations and warranties
made by each Assignor herein or in any certificate or other instrument delivered
by such Assignor or on its behalf under this Agreement shall be considered to
have been relied upon by the Secured Creditors and shall survive the execution
and delivery of this Agreement and the other Secured Debt Agreements regardless
of any investigation made by the Secured Creditors or on their behalf.
10.5. 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.
10.6.Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAW OF THE STATE OF NEW YORK.
10.7. Assignor's Duties. It is expressly agreed, anything herein
contained to the contrary notwithstanding, that each Assignor shall remain
liable to perform all of the obligations, if any, assumed by it with respect to
the Collateral and the Collateral Agent shall not have any obligations or
liabilities with respect to any Collateral by reason of or arising out of this
Agreement, nor shall the Collateral Agent be required or obligated in any manner
to perform or fulfill any of the obligations of each Assignor under or with
respect to any Collateral.
10.8. Termination; Release. (a) On the Termination Date, this
Agreement shall terminate (provided that all indemnities set forth herein
including, without limitation, in Section 8.1 hereof shall survive such
termination) and the Collateral Agent, at the request and expense of the
respective Assignor, will promptly execute and deliver to such Assignor a proper
instrument or instruments (including Uniform Commercial Code termination
statements on form UCC-3) acknowledging the satisfaction and termination of this
Agreement, and will duly assign, transfer and deliver to such Assignor (without
recourse and without any representation or warranty) such of the Collateral as
may be in the possession of the Collateral Agent and as has not theretofore been
sold or otherwise applied or released pursuant to this Agreement. As used in
this Agreement, "Termination Date" shall mean the date upon which the Total
Revolving Commitment and all Interest Rate Agreements have been terminated, no
Revolving Note or Letter of Credit is outstanding (other than Letters of Credit,
together with all Fees that have accrued and will accrue thereon through the
stated termination date of such Letters of Credit, which have been supported in
a manner satisfactory to the Issuing Lender in its sole and absolute discretion)
and all other Obligations (other than any indemnities described in Section 8.1
hereof
25
and in Section 12.13 of the Credit Agreement which are not then due and payable)
have been indefeasibly paid in full.
(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 9.02 of the Credit Agreement or is otherwise released at the
direction of the Required Secured Creditors and the proceeds of such sale or
sales or from such release are applied in accordance with the provisions of the
Credit Agreement, to the extent required to be so applied, such Collateral will
be sold free and clear of the Liens created by this Agreement and the Collateral
Agent, at the request and expense of such Assignor, will duly release from the
security interest created hereby and assign, transfer and deliver to such
Assignor (without recourse and without any representation or warranty) such of
the Collateral as is then being (or has been) so sold or released and as may be
in the possession of the Collateral Agent and has not theretofore been released
pursuant to this Agreement.
(c) At any time that the respective Assignor desires that Collateral
be released as provided in the foregoing Section 10.8(a) or (b), it shall
deliver to the Collateral Agent a certificate signed by an Authorized Officer
stating that the release of the respective Collateral is permitted pursuant to
Section 10.8(a) or (b) hereof.
10.9. 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
Collateral Agent.
10.10. The Collateral Agent. The Collateral Agent 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 Collateral Agent 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 and as provided in the Uniform
Commercial Code in the State of New York. The Collateral Agent shall act
hereunder on the terms and conditions set forth in Section 11 of the Credit
Agreement.
10.11. Additional Assignors. It is understood and agreed that any
Subsidiary of the Borrower that is required to execute a counterpart of this
Agreement after the date hereof pursuant to the Credit Agreement shall
automatically become an Assignor hereunder by executing a counterpart hereof and
delivering the same to the Collateral Agent.
* * *
26
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly authorized officers as of the date first
above written.
Address:
do MJD Communications, Inc. FAIRPOINT COMMUNICATIONS CORP.,
000 Xxxx Xxxxxxxx Xxxxxx as an Assignor
Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxx
Telephone: (000) 000-0000 Ext. 108 -----------------------------------
Fascimile: (000) 000-0000 Title: Vice President of Finance
Address:
do MJD Communications, Inc. FAIRPOINT COMMUNICATIONS CORP. -
000 Xxxx Xxxxxxxx Xxxxxx XXX XXXX,
Xxxxx 000 as an Assignor
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Telephone: (000) 000-0000 Ext. 108 By: /s/ Xxxxxxx X. Xxxxx
Fascimile: (000) 000-0000 -----------------------------------
Title: Vice President of Finance
Address:
do MJD Communications, Inc. FAIRPOINT COMMUNICATIONS CORP. -
000 Xxxx Xxxxxxxx Xxxxxx XXXXXXXX,
Xxxxx 000 as an Assignor
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Telephone: (000) 000-0000 Ext. 108 By: /s/ Xxxxxxx X. Xxxxx
Fascimile: (000) 000-0000 -----------------------------------
Title: Vice President of Finance
BANK OF AMERICA, N.A.,
as Collateral Agent
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------------
Title: Principal
27
ANNEX A
to
SECURITY
AGREEMENT
SCHEDULE OF CHIEF EXECUTIVE OFFICES
AND OTHER RECORD LOCATIONS
FairPoint Communications Corp.
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
[OTHERS]
ANNEX B
to
SECURITY
AGREEMENT
SCHEDULE OF INVENTORY AND EQUIPMENT LOCATIONS
FairPoint Communications Corp.
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
[OTHERS]
ANNEX C
to
SECURITY
AGREEMENT
TRADE AND FICTITIOUS NAMES
[TO BE PROVIDED BY BORROWER]
ANNEX D
SECURITY INTERESTS IN INTELLECTUAL PROPERTY
ANNEX E
to
SECURITY
AGREEMENT
LIST OF PATENTS AND APPLICATIONS
[TO BE PROVIDED BY BORROWER]
ANNEX F
to
SECURITY
AGREEMENT
LIST OF COPYRIGHTS AND APPLICATIONS
[TO BE PROVIDED BY BORROWER]
ANNEX G
GRANT OF SECURITY INTEREST
IN UNITED STATES TRADEMARKS AND PATENTS
FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of
which are hereby acknowledged, [Name of Grantor], a __________ [corporation]
[limited liability company] ("the Grantor") with principal offices at
________________, hereby grants to Bank of America, N.A., as Collateral Agent,
with principal offices at 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxxxxx, Xxxxx 00000-0000
(the "Grantee"), a security interest in (i) all of the Grantor's right, title
and interest in and to the United States trademarks, trademark registrations and
trademark applications (the "Marks") set forth on Schedule A attached hereto,
(ii) all of the Grantor's rights, title and interest in and to the United States
patents (the "Patents") set forth on Schedule B attached, in each case together
with (iii) all Proceeds (as such term is defined in the Security Agreement
referred to below) and products of the Marks and Patents, (iv) the goodwill of
the businesses with which the Marks are associated and (v) all causes of action
arising prior to or after the date hereof for infringement of any of the Marks
and Patents or unfair competition regarding the same.
THIS AGREEMENT is made to secure the satisfactory performance and
payment of all the Obligations of the Grantor, as such term is defined in the
Amended and Restated Security Agreement among Grantor, the other assignors from
time to time party thereto and the Grantee, dated as of October 20, 1999 and
amended and restated as of March 27, 2000 (as amended from time to time, the
"Security Agreement"). Upon the occurrence of the Termination Date (as defined
in the Security Agreement), the Grantee shall, upon such satisfaction, execute,
acknowledge, and deliver to the Grantor an instrument in writing releasing the
security interest in the Marks and Patents acquired under this Agreement.
ANNEX G
Page 2
This Agreement has been granted in conjunction with the security
interest granted to the Grantee under the Security Agreement. The rights and
remedies of the Grantee with respect to the security interest granted herein are
without prejudice to, and are in addition to those set forth in the Security
Agreement, all terms and provisions of which are incorporated herein by
reference. In the event that any provisions of this Agreement are deemed to
conflict with the Security Agreement, the provisions of the Security Agreement
shall govern.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the _____ day of _________,________.
[NAME OF GRANTOR],
as Grantor
By ___________________________________
Title:
BANK OF AMERICA, N.A.,
as Collateral Agent and Grantee
By ___________________________________
Title:
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
On this ____ day of _____________, ____, before me personally came
__________________ who, being by me duly sworn, did state as follows: that [s]he
is _________________ of [Name of Grantor], that [s]he is authorized to execute
the foregoing Agreement on behalf of said [corporation] [limited liability
company] and that [s]he did so by authority of the [Board of Directors]
[Managing Member] of said [corporation] [limited liability company].
__________________
Notary Public
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
On this _____ day of ______________, ____, before me
personally came ______________________ who, being by me duly sworn, did state as
follows: that [s]he is ___________________ of Bank of America, N.A., that [s]he
is authorized to execute the foregoing Agreement on behalf of said corporation
and that [s]he did so by authority of the Board of Directors of said
corporation.
__________________
Notary Public
SCHEDULE A
XXXX REG. NO. REG. DATE
---- -------- ---------
SCHEDULE B
PATENT PATENT NO. ISSUE DATE
------ ---------- ----------
ANNEX H
GRANT OF SECURITY INTEREST
IN UNITED STATES COPYRIGHTS
WHEREAS, [Name of Grantor], a ________________ [corporation]
[limited liability company] (the "Grantor"), having its chief executive office
at ____________________________________________, _____________________, is the
owner of all right, title and interest in and to the United States copyrights
and associated United States copyright registrations and applications for
registration set forth in Schedule A attached hereto;
WHEREAS, BANK OF AMERICA, N.A., as Collateral Agent, having its
principal offices at 000 Xxxx Xxxxxx, 0xx Xxxxx, Xxxxxx, Xxxxx 00000-0000 (the
"Grantee"), desires to acquire a security interest in said copyrights and
copyright registrations and applications therefor; and
WHEREAS, the Grantor is willing to grant to the Grantee a security
interest in and lien upon the copyrights and copyright registrations and
applications therefor described above;
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, and subject to the terms and conditions of the
Amended and Restated Security Agreement, dated as of October 20, 1999 and
amended and restated as of March 27, 2000, made by the Grantor, the other
assignors from time to time party thereto and the Grantee (as amended from time
to time, the "Security Agreement"), the Grantor hereby grants to the Grantee a
security interest in the copyrights and copyright registrations and applications
therefor set forth in Schedule A attached hereto.
This Agreement has been granted in conjunction with the security
interest granted to the Grantee under the Security Agreement. The rights and
remedies of the Grantee with respect to the security interest granted herein are
without prejudice to, and are in addition to those set forth in the Security
Agreement, all terms and provisions of which are incorporated herein by
reference. In the event that any provisions of this Agreement are deemed to
conflict with the Security Agreement, the provisions of the Security Agreement
shall govern.
ANNEX H
Page 2
Executed at New York, New York, the ___ day of __________, ________.
[NAME OF GRANTOR],
as Grantor
By ___________________________________
Name:
Title:
BANK OF AMERICA, N.A.,
as Collateral Agent and Grantee
By ___________________________________
Name:
Title:
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
On this ___ day of ____________, ____ before me personally came
_______________, who being duly sworn, did depose and say that [s]he is
_____________________ of [Name of Grantor], that [s]he is authorized to execute
the foregoing Agreement on behalf of said [corporation] [limited liability
company] and that [s]he did so by authority of the [Board of Directors]
[Managing Member] of said [corporation] [limited liability company].
____________________________
Notary Public
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
On this ____ day of _____________, _____ , before me personally came
______________________ who, being by me duly sworn, did state as follows: that
[s]he is ____________________ of Bank of America, N.A., that [s]he is authorized
to execute the foregoing Agreement on behalf of said corporation and that [s]he
did so by authority of the Board of Directors of said corporation.
____________________________
Notary Public
SCHEDULE A
U.S. COPYRIGHTS
REGISTRATION PUBLICATION
NUMBERS DATE COPYRIGHT TITLE
------------ ----------- ---------------
TABLE OF CONTENTS
Page
----
ARTICLE I
SECURITY INTERESTS .................................................. 2
1.1. Grant of Security Interests .................................... 2
1.2. Power of Attorney .............................................. 2
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS ................... 3
2.1. Necessary Filings .............................................. 3
2.2. No Liens ....................................................... 3
2.3. Other Financing Statements ..................................... 3
2.4. Chief Executive Office; Records ................................ 3
2.5. Location of Inventory and Equipment ............................ 4
2.6. Recourse ....................................................... 4
2.7. Trade Names; Change of Name .................................... 4
ARTICLE III
SPECIAL PROVISIONS CONCERNING
RECEIVABLES; CONTRACT RIGHTS; INSTRUMENTS ........................... 5
3.1. Additional Representations and Warranties ...................... 5
3.2. Maintenance of Records ......................................... 5
3.3. Direction to Account Debtors; Contracting Parties; etc. ........ 5
3.4. Modification of Terms; etc. .................................... 6
3.5. Collection ..................................................... 6
3.6. Instruments .................................................... 6
3.7. Assignors Remain Liable Under Receivables ...................... 6
3.8. Assignors Remain Liable Under Contracts ........................ 7
3.9. Further Actions ................................................ 7
ARTICLE IV
SPECIAL PROVISIONS CONCERNING TRADEMARKS ............................ 7
4.1. Additional Representations and Warranties ...................... 7
4.2. Licenses and Assignments ....................................... 8
4.3. Infringements .................................................. 8
(i)
Page
----
4.4. Preservation of Marks .......................................... 8
4.5. Maintenance of Registration .................................... 8
4.6. Future Registered Marks ........................................ 9
4.7. Remedies ....................................................... 9
ARTICLE V
SPECIAL PROVISIONS CONCERNING
PATENTS, COPYRIGHTS AND TRADE SECRETS ............................... 9
5.1. Additional Representations and Warranties ...................... 9
5.2. Licenses and Assignments ....................................... 10
5.3. Infringements .................................................. 10
5.4. Maintenance of Patents ......................................... 10
5.5. Prosecution of Patent Application .............................. 11
5.6. Other Patents and Copyrights ................................... 11
5.7. Remedies ....................................................... 11
ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL ................................ 11
6.1. Protection of Collateral Agent's Security ...................... 11
6.2. Warehouse Receipts Non-Negotiable .............................. 12
6.3. Further Actions ................................................ 12
6.4. Financing Statements ........................................... 12
ARTICLE VII
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT ........................ 13
7.1. Remedies; Obtaining the Collateral Upon Default ................ 13
7.2. Remedies; Disposition of the Collateral ........................ 14
7.3. Waiver of Claims ............................................... 15
7.4. Application of Proceeds ........................................ 15
7.5. Remedies Cumulative ............................................ 16
7.6. Discontinuance of Proceedings .................................. 17
ARTICLE VIII
INDEMNITY ........................................................... 17
8.1. Indemnity ...................................................... 17
8.2. Indemnity Obligations Secured by Collateral; Survival .......... 18
ARTICLE IX
DEFINITIONS ......................................................... 18
(ii)
Page
----
ARTICLE X
MISCELLANEOUS ....................................................... 23
10.1. Notices ....................................................... 23
10.2. Waiver; Amendment ............................................. 24
10.3. Obligations Absolute .......................................... 24
10.4. Successors and Assigns ........................................ 24
10.5. Headings Descriptive .......................................... 25
10.6. Governing Law ................................................. 25
10.7. Assignor's Duties ............................................. 25
10.8. Termination; Release .......................................... 25
10.9. Counterparts .................................................. 26
10.10. The Collateral Agent ......................................... 26
10.11. Additional Assignors ......................................... 26
ANNEX A Schedule of Chief Executive Offices and other Record Locations
ANNEX B Schedule of Inventory and Equipment Locations
ANNEX C Schedule of Trade and Fictitious Names
ANNEX D Security Interests in Intellectual Property
ANNEX E List of Patents and Applications
ANNEX F List of Copyrights and Applications
ANNEX G Grant of Security Interest in United States Trademarks and Patents
ANNEX H Grant of Security Interest in United States Copyrights
(iii)
ANNEX A
SCHEDULE OF CHIEF EXECUTIVE OFFICES AND OTHER RECORD
LOCATIONS
1. FairPoint Communications Corp.
0000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
2. FairPoint Communications Corp. -- New York
00 Xxxx Xxxx
Xxxxx 000
Xxxx Xxxxxxxxx, XX 00000
3. FairPoint Communications Corp. -- Virginia
0000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
ANNEX B
SCHEDULE OF INVENTORY AND EQUIPMENT LOCATIONS
1. FairPoint Communications Corp.
FairPoint Communications Corp. -- New York
FairPoint Communications Corp. -- Virginia
0000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
2. FairPoint Communications Corp.
FairPoint Communications Corp.-- New York
00 Xxxx Xxxx
Xxxxx 000
Xxxx Xxxxxxxxx, XX 00000
3. FairPoint Communications Corp.
FairPoint Communications Corp. -- New York
Century Plaza Building
000 X. Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
4. FairPoint Communications Corp.
FairPoint Communications Corp.-- New York
0000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxx, XX 00000
5. FairPoint Communications Corp.
FairPoint Communications Corp.-- New York
0000 Xxxx 00xx Xxxxxx
Xxxx, XX 00000
6. FairPoint Communications Corp.
FairPoint Communications Corp. -- New York
Centre Plaza
Sixth Floor
00 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
7. FairPoint Communications Corp.
FairPoint Communications Corp. -- New York
Cornwall Plaza
0000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
8. FairPoint Communications Corp.
FairPoint Communications Corp. -- New York
000 Xxxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
9. FairPoint Communications Corp.
FairPoint Communications Corp. -- New York
Cayuga Professional Center
0000 Xxxxxxxxxxx Xxxx
Xxxxxx, XX 00000
10. FairPoint Communications Corp.
FairPoint Communications Corp.-- New York
00 Xxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
11. FairPoint Communications Corp.
FairPoint Communications Corp.-- New York
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
12. FairPoint Communications Corp.
FairPoint Communications Corp.-- New York
000 Xxxxxxxx Xxxx Xxxx.
Xxxxxxx, XX 00000
13. FairPoint Communications Corp.
FairPoint Communications Corp.-- New York
00 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
14. FairPoint Communications Corp.
FairPoint Communications Corp.-- New York
0000 Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
15. FairPoint Communications Corp.
FairPoint Communications Corp.-- New York
000 Xxxxx Xxxxxx
Xxxx, XX 00000
16. FairPoint Communications Corp.
FairPoint Communications Corp.-- New York
0000 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
ANNEX C
SCHEDULE OF TRADE AND FICTITIOUS NAMES
1. MJD TeleChoice Corp.
2. FairPoint Communications Corp.
3. FairPoint Communications Corp. -- New York
4. FairPoint Communications Corp. -- Virginia
ANNEX D
SECURITY INTERESTS IN INTELLECTUAL PROPERTY
1. Service Xxxx Application Pending
Application filed by FairPoint Communications Corp. on November 19, 1998
under Registration Number 75/596115 for service xxxx of Corporation's
name.
2. Service Xxxx Application Pending
Application filed by FairPoint Communications Corp. on November 19, 1998
under Registration Number 75/658581 for service xxxx of Corporation's
logo: "Power of Choice."
3. Service Xxxx Application Pending
Application filed by FairPoint Communications Corp. on November 19, 1998
under Registration Number 75/596114 for the service xxxx "FairPoint
Communications and Design."
ANNEX E
LIST OF PATENTS AND APPLICATIONS
None.
ANNEX F
LIST OF COPYRIGHTS AND APPLICATIONS
None.
Exhibit J
FORM OF OFFICER'S SOLVENCY CERTIFICATE
To the Administrative Agent, Co-Arrangers and
each of the Lenders party to the Amended and Restated
Credit Agreement referred to below:
I, the undersigned, the Chief Financial Officer of FairPoint
Communications Corp., a Delaware corporation (the "Borrower"), do hereby certify
that:
1. This Certificate is furnished to the Lenders pursuant to Section
6.01(k) of the Amended and Restated Credit Agreement, dated as of October 20,
1999 and amended and restated as of March 27, 2000, among the Borrower, the
lenders from time to time party thereto (the "Lenders") Banc of America
Securities LLC, as Co-Arranger, Deutsche Bank Securities Inc., as Co-Arranger,
First Union Securities, Inc., as Co-Arranger, CoBank, ACB, as Co-Arranger (each
a "Co-Arranger" and together the "Co-Arrangers") and Bank of America, N.A., as
Administrative Agent. Unless otherwise defined herein, capitalized terms used in
this Certificate shall have the meanings set forth in the Amended and Restated
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.
(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
Exhibit J
Page 2
the Borrower of the Total Revolving Commitment under the
Amended and Restated Credit Agreement).
(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 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 New Financing 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
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 all Indebtedness
(including the Revolving 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.
Exhibit J
Page 3
(a) I have reviewed the financial statements referred to in
Section 7.10(b) of the Amended and Restated Credit Agreement.
(b) I and/or certain Designated Officers have made inquiries of
certain officers of the Borrower and its Subsidiaries who have
responsibility for financial and accounting matters regarding
the existence and amount of Identified Contingent Liabilities
associated with the Borrower and its Subsidiaries.
(c) I have knowledge of and have reviewed to my satisfaction the
Credit 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 who have responsibility for legal,
financial and accounting matters as to the existence and
estimated liability with respect to all contingent
liabilities associated with each of the Borrower and its
Subsidiaries;
2. confirmed with officers of each of the Borrower and its
Subsidiaries 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 (exclusive of such Identified Contingent
Liabilities to the extent reflected in Stated
Liabilities) have been considered after giving effect to
the New Financing 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.
Exhibit J
Page 4
(f) I and/or Desiganted Officers have made inquiries of certain
officers of each of the Borrower and its Subsidiaries 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 New
Financing, to (i) have assets with a Fair Value or Present
Fair Salable 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 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 J
Page 5
IN WITNESS WHEREOF, I have hereto set my hand this ___ day of
________, 2000.
FAIRPOINT COMMUNICATIONS CORP.
___________________________
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 Amended and Restated 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:
BANK OF AMERICA, N.A.,
as Administrative Agent
on behalf of the Lenders
___________________________
Name:
Title:
[CONFORMED AS EXECUTED]
EXHIBIT K
AMENDED AND RESTATED PREFERRED STOCK ISSUANCE
AND CAPITAL CONTRIBUTION AGREEMENT
AMENDED AND RESTATED PREFERRED STOCK ISSUANCE AND CAPITAL
CONTRIBUTION AGREEMENT (this "Agreement"), dated as of October 20, 1999 and
amended and restated as of March 27, 2000, among MJD Communications, Inc., a
Delaware corporation ("MJD") and Bank of America, N.A., as Administrative Agent
(the "Administrative Agent") for (and as representative on behalf of) the
Lenders (as defined below).
W I T N E S S E T H:
WHEREAS, MJD desires that the Lenders and the Administrative Agent
enter into an Amended and Restated Credit Agreement dated as of October 20, 1999
and amended and restated as of March 27, 2000 (as amended, restated,
supplemented or modified from time to time in accordance with the terms thereof,
the "Credit Agreement") among FairPoint Communications Corp. (the "Borrower"),
the lenders named therein (together with their respective successors and
assigns, the "Lenders"), Banc of America Securities LLC, as Co-Arranger,
Deutsche Bank Securities Inc., as Co-Arranger, First Union Securities, Inc., as
Co-Arranger, CoBank, ACB, as Co-Arranger (each a "Co-Arranger" and together, the
"Co-Arrangers") and the Administrative Agent;
WHEREAS, upon certain Events of Default in the Credit Agreement, but
subject to certain conditions, MJD shall have the obligation to issue preferred
stock to the Lenders, subject to certain cure rights as provided below; and
WHEREAS, the execution and delivery of this Agreement is a condition
precedent to the Lenders' obligation to make Revolving Loans (as defined in the
Credit Agreement).
NOW, THEREFORE, IT IS AGREED:
SECTION 1. DEFINED TERMS
1.1 Defined Terms. All capitalized terms used herein and not
otherwise defined herein shall have the respective meanings ascribed to such
terms in the Credit Agreement. For purposes of this Agreement, the following
terms shall have the meanings herein specified unless the context requires
otherwise. Defined terms in this Agreement shall include in the singular number
the plural and in the plural the singular.
"Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"Administrative Agent" shall have the meaning provided in the first
paragraph of this Agreement.
"Agent's Notice" shall have the meaning provided in Section 2.2.
"Agreement" shall mean this Preferred Stock Issuance and Capital
Contribution Agreement, as the same may be from time to time further modified,
amended, amended and restated and/or supplemented.
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Capital Contribution Amount" shall have the meaning provided in
Section 2.1(c).
"Closing Date" shall have the meaning provided in Section 3.2.
"Commission" shall mean, at any time, the Securities and Exchange
Commission or any other federal agency then administering the Act and other
Federal securities laws.
"Consolidated Capital Expenditures Covenant" shall have the meaning
provided in Section 2.1(c).
"Consolidated Capital Expenditures Default" shall have the meaning
provided in Section 2.1(c).
"Consolidated Debt Covenant" shall have the meaning provided in
Section 2.1(c).
"Consolidated Debt Default" shall have the meaning provided in
Section 2.1(c).
"Consolidated Senior Debt Covenant" shall have the meaning provided
in Section 2.1(c).
"Consolidated Senior Debt Default" shall have the meaning provided
in Section 2.1(c).
"Credit Agreement" shall have the meaning provided in the recitals
to this Agreement.
"Damages" shall have the meaning provided in Section 3.7.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"Lenders" shall have the meaning provided in the recitals to this
Agreement.
"MJD" shall have the meaning provided in the first paragraph of this
Agreement.
"MJD Investment" shall have the meaning provided in Section 2.1(a).
2
"MJD Preferred Stock Conversion" shall have the meaning provided in
Section 3.1.
"Notice Date" shall have the meaning provided in Section 2.1(a).
"Purchasers" shall have the meaning provided in Section 3.1.
"Senior Subordinated Notes" shall mean the Senior Subordinated Notes
of MJD due 2008.
"Specified Event of Default" shall have the meaning provided in
Section 2.1(c).
SECTION 2.
2.1 Preferred Stock Conversion: MJD Investment; . (a) Subject to
Section 2.1(b) hereof, if a Specified Event of Default exists, as evidenced in
the Officers' Certificate required pursuant to Section 8.01(e) of the Credit
Agreement, MJD shall provide notice to the Lenders that such Lenders may
exercise an MJD Preferred Stock Conversion pursuant to Section 5.02(d) of the
Credit Agreement and this Agreement; provided that MJD shall have the option, at
its sole discretion, to purchase for cash (each, an "MJD Investment"), not later
than the thirtieth Business Day after the date such Officers' 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 (or, at MJD's option, increase its equity account in the Borrower in
lieu of receiving additional shares) for an aggregate cash purchase price equal
to the Capital Contribution Amount in order to cure such Specified Event of
Default (subject to the limitation on the right to cure set forth in the final
paragraph of Section 10 of the Credit Agreement). If MJD makes an MJD
Investment, the Lenders shall not have the right to exercise an MJD Preferred
Stock Conversion in respect of such Specified Event of Default. MJD shall not
have any obligation under this Agreement to make or cause to be made any
investment in the Borrower.
(b) Notwithstanding any provision herein to the contrary, MJD (i)
shall not make any MJD Investment pursuant to Section 2.1(a) of this Agreement
in an amount that is greater than (A) the amount, if any, permitted to be
contributed by MJD pursuant to the MJD Credit Agreement and (B) the amount, if
any, permitted to be contributed by MJD pursuant to the indenture governing the
Senior Subordinated Notes on the Effective Date. MJD agrees that it shall not
(i) enter into any amendment, modification or supplement to the MJD Credit
Agreement or the Senior Subordinated Notes to the extent that the direct or
intended effect of such amendment, modification or supplement is to prohibit or
limit MJD's ability to make any MJD Investment and (ii) enter into any agreement
which would prohibit MJD from making any MJD Investment.
(c) As used herein, (A) a "Specified Event of Default" means the
failure of the Borrower to comply with (i) the Consolidated Capital Expenditures
covenant (the "Consolidated Capital Expenditures Covenant") contained in Section
9.05 of the Credit Agreement (the "Consolidated Capital Expenditures Default"),
(ii) the Consolidated Senior Debt to
3
Capitalization covenant (the "Consolidated Senior Debt Covenant") contained in
Section 9.13 of the Credit Agreement (the "Consolidated Senior Debt Default") or
(iii) the Consolidated Debt to Capitalization covenant (the "Consolidated Debt
Covenant") contained in Section 9.14 of the Credit Agreement (the "Consolidated
Debt Default"), in each case as such covenant (and the definitions used therein)
are in effect from time to time; and (B) the "Capital Contribution Amount" shall
mean (i) in the case of the Consolidated Capital Expenditure Default, an amount
equal to the Consolidated Capital Expenditures made by the Borrower and its
Subsidiaries in excess of the amount permitted by the Consolidated Capital
Expenditures Covenant and (ii) in the case of the Consolidated Senior Debt
Default or the Consolidated Debt Default, as the case may be, the amount which,
when applied to increase the cash of the Borrower in connection with the
calculation of the Consolidated Senior Debt Covenant or the Consolidated Debt
Covenant, as the case may be, will cause the Borrower to have been in compliance
with such covenant during the testing period for which the Borrower failed to be
in compliance.
2.2. Agent's Notice. If for any reason the Borrower shall fail to
deliver the Conversion/Contribution Certificate (as defined in the Credit
Agreement) to MJD as required pursuant to Section 5.02(e) of the Credit
Agreement, the Administrative Agent shall have the right to deliver any such
notice or certificate (an "Agent's Notice") which, if applicable, shall demand
that MJD provide the option to make the MJD Preferred Stock Conversion (subject
to the right to make an MJD Investment as described herein), in each case in
accordance herewith.
SECTION 3. PURCHASE OF PREFERRED STOCK.
3.1 Issuance of Preferred Stock. Subject to the terms and conditions
hereinafter set forth, and in accordance with Section 5.02(d) of the Credit
Agreement, each Lender (each a "Purchaser," and collectively, the "Purchasers")
shall have the option to convert all or a portion of such Lender's outstanding
Revolving Loans (and accrued and unpaid interest and Fees thereon) into MJD
Preferred Stock (each such conversion, an "MJD Preferred Stock Conversion").
3.2 Time and Place of the Closing. Each MJD Preferred Stock
Conversion shall take place on a closing date (each a "Closing Date") at such
place and time that the prospective Purchaser and MJD shall mutually agreed
upon, which, in any event, shall be no later than the date which is 10 Business
Days after the respective Purchaser has given MJD notice of its exercise of its
option to effect an MJD Preferred Stock Conversion.
3.3 Representations and Warranties of MJD. In order to induce the
Purchasers to purchase the MID Preferred Stock, MJD represents and warrants to
each Purchaser that:
(a) Authority, Binding Effect. MJD has full power and authority to
enter into each MJD Preferred Stock Conversion and to incur and perform the
obligations in connection therewith, all of which have been duly authorized by
all necessary corporate action. Each MJD Preferred Stock Conversion will not
violate any provision of any applicable law known to be applicable to it or the
Articles of Incorporation or the By-Laws of MJD or any material agreement or
instrument by which it is bound, and will not result in the creation of any
material encumbrance or charge upon any of its assets. Each MJD Preferred Stock
Conversion will
4
constitute a valid and legally binding obligation of MJD, enforceable against
MJD in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and similar laws and judicial
decisions of general applicability relating to or affecting creditors rights and
to general principles of equity.
(b) Good Standing. MJD is a corporation duly organized, validly
existing and in good standing under the laws of Delaware.
(c) Shares Fully Paid, Non-Assessable. The MJD Preferred Stock, when
issued and delivered, will be validly issued, fully paid and non-assessable.
(d) No Proceedings. There is no action, proceeding or investigation
pending or, to the knowledge of MJD, threatened in writing, nor is there any
basis, to its knowledge, for any action, proceeding or investigation, against it
or any of its properties or assets which could reasonably be expected to have a
material adverse effect on the business operations, financial condition or
results of operations of MJD as a whole, or the ability of MJD to perform its
obligations in connection with the MJD Preferred Stock Conversion.
(e) Broker's or Finder's Fees. No agent, broker, person or firm
acting on behalf of MJD is, or will be, entitled to any commission or broker's
or finder's fees from MJD, or from any person controlling, controlled by or
under common control with MJD, in connection with the MJD Preferred Stock
Conversion.
3.4 Representations and Warranties of Purchaser. In order to induce
MJD to issue the MJD Preferred Stock, each Purchaser (as to itself only)
represents and warrants to MJD that:
(a) Purchase for Investment. Each Purchaser will acquire MJD
Preferred Stock for its own account for investment and not with a view toward
any resale or distribution thereof.
(b) Securities Laws. Each Purchaser understands that MJD Preferred
Stock has not been registered under the Act or under any state securities laws
and may not be sold or transferred unless it is subsequently registered under
the Act and any applicable state or other securities laws, or unless exemptions
from registration under such laws are available.
(c) Knowledge. Each Purchaser represents that it is experienced in
investment matters, fully understands the transactions contemplated by an MJD
Preferred Stock Conversion, has the knowledge and experience in financial
matters as to be capable of evaluating the merits and risks of its investment
and has the financial ability and resources to bear the economic risks of its
investment.
(d) Accredited Investor. Each Purchaser is an "accredited investor"
as defined in Rule 501(a) under the Act.
5
(e) Broker's or Finder's Fees. No agent, broker, person or firm
acting on behalf of any Purchaser is, or will be, entitled to any commission or
broker's or finder's fees from such Purchaser, or from anyone controlling,
controlled by or under common control with such Purchaser, in connection with an
MJD Preferred Stock Conversion.
3.5 Conditions to the Obligations of each Purchaser. The obligation
of each Purchaser to purchase MJD Preferred Stock pursuant to an MJD Preferred
Stock Conversion is subject to the satisfaction of, or the waiver by each
Purchaser of, the following conditions at or prior to the respective Closing
Date for such MJD Preferred Stock Conversion:
(a) Representations and Warranties. The representations and
warranties of MJD contained in Section 3.3 hereof shall be true and correct in
all material respects on and as of the respective Closing Date for such MJD
Preferred Stock Conversion.
(b) Agreements, Conditions and Covenants. MJD shall have performed
or complied in all material respects with all agreements, conditions and
covenants required in connection with the respective MJD Preferred Stock
Conversion to be performed or complied with by it on or before the respective
Closing Date for such MJD Preferred Stock Conversion.
(c) Share Certificate. Such Purchaser shall have received on the
respective Closing Date certificates evidencing the MJD Preferred Stock, duly
completed and executed by MJD in the name of such Purchaser and, if required,
with the requisite share transfer tax stamps duly affixed.
(d) Articles and Bylaws of MJD. Such Purchaser shall have received
copies of the Articles of Incorporation and Bylaws of MJD as they exist on the
respective Closing Date.
(e) Opinions of Counsel. MJD shall have furnished the Purchaser on
the date on which the first share of MJD Preferred Stock is originally issued an
opinion of counsel, dated the Closing Date for such MJD Preferred Stock
Conversion, in form and substance reasonably satisfactory to such Purchaser.
(f) No Litigation Threatened. No action or proceedings shall have
been instituted or, threatened before a court or other government body or by any
public authority to restrain or prohibit the MJD Preferred Stock Conversion to
occur on such Closing Date.
(g) Certificate of Designation. MJD shall deliver to such Purchaser
evidence that the Certificate of Designation of MJD shall have been duly filed
with the Secretary of State of Delaware and shall be in full force and effect.
3.6 Conditions to the Obligations of MJD. The obligation of MJD to
issue and sell the MJD Preferred Stock on any Closing Date is subject to the
satisfaction of, or the waiver by MJD of, the following conditions at or prior
to such Closing Date:
6
(a) Representations and Warranties. The representations and
warranties of the respective Purchaser contained in Section 3.4 hereof shall be
true and correct in all material respects on and as of the respective Closing
Date for such MJD Preferred Stock Conversion.
(b) Agreements, Conditions and Covenants. Such Purchaser shall have
performed or complied in all material respects with all agreements, conditions
and covenants in connection with the MJD Preferred Stock Conversion to occur on
such Closing Date to be performed or complied with by it on or before such
Closing Date.
(c) No Litigation Threatened. No action or proceedings shall have
been instituted or, threatened before a court or other government body or by any
public authority to restrain or prohibit the MJD Preferred Stock Conversion to
occur on such Closing Date.
(d) The Trigger Event. A Trigger Event shall have occurred and any
Lender exercising its Conversion Option shall have provided MJD ten Business
Days' notice requesting such Conversion.
3.7 Indemnification. MJD agrees to indemnify and hold each Purchaser
and its officers, directors, employees, affiliates and agents, and any
successors thereto (and any officers, directors, employees, affiliates and
agents of such successors) harmless from any liability, damage, deficiency,
demand, claim, suit, action, or cause of action, fine, penalty, loss, cost,
expense, including without limitation, reasonable attorney fees (collectively,
"Damages") incurred or suffered as a result of or in connection with the
enforcement of MJD's obligations with respect to any of the terms, conditions or
agreements to be performed (or required to be performed) by it pursuant to the
terms of this Agreement, including without limitation, any Damages incurred or
suffered as a result of, or in connection with, or arising out of, the failure
of any representation or warranty made by MJD in connection with an MJD
Preferred Stock Conversion. The foregoing shall be in addition to, and in no way
limit or impair the rights of any Lender to enforce MJD's obligations hereunder
or seek damages or equitable relief in connection with any failure or assessed
failure of MJD to perform its obligations hereunder. Notwithstanding anything in
this Agreement, in no event shall MJD be obligated under this Agreement to
indemnify any Lender for such Lender's failure to comply with Regulation Y.
3.8 Rule 144A. Except at such times that MJD is a reporting company
under Section 13 or 15(d) of the Exchange Act, MJD shall, upon the written
request of any holder of MJD Preferred Stock, provide, subject to customary
confidentiality arrangements, to any such holder and to any prospective
institutional transferee of MJD Preferred Stock designated by such holder, such
financial and other information as is available to MJD or can be obtained by MJD
and as such holder may reasonably determine is required to permit a transfer of
such MJD Preferred Stock to comply with the requirements of Rule 144A
promulgated under the Act.
3.9 Common Stock MJD will not issue to the holders of common stock
of MJD on or after the Effective Date (as defined in the Credit Agreement) (i)
any class of common stock or any debt securities which (in either case) are
convertible into any class of preferred stock of MJD at any time and (ii) any
class of preferred stock other than preferred stock for fair market value.
7
SECTION 4. MISCELLANEOUS.
4.1 Representations and Warranties. In order to induce the Lenders
to enter into the Credit Agreement and to make the Revolving Loans provided for
therein, MJD represents and warrants to the Administrative Agent and the Lenders
as follows:
(i) it is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation 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 corporate power, authority and legal right to
execute, deliver and perform each of its obligations under this Agreement
and has taken all necessary corporate actions to authorize the execution,
delivery and performance of each of its obligations under this Agreement
and this Agreement constitutes the legal, valid and binding obligation of
MJD, enforceable against MJD in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance or similar laws relating to or effecting creditors' rights
generally or by equitable principles relating to enforceability.
4.2 No Guarantee of Indebtedness. Neither this Agreement, nor
anything herein contained, nor any obligation performed or to be performed
pursuant hereto by MJD shall be construed or deemed to constitute, a direct or
indirect guarantee by MJD 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 Revolving Loans.
4.3 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 MJD, at 000 Xxxx Xxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, XX 00000,
Attention: Xxxxxx X. Xxxxx, Xx. (with a copy to Paul, Hastings, Xxxxxxxx &
Xxxxxx LLP, Tower 42, 00 Xxx Xxxxx Xxxxxx, Xxxxxx, Xxxxxxx XX0X 0XX, Attention:
Xxxx X. Xxxxx); 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 4.3. 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, 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.
4.4 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 MJD 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
8
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 MJD in any case shall entitle MJD to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of any of the Lenders or the Administrative
Agent to any other or further action in any circumstances without notice or
demand.
4.5 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.
4.6 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.
4.7 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 MJD and the Administrative Agent (with the
consent of the Required Lenders). Any waiver or consent shall be effective only
in the specific instance or for the specific purpose for which it was given.
4.8 Governing Law and Jurisdiction. This Agreement, and the rights
and obligations of the parties hereunder, shall be construed in accordance with
and governed by the law of the State of New York. Any legal action or proceeding
with respect to this Agreement may be brought in the courts of the State of New
York or of the United States for the Southern District of New York and, by
execution and delivery of this Agreement, irrevocably accepts for itself and in
respect of its property, unconditionally, the jurisdiction of the aforesaid
courts with respect to any such action or proceeding.
4.9 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 MJD and the successors and assigns thereof, and shall inure
to the benefit of the Administrative Agent and 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. MJD
acknowledges and agrees that this Agreement is made for the benefit of the
Administrative Agent and the Lenders and that the Administrative Agent and/or
the Lenders may enforce all of the obligations of MJD hereunder directly against
MJD. MJD may not assign any of its rights or obligations hereunder without the
consent of the Required Lenders. Prior to any MJD Preferred Stock Conversion by
a Lender, this Agreement and the rights of such Lender hereunder shall only be
assignable by such Lender, to an assignee of such Lender under the Credit
Agreement.
4.10 Survival. All agreements, representations and warranties made
herein shall survive the execution and delivery of this Agreement and the making
of the Revolving Loans.
9
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/ Xxxxxxx X. Xxxxx
--------------------------------
Title: Vice President of Finance
BANK OF AMERICA, N.A.,
as Administrative Agent
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------
Title: Principal
10
Exhibit L
Execution Copy
AMENDED AND RESTATED TAX SHARING AGREEMENT
THIS AMENDED AND RESTATED TAX SHARING AGREEMENT (the "Agreement"), dated
as of October 20, 1999, and amended and restated as of March 27, 2000, is by and
among MJD Communications, Inc., a Delaware corporation ("MJD"), and their
Subsidiaries, whether presently existing or here after acquired (see Attachment
1 for Subsidiaries existing as of this date), as are or shall be part of the
"Affiliated Group" as hereinafter defined (hereinafter referred to individually
as "Subsidiary" and collectively as "Subsidiaries").
W I T N E S S E T H:
WHEREAS, MJD and Subsidiaries are members of an affiliated group ("Group")
as defined in I.R.C. Section 1504(a); and
WHEREAS, MJD and the Subsidiaries will file consolidated Federal income
Tax returns ("Federal Consolidated Returns") and, at MJD's option, may (or, if
otherwise required by law, will) file consolidated, combined and/or unitary Tax
returns for state, local and/or foreign Tax purposes ("Other Consolidated
Returns," and, collectively with Federal Consolidated Returns, "Consolidated
Returns"); and
WHEREAS, it is the intent and desire of the parties hereto that a method
be established for allocating the Group's Tax liability among its members; for
reimbursing MJD and/or other members for the payment of any such Tax liability;
and for reimbursing members for the use of any Tax Attribute (as hereinafter
defined) that reduces the Group's Tax liability otherwise payable.
NOW, THEREFORE, in consideration of the promises, covenants and agreements
contained herein, the parties hereto agree as follows:
1. Definitions.
2. "Tax" means any form of taxation, wherever created or imposed, and whenever
imposed by a national, municipal, governmental, state, federal, foreign, or
other body (a "Taxing Authority"), and without limiting the generality of the
foregoing, shall include any net income, alternative or add-on minimum tax,
gross income, sales, use, ad valorem, gross receipts, value added, franchise,
profits, license, transfer, recording, withholding, payroll, employment, excise,
severance, stamp, occupation, premium, property, windfall profit, custom duty,
or other tax, government fee or other like assessment or charge of any kind
whatsoever, together with any related interest, penalties, or other additions to
tax, or additional amount imposed by any such Taxing Authority.
3. "Tax Attribute" means any net operating loss, net capital loss, excess
charitable contribution, foreign Tax credit, investment Tax credit or other
similar item.
4. Filing of Consolidated Returns. MJD will file, and the Subsidiaries agree to
join in the filing of, a Federal Consolidated Return for any taxable year (or
portion thereof) for which such corporations are permitted or required to file a
Federal Consolidated Return. In addition, each of the Subsidiaries agrees, at
MJD's direction, to join in any Other Consolidated Return for any taxable year
(or portion thereof) for which such corporations are permitted or required to
file a Consolidated Return.
5. Cooperation on Consolidated Return Matters. The Subsidiaries hereby designate
MJD (or MJD's designee) as their agent for the purpose of taking any and all
action necessary or incidental to the filing of Consolidated Returns. The
Subsidiaries agree to furnish MJD with any and all information (including,
without limitation, the Subsidiaries'
2
pro-forma consolidated Tax returns with supporting separate company pro-forma
Tax returns) in the manner and format requested by MJD in order to carry out the
provisions of this Agreement; to cooperate with MJD in any Tax return or consent
contemplated by this Agreement; to take such action with respect to such returns
as MJD may request, including, without limitation, the filing of all elections
and the filing of all requests for the extension of time within which to file
Tax returns; to cooperate in connection with any audit or refund claim; and to
undertake all of the foregoing obligations on a timely basis as requested by
MJD.
6. Apportionment of Taxes. For each taxable period (or portion thereof) for
which a Federal Consolidated Return is filed pursuant to this Agreement, each
Subsidiary shall be apportioned an amount equal to the lesser of(a) the federal
income taxes that the Subsidiary would be required to pay with respect to such
taxable year if the Subsidiary had filed a separate federal income tax return
for the current year and all prior taxable years (collectively, the "Separate
Federal Income Tax Liability"), and (b) the amount determined under Treasury
Regulations ss. 1.1552-l(a)(1) in accordance with the ratio which that portion
of the consolidated taxable income attributable to each member of the Group
having taxable income bears to the total consolidated taxable income.
7. Payment of Taxes. For each taxable period (or portion thereof) for which a
Federal Consolidated Return is filed pursuant to this Agreement, MJD shall
prepare or cause to be prepared the Federal Consolidated Return of the Group and
shall pay all Taxes (including any penalties, fines, interest or other additions
thereto) reported on such Federal Consolidated Return to the relevant Taxing
Authority. At least thirty (30) business days after the due date of any payment
MJD is required to make to any Taxing Authority of any Taxes due with respect to
a Federal Consolidated Return of the Group (including, without limitation,
estimated Tax payments, extension Tax payments,
3
deposits and Tax payments due with a Consolidated Return), each Subsidiary that
is included in such Federal Consolidated Return shall pay to MJD an amount equal
to its share of the consolidated federal income Tax liability of the Group as
determined under clause (a) or (b) of Section 6 as the case may be of this
Agreement.
8. Tax Benefit. For each taxable period (or portion thereof) for which a Federal
Consolidated Return is filed pursuant to this Agreement, MJD shall elect in the
manner specified in Treasury Regulations ss. 1.1502-33(d)(5) that the method
described in Treasury Regulations ss. 1.1502-33(d)(3) be applied to the Group
with respect to additional allocations of income Tax liability. Pursuant to
Treasury Regulations ss.1.1502-33(d)(3), an additional liability will be
allocated to each member of the Group that, as a result of any Tax Attribute
arising from or generated by the activities of another member with respect to a
taxable period (or portion thereof) for which a Federal Consolidated Return was
filed, has an allocated Tax liability as determined under Section 6 of this
Agreement that is less than its Separate Federal Income Tax Liability. The
additional Tax liability allocated to such member shall be equal to 100 percent
of the excess, if any, of (i) the Separate Federal Income Tax Liability of such
member for the taxable year, over (ii) the allocated Tax liability as determined
under Section 6 above. The total of any additional amounts determined in this
Section 8 shall be paid to MJD and MJD shall immediately remit any payments that
it receives to the member that generated such Tax Attribute to which such total
is attributable or retain such amounts to which it is entitled based on its
Separate Federal Income Tax Liability. Any such payment shall be made pursuant
to a consistent method which reasonably reflects such items and which is
substantiated by specific records maintained by the Group for such purposes.
9. Alternative Minimum Tax. MJD and Subsidiaries agree that, in any taxable year
in which any consolidated alternative minimum tax liability (AMT) is imposed on
4
the Group by Section 55 of the Internal Revenue Code of 1986, as amended, MJD
will pay the AMT and not be reimbursed by the Subsidiaries for their
proportionate share.
10. Alternative Minimum Tax Credit. MJD and Subsidiaries agree that in any
taxable year in which the Group reduces its consolidated regular federal income
tax liability by the minimum tax credit provided under Section 53 of the
Internal Revenue Code of 1986, as amended, MJD will be entitled to retain all
the reduction of the regular tax liability and will not reimburse the
Subsidiaries for their proportionate share.
11. Subsequent Adjustments. If for any taxable period (or portion thereof) for
which a Federal Consolidated Return is filed pursuant to this Agreement, the
Federal income Tax liability of the Group as reported on such Federal
Consolidated Return is adjusted, including, without limitation, by means of an
amended Tax return, a claim for refund, notification of audit changes, or an
audit by the relevant Taxing Authority, then the liabilities of MJD and each
Subsidiary that is included in such Federal Consolidated Return shall be
recomputed under the relevant sections of this Agreement to give effect to those
adjustments as if such adjustments had been part of the original determination
of the Group's consolidated Federal income Tax liability. In the case of a
refund, MJD shall make payment to each such Subsidiary of its share of the
refund within thirty (30) business days after the refund is received by MJD and,
in the case of an increase in Tax liability, each such Subsidiary shall pay to
MJD its allocable share of such increased Tax liability at least thirty (30)
business days after the date on which MJD pays such liability to the relevant
Taxing Authority. If any interest is to be paid or received as a result of any
Tax deficiency or refund, that interest shall be allocated to MJD and each
Subsidiary that is included in such Federal Consolidated Return in the ratio
that each such member's positive change in income Tax liability bears to the
total change in the income Tax liability of the Group. If any penalty is to be
paid or received as a result of any Tax
5
deficiency or refund, that penalty shall be allocated to the member whose income
resulted in the imposition of such penalty.
12. Election for Computing Earnings and Profits. For each taxable period (or
portion thereof) for which a Federal Consolidated Return is filed pursuant to
this Agreement, MJD shall elect (if necessary) in the manner specified in
Treasury Regulations ss. 1.1552-1(c) that the Group's consolidated Federal
income Tax liability be apportioned for purposes of computing earnings and
profits in accordance with the method provided in Section 1552(a)(1) of the
Internal Revenue Code of 1986, as amended, and Treasury Regulations ss.
1.1552-1(a)(l).
13. Other Tax Items. This Agreement shall not apply with respect to the
carryback of any Tax Attribute generated by a party and attributable to a
taxable period beginning after the date hereof in which such party is not a
member of the relevant Group.
14. Other Consolidated Returns. The Subsidiaries agree, at the request of MJD,
to join with MJD (or any direct or indirect subsidiary of MJD (if relevant)) in
any Other Consolidated Return for any taxable period (or portion thereof) for
which MJD (or any direct or indirect subsidiary of MJD (if any)) elects to file
an Other Consolidated Return that includes such Subsidiaries. If at any time
subsequent to the date hereof, the liability for any state, local or foreign
income, franchise or other Tax of MJD, the Subsidiaries and/or any other
affiliated corporation (if any) is determined on a unitary, consolidated, group
or combined basis (or any member becomes responsible for the payment of any such
Tax), this Agreement shall be applied to such state, local or foreign income,
franchise or other Tax in like manner as it is applied to matters relating to
Federal income Taxes, after taking into consideration the extent to which each
party has been included in an Other Consolidated Return that relates to those
Taxes and other relevant issues.
6
15. Disputes. Any dispute concerning the interpretation of a Section or an
amount of payment due under this Agreement shall be resolved by MJD in its
reasonable discretion.
16. Successors. A party's rights and obligations under this Agreement may not be
assigned without the prior written consent of the other parties to this
Agreement. This Agreement shall be binding upon and inure to the benefit of any
successor to any party hereto.
17. Additional Subsidiaries. It is understood and agreed that any subsidiary of
MJD that is created after the date hereof shall automatically become a
Subsidiary hereunder by executing a counterpart hereof and delivering the same
to MJD.
18. Exclusive Agreement. This Agreement embodies the entire understanding among
the parties as to the subject matter hereof, and no change or modification may
be made except in writing by each of the parties.
19. Waivers. The waiver of a breach of any term or condition of this Agreement
shall not be deemed to constitute the waiver of any other breach of the same or
any other term or condition.
20. Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original and all of which together shall constitute one and
the same instrument.
21. Choice of Law; Amendments; Headings; Jurisdiction. This Agreement shall be
governed by the internal laws of the State of North Carolina. This Agreement may
not be amended or modified orally. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
7
22. Severability. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Agreement in any other jurisdiction. If any provision of this Agreement is
so broad as to be unenforceable, the provision shall be interpreted to be only
so broad as is enforceable.
8
Attachment 1
IN WITNESS WHEREOF, the undersigned have executed this Tax Sharing
Agreement as of the date first written above.
MJD COMMUNICATIONS, INC.
By:_______________________________________
Name:
Title:
ST ENTERPRISES, INC.
By:_______________________________________
Name:
Title:
SUNFLOWER TELEPHONE COMPANY, INC.
By:_______________________________________
Name:
Title:
NORTHLAND TELEPHONE COMPANY OF VERMONT
By:_______________________________________
Name:
Title:
9
Attachment 1 - continued
NORTHLAND TELEPHONE COMPANY OF MAINE, INC.
By:_______________________________________
Name:
Title:
ST COMMUNICATIONS, INC.
By:_______________________________________
Name:
Title:
ST COMPUTER RESOURCES
By:_______________________________________
Name:
Title:
ST LONG DISTANCE, INC.
By:_______________________________________
Name:
Title:
10
Attachment 1 - continued
ST BROADCASTING
By:_______________________________________
Name:
Title:
MJD VENTURES, INC.
By:_______________________________________
Name:
Title:
XXXXXX TELEPHONE COMPANY
By:_______________________________________
Name:
Title:
C-R COMMUNICATIONS, INC. AND SUBSIDIARIES
By:_______________________________________
Name:
Title:
11
Attachment 1 - continued
TACONIC TELEPHONE CORP. AND SUBSIDIARIES
By:_______________________________________
Name:
Title:
ELLENSBURG TELEPHONE COMPANY AND SUBSIDIARIES
By:_______________________________________
Name:
Title:
UTILITIES, INC. AND SUBSIDIARIES
By:_______________________________________
Name:
Title:
CHOUTEAU TELEPHONE COMPANY
By:_______________________________________
Name:
Title:
12
Attachment 1 - continued
TELEPHONE SERVICES COMPANY
By:_______________________________________
Name:
Title:
COLUMBUS GROVE TELEPHONE COMPANY AND SUBSIDIARIES
By:_______________________________________
Name:
Title:
CHAUTAUQUA & ERIE TELEPHONE CORPORATION AND SUBSIDIARIES
By:_______________________________________
Name:
Title:
MJD SERVICES CORP.
By:_______________________________________
Name:
Title:
13
Attachment 1 - continued
BLUESTEM TELEPHONE COMPANY
By:_______________________________________
Name:
Title:
COLUMBINE TELEPHONE COMPANY
By:_______________________________________
Name:
Title:
BIG XXXXX TELECOM, INC.
By:_______________________________________
Name:
Title:
ODIN TELEPHONE EXCHANGE, INC.
By:_______________________________________
Name:
Title:
14
Attachment 1 - continued
KADOKA TELEPHONE COMPANY
By:_______________________________________
Name:
Title:
RAVENSWOOD COMMINICATIONS, INC. AND SUBSIDIARIES
By:_______________________________________
Name:
Title:
Title:
ARMOUR INDEPENDENT TELPHONE CO. AND SUBSIDIARIES
By:_______________________________________
Name:
Title:
WMW CABLE TV CO.
By:_______________________________________
Name:
Title:
15
Attachment 1 - continued
UNION TELEPHONE COMPANY OF HARTFORD AND SUBSIDIARIES
By:_______________________________________
Name:
Title:
XXXXX CITY TELEPHONE COMPANY
By:_______________________________________
Name:
Title
MJD HOLDINGS CORP.
By:_______________________________________
Name:
Title:
FAIRPOINT COMMUNICATIONS CORP.
By:_______________________________________
Name:
Title:
16
Attachment 1 - continued
XXXXXXXXX XXXXXXXXXXXXXX XXXX, - XXX XXXX
By:_______________________________________
Name:
Title:
FAIRPOINT COMMUNICATIONS CORP. - VIRGINIA
By:_______________________________________
Name:
Title:
MJD CAPITAL CORP.
By:_______________________________________
Name:
Title:
17
Exhibit M
FORM OF ASSIGNMENT AGREEMENT
Date: ______________ __, ____
Reference is made to the Amended and Restated Credit Agreement
described in Item 2 of Annex I annexed hereto (as such Amended and Restated
Credit Agreement may hereafter be amended, 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 attached hereto (the "Assigned Share")
of all of the outstanding rights and obligations under the Credit Agreement,
including, without limitation, all rights and obligations with respect to the
Assigned Share of the Total Revolving Commitment and all outstanding Revolving
Loans and Letters of Credit.
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 of its Subsidiaries of any of their respective 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 fully
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, any Co-Arranger, 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, each Co-Arranger, 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, each
Co-Arranger and the Collateral Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; (v) make the representations and
warranties
Exhibit M
Page 2
required to be made by the Assignee under Section 12.04(b) of the Credit
Agreement; [and] (vi) agrees that it will perform in accordance with their terms
all of the obligations which by the terms of the Credit Agreement and the other
Credit Documents are required to be performed by it as a Lender[; and (vii)
attaches the forms described in Section 12.04(b) of the Credit Agreement.](1)
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 12.04(b) of
the Credit Agreement, the consent hereto by the Administrative Agent and the
Borrower (which consents shall not be unreasonably withheld), (iii) the receipt
by the Administrative Agent of the assignment fee referred to in Section
12.04(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 12.16 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 (x) all interest on the Assigned Share of the Revolving
Loans at the rates specified in Item 6 of Annex I attached hereto, (y) all
Commitment Commission on the Assigned share of the Total Revolving Commitment at
the rate specified in Item 7 of Annex I attached hereto, and (z) all Letter of
Credit Fees on the Assignee's participation in all Letters of Credit at the rate
specified in Item 8 of Annex I attached hereto, which, in each case, accrue on
and after the Settlement Date, such interest, Commitment Commission and Letter
of Credit Fees to be paid by the Administrative Agent directly to the Assignee.
It is further agreed that all payments of principal made on the Assigned Share
of the Revolving 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 Assigned Share of the principal amount of the
respective Revolving Loans made by the Assignor pursuant to the Credit Agreement
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
----------
(1) If the Assignee is organized under the laws of a jurisdiction outside the
United States.
Exhibit M
Page 3
YORK WITHOUT REGARD TO PRINCIPLE OF CONFLICT OF LAWS.
Exhibit M
Page 4
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____________________________
Name:
Title:
[NAME OF ASSIGNEE],
as Assignee
By____________________________
Name:
Title:
Acknowledged and Agreed:
BANK OF AMERICA, N.A.,
as Administrative Agent
By____________________________
Title:
FAIRPOINT COMMUNICATIONS CORP.,
as Borrower
By____________________________
Title:(2)
----------
(2) The consent of he 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 12.04(b)
of the Credit Agreement (which consents shall not be unreasonably withheld).
Exhibit M
Page 5
ANNEX FOR ASSIGNMENT AGREEMENT
ANNEX I
1. The Borrower: FairPoint Communications Corp.
2. Name and Date of Credit Agreement:
Amended and Restated Credit Agreement, dated as of October 20, 1999 and
amended and restated as of March 27, 2000 among FairPoint Communications
Corp., the lenders from time to time party thereto (the "Lenders") Bank of
America Securities LLC, as Co-Arranger, Deutsche Bank Securities Inc., as
Co-Arranger, First Union Securities, Inc., as Co-Arranger, CoBank, ACB, as
Co-Arranger (each a "Co-Arranger" and together the "Co-Arrangers"), and
Bank of America, N.A., as Administrative Agent.
3. Date of Assignment Agreement:
------------ --, -----
4. Amounts (as of date of item #3 above):
Revolving
Commitment
a. Aggregate Amount for all Lenders $_________
b. Assigned Share ________%
c. Amount of Assigned Share $_________
5. Settlement Date:
------------ --, -----
6. Rate of Interest
to the Assignee: As set forth in Section 2.08 of the Credit Agreement
(unless otherwise agreed to by the Assignor and the
Assignee).(1)
----------
(1) The Borrower and the Administrative Agent shall, following recordation of
such assignment by the Administrative Agent on the Register, direct the
entire amount of interest to the Assignee at the rate set forth in Section
2.08 of the Credit Agreement, with the Assignor and Assignee effecting any
agreed upon sharing of interest through payments by the Assignee to the
Assignor.
Exhibit M
Page 6
Commitment
Commission to
the Assignee: As set forth in Section 4.01(a) of the Credit
Agreement (unless otherwise agreed to by the Assignor
and the Assignee).(2)
7. Letter of Credit
Fee to the Assignee: As set forth in Section 4.01(b) of the Credit
Agreement (unless otherwise agreed to by the Assignor
and the Assignee).(3)
8. Notice: ASSIGNOR:
-------------------
-------------------
-------------------
-------------------
Attention:
Telephone No.:
Facsimile No.
Reference:
ASSIGNEE:
-------------------
-------------------
-------------------
-------------------
Attention:
Telephone No.:
Facsimile No.
Reference:
----------
(2) The Borrower and the Administrative Agent shall, following recordation of
such assignment by the Administrative Agent on the Register, direct the
entire amount of the Commitment Commission to the Assignee at the rate set
forth in Section 4.01(a) of the Credit Agreement, with the Assignor and
the Assignee effecting any agreed upon sharing of the Commitment
Commission through payment by the Assignee to the Assignor.
(3) The Borrower and the Administrative Agent shall, following recordation of
such assignment by the Administrative Agent on the Register, direct the
entire amount of the Letter of Credit Fee to the Assignee at the rate set
forth in Section 4.01(b) of the Credit Agreement, with the Assignor and
the Assignee effecting any agreed upon sharing of the Letter of Credit Fee
through payment by the Assignee to the Assignor.
Exhibit M
Page 7
Payment Instructions: ASSIGNOR:
-------------------
-------------------
-------------------
-------------------
ABA No.:
Account No.:
Reference:
Attention
ASSIGNEE:
-------------------
-------------------
-------------------
-------------------
ABA No.:
Account No.:
Reference:
Attention
Accepted and Agreed:
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By_______________________ By_______________________
Name: Name:
Title: Title:
EXHIBIT N
----------------------------------------
CERTIFICATE OF DESIGNATION
OF
MJD COMMUNICATIONS, INC.
Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
------------------------------------------
SERIES A PREFERRED STOCK
MJD COMMUNICATIONS, INC., a Delaware corporation (the "Company"), hereby
certifies that the following resolution has been duly adopted by the Board of
Directors of the Company (the "Board"):
RESOLVED, that pursuant to the authority expressly granted to and vested
in the Board by the provisions of the certificate of incorporation of the
Company (the "Certificate of Incorporation"), there hereby is created, out of
the _______ shares of preferred stock, par value $.01 per share, of the Company
authorized by Article _______ of the Certificate of Incorporation (the
"Preferred Stock"), a series of the Preferred Stock consisting of ________
shares of Series A Preferred Stock (the "Series A Preferred Stock"), which
series shall have the following powers, designations, preferences and relative,
participating, optional and other special rights, and the following
qualifications, limitations and restrictions:
1. Definitions. As used in this Certificate of Designation (this
"Certificate"), and unless the context requires a different meaning, the
following terms have the meanings indicated:
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (which may include, but is 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.
"Board" shall have the meaning set forth in the recitals of this
Certificate.
Exhibit N
Page 2
"Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in the city of New York
are authorized or obligated by law or executive order to close.
"Certificate" shall have the meaning set forth above.
"Certificate of Incorporation" shall have the meaning set forth in the
recitals of this Certificate.
"Commission" shall mean, at any time, the Securities and Exchange
Commission or any other federal agency then administering the Securities Act of
1933, as amended, and the other Federal securities laws.
"Common Stock" shall mean the common stock of the Company.
"Company" shall have the meaning set forth in the recitals of this
Certificate.
"Credit Agreement" shall mean the Amended and Restated Credit Agreement,
dated as of October 20, 1999 and amended and restated as of March 27, 2000,
among FairPoint Communications Corp., as Borrower, the lenders from time to time
party thereto, Banc of America Securities LLC, as Co-Arranger, Deutsche Bank
Securities Inc., as Co-Arranger, First Union Securities, Inc., as Co-Arranger,
CoBank, ACB, as Co-Arranger and Bank of America, N.A. as Administrative Agent,
as same may be amended, restated, modified, or supplemented from time to time.
"Default Rate" shall have the meaning set forth in Section 10 of this
Certificate.
"Dividend Payment Date" shall mean each March 31, June 30, September 30
and December 31 of each year, commencing after the date of (i) the Original
Issue Date or (ii) the Subsequent Issue Date, as the case may be.
"Dividend Period" shall mean each quarterly period beginning on January 1,
April 1, July 1 and October 1 in each year and ending on and including the day
immediately preceding the first day of the next quarterly period, except that
the first Dividend Period shall commence on the Original Issue Date.
"Dividend Rate" shall mean the Treasury Rate on the Original Issue Date
plus 12%; provided, that in no event shall the Dividend Rate be less than 12% or
greater than 21%.
"Initial Holder" shall mean a Lender that converts all or a portion of
such Lender's outstanding Revolving Loans (and accrued and unpaid interest and
fees thereon) into Series A Preferred Stock.
"Junior Stock" shall mean (i) each and every other class or series of
capital stock of the Company authorized as of the Original Issue Date (excluding
Pari Passu Stock but including the Common Stock), par value $.01 per share, of
the Company and (ii) each other class or series of the capital stock of the
Company (excluding Pari Passu Stock).
Exhibit N
Page 3
"Lenders" shall mean the lending institutions that are party to the Credit
Agreement from time to time.
"Liquidation" shall have the meaning set forth in Section 5(a) of this
Certificate.
"Liquidation Value" shall have the meaning set forth in Section 5(a) of
this Certificate.
"Liquidity Event" shall mean (i) any merger (other than a merger pursuant
to which the Company effects an acquisition of another entity), consolidation,
sale, lease, transfer or other disposition of at least 50% of the assets or
businesses of the Company and its Subsidiaries taken as a whole in a single
transaction or in a series of related transactions, (ii) the sale or transfer
(however effected, including by way of merger or consolidation or issuance) in a
single transaction or in a series of related transactions of capital stock of
the Company, whereby as a result of such transfer, a Person or Persons not
having the power to elect a majority of the Board prior to such transaction or
transactions acquires the power to elect a majority of the Board, (iii) one or
more public offerings of Common Stock which individually or in the aggregate
constituted a Qualified Public Offering, and (iv) the occurrence of the first
anniversary of the maturity of the Senior Subordinated Notes.
"Mandatory Redemption" shall have the meaning set forth in Section 7(b) of
this Certificate.
"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 Company.
"Notice of Redemption" shall have the meaning set forth in Section 7(d) of
this Certificate.
"Original Issue Date" shall mean for the Series A Preferred Stock, the
date on which the first share of Series A Preferred Stock was originally issued.
"MJD Credit Agreement" shall mean the credit agreement among the Company,
various lenders party thereto, Bank of America, N.A., as Syndication Agent and
Bankers Trust Company, as Administrative Agent, dated as of March 30, 1998 (as
such agreement may be amended, supplemented or modified from time to time).
"Pari Passu Stock" shall mean any Preferred Stock (other than Preferred
Stock which is expressly designated by the Company as Junior Stock) issued
subsequent to the Effective Date (as defined in the Credit Agreement).
"Period Rate" shall have the meaning set forth in Section 4(a) of this
Certificate.
"Person" shall mean and include, natural persons, corporations, limited
partnerships, general partnerships, joint stock companies, joint ventures,
associations, companies, trusts,
Exhibit N
Page 4
banks, trust companies, land trusts, business trusts or other organizations,
whether or not legal entities, and governments and agencies and political
subdivisions thereof.
"Preference Amount" shall have the meaning set forth in Section 5(a) of
this Certificate.
"Preferred Stock" shall have the meaning set forth in the recitals of this
Certificate.
"Qualified Public Offering" shall mean one or more sales per sale of
Common Stock in underwritten public offering(s) pursuant to effective
registration statement(s) filed with the Commission pursuant to the Act which
yields individually or in the aggregate at least $175,000,000 of net proceeds to
the Company.
"Redemption Date" shall have the meaning set forth in Section 7(d) of this
Certificate.
"Redemption Default" shall mean the failure to make a Mandatory Redemption
in accordance with Section 7(b) of this Certificate on the date required to be
made.
"Redemption Price" shall have the meaning set forth in Section 7(c) of
this Certificate.
"Senior Subordinated Notes" shall mean the Senior Subordinated Notes of
the Company due 2008.
"Senior Subordinated Notes Indenture" shall mean the indenture with
respect to the Senior Subordinated Notes dated as of May 5, 1998, between the
Company and United States Trust Company of New York, as Trustee.
"Series A Preferred Stock" shall have the meaning set forth in the
recitals to this Certificate.
"Subsequent Issue Date" shall mean, with respect to any shares of Series A
Preferred Stock issued after the Original Issue Date, the date on which such
shares of Series A Preferred Stock were originally issued.
"Subsidiary" shall mean, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of capital stock or other equity interests entitled (without
regard to occurrence of any contingency) to vote in the election of directors or
other managing authority thereof is at the time owned or controlled, directly or
indirectly, by such Person or its Subsidiaries.
"Subsequent Holder" shall mean any Person that holds any Series A
Preferred Stock (other than an Initial Holder or an Affiliate of an Initial
Holder).
"Surviving Company" shall have the meaning set forth in Section 8(b) of
this Certificate.
"Treasury Rate" shall mean the interest rate per annum on 10 year direct
obligations issued by the federal government of the United States of America, as
determined by the Administrative Agent as of the first day of each fiscal
quarter.
Exhibit N
Page 5
"Wholly Owned Subsidiary" shall mean, as to any Person, (i) a corporation
one hundred percent of whose capital stock is at the time owned by such Person
and/or one or more Wholly Owned Subsidiaries of such Person and (ii) any
partnership, association, joint venture or other entity in which such person
and/or one or more Wholly Owned Subsidiaries of such Person has a one hundred
percent equity interest at such time.
2. Designation. This series of Preferred Stock shall be designated the
"Series A Preferred Stock."
3. Authorization. The Company shall have the authority to issue ________
shares of Series A Preferred Stock, par value $.01 per share, of the Company;
provided that no shares of Series A Preferred Stock shall be issued after the
Original Issue Date other than to the Initial Holders and in connection with the
payment of dividends issued to holders of shares of Series A Preferred Stock
pursuant to Section 4(b).
4. Dividends.
(a) Amount. The owners of shares of Series A Preferred Stock shall
be entitled to cumulative dividends on each share of Series A Preferred Stock
held by such holders, which dividends for each Dividend Period shall be equal to
the prorated Dividend Rate per annum, unless at any time during such Dividend
Period the Company was required to effect a Mandatory Redemption and failed to
effect such Mandatory Redemption in accordance with the terms of this
Certificate in which case such holders of Series A Preferred Stock shall be
entitled to cumulative dividends at the Default Rate per annum for the portion
of the Dividend Period during which such Mandatory Redemption should have been
effected (the Dividend Rate or the Default Rate as the case may be, the "Period
Rate"). The dividend that will be payable or that will accumulate in respect of
each share of Series A Preferred Stock for each Dividend Period shall be equal
to the product of (a) the Preference Amount for such share, multiplied by (b)
the Period Rate for such period multiplied by (c) a fraction, the numerator of
which is the number of days that such share was outstanding during such Dividend
Period and the denominator of which is 365.
(b) Payment of Dividends. Dividends on the Series A Preferred Stock
shall be payable in kind in shares of Series A Preferred Stock valued at the
Liquidation Value per share or in cash, at the option of the Company. Dividends
on each share of Series A Preferred Stock shall accrue and be cumulative
(whether or not declared by the Board) from the Original Issue Date or
Subsequent Issue Date, as the case may be, and shall be payable in arrears, when
and as declared by the Board out of funds legally available therefor and if to
the extent permitted under the MJD Credit Agreement and Senior Subordinated
Notes Indenture on each Dividend Payment Date. Notwithstanding the foregoing, if
any Dividend Payment Date is not a Business Day, such dividend shall be paid on
the next succeeding Business Day. Accumulated and unpaid dividends, whether or
not declared, shall compound.
(c) Dividends Priority. So long as any shares of Series A Preferred
Stock are outstanding, neither the Company nor any of its Subsidiaries may,
directly or indirectly (whether in cash, property or in obligations of the
Company or any Subsidiary of the Company), declare or
Exhibit N
Page 6
pay or set aside for payment any dividends on distributions in respect of, or
make any other payment of any kind with respect to, or repurchase, redeem or
otherwise acquire, any capital stock of the Company or any Subsidiary of the
Company other than (i) with respect to the Series A Preferred Stock and Pari
Passu Stock so long as all such actions in connection with the Series A
Preferred Stock and Pari Passu Stock are done on a pro rata basis among all
outstanding shares of Series A Preferred Stock and Pari Passu Stock or (ii)
distributions or dividends to the Company or direct or indirect Wholly Owned
Subsidiaries or 90%-Owned Subsidiaries of the Company or (iii) other dividends
permitted to be made pursuant to Sections 7.09(a)(ii) and 7.09(a)(iii) of the
MJD Credit Agreement. The Series A Preferred Stock will rank senior to all other
capital stock of the Company (other than Pari Passu Stock) and pari passu with
respect to Pari Passu Stock. So long as the Series A Preferred Stock is
outstanding, no other class or series of capital stock may be issued which has a
mandatory redemption date prior to October 31, 2009, or which provides for a
sinking fund prior to such date or any other payment of any type before such
date (other than the payment of in-kind dividends on shares of capital stock).
No class of capital stock of the Company may have terms which are equivalent or
more favorable than the terms of the Series A Preferred Stock, including without
limitation, as to: (i) redemption or principal repayment, (ii) maturity, (iii)
rights to receive dividends, (iv) rights upon liquidation, dissolution, or
winding-up of the Company or any Subsidiary of the Company or distribution of
the assets of the Company or any Subsidiary of the Company and (v) covenants. No
class of capital stock of the Company may contain provisions, including
provisions which would require any action to be taken with respect to such
capital stock of the Company upon or as a result of the redemption of the Series
A Preferred Stock, which would prevent the redemption or sale of the Series A
Preferred Stock or would prevent the payment of cash dividends to the holders of
the Series A Preferred Stock (other than Pari Passu Stock so long as any payment
of dividends, whether in cash or in kind, would be paid pro rata to the holders
of all Pari Passu Stock requiring the same and the holders of the Series A
Preferred Stock).
5. Liquidation Rights.
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Company (a "Liquidation"), the
holders of Series A Preferred Stock shall be entitled to receive, out of the
remaining assets of the Company available for distribution to its stockholders,
with respect to each share of Series A Preferred Stock held by such holder, ONE
THOUSAND DOLLARS ($1,000) (the "Liquidation Value") plus an amount equal to all
accrued but unpaid dividends payable with respect to such share of Series A
Preferred Stock (collectively, the "Preference Amount"), before any payment or
distribution may be made to the holders of Junior Stock. If upon any
Liquidation, the assets of the Company available for distribution to its
stockholders shall be insufficient to pay the holders of Series A Preferred
Stock the full Preference Amount to which each such holder shall be entitled,
all of the assets of the Company available for distribution to its stockholders
shall be distributed to the holders of the Series A Preferred Stock and holders
of Pari Passu Stock pro rata in accordance with the aggregate liquidation
preference of shares of Series A Preferred Stock and Pari Passu Stock held by
each such holder.
Exhibit N
Page 7
(b) For purposes of this Section 5, the merger or consolidation of
the Company into or with another entity or the sale, lease, exchange or other
conveyance or transfer of all or substantially all the assets of the Company
shall not be deemed to be a Liquidation unless it results in a Liquidity Event.
6. Notices of Corporate Action. In the event of:
(a) any taking by the Company of a record of the holders of any
class of securities for the purpose of determining the holders thereof who are
entitled to receive any dividend or other distribution, or any right to
subscribe for, purchase or otherwise acquire any shares of stock of any class or
any other securities or property, or to receive any other right;
(b) any capital reorganization of the Company, any reclassification
or recapitalization of the capital stock of the Company, any consolidation or
merger involving the Company and any other entity or any sale, lease, exchange
or other conveyance or transfer of all or substantially all the assets of the
Company to any other person;
(c) any voluntary or involuntary dissolution, liquidation or
winding-up of the affairs of the Company;
(d) any plan or proposal by the Company to register any capital
stock of the Company with the Commission;
the Company will deliver to each holder of Series A Preferred Stock a notice
specifying (i) the date or expected date on which any such record is to be taken
for the purpose of such dividend, distribution or right, and the amount and
character of such dividend, distribution or right, (ii) the date or expected
date on which any such reorganization, reclassification, recapitalization,
consolidation, merger, transfer, dissolution, liquidation or winding-up is to
take place and the time, if any such time is to be fixed, as of which the
holders of record of securities of the Company shall be entitled to exchange
such securities for the new securities or other property deliverable upon such
reorganization, reclassification, recapitalization, consolidation, merger,
transfer, dissolution, liquidation or winding-up, (iii) the date or expected
date of the voluntary or involuntary dissolution, liquidation or winding-up of
the affairs of the Company or (iv) the date or expected date of the filing of
the initial registration statement with respect to the securities being
registered. Such notice shall be furnished at least 20 days prior to the date
therein specified.
7. Redemption.
(a) Optional Redemption. The Company may at any time after the
Original Issue Date, at its option, redeem any or all of the shares of the
outstanding Series A Preferred Stock.
(b) Mandatory Redemption. Upon the earliest Liquidity Event to
occur, subject to the restrictions in the MJD Credit Agreement and Senior
Subordinated Notes Indenture, the Company shall redeem all shares of the Series
A Preferred Stock then outstanding
Exhibit N
Page 8
(each a "Mandatory Redemption"). If the funds of the Company legally available
for redemption of shares of Series A Preferred Stock on the Redemption Date are
insufficient (or if the amounts permitted under the MJD Credit Agreement or
Senior Subordinated Notes Indenture are insufficient) to redeem the total number
of such shares to be redeemed on such date, then those funds which are legally
available (or permitted under the MJD Credit Agreement or Senior Subordinated
Notes Indenture) shall be used to redeem the maximum possible number of shares
of Series A Preferred Stock ratably among the holders of Series A Preferred
Stock, based on the aggregate number of shares of Series A Preferred Stock held
by each such holder. At any time thereafter when additional funds of the Company
are legally available (or no longer subject to the restrictions under the MJD
Credit Agreement or Senior Subordinated Notes Indenture) for the redemption of
shares of Series A Preferred Stock, such funds shall immediately be used to
redeem shares of Series A Preferred Stock.
(c) Redemption Price. The redemption price per share of the Series A
Preferred Stock (the "Redemption Price") shall be paid in immediately available
cash in an amount equal to (A) in the case of any Initial Holder or an Affiliate
thereof, 100% of the Preference Amount, and (B) in the case of any Subsequent
Holder:
(i) 100% of the Preference Amount with respect to any redemption effected
pursuant to Section 7(a) after the Original Issue Date or the Subsequent Issue
Date, as the case may be, but prior to the date which is 9 months thereafter,
(ii) 106% of the Preference Amount with respect to any redemption effected
pursuant to Section 7(a), on or after the date which is 9 months thereafter but
prior to the date which is 21 months thereafter,
(iii) 104% of the Preference Amount with respect to any redemption
effected pursuant to Section 7(a), on or after the date which is 21 months
thereafter but prior to the date which is 33 months thereafter,
(iv) 103% of the Preference Amount with respect to any redemption effected
pursuant to Section 7(a), on or after the date which is 33 months thereafter but
prior to the date which is 45 months thereafter,
(v) 102% of the Preference Amount with respect to any redemption effected
pursuant to Section 7(a), on or after the date which is 45 months thereafter but
prior to the date which is 57 months thereafter,
(vi) 101% of the Preference Amount with respect to any redemption effected
pursuant to Section 7(a), on or after the date which is 57 months thereafter but
prior to the date which is 69 months thereafter,
(vii) 100% of the Preference Amount with respect to any Mandatory
Redemption or any redemption effected pursuant to Section 7(a), on or after the
date which is 69 months after the Original Issue Date or the Subsequent Issue
Date, as the case may be.
Exhibit N
Page 9
In each case, the Preference Amount used to determine the Redemption Price shall
be the Preference Amount in effect immediately prior to the Redemption Date.
(d) Redemption Date. Written notice of any redemption of shares of
Series A Preferred Stock (a "Notice of Redemption"), specifying the time and
place of redemption, shall be mailed by certified mail, return receipt
requested, at least 15, and not more than 30 days prior to the date specified
therein for redemption (the "Redemption Date"), to each registered holder of the
shares of Series A Preferred Stock at each such holder's last address as it
appears on the Company's books. On or after the Redemption Date, each holder of
shares of Series A Preferred Stock called for redemption shall surrender his or
her certificates for such shares to the Company at the place specified in the
Notice of Redemption and the Company shall pay the holder (or shall cause such
holder to be paid) the Redemption Price in cash.
(e) Pro Rata Redemption. Any redemption of shares of Series A
Preferred Stock made pursuant to Section 7(a) or 7(b) shall be made among all
holders of Series A Preferred Stock pro rata in accordance with the number of
shares of Series A Preferred Stock held by each such holder as of the Redemption
Date.
(f) Redeemed Preferred Stock. Unless the Company defaults in the
payment in full of the Redemption Price, dividends on the shares of Series A
Preferred Stock called for redemption shall cease to accumulate on the
Redemption Date, and all rights of the holders of the shares of Series A
Preferred Stock by reason of their ownership of the shares of Series A Preferred
Stock shall cease on the Redemption Date, except the right to receive the
Redemption Price on surrender to the Company of the certificates representing
the redeemed shares of Series A Preferred Stock. After the Redemption Date, the
redeemed shares of Series A Preferred Stock shall not be deemed to be
outstanding and shall not be transferable on the books of the Company.
(g) Cancellation of Preferred Stock. Any shares of Series A
Preferred Stock redeemed or purchased by the Company shall be canceled and shall
have the status of authorized and unissued shares of preferred stock, without
designation as to series.
8. Voting Rights; Merger, Consolidation or Amendment, etc.
(a) Except as required by applicable law or as otherwise specified
in this Certificate, in which case each holder of outstanding shares of Series A
Preferred Stock shall have that number of votes as is equal to the number of
shares of Series A Preferred Stock held by such holder on the applicable record
date for determining voting rights, the holders of the Series A Preferred Stock
shall not have any voting rights.
(b) Without the affirmative vote of the holders of a majority of the
shares of the Series A Preferred Stock voting separately as a class and subject
to the Company's obligations, if any, to effect a Mandatory Redemption in
accordance with Section 7(b), the Company shall not, directly or indirectly, (x)
consolidate with or merge with or into any other person or entity, or transfer
(by lease, assignment, sale or otherwise) all or substantially all of the
properties or assets of the Company, in a single transaction or through a series
of related transactions, to another person or entity or group of affiliated
persons or entities or permit any
Exhibit N
Page 10
subsidiaries of the Company to enter into any such transaction or transactions
if such transaction or transactions in the aggregate would result in a sale of
all or substantially all of the properties and assets of the Company and its
Subsidiaries on a consolidated basis or (y) adopt a plan of liquidation, unless,
in either case:
(i) (A) the Company shall be the continuing Person, or (B) the
Person (if other than the Company) (or, in the case of a liquidation, the sole
Person to which assets are transferred) formed by such consolidation or into
which the Company is merged or to which the properties and assets of the Company
and any Subsidiaries of the Company are transferred or leased (the Company or
such other person or entity being hereinafter referred to as the "Surviving
Company") shall be organized and validly existing under the laws of the United
States or any State thereof or the District of Columbia; and
(ii) (A) in the case of a merger or consolidation in which the
Company is not the Surviving Company, the Series A Preferred Stock shall be
converted into a class of preferred stock of the Surviving Company with powers,
preferences and special rights substantially equal or, except with respect to
voting powers, superior, to the powers, preferences and special rights of the
Series A Preferred Stock or (B) in the case of a transfer (by lease, assignment,
sale or otherwise) of all or substantially all of the properties or assets of
the Company and its Subsidiaries, or of a plan of liquidation, the Surviving
Company offers to issue to the holders of shares of the Series A Preferred Stock
an equal number of shares of a class of preferred stock of the surviving Company
with powers, preferences and special rights substantially equal or, except with
respect to voting powers, superior, to the powers, preferences and special
rights of the Series A Preferred Stock in exchange for such holders' shares of
Series A Preferred Stock; and
(c) Notwithstanding the foregoing, any Subsidiary of the Company may
merge into the Company or any other Subsidiary of the Company at any time,
provided such merger is not part of a plan or transaction otherwise prohibited
by the terms of this Certificate.
(d) For purposes of this Section 8, any transfer (by lease,
assignment, sale or otherwise) of all or substantially all of the properties and
assets of one or more Subsidiaries of the Company (other than a transfer to the
Company or one or more Wholly Owned Subsidiaries of the Company) the capital
stock of which constitutes all or substantially all of the properties and assets
of the Company or any Subsidiary of the Company shall be deemed to be the
transfer of all or substantially all of the assets of the properties and assets
of the Company.
9. Covenants. For so long as any shares of Series A Preferred Stock are
outstanding, the Company shall not:
(i) alter or modify any of the terms, designations, powers,
preferences, privileges or other rights of, or restrictions provided for the
benefit of holders of Series A Preferred Stock;
(ii) create, authorize, designate, issue or sell shares of any class
or series of the capital stock of the Company or rights, options, warrants or
other securities convertible into or exchangeable for any share of capital stock
of the Company, the terms of which provide that
Exhibit N
Page 11
shares of such class or series of capital stock of the Company rank senior to
the Series A Preferred Stock with respect to distributions of assets, payments
of dividends, distributions upon the Liquidation of the Company or which
otherwise adversely affect the terms, designations, powers, preferences,
privileges or other rights of, or restrictions provided for the benefit of the
holders of shares of Series A Preferred Stock;
(iii) amend or change any provision of the Certificate of
Incorporation of the Company, bylaws of the Company or this Certificate if such
action would adversely alter or change the preferences, rights, privileges or
powers of, or the restrictions provided for the benefit of the Series A
Preferred Stock; or
(iv) amend any provision of this Section 9.
10. Default Rate.
In the event a Redemption Default shall have occurred, each share of
Series A Preferred Stock shall be entitled to the dividends set forth in Section
4(a) hereof at a rate of 2% in excess of the Dividend Rate then in effect (the
"Default Rate").
11. Restrictive Legends. Each certificate representing shares of Series A
Preferred Stock shall be stamped or otherwise imprinted with legends in
substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
SUCH SHARES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT (1) PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT OR (2) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH
CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES.
Exhibit N
Page 12
IN WITNESS WHEREOF the foregoing Certificate of Designation has been duly
authorized on behalf of the Company by ___________, its President this ____ day
of __________ 2000.
MJD COMMUNICATIONS, INC.
By:______________________________________
Name:
Title:
[Signature Page for Certificate of Designation]
Exhibit O
FORM OF COMPLIANCE CERTIFICATE
FairPoint Communications Corp.
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
_______ __, ____
Bank of America, N.A.,
as Administrative Agent
for the Lenders party
to the Credit Agreement referred to below
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000-0000
Re: COMPLIANCE CERTIFICATE
This COMPLIANCE CERTIFICATE (this "Certificate") is delivered
pursuant to that certain Amended and Restated Credit Agreement, dated as of
October 20, 1999 and amended and restated as of March 27, 2000, (the "Credit
Agreement"), among FairPoint Communications Corp. (the "Borrower"), the lenders
from time to time party thereto (the "Lenders"), Banc of America LLC, as
Co-Arranger, Deutsche Bank Securities Inc., as Co-Arranger, First Union
Securities, Inc., as Co-Arranger, CoBank, ACB, as Co-Arranger (each a
"Co-Arranger" and together, the "Co-Arrangers") and Bank of America, N.A., as
Administrative Agent. Capitalized terms not defined herein shall have the same
meanings ascribed thereto in the Credit Agreement.
1. The individual executing this Certificate is a duly qualified
[Chief Financial Officer,] [Vice President of Finance] [other Authorized
Officer] of the Borrower and is executing this Certificate on behalf of the
Borrower.
2. The undersigned has reviewed the terms of the Credit Agreement
and has made a review of the transactions, financial condition and other affairs
of the Borrower and each of its Subsidiaries as of, and during the [three
months] [fiscal quarter] ending _________ __, _____ and as of the date hereof,
there are no conditions or events which (i) renders untrue or incorrect, any of
the covenants, representations and warranties contained in Articles 7, 8 and 9
of the Credit Agreement (it being understood and agreed that any covenant,
representation or
Exhibit O
Page 2
warranty which by its terms is made as of a specified date shall be required to
be true and correct only as of such specified date), or (ii) constitutes a
Default or Event of Default.(1)
3. Schedule I attached hereto accurately and completely sets forth
the financial data, computations and other matters required to establish
compliance with the following sections of the Credit Agreement:
(a) Section 9.11 - Minimum Consolidated Revenue;
(b) Section 9.12 - Minimum Consolidated EBITDA;
(c) Section 9.13 - Consolidated Senior Debt to Capitalization Ratio;
(d) Section 9.14 - Consolidated Debt to Capitalization Ratio;
(e) Section 9.15 - Interest Coverage ratio;
(f) Section 9.16 - Leverage Ratio; and
(g) Section 9.17 - Fixed Charge ratio.
The Lenders, Co-Arrangers and the Administrative Agent and their
respective successors and assigns may rely on the truth and accuracy of the
foregoing in connection with the extensions of credit to the Borrower pursuant
to the Credit Agreement.
-------
(1) If a Default or Event of Default exists, specify the nature and extent
thereof.
Exhibit O
Page 2
IN WITNESS WHEREOF, the Borrower has caused this Certificate to be
duly executed by their duly authorized [Chief Financial Officer][,Vice President
of Finance] [other Authorized Officer] on this ___ day of ____, ____.
FAIRPOINT COMMUNICATIONS CORP.
By:______________________________________
Name:
Title:
Schedule I
Part A - Covenant Applicable At All Times:
1. Section 9.14
The Consolidated Debt to Capitalization Ratio may not exceed 0.75.
Actual Consolidated Debt to Capitalization Ratio (see Appendix A for
calculations): ___________
Covenant level in compliance (yes/no): ___________
Part B - Covenants Applicable During Phase I Only:
1. Section 9.11
Consolidated Revenue for any six-month period ending on the date set forth below
may not be less than the amount set forth opposite such six-month period below:
Six-Month Period Ending On Amount
-------------------------- ------
[Insert appropriate period and amount from Section 9.11 of the Credit
Agreement]
Actual Consolidated Revenue for the current six-month period: ___________
Covenant level in compliance (yes/no): ___________
2. Section 9.12
Consolidated EBITDA for any six-month period ending on the date set forth below
may not be less than the amount set forth opposite such six-month period below:
Six-Month Period Ending On Amount
-------------------------- ------
[Insert appropriate period and amount from Section 9.12 of the Credit
Agreement]
Actual Consolidated EBITDA for the current six-month period: ___________
Covenant level in compliance (yes/no): ___________
Schedule I
Page 2
3. Section 9.13
The Consolidated Senior Debt to Capitalization Ratio may not exceed 0.67.
Actual Consolidated Senior Debt to Capitalization Ratio (see Appendix
A for calculations): ___________
Covenant level in compliance (yes/no): ___________
Part C - Covenants Applicable During Phase II Only:
1. Section 9.13
The Consolidated Senior Debt to Capitalization Ratio may not exceed 0.75.
Actual Consolidated Senior Debt to Capitalization Ratio
(see Appendix A for calculations): ___________
Covenant level in compliance (yes/no): ___________
2. Section 9.15
For any fiscal quarter during the period set forth below, the ratio of (i)
Consolidated Annualized EBITDA to (ii) Consolidated Annualized Interest Expense
may not be less than the ratio set forth opposite such period:
Period Ratio
------ -----
[Insert the appropriate period and ratio from Section 9.15 of the Credit
Agreement]
Actual Consolidated Annualized EBITDA (see Appendix A for
calculations): ___________
Actual Consolidated Annualized Interest Expense
(see Appendix A for calculations): ___________
Actual Interest Coverage Ratio: ___________
Permitted level: ___________
Covenant level in compliance (yes/no): ___________
3. Section 9.16
The Leverage Ratio determined as at the end of the last day of any fiscal
quarter during the period set forth below may not be more than the ratio set
forth opposite such period:
Schedule I
Page 3
Period Ratio
------ -----
[Insert the appropriate period and ratio from Section 9.16 of the Credit
Agreement]
Actual Consolidated Debt (see Appendix A for calculations): ___________
Actual Consolidated Annualized EBITDA (see Appendix
A for calculations): ___________
Actual Leverage Ratio: ___________
Permitted level: ___________
Covenant level in compliance (yes/no): ___________
4. Section 9.17
For any fiscal quarter during the period set forth below, the ratio of (i)
Consolidated Annualized EBITDA to (ii) Consolidated Annualized Fixed Charges may
not be less than the ratio set forth opposite such period:
Period Ratio
------ -----
[Insert the appropriate period and ratio from Section 9.17 of the Credit
Agreement]
Actual Consolidated Annualized Fixed Charges
(see Appendix A for calculations): ___________
Actual Consolidated Annualized EBITDA (see Appendix A
for calculations): ___________
Actual Fixed Charge ratio: ___________
Permitted level: ___________
Covenant level in compliance (yes/no): ___________
APPENDIX A
Attach and show all calculations for the following components in connection with
the covenants reported in this Compliance Certificate for the applicable period:
1. Consolidated Debt:
(a) Aggregated stated balance sheet amount of
all Indebtedness of the Borrower and its
Subsidiaries on consolidated basis as determined
in accordance with GAAP at the date of
determination: ___________
plus, without duplication,
(b) 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) plus all contingent reimbursement
obligations in respect of letters of credit
(including Letters of Credit) at the date of
determination: ___________
equals
Consolidated Debt: ___________
2. Consolidated Senior Debt:
Consolidated Debt (see #1 for calculations): ___________
less
Consolidated Debt that constitutes Permitted
Subordinated Debt and/or Permitted Refinancing
Indebtedness at the date of determination: ___________
equals
Consolidated Senior Debt: ___________
3. Consolidated Annualized EBITDA as of the last
day of the applicable fiscal quarter:
Consolidated Net Income (see # 7 for
calculations) for the six months then ended: ___________
plus
Appendix A
Page 2
Provisions for taxes based on income for the
six months then ended: ___________
plus
Consolidated Interest Expense (see #4 for
calculations) for the six months then ended: ___________
plus
The non-cash portion of any retirement or
pension plan expense incurred by the Borrower
or any of its Subsidiaries for the six months
then ended: ___________
plus
Depreciation expense for the six months then
ended: ___________
plus
Amortization expense including any amortization
or write-off related to the write-up of any
assets as a result of purchase accounting for the
six months then ended less gains on sales of assets
(excluding sales in the ordinary course of business)
and other extraordinary gains and other one-time
non-cash gains for the six months then ended: ___________
equals
Consolidated EBITDA(1): ___________
multiplied by two, equals
Consolidated Annualized EBITDA: ___________
4. Consolidated Annualized Interest Expense:
Total interest expense for the six months then
ended (including the portion that is attributable
to Capital
-------
(1) All components of Consolidated EBITDA are to be determined on a
consolidated basis in accordance with GAAP. Consolidated EBITDA for any
period during which a Permitted Acquisition was consummated or a
disposition of a business was effected shall be determined on a pro forma
basis as if such Permitted Acquisition were consummated or disposition
effected, as the case may be, on the first day of such period.
Appendix A
Page 3
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 for the six months
then ended: ___________
plus, without duplication,
Net costs and/or net benefits under Interest Rate
Agreements for the six months then ended, excluding
amortization of deferred financing costs to the
extent included in total interest expense: ___________
equals
Consolidated Interest Expense: ___________
multiplied by two, equals
Consolidated Annualized Interest
Expense: ___________
5. Consolidated Annualized Fixed Charges:
Consolidated Interest Expense (see #4 for
calculations) for the six months then ended: ___________
plus
The scheduled principal amount of all amortization
payments on all Indebtedness (including, without
limitation, the principal component of all
Capitalized Lease Obligations) of the Borrower and
its Subsidiaries for the six months then ended
(determined on the first day of this period): ___________
plus
The amount of all cash payments made by the
Borrower and its Subsidiaries in respect of income
taxes or income tax liabilities for the six months
then ended: ___________
plus
Appendix A
Page 4
The amount of all Consolidated Capital Expenditures
made by the Borrower and its Subsidiaries for the
six months then ended: ___________
plus
The amount of all cash earn-out payments, deferred
purchase price payments and similar payments made
(or required to be made) by the Borrower and its
Subsidiaries for the six months then ended in
respect of acquisitions effected prior to the
Effective Date:
equals
Consolidated Fixed Charges: ___________
multiplied by two, equals
Consolidated Annualized Fixed Charges: ___________
6. Total Capitalization:
Consolidated Debt (see #1 for calculations) ___________
plus
$22,400,000 $22,400,000
-----------
plus
Consolidated Cash Equity (see #8
for calculations) ___________
equals
Total Capitalization: ___________
7. Consolidated Net Income:
The net income (or loss) of the Borrower and its
Subsidiaries on a consolidated basis for the
applicable period, taken as a single accounting
period, determined in conformity with GAAP: ___________
excluding, without duplication,
the following:
The income (or loss) of any Person (other than
Subsidiaries of the
Appendix A
Page 5
Borrower) for the applicable period 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: ___________
and
The income (or loss) of any Person for the
applicable period 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: ___________
and
The income of any Subsidiary of the Borrower for
the applicable period 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 regulations applicable to that
Subsidiary:
equals
Consolidated Net Income: ___________
8. Consolidated Cash Equity:
Cash proceeds (net of underwriting discounts and
commissions and other costs associated therewith)
received by the Borrower from the sale of issuance
of its equity or from a capital contribution to the
Borrower, including any cash received by the
Borrower pursuant to the MJD Tax Sharing Agreement,
on or after October 20, 1999 and until and
including the present date: ___________
