Exhibit 10.5
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CREDIT AGREEMENT
DATED AS OF
OCTOBER 29, 1999
AMONG
XX.XXX CORP.,
THE LENDERS PARTY HERETO
AND
FIRST UNION NATIONAL BANK,
AS ADMINISTRATIVE AGENT
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS........................................................1
Section 1.01. DEFINED TERMS...........................................1
Section 1.02. CLASSIFICATION OF LOANS AND BORROWINGS.................31
Section 1.03. TERMS GENERALLY........................................31
Section 1.04. ACCOUNTING TERMS; GAAP.................................31
ARTICLE II THE LOANS AND LETTERS OF CREDIT..................................32
Section 2.01. COMMITMENTS............................................32
Section 2.02. LOANS AND BORROWINGS; LETTER OF CREDIT SUBFACILITY.....32
Section 2.03. REQUESTS FOR BORROWINGS................................36
Section 2.04. FUNDING OF BORROWINGS..................................37
Section 2.05. INTEREST ELECTIONS.....................................37
Section 2.06. TERMINATION, REDUCTION AND INCREASE OF COMMITMENTS.....39
Section 2.07. REPAYMENT OF LOANS; EVIDENCE OF DEBT...................41
Section 2.08. AMORTIZATION OF LOANS; MANDATORY REDUCTIONS OF
REVOLVING COMMITMENT...................................42
Section 2.09 PREPAYMENT OF LOANS....................................44
Section 2.10. FEES...................................................46
Section 2.11. INTEREST...............................................47
Section 2.12 ALTERNATE RATE OF INTEREST.............................47
Section 2.13. INCREASED COSTS........................................48
Section 2.14 BREAK FUNDING PAYMENTS.................................49
Section 2.15. TAXES..................................................49
Section 2.16. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING
OF SET-OFFS............................................51
Section 2.17. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.........52
Section 2.18 INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES.....53
ARTICLE III REPRESENTATIONS AND WARRANTIES..................................54
Section 3.01. ORGANIZATION; POWERS...................................54
Section 3.02. AUTHORIZATION; ENFORCEABILITY..........................54
Section 3.03. GOVERNMENTAL APPROVALS; NO CONFLICTS...................55
Section 3.04. FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE........55
Section 3.05. PROPERTIES; LIENS; LICENSES............................55
Section 3.06. LITIGATION AND ENVIRONMENTAL MATTERS...................56
Section 3.07. COMPLIANCE WITH LAWS AND AGREEMENTS....................56
Section 3.08. INVESTMENT AND HOLDING COMPANY STATUS..................56
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Section 3.09. TAXES..................................................57
Section 3.10. ERISA..................................................57
Section 3.11. INTELLECTUAL PROPERTY..................................57
Section 3.12. FEDERAL REGULATIONS....................................57
Section 3.13. DISCLOSURE.............................................58
Section 3.14. SUBSIDIARIES...........................................58
Section 3.15. INSURANCE..............................................58
Section 3.16. LABOR MATTERS..........................................58
Section 3.17. AT&T AGREEMENT.........................................58
Section 3.18. SECURITY DOCUMENTS.....................................59
Section 3.19. YEAR 2000 READINESS....................................59
Section 3.20. CAPITALIZATION.........................................59
Section 3.21. FISCAL YEAR............................................60
ARTICLE IV CONDITIONS.......................................................60
Section 4.02. EACH BORROWING.........................................63
ARTICLE V AFFIRMATIVE COVENANTS.............................................64
Section 5.01. FINANCIAL STATEMENTS AND OTHER INFORMATION.............64
Section 5.02. NOTICES OF MATERIAL EVENTS.............................66
Section 5.03. INFORMATION REGARDING COLLATERAL.......................67
Section 5.04. EXISTENCE; CONDUCT OF BUSINESS.........................68
Section 5.05. PAYMENT OF OBLIGATIONS.................................68
Section 5.06. MAINTENANCE OF PROPERTIES..............................68
Section 5.07. INSURANCE..............................................68
Section 5.08. BOOKS AND RECORDS; INSPECTION RIGHTS...................69
Section 5.09. COMPLIANCE WITH LAWS AND AGREEMENTS....................70
Section 5.10. USE OF PROCEEDS........................................70
Section 5.11. FURTHER ASSURANCES.....................................70
Section 5.12. CASUALTY AND CONDEMNATION..............................70
Section 5.13. INTEREST RATE PROTECTION...............................71
Section 5.14. ADDITIONAL SUBSIDIARIES; ADDITIONAL SECURITY DOCUMENTS.71
Section 5.15. SPECIAL PURPOSE SUBSIDIARIES...........................72
Section 5.16. REQUIRED CASH BALANCE CERTIFICATE......................72
ARTICLE VI Negative Covenants...............................................73
Section 6.01. INDEBTEDNESS...........................................73
Section 6.02. LIENS..................................................75
Section 6.03. FUNDAMENTAL CHANGES....................................76
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Section 6.04. INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND
ACQUISITIONS; ASSET SALES..............................77
Section 6.05. HEDGING AGREEMENTS.....................................79
Section 6.06. RESTRICTED PAYMENTS....................................79
Section 6.07. TRANSACTIONS WITH AFFILIATES...........................79
Section 6.08. RESTRICTED AGREEMENTS..................................80
Section 6.09. REPAYMENT OF INDEBTEDNESS..............................80
Section 6.10. LIMITATION ON SALE-LEASEBACK TRANSACTIONS..............80
Section 6.11. MATERIAL CONTRACTS.....................................80
Section 6.12. SPECIAL PURPOSE SUBSIDIARIES...........................81
Section 6.13. MINIMUM ROUTE MILES AND SEGMENTS/LINKS.................81
Section 6.14. MINIMUM CUMULATIVE DARK FIBER/CONDUIT REVENUE/PROCEEDS.82
Section 6.15. MINIMUM CONSOLIDATED OPERATING REVENUES................82
Section 6.16. CONSOLIDATED EBITDA....................................82
Section 6.17. TOTAL LEVERAGE RATIO...................................82
Section 6.18. CONSOLIDATED LEVERAGE RATIO............................82
Section 6.19. INTENTIONALLY OMITTED..................................83
Section 6.20. FIXED CHARGE COVERAGE RATIO............................83
Section 6.21. USE OF COLLATERAL......................................83
Section 6.22. CHANGES TO FISCAL YEAR.................................84
ARTICLE VII EVENTS OF DEFAULT...............................................84
Section 7.01. EVENTS OF DEFAULT......................................84
Section 7.02. CURE BY THE PARENT.....................................87
ARTICLE VIII THE AGENTS.....................................................88
ARTICLE IX MISCELLANEOUS....................................................90
Section 9.01. NOTICES................................................90
Section 9.02. WAIVERS; AMENDMENTS....................................91
Section 9.03. EXPENSES; INDEMNITY; DAMAGE WAIVER.....................92
Section 9.04. SUCCESSORS AND ASSIGNS.................................93
Section 9.05. SURVIVAL...............................................95
Section 9.06. COUNTERPARTS; INTEGRATION; EFFECTIVENESS...............96
Section 9.07. SEVERABILITY...........................................96
Section 9.08. RIGHT OF SETOFF........................................96
Section 9.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE
OF PROCESS.............................................97
Section 9.10. WAIVER OF JURY TRIAL...................................97
Section 9.11. HEADINGS...............................................98
Section 9.12. CONFIDENTIALITY........................................98
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Section 9.13. INTEREST RATE LIMITATION...............................99
Section 9.14. NON-RECOURSE...........................................99
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SCHEDULES:
Schedule 2.01 - Commitment
Schedule 3.05 - Licenses
Schedule 3.06 - Disclosed Matters
Schedule 3.14 - Subsidiaries
Schedule 3.15 - Insurance
Schedule 6.01 - Existing Indebtedness
Schedule 6.02 - Existing Liens
Schedule 6.04 - Existing Investments
Schedule 6.08 - Existing Restrictions
Schedule 6.14 - Minimum Cumulative Dark Fiber/Conduit Revenue/Proceeds
Schedule 6.15 - Minimum Consolidated Operating Revenues
Schedule 6.16 - Consolidated EBITDA
EXHIBITS:
Exhibit A Form of Assignment and Acceptance
Exhibit B Form of Trust Agreement
Exhibit C Form of Note
Exhibit D Form of Borrowing Request
Exhibit E Form of Capitalization Certificate
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This CREDIT AGREEMENT, dated as of October 29, 1999 (this "AGREEMENT"),
among XX.Xxx Corp., a Delaware corporation (the "BORROWER"), the Lenders party
hereto and First Union National Bank, as Administrative Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. DEFINED TERMS.
As used in this Agreement, the following terms have the meanings
specified below:
"ABR" when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Alternate Base Rate.
"ADDITIONAL ASSETS" means any capital assets used or useful in the
business of the Borrower and its Subsidiaries purchased or acquired after the
date hereof.
"ADDITIONAL GUARANTEES" has the meaning assigned to such term in the
Trust Agreement.
"ADDITIONAL SECURITY DOCUMENTS" has the meaning assigned to such term in
the Trust Agreement.
"ADJUSTED LIBO RATE" means, with respect to any LIBOR Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.
"ADMINISTRATIVE AGENT" means First Union, in its capacity as
administrative agent for the Lenders hereunder.
"ADMINISTRATIVE QUESTIONNAIRE" means an administrative questionnaire in
a form supplied by the Administrative Agent.
"AFFILIATE" means, with respect to a specified Person, another Person
that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the specified Person.
"AGENT" means a collective or individual reference, as the context
requires, to the Administrative Agent and each agent and trustee under the Loan
Documents.
"ALTERNATE BASE RATE" means, for any day, a rate per annum equal to the
greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus one-half of one percent. Any change in
the Alternate Base Rate due to a change in the
Prime Rate or the Federal Funds Effective Rate shall be effective from and
including the effective date of such change in the Prime Rate or the Federal
Funds Effective Rate, respectively.
"ANNUAL BUSINESS PLAN" means the annual update to the initial business
plan, including the build-out of the Network agreed to pursuant to Exhibit B of
the AT&T Agreement, as such agreement may be amended from time to time in
accordance with this Agreement (or, if the AT&T Agreement has been terminated,
as approved by the Administrative Agent), including an annual operating and cash
flow budget in reasonable detail for the current fiscal year, projections of
Capital Expenditures, Network Expenses and other Permitted Expenses, and the
estimated timing of all Borrowings, in each case for the year to which such
Annual Business Plan applies, and updated financial projections through the
fiscal year during which the Maturity Date is scheduled to occur.
"ANNUALIZED EBITDA" means, as of any date of determination, Consolidated
EBITDA for the period of two consecutive calendar quarters then most recently
ended, times two.
"APPLICABLE RATE" means, for any day, with respect to any Loan, the
applicable rate per annum set forth below under the caption "ABR Spread" or
"LIBOR Spread", as the case may be, during the following periods as of the most
recent determination date:
Period ABR Spread LIBOR Spread
---------------------------------- --------------- ---------------
During the period Consolidated 3.00% 4.25%
EBITDA is less than zero
During any period when the 2.75% 4.00%
Consolidated Leverage Ratio is more
than 10 to 1
During any period when the 2.50% 3.75%
Consolidated Leverage Ratio is more
than 6 to 1 but less than or equal
to 10 to 1
During any period when the 2.25% 3.50%
Consolidated Leverage Ratio is more
than 4 to 1 and less than or equal
to 6 to 1
During any period when the 2.00% 3.25%
Consolidated Leverage Ratio is less
than or equal to 4 to 1
For purposes of the foregoing table, (i) the Consolidated Leverage Ratio shall
be determined as of the end of each calendar quarter based upon the Borrower's
consolidated financial statements
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delivered pursuant to Section 5.01(a) or (b), except that, prior to delivery of
the first such financial statements after the Effective Date, such determination
shall be based upon the financial statements referred to in Section 3.04 for the
calendar quarter ended June 30, 1999, and (ii) each change in the Applicable
Rate resulting from a change in the Consolidated Leverage Ratio shall be
effective during the period commencing on and including the date of delivery to
the Administrative Agent of such consolidated financial statements indicating
such change and ending on the date immediately preceding the effective date of
the next such change; PROVIDED that if the Borrower fails to deliver the
consolidated financial statements required to be delivered by it pursuant to
Section 5.01(a) or (b) within the period specified therein for delivery thereof
and, when such financial statements are delivered, the Applicable Rate resulting
from the Consolidated Leverage Ratio based upon such financial statements is
greater than the Applicable Rate in effect immediately prior to the end of the
period during which such financial statements were required to be delivered,
then (x) the Applicable Rate shall be retroactively increased (for the period
from the expiration of the period specified in Section 5.01(a) or (b) for
delivery of such consolidated financial statements until the earlier of the date
such consolidated financial statements are delivered or the date of the
expiration of the period specified therein for delivery) and (y) if any payments
of interest have been made with respect to such period, the Borrower shall
promptly make a supplemental payment of interest to correct the underpayment.
"ASSET SALE" means any sale, transfer or other disposition (including by
way of merger, consolidation or sale-leaseback transactions) in one transaction
or a series of related transactions by the Borrower or its Subsidiaries to any
Person other than the Borrower or any of its Subsidiaries of (i) all or any of
the capital stock of any Subsidiary, (ii) all or substantially all of the
property and assets of an operating unit or business of the Borrower or any of
the Subsidiaries or (iii) any other property or assets of the Borrower or any of
the Subsidiaries other than in the ordinary course of business of the Borrower
or such Subsidiary; PROVIDED that sales or other dispositions of equipment that
has become worn out, obsolete or damaged, or otherwise unsuitable for use in
connection with the business of the Borrower or the Subsidiaries, shall not be
included within the meaning of "Asset Sale".
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered
into by a Lender and an assignee (with the consent of the Borrower and
Administrative Agent if required by Section 9.04), and accepted by the
Administrative Agent, in the form of Exhibit A or any other form approved by the
Administrative Agent.
"AT&T AGREEMENT" means that certain Fiber Optic System Agreement, dated
October 29, 1999, between the Borrower and AT&T Corp., as amended in accordance
with this Agreement.
"AVAILABILITY PERIOD" means, in respect of the Tranche A-1 Loans, the
Tranche A-1 Availability Period, in respect of the Tranche A-2 Loans, the
Tranche A-2 Availability Period, in respect of the Revolving Loans, the
Revolving Availability Period, and, in respect of the Letters of Credit, the
Letter of Credit Availability Period.
"BLOCKAGE NOTICE" has the meaning set forth in the definition of
"Blockage Period."
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"BLOCKAGE PERIOD" means any period (i) commencing on a date on which the
Administrative Agent delivers a notice (a "BLOCKAGE NOTICE") to the Borrower to
the effect that an Event of Default under Section 7.01(d) has occurred and is
continuing by reason of a breach of any provision of Sections 6.14 through 6.20,
and (ii) ending on the earliest of: (A) the 179th day after delivery of the
Blockage Notice with respect to such Blockage Period, (B) the cure or waiver of
the breach that was the basis for such Blockage Notice (so long as no other
Event of Default under Section 7.01(d) has occurred and is continuing by reason
of a breach of any provision of Sections 6.14 through 6.20), and (C) the payment
in full of the Loans and the termination of the Commitments under this
Agreement; PROVIDED that no more than one Blockage Notice may be given during
any 365-day period and no such breach that existed on the date of delivery of a
Blockage Notice may be made the basis for another Blockage Period unless such
breach has been cured for at least 90 days.
"BOARD" means the Board of Governors of the Federal Reserve System of
the United States of America.
"BORROWER" means XX.Xxx Corp., a Delaware corporation and a wholly-owned
subsidiary of the Parent.
"BORROWING" means a Loan or group of Loans of the same Class and Type,
made, converted or continued on the same date and, in the case of LIBOR Loans,
as to which a single Interest Period is in effect.
"BORROWING REQUEST" means a request by the Borrower for a Borrowing in
accordance with Section 2.03 in the form of Exhibit D.
"BRIDGE FACILITY" means, at any time, the extensions of credit pursuant
to the Bridge Loan Agreement, the Term Loan Agreement and/or the Exchange Notes
Indenture, whichever is then in effect.
"BRIDGE LOAN AGREEMENT" means that certain Bridge Loan Agreement, dated
as of October 29, 1999, among Warburg Dillon Read LLC, Credit Suisse First
Boston, as Agents, the Parent, and the lenders from time to time party thereto.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required by law to
remain closed; PROVIDED that, when used in connection with a LIBOR Loan, the
term "BUSINESS DAY" shall also exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market.
"BUSINESS PLAN" means the initial business plan setting forth the
management case of the Borrower and the Subsidiaries dated October 8, 1999,
which includes a capital budget, a construction budget for the Network Expenses,
and a schedule of each estimated Borrowing, in each case consistent with the
rest of the Business Plan.
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"CAPITAL EXPENDITURES" means, for any period, the additions to property,
plant and equipment and other capital expenditures of the Borrower and its
Subsidiaries that are (or would be) set forth in a consolidated statement of
cash flows of the Borrower for such period prepared in accordance with GAAP;
PROVIDED that no capitalized interest shall be included in the definition of
"Capital Expenditures."
"CAPITAL LEASE OBLIGATIONS" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"CHANGE IN CONTROL" means: (a) the acquisition of beneficial ownership,
directly or indirectly, by any Person or group (within the meaning of the
Securities Exchange Act), other than the Parent Stockholders, of shares
representing more than 35% of the aggregate ordinary voting power represented by
the issued and outstanding capital stock of the Parent; (b) occupation of a
majority of the seats (other than vacant seats) on the board of directors of the
Parent by persons who were neither (A) recommended by the board of directors of
the Parent to be elected by the stockholders of the Parent nor (B) appointed by
directors so nominated; (c) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person other than the Parent of
any ownership or equity interest in the Borrower; or (d) the failure by the
Parent to have the ability (without the consent of any other Person) to elect at
least a majority of the directors) of the Borrower.
"CHANGE IN LAW" means (a) the adoption of any law, rule or regulation
after the date of this Agreement, (b) any change in any law, rule or regulation
or in the interpretation or application thereof by any Governmental Authority
after the date of this Agreement or (c) compliance by any Lender (or, for
purposes of Section 2.13(b), by any lending office of such Lender or by such
Lender's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
"CHARGES" has the meaning set forth in Section 9.13.
"CLASS" when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Tranche A-1
Loans, Tranche A-2 Loans or Revolving Loans.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"COLLATERAL" has the meaning assigned to such term in the Trust
Agreement.
"COLLATERAL TRUSTEE" means a collective reference to the Corporate
Trustee and the Individual Trustee under the Trust Agreement.
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"COMMITMENT" means, with respect to each Lender, the commitment, if any,
of such Lender to make Loans and issue or participate in Letters of Credit
hereunder during any Availability Period, expressed as an amount representing
the maximum principal amount of the Loans to be made and Letters of Credit to be
issued or participated in by such Lender hereunder, as such commitment may be
(a) reduced or increased from time to time pursuant to Section 2.06 and (b)
reduced or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 9.04. The initial amount of each Lender's Commitment
is set forth on Schedule 2.01, in the Assignment and Acceptance pursuant to
which such Lender shall have assumed its Commitment or in the joinder agreement
or other document pursuant to which such Lender shall have agreed to provide all
or a portion of any increase in the Commitment pursuant to Section 2.06(g), as
applicable. The initial aggregate amount of the Lenders' Commitments is
$350,000,000.
"COMMITMENT FEE" has the meaning set forth in Section 2.10.
"CONSOLIDATED DEBT SERVICE" means, for any period, without duplication,
Consolidated Interest Expense for such period, PLUS any scheduled mandatory cash
Repayments of Indebtedness of the Borrower and its Subsidiaries made during such
period, PLUS all dividends paid by the Borrower to the Parent during such period
(excluding any amount exceeding the amount of the Permitted Interest Liabilities
paid by the Parent during such period), PLUS all Commitment Fees paid by any
Loan Party during such period and other commitment fees in respect of any
Consolidated Indebtedness.
"CONSOLIDATED EBITDA" means, for any period: (i) Consolidated Net Income
for such period (adjusted to exclude all extraordinary items and Non-Recurring
Items), PLUS (ii) without duplication and to the extent deducted from revenues
in determining Consolidated Net Income for such period, the sum of (a) the
aggregate amount of Consolidated Interest Expense for such period, (b) the
aggregate amount of income tax expense for such period, (c) all amounts
attributable to depreciation and amortization for such period, (d) non-cash
compensation expenses, (e) the aggregate amount of (1) all fees and expenses
paid by the Borrower under and in respect of the closing, initial amendment and
syndication of this Agreement and in connection with the Fee Letter and that
certain fee letter dated as of October 29, 1999, between the Borrower and Lucent
Technologies, Inc. and (2) expense in respect of Permitted Transaction Fees
(but, solely for purposes of this definition, only to the extent incurred in
connection with the consummation of the transactions contemplated by the Bridge
Loan Agreement and the Subscription Agreement and the initial issuance of High
Yield Debt), and (f) on or prior to September 30, 2001, the amount expensed in
connection with cash bonuses to and/or the forgiveness of loans in favor of the
chief executive officer and other key employees of the Borrower related to
initial compensation payment which shall not exceed $15,000,000 in the
aggregate, in each case as determined for such period on a consolidated basis
with respect to the Borrower and the Subsidiaries in accordance with GAAP.
"CONSOLIDATED GROSS REVENUES" means, for any period, consolidated gross
revenues of the Borrower and its Subsidiaries attributable to sales of its
services determined for such period on a consolidated basis with respect to the
Borrower and its Subsidiaries in accordance with GAAP.
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"CONSOLIDATED INDEBTEDNESS" means, as of any date of determination, the
aggregate principal amount of Indebtedness of the Borrower and its Subsidiaries
outstanding as of such date determined on a consolidated basis in accordance
with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the sum of (a)
the interest expense, both expensed and capitalized (including the interest
component in respect of Capital Lease Obligations, but excluding any such
interest expense of any Person for any period that the income (or loss) of such
Person is excluded from the calculation of Consolidated Net Income by reason of
clause (b) of the definition of "Consolidated Net Income"), accrued by the
Borrower and the Subsidiaries during such period, PLUS (b) preferred stock
dividends in respect of Disqualified Stock of the Borrower and its Subsidiaries
for such period, in each case determined on a consolidated basis in accordance
with GAAP.
"CONSOLIDATED LEVERAGE RATIO" means, as of any date of determination,
the ratio of (a) Consolidated Indebtedness as of such date to (b) Annualized
EBITDA.
"CONSOLIDATED NET INCOME" means, for any period, net income or loss of
the Borrower and its Subsidiaries for such period determined on a consolidated
basis in accordance with GAAP, excluding (a) the income of any Person in which
any other Person (other than the Borrower or any of its Subsidiaries or any
director holding qualifying shares in compliance with applicable law) has a
joint interest, except to the extent of the amount of dividends or other
distributions (including distributions made as a return of capital or Repayment
of principal or advances) actually paid to the Borrower or any of its
Subsidiaries, by such Person, and (b) the income (or loss) of any Person accrued
prior to the date it becomes a Subsidiary of Borrower or is merged into or
consolidated with the Borrower or any of its Subsidiaries or the date such
Person's assets are acquired by the Borrower or any Subsidiary of Borrower.
"CONSOLIDATED OPERATING REVENUES" means, for any period, Consolidated
Gross Revenues for such period excluding, to the extent included in the
determination thereof, without duplication (i) all revenues of the Borrower and
its Subsidiaries attributable to the sale of capital assets and (ii) all
revenues of the Borrower and its Subsidiaries attributable to Dark Fiber/Conduit
Dispositions and Fiber Swaps, in each case, determined on a consolidated basis
in accordance with GAAP.
"CONTROL" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"CONTROLLING" and "CONTROLLED" have meanings correlative thereto.
"CONVERSION DATE" means the earlier to occur of (i) September 30, 2003,
and (ii) the first Quarterly Date as of which the Consolidated EBITDA for each
of two consecutive calendar quarters then most recently ended has been positive;
PROVIDED that in no case shall the Conversion Date be any earlier than October
31, 2002.
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"CUMULATIVE DARK FIBER/CONDUIT GROSS PROCEEDS" means, as of any date of
determination, the aggregate amount of gross cash proceeds received by the
Borrower and the Subsidiaries in respect of Dark Fiber/Conduit Dispositions.
"CUMULATIVE DARK FIBER/CONDUIT REVENUE/PROCEEDS means, as of any date of
determination, the aggregate amount of Dark Fiber/Conduit Revenue/Proceeds for
all Dark Fiber/Conduit Dispositions and Fiber Swaps consummated on or prior to
such date. For purposes of this definition, "Dark Fiber/Conduit
Revenue/Proceeds" means, as of any date of determination thereof, for any Dark
Fiber/Conduit Disposition or Fiber Swap (a "disposition"), the greater of (i)
the revenues of the Borrower and its Subsidiaries attributable to such
disposition for the period from the date of such disposition to the date of
determination, determined on a consolidated basis in accordance with GAAP, and
(ii) the amount of cash proceeds received by the Borrower and its Subsidiaries
in respect of such disposition during such period.
"DARK FIBER/CONDUIT DISPOSITION" means a lease, sale, conveyance or
other disposition (other than a Fiber Swap) by the Borrower or any Subsidiary of
unused or "dark" fiber optic strands or unused conduit, or the use thereof, for
a period of at least ten (10) years, in a transaction in which none of Borrower
or the Subsidiaries has any obligation to "light" such fiber optic strands
except dispositions required by the AT&T Agreement as in effect on March 30,
2000, or as amended with the consent of the Administrative Agent if such consent
is required pursuant to Section 6.11.
"DEBT SERVICE COVERAGE RATIO" means, as of any date of determination
thereof, the ratio of Consolidated EBITDA for the period of two consecutive
calendar quarters then most recently ended to Consolidated Debt Service for the
period of two consecutive quarters then most recently ended.
"DEDICATED CONDUIT" means that portion of the conduit that has been
dedicated to lit fiber services conducted by XX.Xxx Services.
"DEFAULT" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"DISCLOSED MATTERS" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.
"DISQUALIFIED STOCK" means, with respect to any Person, any capital
stock of such Person which by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable or exercisable) or upon
the happening of any event (i) matures or is mandatorily redeemable pursuant to
a sinking fund obligation or otherwise, (ii) is convertible or exchangeable for
Indebtedness or other Disqualified Stock, (iii) requires the payment of
dividends other than dividends payable solely in additional shares of capital
stock of such Person (other than Disqualified Stock) or (iv) is redeemable or
subject to required repurchase at the option of the holder thereof, in whole or
in part; PROVIDED that "Disqualified Stock" shall not include the Series A
Convertible Preferred Stock of the Parent solely by the virtue of such class of
capital stock (i)
8
being redeemable upon the occurrence of any event that constitutes a Change of
Control, subject to the Repayment of the Obligations prior to payment of any
such redemption obligation, or (ii) being redeemable on a date not earlier than
two years after the Maturity Date.
"DOLLARS" or "$" refers to lawful money of the United States of America.
"EFFECTIVE DATE" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"ELIGIBLE INSTITUTION" means a commercial banking institution that has a
combined capital and surplus of not less than $500 million (or its equivalent in
foreign currency) whose debt is rated "A" or better by S&P or "A2" or better by
Xxxxx'x at the time as of which any investment or rollover therein is made.
"ELIGIBLE PERSON" means (a) a commercial bank, an insurance company or
other similar financial institution, (b) any other entity which is (or which is
managed by a manager which manages funds which are) primarily engaged in making,
purchasing or otherwise investing in commercial loans or extending, or investing
in extensions of, credit for its own account in the ordinary course of business
or (c) any Person that supplies or makes available to the Borrower or any of its
Subsidiaries any property or services used or useful for any Qualifying
Business, or any Affiliate of any such Person, that provides a portion of any
increase in the Tranche A Commitments pursuant to Section 2.06(g); PROVIDED,
HOWEVER, that, except if the Borrower so elects, in no event may any Person be
an "Eligible Person" if such Person is engaged in a business that competes with
a Qualifying Business or if it is Controlled by a Person that is engaged in a
business that competes with a Qualifying Business.
"ENVIRONMENTAL LAWS" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"ENVIRONMENTAL LIABILITY" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of any Loan Party directly or indirectly resulting
from or based upon (a) violation of any Environmental Law, (b) the generation,
use, handling, transportation, storage, treatment or disposal of any Hazardous
Materials, (c) exposure to any Hazardous Materials, (d) the release or
threatened release of any Hazardous Materials into the environment or (e) any
contract, agreement or other consensual arrangement pursuant to which liability
is assumed or imposed with respect to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the
9
Code or, solely for purposes of Section 302 of ERISA and Section 412 of the
Code, is treated as a single employer under Section 414 of the Code.
"ERISA EVENT" means (a) any "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder with respect to a Plan (other
than an event for which the 30-day notice period is waived); (b) the existence
with respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"EVENT OF DEFAULT" has the meaning assigned to such term in Article VII.
"EXCESS CASH FLOW" means, for any fiscal year of the Borrower, the sum
(without duplication) of the following (PROVIDED that "Excess Cash Flow" shall
be zero for any fiscal year for which the sum of the following would otherwise
be less than zero):
(a) Consolidated Net Income for such fiscal year, adjusted to exclude
any gain or loss or net income or loss attributable to Prepayment Events, Dark
Fiber/Conduit Dispositions and Fiber Swaps; PLUS
(b) depreciation, amortization and other non-cash charges or losses
deducted in determining such Consolidated Net Income for such fiscal year
(including any interest expense accrued for such fiscal year that is not payable
currently in cash to the extent deducted in determining Consolidated Net
Income); PLUS
(c) the sum of (i) the amount, if any, by which Net Working Capital
decreased during such fiscal year, plus (ii) the amount, if any, by which the
consolidated deferred revenues of the Borrower and its Subsidiaries increased
during such fiscal year; MINUS
(d) the sum of (i) any non-cash gains included in determining such
Consolidated Net Income for such fiscal year plus (ii) the amount, if any, by
which Net Working Capital increased during such fiscal year plus (iii) the
amount, if any, by which the consolidated deferred revenues of the Borrower and
the Subsidiaries decreased during such fiscal year; MINUS
10
(e) Capital Expenditures for such fiscal year except to the extent
attributable to the incurrence of Capital Lease Obligations and other
Indebtedness of the Borrower and its Subsidiaries other than the Loans; MINUS
(f) the aggregate principal amount of Indebtedness repaid or prepaid by
the Borrower and its Subsidiaries during such fiscal year, excluding (i) Loans
prepaid pursuant to clauses (b) and (c) of Section 2.09, and (ii) Repayments or
prepayments of Indebtedness financed by incurring other Indebtedness, to the
extent that mandatory principal payments in respect of such other Indebtedness
would not be excluded from this clause (f) when made, in each case calculated
for such fiscal year; MINUS
(g) the aggregate amount in such fiscal year of dividends and
distributions paid by the Borrower to the Parent in order to permit the Parent
to pay Permitted Parent Liabilities.
"EXCHANGE NOTES INDENTURE" has the meaning set forth in the Bridge Loan
Agreement as in effect on the date hereof.
"EXCLUDED REAL ESTATE RIGHTS" means any Real Estate Rights acquired,
constructed or improved with proceeds of Indebtedness permitted pursuant to
Sections 6.01(iv)(C) or (D).
"EXCLUDED TAXES" means, with respect to the Administrative Agent, any
Lender or any other recipient of any payment to be made by or on account of any
obligation of the Borrower hereunder, (a) income or franchise taxes imposed on
(or measured by) its net income by the United States of America, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction in which the Borrower is located and (c) in the case of a Foreign
Lender (other than an assignee pursuant to a request by the Borrower under
Section 2.17(b)), any withholding tax that is imposed on amounts payable to such
Foreign Lender at the time such Foreign Lender becomes a party to this Agreement
(or designates a new lending office) or is attributable to such Foreign Lender's
failure to comply with Section 2.15(e), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation of a
new lending office (or assignment), to receive additional amounts from the
Borrower with respect to such withholding tax pursuant to Section 2.15(a).
"EXISTING AGREEMENTS" means (i) the Amended and Restated Fiber Network
Development Agreement, dated October 29, 1999, between Sea Breeze Communication
Company and the Borrower, (ii) the note of the Parent payable to Xxxx Telecom
Ventures, Inc. in the principal amount of $10,000,000, (iii) the Master
Secondment Agreement, dated October 29, 1999, between the Borrower and Xxxx
Telecom Ventures, Inc. and (iv) Master Secondment Agreement dated as of October
29, 1999 by and between PF Telecom Holdings LLC and Borrower, in each case as
amended through March 30, 2000.
"EXISTING CREDIT AGREEMENT" means that certain Credit Agreement, dated
as of October 29, 1999, among the Borrower, the lenders party thereto, Lucent,
as administrative agent, and Lucent Technologies, Inc., as syndication agent.
11
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"FEE LETTER" means that certain letter agreement, dated as of March 30,
2000, by and between First Union and the Borrower, relating to certain
syndication requirements and the payment of certain fees by the Borrower.
"FIBER SWAP" means any exchange or lease of fiber optic strands or
conduit in exchange for the ownership or use of other fiber optic strands or
conduit.
"FINANCIAL OFFICER" means, with respect to any Person, the chief
executive officer, the chief financial officer, principal accounting officer,
treasurer or controller of such Person.
"FIRST UNION" shall mean First Union National Bank, a national banking
association, together with its successors.
"FIXED CHARGE COVERAGE RATIO" means, as of any date of determination
thereof, the ratio of (a) Annualized EBITDA MINUS Capital Expenditures for the
period of two consecutive calendar quarters then most recently ended, times two
(provided, that after the date ending two calendar quarters after the Conversion
Date, Capital Expenditures hereunder shall be determined based upon the actual
amount of Capital Expenditures made during the trailing twelve month period)
MINUS (without duplication) cash taxes paid by the Borrower to a Governmental
Authority or pursuant to the Tax Sharing Agreement for the period of two
consecutive calendar quarters then most recently ended, times two to (b)
Consolidated Debt Service.
"FIXTURE" shall mean a fixture as defined in ss. 9-313(1)(a) of the
Uniform Commercial Code as in effect in the State of New York; for purposes
hereof, "Fixture" shall specifically include conduit and specifically exclude
fiber.
"FOREIGN LENDER" means any Lender that is organized under the laws of a
jurisdiction other than the United States of America, any State thereof or the
District of Columbia.
"GAAP" means, subject to Section 1.04, generally accepted accounting
principles in the United States of America.
"GOVERNMENT ACTS" has the meaning set forth in Section 2.18.
"GOVERNMENTAL AUTHORITY" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency,
12
authority, instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"GUARANTEE" of or by any Person (the "GUARANTOR") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "PRIMARY OBLIGOR") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guarantee issued to support such Indebtedness or
obligation; PROVIDED that the term "guarantee" shall not include endorsements
for collection or deposit in the ordinary course of business.
"GUARANTEES" has the meaning assigned to such term in the Trust
Agreement.
"GUARANTY OBLIGATIONS" means, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection
and obligations as principal or for reimbursement of the surety in respect of
payment bonds, performance bonds, bid bonds and other surety bonds issued by or
for the account of the Borrower or any Subsidiary in the ordinary course of
business) guaranteeing or intended to guarantee any Indebtedness or other
obligation of any other Person in any manner, whether direct or indirect, and
including without limitation any obligation, whether or not contingent, (i) to
purchase any such Indebtedness or any property constituting security therefor,
(ii) to advance or provide funds or other support for the payment or purchase of
any such Indebtedness or to maintain working capital, solvency or other balance
sheet condition of such other Person (including without limitation keep well
agreements, maintenance agreements, comfort letters or similar agreements or
arrangements) for the benefit of any holder of Indebtedness of such other
Person, (iii) to lease or purchase Property, securities or services primarily
for the purpose of assuring the holder of such Indebtedness, or (iv) to
otherwise assure or hold harmless the holder of such Indebtedness against loss
in respect thereof. The amount of any Guaranty Obligation hereunder shall
(subject to any limitations set forth therein) be deemed to be an amount equal
to the outstanding principal amount of the Indebtedness in respect of which such
Guaranty Obligation is made.
"HAZARDOUS MATERIALS" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
13
"HEDGING AGREEMENT" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"HIGH YIELD DEBT" means fixed rate Indebtedness of the Parent in respect
of debt Securities (other than the Securities evidencing Indebtedness under the
Exchange Notes Indenture) issued in an underwritten public offering or private
placement pursuant to Rule 144A of the Securities Act, which Indebtedness (i) is
not secured by any Lien on the assets of any Loan Party, (ii) does not mature
(except upon acceleration upon events of default, subject to clause (v) below,
under the High Yield Indenture), nor is any scheduled Repayment thereof due,
prior to the date that is one year after the later of the Maturity Date and any
other maturity date established in respect of Loans hereunder at the time such
debt Securities are issued, (iii) is not subject to any mandatory redemption or
required repurchase, conversion or exchange (whether upon the occurrence of any
contingency or otherwise), but excluding contingent redemption offer provisions
in the event of a "change of control" or "asset sale" that are customary for
similar debt Securities, (iv) is not guaranteed by any other Loan Party, (v) is
issued on such other terms, including covenants, events of default and similar
provisions relating thereto, that are customary at the times of offering and
issuance for debt Securities issued by companies of comparable credit quality
with, and in the same market as, the Parent, and otherwise no less favorable to
the Parent than the Bridge Facility, and (vi) as to which the Administrative
Agent has received all drafts of the High Yield Indenture and other related
documents and agreements provided to the Parent and has been consulted by the
Parent with respect to the terms and conditions of such documents and agreements
prior to the execution and delivery thereof.
"HIGH YIELD INDENTURE" means, at any time, the indenture then
outstanding executed with respect to an issuance of Indebtedness meeting the
definition of High Yield Debt (which indenture has not been amended, modified,
supplemented or waived except in compliance with clause (vi) of the definition
of "High Yield Debt," or in any other manner that would cause it not to comply
with the definition of "High Yield Debt").
"INDEBTEDNESS" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar debt securities, (c) all
obligations of such Person upon which interest charges are customarily paid, (d)
all obligations of such Person under conditional sale or other title retention
agreements relating to property acquired by such Person, (e) all obligations of
such Person in respect of the deferred purchase price of property or services
(excluding accounts payable incurred in the ordinary course of business that are
not overdue by more than 60 days unless and to the extent that any such amount
may be the subject of a bona fide dispute), (f) all Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, but only to the extent of the lesser of the amount of such
Indebtedness and the fair market value of such property, (g) all Guaranty
Obligations of such Person, (h) all Capital Lease Obligations of such Person,
(i) all obligations, contingent or otherwise, of such Person as an account party
in respect of letters of credit, (j) all obligations, contingent or otherwise,
of such Person in respect of bankers' acceptances, (k) all Disqualified Stock of
such Person, and (l) all obligations of such Person
14
under Hedging Agreements; provided, however, obligations of such Person
evidenced by payment, performance, bid or surety bonds incurred in the ordinary
course of business shall not constitute Indebtedness. The Indebtedness of any
Person shall include the Indebtedness of any other entity (including any
partnership in which such Person is a general partner) to the extent such Person
is liable therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor. The amount
outstanding at any time of any Indebtedness issued with original issue discount
is the face amount of such Indebtedness less the remaining unamortized portion
of the original issue discount of such Indebtedness at such time as determined
in conformity with GAAP.
"INDEMNIFIED TAXES" means Taxes other than Excluded Taxes.
"INDEMNITEE" has the meaning set forth in Section 9.03(b).
"INDEMNITY AND CONTRIBUTION AGREEMENT" means that certain Indemnity,
Subrogation and Contribution Agreement, dated as of the date hereof, among the
Loan Parties and the Collateral Trustee.
"INFORMATION" has the meaning set forth in Section 9.12.
"INITIAL GUARANTEE" has the meaning assigned to such term in the Trust
Agreement.
"INITIAL NETWORK" means the approximately 6400-mile fiber optic network
to be developed, constructed and operated by the Borrower pursuant to the
Business Plan.
"INITIAL SECURITY DOCUMENTS" has the meaning assigned to such term in
the Trust Agreement.
"INTELLECTUAL PROPERTY" has the meaning set forth in Section 3.11.
"INTEREST ELECTION REQUEST" means a request by the Borrower to convert
or continue a Borrowing in accordance with Section 2.05.
"INTEREST FUND" means a fund, escrow or reserve established for the
purpose of providing a source of funds to pay interest in respect of
Indebtedness of the Parent.
"INTEREST PAYMENT DATE" means (a) with respect to any ABR Loan, the last
day of each March, June, September and December and (b) with respect to any
LIBOR Loan, the last day of the Interest Period applicable to the Borrowing of
which such Loan is a part and, in the case of a LIBOR Borrowing with an Interest
Period of more than three months' duration, each day prior to the last day of
such Interest Period that occurs at intervals of three months' duration after
the first day of such Interest Period.
"INTEREST PERIOD" means, with respect to any LIBOR Borrowing, the period
commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar
15
month that is one, two, three or six months thereafter, as the Borrower may
elect; PROVIDED that (a) if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day and (b) any Interest Period that commences on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Interest Period) shall end
on the last Business Day of the last calendar month of such Interest Period. For
purposes hereof, the date of a Borrowing initially shall be the date on which
such Borrowing is made and thereafter shall be the effective date of the most
recent conversion or continuation of such Borrowing.
"ISSUING LENDER" shall mean First Union.
"ISSUING LENDER FEES" shall have the meaning set forth in Section
2.10(d).
"LENDERS" means the Persons listed on Schedule 2.01 and any other Person
that shall have become a party hereto pursuant to an Assignment and Acceptance
or upon an increase in the Commitments pursuant to Section 2.06(g), other than
any such Person that ceases to be a party hereto pursuant to an Assignment and
Acceptance.
"LETTER OF CREDIT AVAILABILITY PERIOD" means the period from and
including the Effective Date to but excluding the earlier of (A) the Maturity
Date, and (B) any earlier date of termination of the LOC Commitments in
accordance with this Agreement.
"LETTER OF CREDIT FEE" shall have the meaning set forth in Section
2.10(c).
"LETTERS OF CREDIT" shall mean any letter of credit issued by the
Issuing Lender for the account of the Borrower pursuant to the terms hereof, as
such Letters of Credit may be amended, modified, extended, renewed or replaced
from time to time.
"LIBO RATE" means, with respect to any LIBOR Borrowing for any Interest
Period, the rate appearing on Telerate Page 3750 (or on any successor page) as
the London interbank offered rate for deposits in dollars at approximately 11:00
a.m., London time, two Business Days prior to the commencement of such Interest
Period with a maturity comparable to such Interest Period. In the event that
such rate is not available at such time for any reason, then the "LIBO RATE"
with respect to such LIBOR Borrowing for such Interest Period shall be the rate
at which dollar deposits of $5,000,000 and for a maturity comparable to such
Interest Period are offered by the principal London office of the Administrative
Agent (or, if the Administrative Agent at the time is not a commercial bank, any
commercial bank based in New York City selected by the Administrative Agent for
the purpose of quoting such rate, PROVIDED that such commercial bank has a
combined capital and surplus and undivided profits of not less than
$500,000,000) in immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
16
"LIBOR" when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Adjusted LIBO Rate.
"LICENSES" has the meaning set forth in Section 3.05(b).
"LIEN" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"LOAN DOCUMENTS" means this Agreement, the Fee Letter, the Guarantees,
the Security Documents, the LOC Documents and the Indemnity and Contribution
Agreement.
"LOAN PARTIES" means the Parent, the Borrower and the Subsidiaries.
"LOANS" means the loans made or deemed made to the Borrower pursuant to
this Agreement.
"LOC COMMITMENT" shall mean the commitment of the Issuing Lender to
issue Letters of Credit and with respect to each Lender, the commitment of such
Lender to purchase participation interests in the Letters of Credit up to such
Lender's LOC Committed Amount as specified in Schedule 2.01, as such amount may
be reduced from time to time in accordance with the provisions hereof.
"LOC COMMITMENT PERCENTAGE" shall mean, for each Lender, the percentage
identified as its LOC Commitment Percentage on Schedule 2.01, as such percentage
may be modified in connection with any assignment made in accordance with the
provisions of Section 9.04.
"LOC COMMITTED AMOUNT" shall mean, collectively, the aggregate amount of
all of the LOC Commitments of the Lenders to issue and participate in Letters of
Credit as referenced in Section 2.02(b) and, individually, the amount of each
Lender's LOC Commitment as specified in Schedule 2.01.
"LOC DOCUMENTS" shall mean, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in connection
therewith, any application therefor, and any agreements, instruments, guarantees
or other documents (whether general in application or applicable only to such
Letter of Credit) governing or providing for (a) the rights and obligations of
the parties concerned or (b) any collateral security for such obligations. To
the extent of any conflict between the provisions of this Agreement and any LOC
Documents, this Agreement shall be controlling.
"LOC OBLIGATIONS" shall mean, at any time, the sum (without duplication)
of (a) the maximum amount which is, or at any time thereafter may become,
available to be drawn under
17
Letters of Credit then outstanding, assuming compliance with all requirements
for drawings referred to in such Letters of Credit PLUS (b) the aggregate amount
of all drawings under Letters of Credit honored by the Issuing Lender but not
theretofore reimbursed.
"LUCENT" means Lucent Technologies Inc.
"LUCENT/FIRST UNION ASSIGNMENT AND ACCEPTANCE" means that certain
Assignment and Acceptance, dated as of March 30, 2000, between Lucent and First
Union.
"LUCENT PRODUCT" means any products or services (including delivery and
installation) purchased by the Borrower or any Subsidiary pursuant to the Supply
Agreement.
"MANDATORY BORROWING" shall have the meaning set forth in Section
2.02(b)(v).
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, performance or
properties of the Parent and the Subsidiaries taken as a whole, (b) the
business, condition (financial or otherwise), operations, performance or
properties of the Borrower and its Subsidiaries, taken as a whole, (c) the
ability of any Loan Party to perform any of its obligations under any Loan
Document, (d) the legality, validity, binding effect or enforceability of this
Agreement or any other Loan Document, or (e) the rights of or benefits available
to the Lenders under any Loan Document.
"MATERIAL INDEBTEDNESS" means Indebtedness (other than the Loans), or
obligations in respect of one or more Hedging Agreements, of any one or more of
the Loan Parties in an aggregate principal amount exceeding $6,000,000. For
purposes of determining "Material Indebtedness," the "principal amount" of the
obligations of a Loan Party in respect of any Hedging Agreement at any time
shall be the maximum aggregate amount (giving effect to any netting agreements)
that such Loan Party would be required to pay if such Hedging Agreement were
terminated at such time.
"MATURITY DATE" means December 31, 2006.
"MAXIMUM RATE" has the meaning set forth in Section 9.13.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"NET PROCEEDS" means, with respect to any Prepayment Event, (a) the cash
proceeds received in respect of such event including (i) any cash received in
respect of any non-cash proceeds, but only as and when received, (ii) in the
case of a casualty, insurance proceeds, and (iii) in the case of a condemnation
or similar event, condemnation awards and similar payments, net of (b) the sum
of (i) all reasonable fees and out-of-pocket expenses paid by the Borrower and
its Subsidiaries to third parties (other than Affiliates) in connection with
such event, (ii) in the case of a sale or other disposition of an asset
(including pursuant to a casualty or condemnation),
18
the amount of all payments required to be made by the Borrower and its
Subsidiaries as a result of such event to repay Indebtedness (other than Loans)
secured by such asset or otherwise subject to mandatory prepayment as a result
of such event, and (iii) the amount of all taxes paid (or reasonably estimated
to be payable) by the Borrower and its Subsidiaries (either directly or to the
Parent pursuant to the Tax Sharing Agreement), and the amount of any reserves
established by the Borrower and its Subsidiaries to fund contingent liabilities
reasonably estimated to be payable, in each case that are directly attributable
to such event (as determined reasonably and in good faith by the chief financial
officer of the Borrower).
"NET WORKING CAPITAL" means, at any date (a) the consolidated current
assets of the Borrower and its Subsidiaries as of such date (excluding, without
duplication, cash and Permitted Investments and any current assets attributable
to Dark Fiber/Conduit Dispositions and Fiber Swaps), minus (b) the consolidated
current liabilities of the Borrower and its Subsidiaries as of such date
(excluding, without duplication, current liabilities in respect of Indebtedness
and any current liabilities attributable to Dark Fiber/Conduit Dispositions and
Fiber Swaps), determined on a consolidated basis in accordance with GAAP. Net
Working Capital at any date may be a positive or negative number. Net Working
Capital increases when it becomes more positive or less negative and decreases
when it becomes less positive or more negative.
"NETWORK" means the approximately 6400-mile fiber optic network to be
developed, constructed and operated by the Borrower pursuant to the Business
Plan in jurisdictions along project routes identified in the Annual Business
Plan, as such network is expanded through the addition of optic fiber strands or
conduit acquired through Fiber Swaps or with the proceeds of Dark Fiber/Conduit
Dispositions or other dispositions of assets permitted under Section 6.04(b) or
through the issuance of capital stock or other equity Securities by the Parent,
that are used to expand the mileage of such initially-built system.
"NETWORK EXPENSES" means Capital Expenditures (excluding Capital
Expenditures financed by the incurrence of Capital Lease Obligations or of
purchase money indebtedness) for equipment and other property and related
services to be used by the Borrower for the construction and development of the
Network and the deployment of equipment and systems necessary for operating the
Network.
"NON-RECURRING ITEMS" means, with respect to any Person for any period,
(a) all non-recurring items that do not involve any payment of cash by a Person
or any of its subsidiaries during such period or any future period and (b)
non-recurring items set forth on such Person's consolidated statement of
operations for such period below the operating income line in respect of (i)
gains or losses on sales or dispositions of assets outside the ordinary course
of business, (ii) discontinued operations, (iii) the effects of changes in
accounting principles or methods, (iv) write-downs on any investments of such
Person or of any subsidiary of such Person (other than such Person or any of its
subsidiaries), and (v) any restructuring charges, including the amount of any
such restructuring charge to cover cash payouts to laid-off employees of such
Person or any of its subsidiaries. "Non-Recurring Items" shall include without
duplication, and only to the extent included in determining Consolidated Net
Income, all gain, net income or loss attributable to Dark Fiber/Conduit
Dispositions and Fiber Swaps.
19
"OBLIGATIONS" means, at any time, all obligations of payment and
performance of the Borrower, the Parent and the Subsidiaries under the Loan
Documents.
"OTHER TAXES" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made under any Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document.
"PARENT" means XX.Xxx Holdings, Limited, a Delaware corporation.
"PARENT DEBT INSTRUMENT" means, at any time, (i) whichever of the Bridge
Loan Agreement, the Term Loan Agreement, the Exchange Notes Indenture or the
High Yield Indenture, if any, shall then evidence outstanding Indebtedness of
the Parent, and (ii) any other agreement or instrument evidencing Indebtedness
of the Parent (other than an indenture in respect of high yield Indebtedness of
the Parent that does not comply with the definition of "High Yield Indenture").
"PARENT STOCKHOLDERS" means: Xxxx Xxxxx; Xxxxx Xxxxx; Treg Ventures LLC;
Xxxx Telecom Ventures, Inc.; PF Telecom Holdings, LLC; GLW Ventures LLC;
Xxxxxxxxx Xxxxx; Odyssey Coinvestors, LLC; Odyssey Investment Partners Fund, LP;
Warburg Dillon Read LLC; Credit Suisse First Boston; and UBS Capital II LLC; and
each "Permitted Transferee" of each such Person, as such term is defined under
the Stockholders Agreement as in effect on the date hereof.
"PARTICIPANT" has the meaning set forth in Section 9.04(e).
"PARTICIPATION INTEREST" means the purchase by a Lender of a
participation interest in Letters of Credit as provided in Section 2.02(b).
"PAYMENT DATE" means each Quarterly Date after the Effective Date ending
on and including the Maturity Date.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
"PERFECTION CERTIFICATE" means, with respect to the Borrower, a
certificate in the form of Exhibit A to the Security Agreement and, with respect
to any Subsidiary, a similar certificate in the form approved under the
applicable Security Document delivered by such Subsidiary or any other form
approved by the Collateral Trustee.
"PERMITTED ENCUMBRANCES" means:
(a) Liens imposed by law for taxes, assessments, governmental charges or
similar claims that are not yet due or are being contested in compliance with
Section 5.05;
20
(b) statutory or common law Liens of landlords and carriers,
warehousemen, mechanics, suppliers, materialmen, repairmen and other similar
Liens, arising in the ordinary course of business and securing obligations that
are not yet delinquent or are being contested in compliance with Section 5.05;
(c) Liens incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other types
of social security laws or regulations;
(d) Liens incurred or deposits made to secure the performance of
tenders, bids, leases, statutory or regulatory obligations, surety and appeal
bonds, government contracts, performance and return-of-money bonds and other
obligations of a like nature, in each case in the ordinary course of business,
and a bank's unexercised right of set-off with respect to deposits made in the
ordinary course;
(e) judgment liens in respect of judgments that do not constitute an
Event of Default under clause (k) of Section 7.01;
(f) easements, municipal and zoning ordinances, rights-of-way and
similar encumbrances on or defects or other irregularities of title to real
property imposed by law or arising in the ordinary course of business that do
not secure any monetary obligations (other than customary maintenance required
by Governmental Authorities) and do not materially detract from the value of the
affected property or interfere with the ordinary conduct of business of the
Borrower or any Subsidiary;
(g) interests of lessees under leases or subleases granted by the
Parent, the Borrower or a Subsidiary as lessor that do not materially interfere
with the ordinary course of business of the Borrower and the Subsidiaries, taken
as a whole;
(h) any interest or title of a lessor in any property subject to any
lease otherwise permitted by the Loan Documents;
(i) any interest or title of a licensor in any property subject to any
license otherwise permitted by the Loan Documents; and
(j) Liens in favor of a Securities Intermediary pursuant to such
Securities Intermediary's customary customer account agreement; PROVIDED that
any such Liens shall at no time secure any Indebtedness or obligations other
than customary fees and charges payable to such Securities Intermediary;
PROVIDED that the term "PERMITTED ENCUMBRANCES" shall not include any
Lien securing Indebtedness.
"PERMITTED EXPENSES" means, for any fiscal year, (i) Network Expenses,
(ii) operating expenses of the Borrower or otherwise related to the Network, and
other working capital expenses, (iii) payments of interest on Indebtedness of
the Borrower, (iv) dividends to the Parent
21
to the extent permitted pursuant to Section 6.06(iii), (iv) or (v), and (v) fees
due hereunder and under the Fee Letter, in each case paid or incurred, or to be
paid or incurred, in accordance with the Annual Business Plan applicable to such
fiscal year.
"PERMITTED INTEREST FUND" means an Interest Fund or portion thereof in
an amount not greater than the amount which, together with any investment
earnings thereon, would be sufficient to allow the Parent to pay interest in
respect of up to six semi-annual interest payments on Permitted Parent Debt. For
purposes of this definition, only one such Interest Fund may be counted as the
Permitted Interest Fund.
"PERMITTED INTEREST LIABILITIES" means interest payable in respect of
Permitted Parent Debt in accordance with the terms of the Parent Debt
Instrument; PROVIDED, HOWEVER, that in the event an Interest Fund is established
in connection with the issuance and sale of Securities evidencing Indebtedness
of the Parent, Permitted Interest Liabilities shall not include any interest
payable in respect of Permitted Parent Debt during any period in which the
Parent's obligations to pay such interest are to be discharged pursuant to the
terms of the Permitted Debt Instrument by distributions from such Interest Fund;
and PROVIDED, FURTHER (i) in the case of any Indebtedness under the Bridge Loan
Agreement, such interest shall be determined on the basis of the applicable rate
of interest, but in any event not exceeding the Maximum Cash Interest Rate (as
defined in the Bridge Loan Agreement as in effect on the Effective Date), and
otherwise determined as provided in the Bridge Loan Agreement as in effect on
the Effective Date, and (ii) in the case of any Indebtedness under the Term Loan
Agreement, the Exchange Notes Indenture or the High Yield Indenture, such
interest shall be determined on the basis of the annual rate of interest
specified therein but in no event exceeding a 18% fixed rate and otherwise
determined in accordance with such agreement; PROVIDED that in the case of this
clause (ii) if the interest rate exceeds 16%, such interest shall be paid by the
issuance of additional Indebtedness under the Term Loan Agreement, the Exchange
Note Indenture or the High Yield Indenture in an aggregate principal amount
equal to such excess.
"PERMITTED INVESTMENTS" means:
(a) direct obligations of, or obligations the principal of and interest
on which are unconditionally guaranteed by, the United States of America (or by
any agency thereof to the extent such obligations are backed by the full faith
and credit of the United States of America), in each case maturing not more than
365 days after the date of acquisition thereof;
(b) commercial paper of a domestic issuer rated "A-1" or better by S&P
or "P-1" or better by Moody's maturing not more than 365 days after the date of
acquisition thereof;
(c) certificates of deposit, banker's acceptances and time deposits
maturing not more than 365 days after the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or
offered by, an Eligible Institution;
(d) master note or deposit arrangements with Securities of the types
described in paragraphs (a), (b) and (c) above;
22
(e) money market preferred stock of a corporation organized under the
laws of a jurisdiction within the United States of America rated "AA" or better
by S&P or "Aa" or better by Moody's; PROVIDED, HOWEVER, that any such debt
security that is rated by both such rating agencies shall be rated "AA" or
better by S&P or Moody's;
(f) fully collateralized repurchase agreements with a term of not more
than 30 days for Securities described in clause (a) above and entered into with
an Eligible Institution; and
(g) any fund investing exclusively in investments of the types described
in clauses (a) through (f) above.
"PERMITTED PARENT DEBT" means any Indebtedness of the Parent outstanding
under any Parent Debt Instrument in an aggregate principal amount equal to the
difference (but not less than zero) of (a) the net proceeds of the incurrence of
such Indebtedness (i) applied to the payment of Permitted Transaction Fees
incurred in connection with such incurrence, (ii) applied to the Repayment of
other Permitted Parent Debt, and any interest accrued thereon to the date of
Repayment, (iii) contributed to a Permitted Interest Fund, or (iv) contributed
to the Borrower as equity capital, MINUS (b) the aggregate amount of all
Repayments of such Indebtedness made after such incurrence.
"PERMITTED PARENT EXPENSES" means all operating and administrative
expenses of the Parent (other than any expenses in respect of taxes that are
allocated between the Parent and the Borrower and its Subsidiaries pursuant to
the Tax Sharing Agreement), in each case, to the extent fairly allocable to the
business of the Borrower and, at such times as the Parent has other
subsidiaries, in an amount no greater than Borrower's pro rata share thereof.
"PERMITTED PARENT LIABILITIES" means, for any period, the sum of (i)
Permitted Transaction Fees, (ii) Permitted Interest Liabilities, (iii) Permitted
Parent Expenses and (iv) an aggregate amount (together with any amounts invested
by the Borrower and its Subsidiaries pursuant to Section 6.04(a)(iv)(B)(III))
not greater than $3,000,000 during each fiscal year of the Borrower (it being
agreed that amounts not used in any fiscal year may be carried forward to the
next succeeding fiscal year only) PLUS net cash proceeds received since the
Effective Date from the issuance of equity interests of the Parent to directors,
officers and employees (net of loans to directors, officers and employees
pursuant to Section 6.04(a)(iv)(B)(III)(y) that are outstanding or that have
been forgiven), payable to purchase or otherwise acquire or retire capital stock
of the Parent or options or warrants for the issuance of capital stock of the
Parent issued to directors, officers or employees.
"PERMITTED PREFERRED STOCK" means capital stock of the Borrower (other
than Disqualified Stock of the Borrower) of any class or classes (however
designated) that is preferred as to the payment of dividends, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of the Borrower, over shares of capital stock of any other class of
the Borrower.
"PERMITTED TRANSACTION FEES" means (without duplication) (i) all fees
and expenses payable by the Parent under the Bridge Loan Agreement and the Term
Loan Agreement or the
23
Exchange Notes Indenture, in connection with that certain Fee Letter, dated as
of October 1, 1999, between the Parent and the Bridge Facility lenders, or
otherwise in connection with the Bridge Facility, (ii) all fees and expenses
payable by the Parent under the Subscription Agreement or otherwise in
connection with the Subscription Agreement, (iii) the fees of up to $2,500,000
payable to Odyssey Coinvestors, LLC, and Odyssey Investment Partners Fund, LP,
under that certain Fee Letter, dated October 29, 1999, from such Persons to the
Parent, (iv) customary underwriting fees, sales commissions and other
transaction fees and expenses incurred by the Parent in connection with any
issuance of High Yield Debt (it being acknowledged that fees and commissions
payable under that certain Engagement Letter, dated as of October 29, 1999,
between the Parent, Warburg Dillon Read, LLC and Credit Suisse First Boston
Corporation, are customary).
"PERMITTED UCC JURISDICTION" means (i) the jurisdictions in which the
Borrower indicates in the Perfection Certificate delivered pursuant to Section
4.01(i) that the Borrower maintains or anticipates maintaining equipment at any
time the Loans are to be outstanding, and (ii) any jurisdiction which the
Borrower or a Subsidiary identifies in a certificate delivered (x) pursuant to
Section 5.03(b), (y) in connection with the execution and delivery of any
Security Document pursuant to Section 5.14 or (z) otherwise in a certificate
delivered to the Administrative Agent and the Collateral Trustee, in any such
case, as a jurisdiction in which the Borrower or such Subsidiary maintains or
anticipates maintaining equipment at any time the Loans are to be outstanding or
as a jurisdiction in which the Borrower or such Subsidiary maintains or
anticipates maintaining equipment at any time the Loans are to be outstanding;
PROVIDED that, in the case of any jurisdiction identified in a certificate
described in either of the foregoing clauses (ii)(y) or (z), the Borrower shall
have also delivered a certificate to the Administrative Agent and the Collateral
Trustee to the effect described under Section 5.03(b)(ii) with respect in such
jurisdiction, and, in the case of any jurisdiction identified in a certificate
described in the foregoing clause (ii)(z), the Borrower shall have caused an
opinion of legal counsel to be delivered to the Administrative Agent and the
Collateral Trustee, in form and substance reasonably satisfactory to each of
them, to effect described under Section 5.03(b)(ii) with respect to such
jurisdiction.
"PERSON" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"XX.XXX PROPERTY" has the meaning set forth in Section 5.15.
"XX.XXX SERVICES" has the meaning set forth in Section 5.15.
"PLAN" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Parent or
the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in Section
3(5) of ERISA.
24
"PREPAYMENT EVENT" means:
(a) any Asset Sale other than (i) dispositions permitted by Section
6.04(b), and (ii) any Dark Fiber/Conduit Disposition or Fiber Swap;
(b) any receipt by the Borrower or any Subsidiary of cash proceeds in
respect of any Dark Fiber/Conduit Disposition at any time after Cumulative Dark
Fiber/Conduit Gross Proceeds exceed $225,000,000;
(c) any Fiber Swap resulting in cash proceeds or other consideration;
(d) any casualty or other insured damage to, or any taking under power
of eminent domain or by condemnation or similar proceeding of, any property or
asset of the Borrower or any Subsidiary after the Effective Date;
PROVIDED that (i) such events shall not constitute "Prepayment Events"
to the extent that the aggregate Net Proceeds from all such events are less than
$250,000 during any fiscal year of the Borrower, and (ii) any such event
referred to in clauses (a), (b) or (c) above shall not constitute a "Prepayment
Event" if the Borrower elects (by notice to the Administrative Agent within five
Business Days after receipt of the Net Proceeds of such event) to reinvest the
Net Proceeds of such event in Additional Assets as promptly as practicable, but
in any event within 180 days, after the receipt of the Net Proceeds of such
event and (iii) any such event referred to in clause (d) above shall not
constitute a "Prepayment Event" if the Borrower elects (by notice to the
Administrative Agent within five Business Days after receipt of the Net Proceeds
of such event) to apply the Net Proceeds of such event to repair, restore or
replace the affected property or asset, or to reinvest such Net Proceeds in
Additional Assets as promptly as practicable, but in any event within 180 days,
after the receipt of the Net Proceeds of such event; PROVIDED, FURTHER, that if,
at the expiration of the 180-day period referred to in clauses (ii) and (iii)
less than all the Net Proceeds of such event have been reinvested or applied as
provided therein, then a "Prepayment Event" shall be deemed to have occurred at
the expiration of such 180-day period with Net Proceeds equal to the Net
Proceeds that have not been so reinvested or applied. Notwithstanding the
foregoing, any Asset Sale or similar event that would not otherwise constitute a
Prepayment Event hereunder but, under the terms of any indenture or other
agreement governing any Material Indebtedness, would require any prepayment or
redemption of, or offer to prepay or redeem, any such Indebtedness to the extent
that the Net Proceeds therefrom are not reinvested within a specified period of
time, shall constitute a Prepayment Event to the extent that the Net Proceeds
therefrom are not reinvested in accordance with clauses (ii) and (iii) above.
"PRIME RATE" shall mean, at any time, the rate of interest per annum
publicly announced from time to time by First Union at its principal office in
Charlotte, North Carolina as its prime rate. Each change in the Prime Rate shall
be effective as of the opening of business on the day such change in the Prime
Rate occurs. The parties hereto acknowledge that the rate announced publicly by
First Union as its Prime Rate is an index or base rate and shall not necessarily
be its lowest or best rate charged to its customers or other banks.
25
"PURCHASE MONEY DEBT" means Indebtedness of the Borrower or any
Subsidiary permitted under Section 6.01(iv), and any Indebtedness of the
Borrower or any Subsidiary permitted under Section 6.01(v) the proceeds of which
are used to refinance such Indebtedness.
"PURCHASE MONEY DEBT LIMIT" means $35,000,000.
"PURCHASE MONEY LIEN" means any Lien permitted under clause (iv) of
Section 6.02 securing Indebtedness permitted under clause (iv) of Section 6.01
and any related obligations for fees, expense reimbursements, indemnities or the
like to the holders of such Indebtedness.
"PURCHASE PRICE" means any amounts paid or payable for (a) Lucent
Product to be used in connection with the Network in accordance with invoices
delivered pursuant to the Supply Agreement or (b) Vendor Product to be used in
connection with the Network pursuant to invoices or purchase receipts.
"QUALIFYING BUSINESS" means the business of owning, constructing,
developing and operating the Network, and all other activities incidental,
related or ancillary to, or necessary for, such business.
"QUARTERLY DATE" means the last day of each of March, June, September
and December.
"REAL ESTATE RIGHTS" has the meaning set forth in Section 5.15.
"REDUCTION DATE" means each Quarterly Date beginning with the Quarterly
Date ended March 31, 2003 and ending on and including the Maturity Date.
"REGISTER" has the meaning set forth in Section 9.04(c).
"RELATED PARTIES" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"REPAYMENT" means, in respect of any Indebtedness, the direct or
indirect repayment, prepayment, redemption, purchase, acquisition, defeasance,
retirement or other satisfaction of the principal of such Indebtedness, in whole
or in part, whether optional or mandatory. "REPAY" has a meaning correlative
thereto.
"REQUIRED LENDERS" shall mean Lenders, including the Administrative
Agent, holding in the aggregate more than 50% of (a) all Revolving Loans and LOC
Obligations then outstanding at such time PLUS (b) the aggregate unused
Revolving Commitments at such time (treating for purposes hereof, in the case of
the Issuing Lender, the portion of the LOC Obligations of the Issuing Lender
which is not subject to the Participation Interests of the other Lenders as
direct Obligations of the Issuing Lender and, in the case of the Lenders other
than the Issuing Lender, the Participation Interests of such Lenders in LOC
Obligations hereunder as direct Obligations of such Lenders) PLUS (c) all
Tranche A-1 Loans and Tranche A-2 Loans then outstanding at such time PLUS (d)
during the Tranche A-1 Availability Period, the aggregate unused Tranche A-1
26
Commitments at such time PLUS (e) during the Tranche A-2 Availability Period,
the aggregate unused Tranche A-2 Commitments at such time, PLUS (f) any and all
increases in the Loans and the Commitments (including the addition of any new
tranche of term loans) pursuant to Section 2.06(g).
"RESTRICTED PAYMENT" means (a) any dividend or other distribution
(whether in cash, securities or other property) with respect to any shares of
any class of capital stock of the Borrower or any of its Subsidiaries, and (b)
any payment (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any shares of any class
of capital stock of the Borrower or any of its Subsidiaries or any option,
warrant or other right to acquire any such shares of capital stock of the
Borrower or any Subsidiaries and (c) any payment by the Borrower and its
Subsidiaries to the Parent pursuant to the Tax Sharing Agreement or otherwise in
respect of tax liabilities of the Parent.
"REVOLVING AVAILABILITY PERIOD" means the period from and including the
Effective Date to but excluding the earlier of (A) the Maturity Date, and (B)
any earlier date of termination of the Revolving Commitments in accordance with
this Agreement.
"REVOLVING COMMITMENT" means the Commitment with respect to Revolving
Loans in an aggregate amount from all Lenders not to exceed $150,000,000.
"REVOLVING LOANS" means Loans made or deemed made pursuant to this
Agreement with respect to the Revolving Commitment.
"ROW LICENSE" means a collective reference to (i) all licenses granted
by AT&T Corp. to the Borrower or any Subsidiary for the use of AT&T Corp.
rights-of-way, easements and other Real Estate Rights owned or leased by AT&T
Corp., and (ii) each other license granted to the Borrower or any Subsidiary
with respect to rights-of-way, easements or other Real Estate Rights.
"ROW/LICENSE RIGHTS" has the meaning set forth in Section 5.15.
"S&P" means Standard & Poor's Ratings Services, a Division of the
XxXxxx-Xxxx Companies.
"SECURITIES" has the meaning assigned thereto in the Securities Act.
"SECURITIES ACCOUNT CONTROL AGREEMENT" means the Securities Account
Control Agreement between the Borrower, the Securities Intermediary and the
Collateral Trustee, substantially in the form of Exhibit E to the Security
Agreement.
"SECURITIES ACT" means the Securities Act of 1933, as amended and the
rules of the Securities and Exchange Commission thereunder as in effect from
time to time.
"SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules of the Securities and Exchange Commission thereunder as
in effect from time to time.
27
"SECURITIES INTERMEDIARY" means any Person that is a party to the
Securities Account Control Agreement as the "Securities Intermediary"
thereunder.
"SECURITY AGREEMENT" means the Security Agreement between the Borrower
and the Collateral Trustee, substantially in the form of Exhibit E to the Trust
Agreement.
"SECURITY DOCUMENTS" means the Trust Agreement, the Initial Security
Documents, the Additional Security Documents and the Securities Account Control
Agreement.
"SEGMENT" means (i) with respect to any inter-city portion of the
Network, the through-portion of such Network between two local networks, and
(ii) with respect to a local portion of the Network, the entire through-portion
of such local network, excluding the spurs which branch off the through-portion.
"SERVICES SUBSIDIARY" has the meaning set forth in Section 5.15(b).
"SPECIAL PURPOSE SUBSIDIARY" means a collective or individual reference,
as the context requires, to XX.Xxx Property, XX.Xxx Services or any Services
Subsidiary.
"STATUTORY RESERVE RATE" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which any Lender subject to regulation by the Board
is subject with respect to the Adjusted LIBO Rate, for eurocurrency funding
(currently referred to as "EUROCURRENCY LIABILITIES" in Regulation D of the
Board). Such reserve percentages shall include those imposed pursuant to such
Regulation D. LIBOR Loans shall be deemed to constitute eurocurrency funding and
to be subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to any
Lender under such Regulation D or any comparable regulation. The Statutory
Reserve Rate shall be adjusted automatically on and as of the effective date of
any change in any reserve percentage.
"STOCKHOLDERS AGREEMENT" means that certain Stockholders Agreement,
dated as of October 29, 1999, among the Parent and each of the Parent
Stockholders parties thereto on the date hereof, as amended through March 30,
2000.
"SUBSCRIPTION AGREEMENT" means that certain Subscription Agreement,
dated as of October 29, 1999, between the Parent and Odyssey Investment Partners
Fund LP, Odyssey Coinvestors, LLC and UBS Capital II LLC, as amended through
March 30, 2000.
"SUBSIDIARY" means, with respect to any Person (the "PARENT") at any
date, any corporation, limited liability company, partnership, association or
other entity of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership
28
interests are, as of such date, owned, controlled or held by the parent or one
or more subsidiaries of the parent or by the parent and one or more subsidiaries
of the parent.
"SUBSIDIARY" means any direct or indirect subsidiary of the Borrower.
"SUPPLY AGREEMENT" means the Master Supply, Services and Systems
Agreement dated as of August 6, 1999, between Lucent and XX.Xxx Supply Corp. (as
assignee of XX.Xxx, LLC, a Delaware limited liability company, n/k/a XX.Xxx
Corp.), as amended through March 30, 2000 and as further amended from time to
time.
"TAX SHARING AGREEMENT" means that certain Tax Sharing Agreement, dated
as of October 29, 1999, between the Borrower and each Subsidiary and the Parent.
"TAXES" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"TERM LOAN AGREEMENT" has the meaning set forth in the Bridge Loan
Agreement as in effect on the date hereof.
"TOTAL CAPITALIZATION" means, as of any date of determination, the sum
of (a) Consolidated Indebtedness as of such date, PLUS (b) the amount of paid-in
capital of the Borrower as of such date determined on a consolidated basis in
accordance with GAAP, PLUS (c) if positive, the retained earnings of the
Borrower and the Subsidiaries on such date determined on a consolidated basis in
accordance with GAAP, PLUS (d) solely with respect to the first issuance of High
Yield Debt, the difference, if positive, of (x) $225,000,000, MINUS (y) the
difference of (A) the gross proceeds of the issuance of any High Yield Debt,
MINUS (B) the amount of any Permitted Interest Fund established in connection
with such issuance of High Yield Debt.
"TOTAL LEVERAGE RATIO" means, as of any date of determination thereof,
the ratio of Consolidated Indebtedness as of such date to Total Capitalization
as of such date.
"TRANCHE A" means a collective reference to Tranches A-1 and A-2.
"TRANCHE A COMMITMENTS" means a collective reference to the Tranche A-1
Commitment and the Tranche A-2 Commitment.
"TRANCHE A-1 AVAILABILITY" has the meaning set forth in Section 4.02(c).
"TRANCHE A-1 AVAILABILITY PERIOD" means the period from and including
the Effective Date to but excluding the earlier of (A) the Tranche A-1
Availability Termination Date, and (B) any earlier date of termination of the
Tranche A-1 Commitments in accordance with this Agreement.
"TRANCHE A-1 AVAILABILITY TERMINATION DATE" means the earlier of (i) the
date thirty months after the Effective Date and (ii) the date the Tranche A-1
Commitments are fully drawn.
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"TRANCHE A-1 COMMITMENT" means the Commitment with respect to Tranche
A-1 Loans in an aggregate amount from all Lenders not to exceed $160,000,000.
"TRANCHE A-1 LOANS" means Loans made or deemed made under this Agreement
pursuant to the Tranche A-1 Commitment.
"TRANCHE A-2 AVAILABILITY" has the meaning set forth in Section 4.02(d).
"TRANCHE A-2 AVAILABILITY PERIOD" means the period from and including
the Effective Date to but excluding the earlier of (A) the Tranche A-2
Availability Termination Date, and (B) any earlier date of termination of the
Tranche A-2 Commitments in accordance with this Agreement.
"TRANCHE A-2 AVAILABILITY TERMINATION DATE" means the earlier of (i) the
date that is thirty months after the Effective Date, and (ii) the date the
Tranche A-2 Commitments are fully drawn.
"TRANCHE A-2 COMMITMENT" means the Commitment with respect to Tranche
A-2 Loans in an aggregate amount from all Lenders not to exceed $40,000,000.
"TRANCHE A-2 LOANS" means Loans made or deemed made under this Agreement
pursuant to the Tranche A-2 Commitment.
"TRANSACTIONS" means the execution, delivery and performance by each
Loan Party of the Loan Documents to which it is to be a party, the borrowing of
Loans and the use of the proceeds thereof.
"TRUST AGREEMENT" means the Trust Agreement substantially in the form of
Exhibit B.
"TYPE" when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate or the Alternate
Base Rate.
"UNDRAWN COMMITMENT" has the meaning set forth in Section 2.10(a).
"VENDOR PRODUCT" means any products or services (including delivery and
installation) to be used in connection with the Network that are purchased by
the Borrower or any Subsidiary from a vendor other than Lucent.
"VENDOR SUPPLY AGREEMENT" means any agreement pursuant to which Vendor
Product is sold to the Borrower or a Subsidiary (other than a Special Purpose
Subsidiary).
"XXXXXXX XXXX ENTITY" means Xxxxxxxxx Xxxx, or Xxxxxxx X. Xxxx, or any
spouse, child or grandchild of Xxxxxxxxx Xxxx or Xxxxxxx X. Xxxx, or any
partnership (general or limited), corporation, association, joint stock company,
trust, family trust, venture, unincorporated organization or other entity of any
type or nature, that directly, through one or more
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intermediaries, is controlled by Xxxxxxxxx Xxxx or Xxxxxxx X. Xxxx, or any
spouse, child, or grandchild of Xxxxxxxxx Xxxx or Xxxxxxx X. Xxxx.
"WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. CLASSIFICATION OF LOANS AND BORROWINGS.
For purposes of this Agreement, Loans may be classified and referred to
by Class (e.g., a "Tranche A Loan") or by Type (e.g., a "LIBOR Loan") or by
Class and Type (e.g., a "Tranche A LIBOR Loan"). Borrowings also may be
classified and referred to by Class (e.g., a "Tranche A Borrowing") or by Type
(e.g., a "LIBOR Borrowing") or by Class and Type (e.g., a "Tranche A LIBOR
Borrowing").
SECTION 1.03. TERMS GENERALLY.
The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
"include", "includes" and "including" shall be deemed to be followed by the
phrase "without limitation." The word "will" shall be construed to have the same
meaning and effect as the word "shall." Unless the context requires otherwise
(a) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument or
other document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein) and to all exhibits, schedules, annexes, attachments and
appendices to such agreement, instrument or document, (b) any reference herein
to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein," "hereof" and "hereunder," and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts, contract rights, licenses and intellectual
property.
SECTION 1.04. ACCOUNTING TERMS; GAAP.
Except as otherwise expressly provided herein, all terms of an
accounting or financial nature shall be construed in accordance with GAAP, as in
effect from time to time; PROVIDED that, if the Borrower notifies the
Administrative Agent that it is requesting an amendment to any provision hereof
to eliminate the effect of any change occurring after the date hereof in GAAP or
in the application thereof on the operation of such provision (or if the
Administrative Agent notifies the Borrower that the Required Lenders request an
amendment to any provision hereof for such purpose), regardless of whether any
such notice is given before or after such change in GAAP or in the application
thereof, then such provision shall be interpreted on the basis of
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GAAP as in effect and applied immediately before such change shall have become
effective until such notice shall have been withdrawn or such provision amended
in accordance herewith.
ARTICLE II
THE LOANS AND LETTERS OF CREDIT
SECTION 2.01. COMMITMENTS.
Subject to the terms and conditions set forth herein, each Lender agrees
to make Loans and to issue or participate in Letters of Credit to the Borrower
at any time and from time to time during each applicable Availability Period for
such Class of Loans in an aggregate principal amount not exceeding the amount of
its Commitment for each Class of Loans. Amounts repaid in respect of Tranche A
Loans may not be reborrowed. Revolving Loans and LOC Obligations that are repaid
may be reborrowed during the Revolving Availability Period.
SECTION 2.02. LOANS AND BORROWINGS; LETTER OF CREDIT SUBFACILITY.
(a) LOANS.
(i) Each Loan shall be made as part of a Borrowing consisting of
Loans of the same Class and Type made by the Lenders ratably in
accordance with their respective Commitments. The failure of any Lender
to make any Loan required to be made by it shall not relieve any other
Lender of its obligations hereunder; PROVIDED that the Commitments of
the Lenders are several and no Lender shall be responsible for any other
Lender's failure to make Loans as required.
(ii) Subject to Section 2.12, each Borrowing shall be comprised
entirely of LIBOR Loans or ABR Loans as the Borrower may request in
accordance herewith. Each Lender at its option may make any LIBOR Loan
by causing any domestic or foreign branch or Affiliate of such Lender to
make such Loan; PROVIDED that any exercise of such option shall not
affect the obligation of the Borrower to repay such Loan in accordance
with the terms of this Agreement.
(iii) At the commencement of each Interest Period for any LIBOR
Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $500,000 and not less than $5,000,000. At the time
that each ABR Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $500,000 and not less than
$1,000,000, PROVIDED that an ABR Borrowing may be in an aggregate amount
that is equal to the entire remaining Commitments. Borrowings of more
than one Type and Class may be outstanding at the same time; PROVIDED
that there shall not be more than twelve LIBOR Borrowings with respect
to all of the Tranche A-1 Loans, Tranche A-2 Loans, and Revolving Loans,
collectively, outstanding at the same time.
(iv) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or
continue, any Borrowing as a
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LIBOR Borrowing if the Interest Period requested with respect thereto
would end after the Maturity Date for the Loans included in such
Borrowing.
(b) LETTERS OF CREDIT.
(i) ISSUANCE. Subject to the terms and conditions hereof and of
the LOC Documents, if any, and the submission of a Letter of Credit
application in customary form, during the Letter of Credit Availability
Period the Issuing Lender shall issue, and the Lenders shall participate
in, Letters of Credit for the account of the Borrower from time to time
upon request in a form reasonably acceptable to the Issuing Lender;
provided, HOWEVER, that (A) the aggregate amount of LOC Obligations
shall not at any time exceed FIFTY MILLION DOLLARS ($50,000,000) (the
"LOC COMMITTED AMOUNT"), (B) the sum of the aggregate amount of
Revolving Loans PLUS LOC Obligations shall not at any time exceed the
aggregate Revolving Commitment then in effect, (C) all Letters of Credit
shall be denominated in dollars and (D) Letters of Credit shall be
issued for lawful corporate purposes and may be issued as trade letters
of credit. No Letter of Credit shall have an original expiry date more
than twelve (12) months from the date of issuance; PROVIDED, HOWEVER, so
long as no Default has occurred and is continuing and subject to the
other terms and conditions to the issuance of Letters of Credit
hereunder, the expiry dates of Letters of Credit may be extended
annually or periodically from time to time on the request of the
Borrower or by operation of the terms of the applicable Letter of Credit
to a date not more than twelve (12) months from the date of extension;
PROVIDED, FURTHER, that no Letter of Credit, as originally issued or as
extended, shall have an expiry date extending beyond the Maturity Date.
Each Letter of Credit shall comply with the related LOC Documents. The
issuance and expiry date of each Letter of Credit shall be a Business
Day. First Union shall be the Issuing Lender on all Letters of Credit.
Any Letter of Credit issued hereunder shall be in a minimum original
face amount of $100,000 or such other amount as may be agreed to by the
Issuing Lender and the Borrower.
(ii) NOTICE AND REPORTS. The request for the issuance of a Letter
of Credit shall be submitted to the Issuing Lender at least three (3)
Business Days prior to the requested date of issuance. The Issuing
Lender will promptly upon request provide to the Administrative Agent
for dissemination to the Lenders a detailed report specifying the
Letters of Credit which are then issued and outstanding and any activity
with respect thereto which may have occurred since the date of any prior
report, and including therein, among other things, the account party,
the beneficiary, the face amount, expiry date as well as any payments or
expirations which may have occurred. The Issuing Lender will further
provide to the Administrative Agent promptly upon request copies of the
Letters of Credit. The Issuing Lender will provide to the Administrative
Agent promptly upon request a summary report of the nature and extent of
LOC Obligations then outstanding.
(iii) PARTICIPATIONS. Each Lender upon issuance of a Letter of
Credit shall be deemed to have purchased without recourse a risk
participation from the Issuing Lender in such Letter of Credit and the
obligations arising thereunder and any collateral relating thereto, in
each case in an amount equal to its LOC Commitment Percentage of the
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obligations under such Letter of Credit and shall absolutely,
unconditionally and irrevocably assume, as primary obligor and not as
surety, and be obligated to pay to the Issuing Lender therefor and
discharge when due, its LOC Commitment Percentage of the obligations
arising under such Letter of Credit. Without limiting the scope and
nature of each Lender's participation in any Letter of Credit, to the
extent that the Issuing Lender has not been reimbursed as required
hereunder or under any LOC Document, each such Lender shall pay to the
Issuing Lender its LOC Commitment Percentage of such unreimbursed
drawing in same day funds on the day of notification by the Issuing
Lender of an unreimbursed drawing pursuant to the provisions of
subsection (iv) below if such notice is received at or before 2:00 p.m.,
New York city time, otherwise such payment shall be made at or before
12:00 Noon, New York city time, on the Business Day next succeeding the
day such notice is received. The obligation of each Lender to so
reimburse the Issuing Lender shall be absolute and unconditional and
shall not be affected by the occurrence of a Default or any other
occurrence or event. Any such reimbursement shall not relieve or
otherwise impair the obligation of the Borrower to reimburse the Issuing
Lender under any Letter of Credit, together with interest as hereinafter
provided.
(iv) REIMBURSEMENT. In the event of any drawing under any Letter
of Credit, the Issuing Lender will promptly notify the Borrower and the
Administrative Agent. The Borrower shall reimburse the Issuing Lender on
the first Business Day after the day any drawing under any Letter of
Credit is duly honored by the Issuing Lender (with the proceeds of a
Revolving Loan obtained hereunder or otherwise) in same day funds as
provided herein or in the LOC Documents. If the Borrower shall fail to
reimburse the Issuing Lender as provided herein, the unreimbursed amount
of such drawing shall bear interest at a per annum rate equal to the
Alternate Base Rate plus the Applicable Rate. Unless the Borrower shall
immediately notify the Issuing Lender and the Administrative Agent of
its intent to otherwise reimburse the Issuing Lender, the Borrower shall
be deemed to have requested a Revolving Loan in the amount of the
drawing as provided in subsection (v) below, the proceeds of which will
be used to satisfy the reimbursement obligations. The Borrower's
reimbursement obligations hereunder shall be absolute and unconditional
under all circumstances irrespective of any rights of set-off,
counterclaim or defense to payment the Borrower may claim or have
against the Issuing Lender, the Administrative Agent, the Lenders, the
beneficiary of the Letter of Credit drawn upon or any other Person,
including without limitation any defense based on any failure of the
Borrower to receive consideration or the legality, validity, regularity
or unenforceability of the Letter of Credit. The Issuing Lender will
promptly notify the other Lenders of the amount of any unreimbursed
drawing and each Lender shall promptly pay to the Administrative Agent
for the
34
account of the Issuing Lender in dollars and in immediately available
funds, the amount of such Lender's LOC Commitment Percentage of such
unreimbursed drawing. Such payment shall be made on the day such notice
is received by such Lender from the Issuing Lender if such notice is
received at or before 2:00 p.m., New York city time, otherwise such
payment shall be made at or before 12:00 Noon, New York city time, on
the Business Day next succeeding the day such notice is received. If
such Lender does not pay such amount to the Issuing Lender in full upon
such request, such Lender shall, on demand, pay to the Administrative
Agent for the account of the Issuing Lender interest on the unpaid
amount during the period from the date of such drawing until such Lender
pays such amount to the Issuing Lender in full at a rate per annum equal
to, if paid within two (2) Business Days of the date of drawing, the
Federal Funds Effective Rate and thereafter at a rate equal to the
Alternate Base Rate. Each Lender's obligation to make such payment to
the Issuing Lender, and the right of the Issuing Lender to receive the
same, shall be absolute and unconditional, shall not be affected by any
circumstance whatsoever and without regard to the termination of this
Agreement or the Commitments hereunder, the existence of a Default or
the acceleration of the Obligations and shall be made without any
offset, abatement, withholding or reduction whatsoever.
(v) REPAYMENT WITH REVOLVING LOANS. On any day on which the
Borrower shall have requested, or been deemed to have requested, a
Revolving Loan to reimburse a drawing under a Letter of Credit, the
Administrative Agent shall give notice to the Lenders that a Revolving
Loan has been requested or deemed requested in connection with a drawing
under a Letter of Credit, in which case a Revolving Loan Borrowing
comprised entirely of ABR Loans (each such borrowing, a "MANDATORY
BORROWING") shall be immediately made (without giving effect to any
termination of the Commitments pursuant to Section 7.01) pro RATA based
on each Lender's respective Revolving Commitment (determined before
giving effect to any termination of the Commitments pursuant to Section
7.01) and the proceeds thereof shall be paid directly to the Issuing
Lender for application to the respective LOC Obligations. Each Lender
hereby irrevocably agrees to make such Revolving Loans immediately upon
any such request or deemed request on account of each Mandatory
Borrowing in the amount and in the manner specified in the preceding
sentence and on the same such date NOTWITHSTANDING (I) the amount of
Mandatory Borrowing may not comply with the minimum amount for
borrowings of Revolving Loans otherwise required hereunder, (II) whether
any conditions specified in Section 4.02 are then satisfied, (III)
whether a Default then exists, (IV) failure for any such request or
deemed request for Revolving Loan to be made by the time otherwise
required in Section 2.03, (V) the date of such Mandatory Borrowing, or
(VI) any reduction in the aggregate amount of Revolving Commitments
after any such Letter of Credit may have been drawn upon. In the event
that any Mandatory Borrowing cannot for any reason be made on the date
otherwise required above (including, without limitation, as a result of
the commencement of a proceeding under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law with respect to the
Borrower), then each such Lender hereby agrees that it shall forthwith
fund (as of the date the Mandatory Borrowing would otherwise have
occurred, but adjusted for any payments received from the Borrower on or
after such date and prior to such purchase) its Participation Interests
in the outstanding LOC Obligations; PROVIDED, FURTHER, that in the event
any Lender shall fail to fund its Participation Interest on the day the
Mandatory Borrowing would otherwise have occurred, then the amount of
such Lender's unfunded Participation Interest therein shall bear
interest payable to the Issuing Lender upon demand, at the rate equal
to, if paid within two (2) Business Days of such date, the Federal Funds
Effective Rate, and thereafter at a rate equal to the Alternate Base
Rate.
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(vi) DESIGNATION OF SUBSIDIARIES AS ACCOUNT PARTIES.
Notwithstanding anything to the contrary set forth in this Agreement,
including without limitation Section 2.02(b)(i), a Letter of Credit
issued hereunder may contain a statement to the effect that such Letter
of Credit is issued for the account of a Subsidiary of the Borrower,
provided that notwithstanding such statement, the Borrower shall be the
actual account party for all purposes of this Agreement for such Letter
of Credit and such statement shall not affect the Borrower's
reimbursement obligations hereunder with respect to such Letter of
Credit.
(vii) MODIFICATION, EXTENSION. The issuance of any supplement,
modification, amendment, renewal, or extension to any Letter of Credit
shall, for purposes hereof, be treated in all respects the same as the
issuance of a new Letter of Credit hereunder.
(viii) UNIFORM CUSTOMS AND PRACTICES/INTERNATIONAL STANDBY
PRACTICES 1998. The Issuing Lender shall have the Letters of Credit be
subject to The Uniform Customs and Practice for Documentary Credits (the
"UCP") or the International Standby Practices 1998 (the "ISP98"), in
either case as published as of the date of issue by the International
Chamber of Commerce, in which case the UCP or ISP98, as applicable, may
be incorporated therein and deemed in all respects to be a part thereof.
SECTION 2.03. REQUESTS FOR BORROWINGS.
To request a Borrowing, the Borrower shall notify the Administrative
Agent of such request by telephone (a) in the case of a LIBOR Borrowing, not
later than 11:00 a.m., New York City time, three Business Days before the date
of the proposed Borrowing or (b) in the case of an ABR Borrowing, not later than
11:00 a.m., New York City time, one Business Day before the date of the proposed
Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall
be confirmed promptly by hand delivery or telecopy to the Administrative Agent
of a written Borrowing Request in a form approved by the Administrative Agent
and signed by the Borrower. Each such telephonic and written Borrowing Request
shall specify the following information in compliance with Section 2.02:
(i) the aggregate amount of such Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be a LIBOR Borrowing or an ABR
Borrowing and whether such Borrowing shall consist of Tranche A-1 Loans,
Tranche A-2 Loans or Revolving Loans;
(iv) in the case of a LIBOR Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated by
the definition of the term "Interest Period"; and
(v) the location and number of the account or accounts to which
funds (if any) are to be disbursed, which shall comply with the
requirements of Section 2.04.
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Each such written Borrowing Request shall also certify that there shall not
exist, on the date of the requested Borrowing and after giving effect thereto, a
Default.
If no election as to the Type of Borrowing is specified, then the
requested Borrowing shall be an ABR Borrowing. If no Interest Period is
specified with respect to any requested LIBOR Borrowing, then the Borrower shall
be deemed to have selected an Interest Period of one month's duration. If no
election as to the Class of Borrowing is specified, then the requested Borrowing
shall consist of Revolving Loans. Promptly following receipt of a Borrowing
Request in accordance with this Section, the Administrative Agent shall advise
each Lender of the details thereof and of the amount of such Lender's Loan to be
made as part of the requested Borrowing.
SECTION 2.04. FUNDING OF BORROWINGS.
(a) Each Lender shall make each Loan to be made by it hereunder on the
proposed date thereof by wire transfer of immediately available funds by 12:00
noon, New York City time, to the account of the Administrative Agent most
recently designated by it for such purpose by notice to the Lenders. The
Administrative Agent will make such Loans available to the Borrower by promptly
crediting the amounts so received, in like funds, to an account of the Borrower
designated by the Borrower in the applicable Borrowing Request.
(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender agrees to pay to the Administrative Agent forthwith on demand
such corresponding amount with interest thereon, for each day from and including
the date such amount is made available to the Borrower to but excluding the date
of payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation. If such Lender pays such
amount to the Administrative Agent, then such amount shall constitute such
Lender's Loan included in such Borrowing.
SECTION 2.05. INTEREST ELECTIONS.
(a) Each Borrowing initially shall be of the Type specified in the
applicable Borrowing Request and, in the case of a LIBOR Borrowing, shall have
an initial Interest Period as specified in such Borrowing Request. Thereafter,
the Borrower may elect to convert such Borrowing to a different Type or to
continue such Borrowing and, in the case of a LIBOR Borrowing, may elect
Interest Periods therefor, all as provided in this Section. The Borrower may
elect different options with respect to different portions of the affected
Borrowing, in which case each such portion shall be allocated ratably among the
Lenders holding the Loans
37
comprising such Borrowing, and the Loans comprising each such portion shall be
considered a separate Borrowing.
(b) To make an election pursuant to this Section, the Borrower shall
notify the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required to be made under Section 2.03 if the
Borrower were requesting a Borrowing of the Type resulting from such election to
be made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by the
Borrower.
(c) Each telephonic and written Interest Election Request shall specify
the following information in compliance with Section 2.02 and paragraph (f) of
this Section:
(i) the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to
clauses (iii) and (iv) below shall be specified for each resulting
Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be a LIBOR Borrowing
or an ABR Borrowing; and
(iv) if the resulting Borrowing is a LIBOR Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period."
If any such Interest Election Request requests a LIBOR Borrowing but
does not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election Request
with respect to a LIBOR Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein, at
the end of such Interest Period such Borrowing shall be converted to an ABR
Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default
has occurred and is continuing, then, so long as an Event of Default is
continuing (i) no outstanding Borrowing may be converted to or continued as a
LIBOR Borrowing at the end of the then current Interest Period and (ii) unless
repaid, each LIBOR Borrowing shall be converted to an ABR Borrowing at the end
of the Interest Period applicable thereto.
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(f) A Borrowing of any Class may not be converted to or continued as a
LIBOR Borrowing if after giving effect thereto both (i) the Interest Period
therefor would commence before and end after a date on which any principal of
the Loans of such Class is scheduled to be repaid or, with respect to Revolving
Loans, the Revolving Commitment is scheduled to be reduced pursuant to Section
2.08(b) and (ii) the sum of the aggregate principal amount of outstanding LIBOR
Borrowings of such Class with Interest Periods ending on or prior to such
scheduled Repayment date (or scheduled reduction date) plus the aggregate
principal amount of outstanding ABR Borrowings of such Class would be less than
the aggregate principal amount of Loans of such Class required to be repaid on
such scheduled Repayment date (or scheduled reduction date).
SECTION 2.06. TERMINATION, REDUCTION AND INCREASE OF COMMITMENTS.
(a) Unless previously terminated, the Commitments with respect to
Tranche A-1 and A-2 Loans shall terminate on, respectively, the Tranche A-1
Availability Termination Date and the Tranche A-2 Availability Termination Date,
and the Commitments with respect to Revolving Loans shall terminate on the
Maturity Date.
(b) On the date of each Revolving Loan Borrowing, the Commitments with
respect to Revolving Loans shall be temporarily reduced by an amount equal to
such Revolving Loan until such Revolving Loan is repaid.
(c) If a prepayment of Revolving Loans is required pursuant to Section
2.09, then the Revolving Commitment shall be reduced by an amount equal to such
prepayment.
(d) Subject to Section 2.06(e), the Borrower may at any time terminate,
or from time to time reduce, the Commitments; PROVIDED, HOWEVER, that (i) no
such reduction or termination shall be permitted if after giving effect thereto
and to any prepayments of the Loans made on the effective date thereof, (A) the
sum of the then outstanding aggregate principal amount of the Revolving Loans
PLUS LOC Obligations would exceed the aggregate Revolving Commitment then in
effect, (B) the sum of the then outstanding aggregate principal amount of the
Tranche A-1 Loans would exceed the aggregate Tranche A-1 Commitment then in
effect and (C) the sum of the then outstanding aggregate principal amount of
Tranche A-2 Loans would exceed the aggregate Tranche A-2 Commitment then in
effect, and (ii) unless such reduction causes the Commitments to be reduced to
zero (A) each reduction of the Commitments pursuant to this paragraph (d) shall
be in an amount that is an integral multiple of $1,000,000 and not less than
$5,000,000 and (B) unless at such time no Loans are outstanding, the Borrower
shall not terminate or reduce the Commitments if the Commitments remaining
following the proposed termination or reduction, together with other identified
funds available to Borrower, are not, in the reasonable opinion of the
Administrative Agent (upon consultation with an independent engineer),
sufficient to complete the Network in accordance with the Annual Business Plan.
(e) The Borrower shall notify the Administrative Agent of any election
to terminate or reduce the Commitments under paragraph (d) of this Section 2.06
at least five Business Days prior to the proposed effective date of such
termination or reduction, specifying such election
39
and the proposed effective date thereof; PROVIDED, HOWEVER, that such
termination or reduction shall become effective when and only to the extent that
the Administrative Agent reasonably determines the Borrower has complied with
the requirements of paragraph (d) of this Section 2.06. Promptly following such
determination, the Administrative Agent shall advise the Lenders thereof. Each
notice delivered by the Borrower pursuant to this Section shall be irrevocable
subject to the determination by the Administrative Agent of the compliance by
the Borrower with the requirements of paragraph (d) of this Section 2.06. Any
termination or reduction of the Commitments shall be permanent. Each reduction
of the Commitments pursuant to paragraph (e) of this Section 2.06 shall be made
ratably among the Lenders in accordance with their respective Commitments.
(f) Subject to the terms and conditions set forth herein, upon ten (10)
Business Days advance written notice to the Administrative Agent, the Borrower
shall have the right, at any time and from time to time from the Effective Date
until sixty (60) days prior to the Maturity Date, to increase the aggregate
amount of the Commitments hereunder (either by an increase in the Tranche A
Commitments (allocated to the Tranche A-1 Commitment and the Tranche A-2
Commitment on a pro rata basis) or by the addition of a new tranche of term
loans under this Agreement that has a weighted average life to maturity equal to
or longer than the Tranche A Term Loans and otherwise is pari passu with the
Loans and LOC Obligations in all respects, including as to ranking, security,
mandatory prepayments and voting issues) by an aggregate amount not to exceed
$125,000,000; PROVIDED that
(i) any such increase in the Tranche A Commitments shall be in a
minimum principal amount of $5,000,000 and integral multiples of
$1,000,000 in excess thereof (or the remaining amount, if less),
(ii) any such increase pursuant to the addition of a new tranche
of term loans shall be in a minimum principal amount of $20,000,000 and
integral multiples of $1,000,000 in excess thereof (or the remaining
amount, if less),
(iii) if the Tranche A Commitments are increased and if any
Tranche A Loans are outstanding at the time of any such increase, the
Lenders shall assign portions of their outstanding Tranche A Loans (and
their unfunded Commitments shall automatically be increased by an
identical amount) to other Lenders (including new Lenders) as necessary
to conform to the revised Tranche A Commitments of the Lenders resulting
from such increase and the Borrower shall pay any break-funding amount
owing under Section 2.14 in connection with such assignments,
(iv) to the extent such increase is an increase of the Tranche
A-1 Commitment and (A) such increase is effective prior to the Tranche
A-1 Availability Termination Date, the Borrower shall have the right to
borrow up to the full amount of such increase until the Tranche A-1
Availability Termination Date, or (B) such increase is effective on or
after the Tranche A-1 Availability Termination Date, a Borrowing of
Tranche A-1 Loans in the amount of such increase in the Tranche A-1
Commitment shall be made on the effective date of such increase,
40
(v) to the extent such increase is an increase of the Tranche A-2
Commitment and (A) such increase is effective prior to the Tranche A-2
Availability Termination Date, the Borrower shall have the right to
borrow up to the full amount of such increase until the Tranche A-2
Availability Termination Date, or (B) such increase is effective on or
after the Tranche A-2 Availability Termination Date, a Borrowing of
Tranche A-2 Loans in the amount of such increase in the Tranche A-2
Commitment shall be made on the effective date of such increase, and
(vi) the conditions to borrowing set forth in Section 4.02 shall
be satisfied as of the date of such increase.
Any increase in the Commitments hereunder (including pursuant to the
addition of a new tranche of term loans) shall be subject to satisfaction of the
following: (1) the amount of such increase shall be offered first to the
existing Lenders, and in the event the additional commitments which existing
Lenders are willing to take shall exceed the amount requested by the Borrower,
then (x) each existing Lender that is willing to provide a portion of such
increase (each a "Committing Lender") shall be entitled to provide an amount up
to its pro rata share of such increase based on the amount of its existing
Commitments and (y) if there is any portion of such increase remaining after
giving effect to clause (x), then the Borrower, in consultation with the
Administrative Agent, shall determine how the remaining portion of such increase
is disbursed among the Committing Lenders (taking into consideration the amount
of the additional commitments which each Committing Lender was initially willing
to take) so that such increase is fully committed, (2) if the amount of the
additional commitments requested by the Borrower shall exceed the additional
commitments which the existing Lenders are willing to take, then the Borrower
may invite other Eligible Persons to join this Credit Agreement as Lenders
hereunder for the portion of commitments not taken by existing Lenders, provided
that such other Eligible Persons shall enter into such joinder agreements to
give effect thereto as the Administrative Agent and the Borrower may reasonably
request and (3) the Borrower shall execute and/or deliver to the Administrative
Agent such promissory notes, certified resolutions, opinions of counsel and such
modifications to this Agreement (including revisions of Schedule 2.1(a)) and the
other Loan Documents as the Administrative Agent shall reasonably request in
connection with such increase. The Lenders hereby authorize the Administrative
Agent, on their behalf, to execute any amendment or modification to this
Agreement and the other Loan Documents necessary to consummate any increase in
the Commitments pursuant to this Section.
SECTION 2.07. REPAYMENT OF LOANS; EVIDENCE OF DEBT.
(a) The Borrower hereby unconditionally promises to pay to the
Administrative Agent for the account of each Lender the then-unpaid principal
amount of each Loan of such Lender as provided in Section 2.08.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
41
(c) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Class and Type thereof
and the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph
(b) or (c) of this Section shall be PRIMA FACIE evidence of the existence and
amounts of the obligations recorded therein; PROVIDED that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans of any Class made by it be
evidenced by a promissory note. In such event, the Borrower shall prepare,
execute and deliver to such Lender such a promissory note payable to the order
of such Lender (or, if requested by such Lender, to such Lender and its
registered assigns) and in the form set forth as Exhibit D. Thereafter, the
Loans evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to Section 9.04) be represented by one or
more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).
SECTION 2.08 AMORTIZATION OF LOANS; MANDATORY REDUCTIONS OF REVOLVING
COMMITMENT.
(a) Subject to adjustment pursuant to paragraph (c) of this Section, the
Borrower shall Repay Tranche A Loans on each of the following Payment Dates in
an aggregate amount equal to the percentage set forth opposite such Payment Date
of the sum of all Tranche A Loans made or deemed made hereunder (including
amounts previously repaid or prepaid):
PAYMENT DATES PERCENTAGE
------------- ----------
September 30, 2002 2.50%
December 31, 2002 2.50%
March 31, 2003 2.50%
June 30, 2003 2.50%
September 30, 2003 3.75%
December 31, 2003 3.75%
March 31, 2004 3.75%
June 30, 2004 3.75%
September 30, 2004 6.25%
December 31, 2004 6.25%
March 31, 2005 6.25%
June 30, 2005 6.25%
September 30, 2005 7.50%
December 31, 2005 7.50%
March 31, 2006 7.50%
42
PAYMENT DATES PERCENTAGE
------------- ----------
June 30, 2006 7.50%
September 30, 2006 10.00%
December 31, 2006 10.00%
(b) The Revolving Commitment shall be reduced on each of the following
Reduction Dates in an aggregate amount equal to the percentage set forth
opposite such Reduction Date of the initial Revolving Commitment and, if on any
such Reduction Date the outstanding Revolving Loans and LOC Obligations exceed
the Revolving Commitment as so reduced, the Borrower shall Repay Revolving Loans
on each such Reduction Date in an amount such that after giving effect to such
reduction of the Revolving Commitment and corresponding Repayment, the amount of
Revolving Loans and LOC Obligations outstanding shall not exceed the Revolving
Commitment.
REDUCTION DATES PERCENTAGE
--------------- ----------
March 31, 2003 2.50%
June 30, 2003 2.50%
September 30, 2003 3.75%
December 31, 2003 3.75%
March 31, 2004 3.75%
June 30, 2004 3.75%
September 30, 2004 6.25%
December 31, 2004 6.25%
March 31, 2005 6.25%
June 30, 2005 6.25%
September 30, 2005 8.75%
December 31, 2005 8.75%
March 31, 2006 8.75%
June 30, 2006 8.75%
September 30, 2006 10.00%
December 31, 2006 10.00%
(c) To the extent not previously paid, all Loans of each Class shall be
due and payable on the Maturity Date.
(d) Any prepayment of a Borrowing of any Class shall be applied to
reduce ratably the subsequent scheduled Repayments of the Borrowings of such
Class to be made pursuant to this Section; provided, however, with respect to
optional prepayments only, if any scheduled Repayment shall be due within 90
days of such optional prepayment, then at the Borrower's election, the Borrower
may apply such prepayment to such next scheduled Repayment only, and then
ratably to the remaining scheduled Repayments occurring thereafter.
(e) Prior to any Repayment of any Loans of any Class hereunder, the
Borrower shall select the applicable Classes and Types of Loans to be repaid and
shall notify the Administrative
43
Agent by telephone (confirmed by telecopy) of such selection not later than
11:00 a.m., New York City time, three Business Days before the scheduled date of
such Repayment; PROVIDED that (i) each Repayment of Loans of any Class shall be
applied to repay any outstanding ABR Loans of such Class before any other Loans
of such Class, (ii) all such Repayments made pursuant to Section 2.08(a) shall
be applied to reduce ratably Borrowings of Tranche A Loans and (iii) all such
Repayments (if any) made pursuant to Section 2.08(b) shall be applied to reduce
ratably Borrowings of Revolving Loans and (after all Revolving Loans have been
repaid) to a cash collateral account in respect of LOC Obligations. If the
Borrower fails to make a timely selection of the Loan or Loans to be repaid,
such Repayment shall be applied, first, to repay any outstanding ABR Loans of
the applicable Class and, second, to other Loans of the applicable Class in the
order of the remaining duration of their respective Interest Periods (the Loans
with the shortest remaining Interest Period to be repaid first). Any Repayment
of the Loans shall be applied to reduce ratably the subsequent scheduled
Repayments of the then-outstanding and unpaid balances of the Loans of the same
Class and Type then outstanding. Repayments of Loans shall be accompanied by the
payment of accrued interest on the amount of the Repayment thereof.
SECTION 2.09 PREPAYMENT OF LOANS.
(a) The Borrower shall have the right at any time and from time to time
to prepay any Loan in whole or in part, subject to the requirements of this
Section 2.09, without penalty or premium (except as provided in Section 2.14 or
2.15).
(b) In the event and on each occasion that any Net Proceeds are received
by or on behalf of the Borrower or any of its Subsidiaries in respect of any
Prepayment Event, the Borrower shall, within ten Business Days after such Net
Proceeds are received, prepay Loans in an aggregate amount equal to 50% of such
Net Proceeds.
(c) Following the end of each fiscal year of the Borrower, commencing
with the fiscal year in which the Conversion Date occurs, the Borrower shall
prepay Loans in an aggregate amount equal to 50% of the Excess Cash Flow for
such fiscal year if the Consolidated Leverage Ratio at the end of such fiscal
year exceeded 4.00:1.00 (PROVIDED that such prepayment shall be in an aggregate
amount equal to 100% of Excess Cash Flow for any year in which an Event of
Default (other than under Section 7.01(e)) has taken place). Each prepayment
pursuant to this paragraph shall be made on or before the date on which
financial statements are delivered pursuant to Section 5.01 with respect to the
fiscal year for which Excess Cash Flow is being calculated (and in any event
within 90 days after the end of such fiscal year).
(d) In the event and on each occasion that the Borrower Repays any
Indebtedness, then the Borrower shall, within three Business Days after the date
of such Repayment, prepay Loans in an aggregate amount equal to the product of
(x) the sum of the aggregate principal amount of the Loans outstanding at the
time, multiplied by (y) a fraction, the numerator of which is the aggregate
principal amount of such Repayment, and the denominator of which is the amount
of Consolidated Indebtedness (excluding, to the extent included in the
determination thereof, Purchase Money Debt, the Repayment of which does not
require the Repayment of Loans under this Section 2.09(d)) immediately prior to
such Repayment; PROVIDED that
44
prepayments of Borrowings shall not be required pursuant to this paragraph in
respect of (i) any Repayment of the Loans or any Purchase Money Debt, (ii) any
scheduled Repayment or mandatory prepayment of Indebtedness, (iii) any Repayment
of Indebtedness to the extent such Repayment is refinanced by incurring other
Indebtedness that (A) has a scheduled maturity date that is on or after the
scheduled maturity date of the Indebtedness being refinanced, (B) has a weighted
average life to maturity that is equal to or longer than the remaining weighted
average life to maturity of the Indebtedness being refinanced, determined
immediately prior to giving effect to such Repayment, (C) does not include any
provisions that may require mandatory Repayment thereof prior to scheduled
maturity, other than scheduled Repayments taken into consideration in
determining compliance with clause (B) above and other provisions that are not
materially more burdensome than any such provisions included in the Indebtedness
being refinanced, and (D) is issued or incurred by the same Person that issued
or incurred the Indebtedness being refinanced and is not guaranteed or secured
by any Lien unless the Indebtedness being refinanced was guaranteed or secured
(in which case such Indebtedness shall not be guaranteed by any Person that did
not guarantee the Indebtedness being refinanced and shall not be secured by a
Lien on any asset that did not secure the Indebtedness being refinanced), or
(iv) any Repayment of Revolving Loans.
(e) If at any time the sum of the aggregate principal amount of
outstanding Revolving Loans PLUS LOC Obligations shall exceed the aggregate
Revolving Commitment then in effect, the Borrower immediately shall prepay the
Revolving Loans and (after all Revolving Loans have been repaid) cash
collateralize the LOC Obligations, in an amount sufficient to eliminate such
excess.
(f) Prior to any optional or mandatory prepayment of Borrowings
hereunder, the Borrower shall select the Loan or Loans to be prepaid and shall
specify such selection in the notice of such prepayment pursuant to paragraph
(g) of this Section; PROVIDED that each prepayment of Loans of any Class shall
be applied to prepay ABR Loans of such Class before any other Loans of such
Class. If optional or mandatory prepayment of Loans are made at a time when
Loans of more than one Class are outstanding, the Borrower shall select Loans to
be prepaid so that the aggregate amount of such prepayment is allocated (i)
FIRST, to the Tranche A-1 Loans pro rata based on the aggregate principal amount
of outstanding Tranche A-1 Loans until the Tranche A-1 Loans are repaid in full,
(ii) SECOND, to the Tranche A-2 Loans pro rata based on the aggregate principal
amount of outstanding Tranche A-2 Loans until the Tranche A-2 Loans are repaid
in full, and (iii) THIRD, to the outstanding Revolving Loans and (after all
Revolving Loans have been repaid) to a cash collateral account in respect of the
LOC Obligations.
(g) The Borrower shall notify the Administrative Agent by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a LIBOR Loan, not later than 1:00 p.m., New York City time, three
Business Days before the date of prepayment or (ii) in the case of prepayment of
an ABR Loan, not later than 11:00 a.m., New York City time, one Business Day
before the date of prepayment. Each such notice shall be irrevocable and shall
specify the prepayment date, the principal amount of each Loan or portion
thereof to be prepaid and, in the case of a mandatory prepayment, a reasonably
detailed calculation of the amount of such prepayment. Promptly following
receipt of any such notice, the Administrative Agent shall advise the Lenders of
the contents thereof. Each partial prepayment of any Loan shall be in an
45
amount that is an integral multiple of $500,000 and not less than $5,000,000 for
any LIBOR Loan and an integral multiple of $500,000 and not less than $1,000,000
for any ABR Loan, except as necessary to apply fully the required amount of a
mandatory prepayment. Prepayments of Borrowings shall be accompanied by the
payment of accrued interest on the amount prepaid.
SECTION 2.10. FEES.
(a) The Borrower agrees to pay to the Administrative Agent for the
account of the Lenders a commitment fee (the "COMMITMENT FEE") of 1.5% per annum
on the daily average of the undrawn Commitment (the "UNDRAWN COMMITMENT") from
March 30, 2000 until the expiration of all Availability Periods. For purposes of
determining the Undrawn Commitment, (i) outstanding Loans and LOC Obligations
shall constitute usage of the Commitment and (ii) the amount of the Commitment
used in such calculation shall be the aggregate Commitment as of the Effective
Date. The Commitment Fee shall be payable quarterly in arrears on the 15th day
following the last day of each calendar quarter for the prior calendar quarter
and shall be reduced as the Undrawn Commitment is reduced in accordance with the
schedule below.
COMMITMENT FEE
UNDRAWN COMMITMENT PERCENTAGE
------------------ ----------
} 75% of total Commitment 1.50%
} 66% but {= 75% of total Commitment 1.25%
} 50% but {= 66% of total Commitment 1.00%
{= 50% of total Commitment 0.75%
After the Conversion Date, if the Consolidated Leverage Ratio as of any two
consecutive Quarterly Dates is equal to or less than 4.0 to 1.0, then the
Commitment Fee shall be reduced to 0.50%.
(b) The Borrower agrees to pay to the Administrative Agent, for its own
account, fees set forth in the Fee Letter.
(c) In consideration of the LOC Commitments, the Borrower agrees to pay
to the Issuing Lender a fee (the "LETTER OF CREDIT FEE") of one-fourth of one
percent (1/4%) per annum on the average daily maximum amount available to be
drawn under each Letter of Credit from the date of issuance to the date of
expiration. In addition to such Letter of Credit Fee, the Issuing Lender may
charge, and retain for its own account without sharing by the other Lenders, an
additional facing fee of one-eighth of one percent (1/8%) per annum on the
average daily maximum amount available to be drawn under each such Letter of
Credit issued by it. The Issuing Lender shall promptly pay over to the
Administrative Agent for the ratable benefit of the Lenders (including the
Issuing Lender) the Letter of Credit Fee. The Letter of Credit Fee shall be
payable quarterly in arrears on the 15th day following the last day of each
calendar quarter for the prior calendar quarter.
(d) In addition to the Letter of Credit Fees payable pursuant to
paragraph (c) above, the Borrower shall pay to the Issuing Lender for its own
account without sharing by the other
46
Lenders the reasonable and customary charges from time to time of the Issuing
Lender with respect to the amendment, transfer, administration, cancellation and
conversion of, and drawings under, such Letters of Credit (collectively, the
"ISSUING LENDER FEES").
(e) All fees payable hereunder shall be paid on the dates due in
immediately available funds to the Administrative Agent, in the case of fees
payable to it and, in the case of fees payable to it and to the Lenders, for
distribution to the Lenders entitled thereto.
SECTION 2.11. INTEREST.
(a) The Loans comprising each ABR Borrowing shall bear interest at the
Alternate Base Rate plus the Applicable Rate.
(b) The Loans comprising each LIBOR Borrowing shall bear interest at the
Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Rate.
(c) Notwithstanding the foregoing paragraphs (a) and (b) of this Section
2.11, if any principal of or interest on any Loan or any fee or other amount
payable by the Borrower hereunder is not paid when due, whether at stated
maturity, upon acceleration or otherwise, such overdue amount shall bear
interest, after as well as before judgment, at a rate per annum equal to two
percent (2%) plus the applicable interest rate set forth in such paragraph (a)
or (b), as the case may be, or, if no such interest rate is applicable or is
then in effect, then at a rate per annum equal to the Alternate Base Rate plus
two percent (2%).
(d) All accrued interest on each Loan shall be payable in arrears on
each Interest Payment Date for such Loan; PROVIDED that (i) interest accrued
pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in
the event of any Repayment or prepayment of any Loan, accrued interest on the
principal amount of such Loan repaid or prepaid shall be payable on the date of
such Repayment or prepayment, and (iii) in the event of any conversion of any
Loan prior to the end of the current Interest Period therefor, accrued interest
on such Loan shall be payable on the effective date of such conversion.
(e) All interest hereunder shall be computed on the basis of a year of
360 days, except that interest computed by reference to the Alternate Base Rate
at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Alternate Base Rate or
Adjusted LIBO Rate shall be determined in accordance with this Agreement by the
Administrative Agent, and such determination shall be conclusive absent manifest
error.
SECTION 2.12 ALTERNATE RATE OF INTEREST.
If prior to the commencement of any Interest Period for a LIBOR
Borrowing:
47
(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or
(b) the Administrative Agent is advised by a majority in interest of the
Lenders participating in such Borrowing that the Adjusted LIBO Rate for such
Interest Period will not adequately and fairly reflect the cost to such Lenders
of making or maintaining their Loans included in such Borrowing for such
Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower
and the Lenders by telephone or telecopy as promptly as practicable thereafter
and, until the Administrative Agent notifies the Borrower and the Lenders that
the circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a LIBOR Borrowing shall be ineffective and
(ii) if any Borrowing Request requests a LIBOR Borrowing, such Borrowing shall
be made as an ABR Borrowing.
SECTION 2.13. INCREASED COSTS.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate); or
(ii) impose on any Lender or the London interbank market any
other condition affecting this Agreement or LIBOR Loans made by such
Lender;
and the result of any of the foregoing shall be to increase the cost to
such Lender of making or maintaining any LIBOR Loan (or of maintaining its
obligation to make any such Loan) or to reduce the amount of any sum received or
receivable by such Lender hereunder (whether of principal, interest or
otherwise), then the Borrower will pay to such Lender such additional amount or
amounts as will compensate such Lender for such additional costs incurred or
reduction suffered.
(b) If any Lender determines that any Change in Law regarding capital
requirements has or would have the effect of reducing the rate of return on such
Lender's capital or on the capital of such Lender's holding company, if any, as
a consequence of this Agreement or the Loans made by such Lender to a level
below that which such Lender or such Lender's holding company could have
achieved but for such Change in Law (taking into consideration such Lender's
policies and the policies of such Lender's holding company with respect to
capital adequacy), then from time to time the Borrower will pay to such Lender
such additional amount or amounts as will compensate such Lender or such
Lender's holding company for any such reduction suffered.
48
(c) A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or its holding company, as the case may be,
as specified in paragraph (a) or (b) of this Section and the basis therefor
shall be delivered to the Borrower by the applicable Lender (with a copy to the
Administrative Agent) and shall be conclusive absent manifest error. The
Borrower shall pay such Lender the amount shown as due on any such certificate
within 30 days after receipt thereof.
(d) Failure or delay on the part of any Lender to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender's right to
demand such compensation; PROVIDED that the Borrower shall not be required to
compensate a Lender pursuant to this Section for any increased costs or
reductions incurred more than 180 days prior to the date that such Lender
notifies the Borrower of the Change in Law giving rise to such increased costs
or reductions and of such Lender's intention to claim compensation therefor;
PROVIDED, FURTHER, that, if the Change in Law giving rise to such increased
costs or reductions is retroactive, then the 180-day period referred to above
shall be extended to include the period of retroactive effect thereof.
SECTION 2.14 BREAK FUNDING PAYMENTS.
In the event of (i) the payment of any principal of any LIBOR Loan other
than on the last day of an Interest Period applicable thereto (including as a
result of an Event of Default), (ii) the conversion of any LIBOR Loan other than
on the last day of the Interest Period applicable thereto, (iii) the failure to
borrow, convert, continue or prepay any Loan on the date specified in any notice
delivered pursuant hereto, or (iv) the assignment of any LIBOR Loan other than
on the last day of the Interest Period applicable thereto as a result of a
request by the Borrower pursuant to Section 2.17, then, in any such event, the
Borrower shall compensate each Lender for the loss, cost and expense
attributable to such event. In the case of a LIBOR Loan, such loss, cost or
expense to any Lender shall be deemed to include an amount determined by such
Lender to be the excess, if any, of (i) the amount of interest which would have
accrued on the principal amount of such Loan had such event not occurred, at the
Adjusted LIBO Rate that would have been applicable to such Loan, for the period
from the date of such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to borrow, convert or continue, for the
period that would have been the Interest Period for such Loan), over (ii) the
amount of interest which would accrue on such principal amount for such period
at the interest rate which such Lender would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the eurodollar market. A certificate of any Lender
setting forth any amount or amounts that such Lender is entitled to receive
pursuant to this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender the amount
shown as due on any such certificate within 10 Business Days after receipt
thereof.
SECTION 2.15. TAXES.
(a) Any and all payments by or on account of any obligation of the
Borrower hereunder or under any other Loan Document shall be made free and clear
of and without deduction for any Indemnified Taxes or Other Taxes; PROVIDED that
if the Borrower shall be
49
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section) the Administrative Agent or Lender receives an amount equal
to the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent and each
Lender, within 10 days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Administrative Agent or such Lender
on or with respect to any payment by or on account of any obligation of the
Borrower hereunder or under any other Loan Document (including Indemnified Taxes
or Other Taxes imposed or asserted on or attributable to amounts payable under
this Section) and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes or
Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment delivered
to the Borrower by a Lender, or by the Administrative Agent on its own behalf or
on behalf of a Lender, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Administrative Agent a copy of the receipt issued by such
Governmental Authority evidencing such payment, a copy of the return reporting
such payment or other evidence of such payment reasonably satisfactory to the
Administrative Agent.
(e) Each Foreign Lender shall deliver to the Borrower (with a copy to
the Administrative Agent) two copies of either United States Internal Revenue
Service Form W-8 BEN or Form W-8ECI, or any subsequent versions thereof or
successors thereto properly completed and duly executed by such Foreign Lender.
Such forms shall be delivered by each Foreign Lender on or before the date it
becomes a party to this Agreement or designates a new lending office. In
addition, each Foreign Lender shall deliver such forms promptly upon the
obsolescence, expiration or invalidity of any form previously delivered by such
Foreign Lender. Notwithstanding any other provision of this Section 2.15, a
Foreign Lender shall not be required to deliver any form pursuant to this
Section 2.15 that such Foreign Lender is not legally able to deliver.
(f) If the Administrative Agent or a Lender determines, in its sole
discretion, that it has received a refund of any Taxes as to which it has been
indemnified by the Borrower pursuant to this Section 2.15, it shall pay over
such refund to the Borrower (but only to the extent of indemnity payments made
by the Borrower under this Section 2.15 with respect to the Taxes giving rise to
such refund), net of all reasonable out-of-pocket expenses of the Administrative
Agent or such Lender directly attributable to such Tax or refund and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); PROVIDED, HOWEVER, that the Borrower, upon the
request of the Administrative Agent or such Lender, agrees
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to repay the amount paid over to the Borrower (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the
Administrative Agent or such Lender in the event the Administrative Agent or
such Lender is required to repay such refund to such Governmental Authority.
Nothing contained in this Section 2.15 shall require the Administrative Agent or
any Lender to make available its tax returns (or any other information relating
to its Taxes which it deems confidential) to the Borrower or any other Person.
SECTION 2.16. PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF
SET-OFFS.
(a) The Borrower shall make each payment required to be made by it
hereunder or under any other Loan Document (whether of principal, interest or
fees, or of amounts payable under Sections 2.13, 2.14 or 2.15, or otherwise)
prior to 12:00 noon, New York City time, on the date when due, in immediately
available funds, without set-off or counterclaim. Any amounts received after
such date may, in the discretion of the Administrative Agent, be deemed to have
been received on the next succeeding Business Day for purposes of calculating
interest thereon. All such payments shall be made to the Administrative Agent at
First Union National Bank, Charlotte, North Carolina, ABA no. 000000000, account
no. 0000000000000, phone no. (000) 000-0000 (or such other account as the
Administrative Agent shall from time to time specify by notice), except that
payments pursuant to Sections 2.10(b), 2.10(c), 2.13, 2.14, 2.15 and 9.03 shall
be made directly to the Persons entitled thereto and payments pursuant to other
Loan Documents shall be made to the Persons specified therein. The
Administrative Agent shall distribute any such payments received by it for the
account of any other Person to the appropriate recipient promptly following
receipt thereof. If any payment under any Loan Document shall be due on a day
that is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
under each Loan Document shall be made in dollars.
(b) If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, interest and
fees then due hereunder, such funds shall be applied (i) first, towards payment
of interest and fees then due hereunder, ratably among the parties entitled
thereto in accordance with the amounts of interest and fees then due to such
parties, and (ii) second, towards payment of principal then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
principal then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans resulting in such Lender receiving payment of a
greater proportion of the aggregate amount of its Loans and accrued interest
thereon than the proportion received by any other Lender, then the Lender
receiving such greater proportion shall purchase (for cash at face value)
participations in the Loans of other Lenders to the extent necessary so that the
benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans; PROVIDED that (i) if any such participations are
purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery,
51
without interest, and (ii) the provisions of this paragraph shall not be
construed to apply to any payment made by the Borrower pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a
Lender as consideration for the assignment of or sale of a participation in any
of its Loans to any assignee or participant, other than to the Borrower or any
Subsidiary or Affiliate thereof (as to which the provisions of this paragraph
shall apply). The Borrower consents to the foregoing and agrees, to the extent
it may effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Borrower in the amount
of such participation.
(d) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders hereunder that the Borrower will not make
such payment, the Administrative Agent may assume that the Borrower has made
such payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders the amount due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders severally
agrees to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender with interest thereon, for each day from and
including the date such amount is distributed to it to but excluding the date of
payment to the Administrative Agent, at the greater of the Federal Funds
Effective Rate and a rate determined by the Administrative Agent in accordance
with banking industry rules on interbank compensation.
(e) Without limiting the generality of paragraph (a) above, the
Borrower's obligations to make each payment required to be made by it hereunder
or under any other Loan Document (whether of principal, interest, fees or
otherwise) shall be absolute and unconditional and shall not be subject to any
delay, reduction, set-off, counterclaim, defense or recoupment for any reason,
including any failure of any equipment or other assets constituting Lucent
Product or Vendor Product or any part thereof, or any dispute with, breach of
representation or warranty by or claim against any supplier, manufacturer,
installer, vendor or distributor, including Lucent. The provisions of this
paragraph shall not be construed as a waiver by the Borrower of any rights it
may have under the Supply Agreement.
SECTION 2.17. MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS.
(a) If any Lender requests compensation under Section 2.13, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.15,
then, if requested by the Borrower, such Lender shall use reasonable efforts to
designate a different lending office for funding or booking its Loans hereunder
or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the reasonable judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 2.13 or 2.15, as the case may be, in the future and (ii) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment made at the Borrower's request.
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(b) If any Lender requests compensation under Section 2.13, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.15,
then the Borrower may, at its sole expense and effort, upon notice to such
Lender and the Administrative Agent, require such Lender to assign and delegate,
without recourse (in accordance with and subject to the restrictions contained
in Section 9.04), all its interests, rights and obligations under this Agreement
to an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); PROVIDED that (i) the Borrower
shall have received the prior written consent of the Administrative Agent, which
consent shall not unreasonably be withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans, and
accrued interest thereon, accrued fees and all other amounts payable to it
hereunder, from the assignee (to the extent of such outstanding principal and
accrued interest and fees) or the Borrower (in the case of all other amounts)
and (iii) such assignment will result in a reduction in such compensation or
payments. A Lender shall not be required to make any such assignment and
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such assignment
and delegation cease to apply.
SECTION 2.18 INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES.
(a) In addition to its other indemnification obligations under this
Agreement, the Borrower hereby agrees to protect, indemnify, pay and save the
Issuing Lender harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) that the Issuing Lender may incur or be subject to as a
consequence, direct or indirect, of (i) the issuance of any Letter of Credit or
(ii) the failure of the Issuing Lender to honor a drawing under a Letter of
Credit as a result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or governmental authority (all
such acts or omissions, herein called "GOVERNMENT ACTS").
(b) As between the Borrower and the Issuing Lender, the Borrower shall
assume all risks of the acts, omissions or misuse of any Letter of Credit by the
beneficiary thereof. The Issuing Lender shall not be responsible: (i) for the
form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for and
issuance of any Letter of Credit, even if it should in fact prove to be in any
or all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii)
for the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, that may prove to be
invalid or ineffective for any reason; (iii) for failure of the beneficiary of a
Letter of Credit to comply fully with conditions required in order to draw upon
a Letter of Credit; (iv) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (v) for errors in interpretation of
technical terms; (vi) for any loss or delay in the transmission or otherwise of
any document required in order to make a drawing under a Letter of Credit or of
the proceeds thereof; and (vii) for any consequences arising from causes beyond
the control of the Issuing Lender, including, without limitation, any Government
Acts. None of the above shall affect, impair, or prevent the vesting of the
Issuing Lender's rights or powers hereunder.
53
(c) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by the Issuing
Lender, under or in connection with any Letter of Credit or the related
certificates, if taken or omitted in good faith (and without gross negligence or
willful misconduct), shall not put the Issuing Lender under any resulting
liability to the Borrower. It is the intention of the parties that this
Agreement shall be construed and applied to protect and indemnify the Issuing
Lender against any and all risks involved in the issuance of the Letters of
Credit, all of which risks are hereby assumed by the Borrower, including,
without limitation, any and all risks of the acts or omissions, whether rightful
or wrongful, of any Government Authority. The Issuing Lender shall not, in any
way, be liable for any failure by the Issuing Lender or anyone else to pay any
drawing under any Letter of Credit as a result of any Government Acts or any
other cause beyond the control of the Issuing Lender.
(d) The obligations of the Borrower under this Section 2.18 shall
survive the termination of this Agreement. No act or omissions of any current or
prior beneficiary of a Letter of Credit shall in any way affect or impair the
rights of the Issuing Lender to enforce any right, power or benefit under this
Agreement.
(e) Notwithstanding anything to the contrary contained in this Section
2.18, the Borrower shall have no obligation to indemnify the Issuing Lender in
respect of any liability incurred by the Issuing Lender arising out of the gross
negligence or willful misconduct of the Issuing Lender (including action not
taken by the Issuing Lender), as determined by a court of competent
jurisdiction.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
SECTION 3.01. ORGANIZATION; POWERS.
Each of the Parent, the Borrower and the Subsidiaries is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, has all requisite company or corporate, as the case may be, power
and authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
SECTION 3.02. AUTHORIZATION; ENFORCEABILITY.
The Transactions are within each Loan Party's corporate powers and have
been duly authorized by all necessary corporate or company, as the case may be,
and, if required, stockholder or member, as the case may be, action. This
Agreement has been duly executed and delivered by the Borrower and constitutes,
and each other Loan Document to which any Loan Party is to be a party, when
executed and delivered by such Loan Party, will constitute, a legal,
54
valid and binding obligation of the Borrower or such Loan Party (as the case may
be), enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
generally and subject to general principles of equity, regardless of whether
considered in a proceeding in equity or at law.
SECTION 3.03. GOVERNMENTAL APPROVALS; NO CONFLICTS.
The Transactions (a) do not require any consent or approval of,
registration or filing with, or any other action by, any Governmental Authority,
except such as have been obtained or made and are in full force and effect and
except for filings necessary to perfect Liens created under the Security
Documents, (b) will not violate any applicable law or regulation or the charter,
by-laws or other organizational documents of any Loan Party or any order of any
Governmental Authority, (c) will not violate or result in a default under any
indenture, agreement or other instrument evidencing or governing any Material
Indebtedness or any other material indenture, agreement or other instrument
binding upon any Loan Party or its assets, or give rise to a right thereunder to
require any payment to be made by any Loan Party, and (d) will not result in the
creation or imposition of any Lien on any asset of any Loan Party, except Liens
created under the Security Documents.
SECTION 3.04. FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE.
(a) Each of the Parent and the Borrower has heretofore furnished to the
Lenders its audited consolidated balance sheet and statement of stockholders'
equity as of August 31, 1999, certified by a Financial Officer of such Person,
and its unaudited pro forma consolidated balance sheet and statement of
stockholders' equity as of the date of this Agreement. Such financial statements
present fairly, in all material respects, the financial position and
capitalization of the Parent and its consolidated subsidiaries, and the Borrower
and its consolidated Subsidiaries, in each case as of such dates in accordance
with GAAP, subject to year end audit adjustments and the absence of footnotes.
(b) Since August 31, 1999, there has been no material adverse change in
the business, condition (financial or otherwise), operations, performance or
properties of the Parent, the Borrower or the Subsidiaries.
SECTION 3.05. PROPERTIES; LIENS; LICENSES.
(a) On each date that this representation is made, each of the Loan
Parties has good title to, or valid leasehold interests in, all the real and
personal property material to its business as then constituted, except for
Permitted Encumbrances and minor defects in title that do not interfere with its
ability to conduct its business as proposed to be conducted during the term of
the Loans or to utilize such properties for their intended purposes, and none of
such property is subject to any Lien other than Permitted Encumbrances.
(b) The certificates, licenses and approvals identified on Schedule
3.05, or the most recent update to Schedule 3.05 that the Borrower may include
with a Borrowing Request (the "LICENSES"), are all the certificates, licenses
and approvals that have been issued or provided to
55
the Borrower or the Subsidiaries by any Governmental Authority having
jurisdiction over the telecommunications business, and each such License is in
full force and effect except as set forth in Schedule 3.05 and has not been
revoked, cancelled, suspended or modified in an adverse way. The Borrower and
each Subsidiary have all licenses and permits that are material to the business
of the Borrower and each Subsidiary (as conducted on each date this
representation is made). Each license or permit that is material to the business
of the Borrower and the Subsidiaries is valid and in full force and effect, and
the Borrower and each Subsidiary are in compliance in all material respects with
the terms and conditions thereof.
SECTION 3.06. LITIGATION AND ENVIRONMENTAL MATTERS.
(a) There are no actions, suits or proceedings by or before any
arbitrator or Governmental Authority pending against or, to the knowledge of the
Parent, the Borrower or any Subsidiary, threatened against or affecting the
Parent, the Borrower or any Subsidiary (i) as to which there is a reasonable
possibility of an adverse determination and that, if adversely determined, could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve
any of the Loan Documents or the Transactions.
(b) Except with respect to any other matters that, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect, none of the Parent, the Borrower or any Subsidiaries (i) has failed to
comply with any Environmental Law or to obtain, maintain or comply with any
permit, license or other approval required under any Environmental Law, (ii) has
become subject to any Environmental Liability, (iii) has received notice of any
claim with respect to any Environmental Liability or (iv) knows of any basis for
any Environmental Liability.
SECTION 3.07. COMPLIANCE WITH LAWS AND AGREEMENTS.
Each of the Parent, the Borrower and the Subsidiaries is in compliance
with all laws, regulations and orders of any Governmental Authority applicable
to it or its property and all indentures, agreements and other instruments
binding upon it or its property, except where the failure to do so, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect. No Default has occurred and is continuing. True and correct
copies of all material agreements to which the Parent, the Borrower or any
Subsidiary is a party or by which any of them or their properties is bound have
been provided to special counsel to First Union.
SECTION 3.08. INVESTMENT AND HOLDING COMPANY STATUS.
None of the Loan Parties is (a) an "investment company" as defined in,
or subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
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SECTION 3.09. TAXES.
Each of the Loan Parties has timely filed or caused to be filed all Tax
returns and reports required to have been filed and has paid or caused to be
paid all Taxes required to have been paid by it, except (a) Taxes that are being
contested in good faith by appropriate proceedings and for which the applicable
Loan Party has set aside on its books adequate reserves or (b) the filing of
local Tax returns and reports to the extent that the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect.
SECTION 3.10. ERISA.
Each Plan has been administered in compliance with all applicable laws
except for such instances of noncompliance as have not resulted in and could not
reasonably be expected to result in a Material Adverse Effect. No ERISA Event
has occurred or is reasonably expected to occur that, when taken together with
all other such ERISA Events for which liability is reasonably expected to occur,
could reasonably be expected to result in a Material Adverse Effect. The present
value of all accumulated benefit obligations under each Plan (based on the
assumptions used for purposes of Statement of Financial Accounting Standards No.
87) did not, as of the date of the most recent financial statements reflecting
such amounts, exceed the fair market value of the assets of such Plan, and the
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed the fair market value of the assets
of all such underfunded Plans.
SECTION 3.11. INTELLECTUAL PROPERTY.
The Borrower and each of its Subsidiaries owns, or is licensed to use,
all trademarks, trade names, copyrights, technology, patents, know-how,
processes and other intellectual property material to or necessary for the
conduct of its business as currently conducted and as proposed to be conducted
except those as to which the failure to own or license could not reasonably be
expected to have a Material Adverse Effect (the "INTELLECTUAL PROPERTY"). No
claim has been asserted and is pending by any Person challenging or questioning
the use of any Intellectual Property or validity or effectiveness of any
Intellectual Property, nor does the Borrower know of any valid basis for any
such claim, except for any claim which, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect. The use of the
Intellectual Property by the Borrower and its Subsidiaries does not infringe on
the rights of any Person, except for such infringements that, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
SECTION 3.12. FEDERAL REGULATIONS.
No part of the proceeds of any Loans will be used in any manner which
would result in a violation of Regulation U of the Board of Governors of the
Federal Reserve System as now and from time to time hereafter in effect.
Following the application of proceeds of each Loan, no more than 10% of the
value of the assets of the Borrower, and no more than 10% of the value of the
57
consolidated assets of the Borrower and its Subsidiaries, will be "margin stock"
as defined in said Regulation U.
SECTION 3.13. DISCLOSURE.
The Parent and the Borrower have disclosed to the Lenders all
agreements, instruments and corporate or other restrictions to which any of the
Loan Parties is subject that, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect. None of the reports,
financial statements, certificates or other information furnished by or on
behalf of any Loan Party to the Administrative Agent or any Lender in connection
with the negotiation of this Agreement or any other Loan Document or delivered
hereunder or thereunder (as modified or supplemented by other information so
furnished, including any publicly available filings made by the Parent with the
Securities and Exchange Commission) contains any material misstatement of fact
or omits to state any material fact necessary to make the statements therein in
the light of the circumstances under which they were made, not misleading;
PROVIDED that, with respect to projected financial information, the Borrower
represents only that such information was prepared in good faith based upon
assumptions believed to be reasonable at the time.
SECTION 3.14. SUBSIDIARIES.
Schedule 3.14 sets forth as of the date of this Agreement the name of,
and the ownership interest of the Borrower in, each Subsidiary.
SECTION 3.15. INSURANCE.
Schedule 3.15 sets forth a description of all insurance maintained by or
on behalf of the Borrower and the Subsidiaries as of the date of this Agreement.
As of the date of this Agreement, all premiums in respect of such insurance have
been paid.
SECTION 3.16. LABOR MATTERS.
As of the date hereof, there are no strikes, lockouts or slowdowns
against any Loan Party pending or, to the knowledge of the Borrower, threatened.
The hours worked by and payments made to employees of the Loan Parties have not
been in violation of the Fair Labor Standards Act or any other applicable
Federal, state, local or foreign law dealing with such matters. All payments due
from any Loan Party, or for which any claim may be made against any Loan Party,
on account of wages and employee health and welfare insurance and other
benefits, have been paid or accrued as a liability on the books of the
applicable Loan Party. The consummation of the Transactions will not give rise
to any right of termination or right of renegotiation on the part of any union
under any collective bargaining agreement to which any Loan Party is bound.
SECTION 3.17. AT&T AGREEMENT.
(i) AT&T has not delivered a notice of termination of the AT&T
Agreement, (ii) AT&T has not failed to pay the amount due pursuant to Section
10.2A of the AT&T Agreement for 30 days after the date when due, (iii) AT&T is
not in arrears for 45 days or more in payments due
58
under the AT&T Agreement in an aggregate amount of $10 million or more, (iv)
AT&T has neither repudiated its obligations under the AT&T Agreement nor refused
to make payments thereunder, and (v) the AT&T Agreement has not been terminated
for any reason.
SECTION 3.18. SECURITY DOCUMENTS.
The representations and warranties in each Security Document are true
and correct, and each of the Security Documents creates, as of the Effective
Date, a valid, enforceable first priority perfected security interest on the
Collateral covered thereby, subject only, as to the priority of such security
interests, to statutory and tax Liens arising by operation of law that are
necessarily prior to the Liens of the Security Documents.
SECTION 3.19. YEAR 2000 READINESS.
Any reprogramming required to permit the proper functioning, in and
following the year 2000, of (a) the computer systems of Parent, the Borrower and
the Subsidiaries and (b) equipment of the Parent, the Borrower and the
Subsidiaries containing embedded microchips and the testing of all such systems
and equipment, as so reprogrammed, will be completed by November 30, 1999,
except to the extent that failure to do so would not have a Material Adverse
Effect. The cost to the Parent, the Borrower and the Subsidiaries of such
reprogramming and testing and of the reasonably foreseeable consequences of year
2000 to the Parent, the Borrower and the Subsidiaries (including reprogramming
errors and the failures of others systems or equipment) could not reasonably be
expected to have a Material Adverse Effect. The Parent, the Borrower and the
Subsidiaries have used commercially reasonable efforts to identify all possible
failures of the systems or equipment of their material suppliers, vendors and
customers and to assess the impact of any such failures on the business,
condition (financial or otherwise), operations, performance or properties of the
Parent, the Borrower and the Subsidiaries.
SECTION 3.20. CAPITALIZATION.
(a) As of the date hereof, the authorized capital stock of the Borrower
consists of (i) 100 shares of common stock, par value $0.01 per share, of which
(i) 100 shares are issued and outstanding and owned beneficially and of record
by the Parent. As of the date hereof, the authorized capital stock of the Parent
consists of 200,000,000 shares of common stock, par value $0.01 per share, and
1,250,000 shares of preferred stock, par value $.01 per share, of which (i)
40,000,000 shares of the common stock are issued and outstanding, and a
sufficient number of shares of common stock are reserved for issuance upon the
exercise or conversion of the warrants and shares of Series A Preferred Stock
outstanding on the date hereof as are necessary to permit the exercise or
conversion of such warrants and shares, and (ii) 1,250,000 shares of Series A
Preferred Stock are to be issued and outstanding pursuant to the Subscription
Agreement. All such outstanding shares of the Borrower and the Parent are
validly issued, fully paid and non assessable and were not issued in violation
of any preemptive or similar rights of any Person. Except as described in the
first two sentences of this Section 3.20, as of the date hereof, no other shares
of capital stock of the Borrower or the Parent are issued and outstanding or
reserved for issuance. Except for the Stockholders Agreement, as of the date
hereof there are no shareholders agreements, voting trusts, proxies or other
agreements, commitments or
59
understandings of any character to which the Parent, the Borrower or any
Subsidiaries is a party or by which the Parent, the Borrower or any Subsidiary
is bound with respect to the voting of any shares of capital stock of the
Parent, the Borrower or any Subsidiaries.
(b) All Securities issued by the Parent, the Borrower or any
Subsidiaries have been offered, issued, sold and delivered, in compliance with,
or pursuant to exemptions from, the Securities Act, and the rules and
regulations of the Securities and Exchange Commission thereunder, and all other
laws of any jurisdiction, and the rules and regulations of any Governmental
Authority, applicable to the offering, issuance, sale or delivery of Securities.
As of the date hereof, none of the Parent, the Borrower or any Subsidiary is
required to file, nor has it filed, any information with the Securities and
Exchange Commission pursuant to the Securities Exchange Act. As of the date
hereof, none of the Parent, the Borrower or any Subsidiary has registered any
Securities under the Securities Act.
SECTION 3.21. FISCAL YEAR.
The fiscal year applicable to Borrower and its consolidated Subsidiaries
begins on each January 1 and ends on each subsequent December 31.
ARTICLE IV
CONDITIONS
SECTION 4.01. EFFECTIVE DATE.
The obligations of the Lenders to make Loans hereunder shall not become
effective until the date on which each of the following conditions is satisfied
(or waived in accordance with Section 9.02):
(a) The Administrative Agent (or its counsel) shall have received from
each party hereto either (i) a counterpart of this Agreement signed on behalf of
such party or (ii) written evidence satisfactory to the Administrative Agent
(which may include telecopy transmission of a signed signature page of this
Agreement) that such party has signed a counterpart of this Agreement.
(b) The Administrative Agent shall have received a favorable written
opinion (addressed to or for the benefit of the Lenders, dated the Effective
Date and addressing such matters relating to the Loan Parties, the Loan
Documents and the Transactions as the Administrative Agent shall reasonably
request) of each of (i) Xxxxxx Xxxxxxxx Frome Xxxxxxxxxx & Xxxxxxx LLP, Xxxxxx &
Xxxxxxx and Cleary, Gottlieb, Xxxxx & Xxxxxxxx, counsel for the Parent and the
Borrower, in form and substance reasonably satisfactory to the Administrative
Agent, (ii) Xxxxxxx Berlin Shereff Xxxxxxxx, LLP, special communications counsel
to the Parent and the Borrower, in form and substance reasonably satisfactory to
the Administrative Agent, and (iii) Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP, special
counsel for Lucent, in form and substance reasonably satisfactory to the
Administrative Agent. The Parent and the Borrower hereby request their counsel
referred to in clauses (i) and (ii) of this paragraph to deliver such opinions.
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(c) The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably request
relating to the organization, existence and good standing of the Loan Parties,
the authorization of the Transactions and any other legal matters relating to
the Loan Parties, the Loan Documents or the Transactions, all in form and
substance satisfactory to the Administrative Agent and its counsel.
(d) The representations and warranties of the Loan Parties set forth in
the Loan Documents shall be true and correct in all respects (or, in the case of
any representation or warranty that is not qualified as to materiality, in all
material respects), no Default shall have occurred and be continuing, the
Borrower shall have performed all of its obligations and satisfied all
conditions required to be satisfied or performed, and the Supply Agreement shall
be in full force and effect, and the Borrower shall be in compliance therewith
in all material respects.
(e) The Administrative Agent and Lucent shall be satisfied that all fees
and other amounts due and payable to them hereunder and under the Fee Letter on
or prior to the Effective Date, including, to the extent invoiced, reimbursement
or payment of all expenses required to be reimbursed or paid by the Borrower
hereunder or under any other Loan Document, have been paid or will be paid from
the proceeds of a Borrowing to be made on the Effective Date.
(f) The Lenders shall be reasonably satisfied with the corporate and
legal structure and capitalization of the Parent, the Borrower and the
Subsidiaries, including the charter and by-laws of the Parent, the Borrower and
each Subsidiary and each agreement or instrument evidencing Indebtedness.
(g) The Administrative Agent shall have received (i) counterparts of the
Initial Guarantee signed on behalf of the Parent and each Subsidiary, and (ii)
counterparts of the Indemnity and Contribution Agreement signed on behalf of
each Loan Party.
(h) The Administrative Agent and the Collateral Trustee shall have
received (i) counterparts of each of the Security Documents signed on behalf of
the Loan Party that is a party thereto and (ii) evidence satisfactory to the
Required Lenders that all documents and instruments, including Uniform
Commercial Code financing statements, required by law or reasonably requested by
the Administrative Agent to be filed, registered or recorded to create or
perfect the Liens intended to be created under the Security Documents, and to
protect the respective ownership interests of the Parent, the Borrower and the
Subsidiaries in (and the Liens of the Security Documents on) all Collateral,
have been so filed, registered or recorded.
(i) The Administrative Agent shall have received a completed Perfection
Certificate from the Borrower, dated the Effective Date and signed by a
Financial Officer of the Borrower together with all attachments contemplated
thereby, including (i) the results of a search of the Uniform Commercial Code
(or equivalent) filings made with respect to the Borrower in the jurisdictions
contemplated by the Perfection Certificate and (ii) copies of the financing
statements (or similar documents) disclosed by such search and evidence
reasonably satisfactory to the Administrative Agent that the Liens indicated by
such financing statements (or similar documents) are permitted by Section 6.02
or have been released.
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(j) The Administrative Agent shall have received evidence satisfactory
to it that the insurance required by Section 5.07 is in effect and that the
Administrative Agent and the Collateral Trustee have been named as an additional
insured and loss payee under all insurance policies to be maintained with
respect to the properties of the Borrower constituting the Collateral.
(k) The Lenders shall have received the Business Plan and the Lenders
shall be satisfied with the Business Plan and there shall have been no material
adverse changes in the Business Plan compared to the information disclosed to
Lucent prior to the date of execution of this Agreement.
(l) The Lenders (i) shall have been given access to the management,
records, books of account, contracts and properties of the Loan Parties and
shall have received such financial, business and other information regarding the
Loan Parties as the Lenders shall have reasonably requested and (ii) shall have
completed their due diligence review of the Loan Parties and shall be reasonably
satisfied with the results of such review.
(m) The Administrative Agent shall have received evidence reasonably
satisfactory to it that the Subsidiaries hold all material governmental
approvals reasonably necessary to conduct their respective businesses.
(n) The Administrative Agent shall have received evidence satisfactory
to it that the Borrower is exercising reasonable commercial efforts to employ a
chief executive officer.
(o) The Borrower shall have delivered to the Administrative Agent
evidence satisfactory to the Lenders that the Parent has received cash pursuant
to the Bridge Loan Agreement and the Subscription Agreement of at least
$100,000,000 and has contributed at least $96,400,000 as cash equity, to the
Borrower.
(p) The Administrative Agent shall have received a certificate of the
Borrower attaching copies of the Subscription Agreement, the Bridge Loan
Agreement, the Tax Sharing Agreement, and all agreements and other documents
delivered in connection therewith, and certifying, as to each such agreement and
document, that (i) such copy is true and correct and (ii) in the case of any
such agreement, such agreement is in full force and effect.
(q) The Administrative Agent shall have received a certificate of the
Borrower to the effect that, as of the Effective Date, (i) the AT&T Agreement is
in full force and effect, (ii) the Borrower is in compliance in all respects
with the terms and conditions of the AT&T Agreement, (iii) the Borrower has not
taken any action which could result in the termination by AT&T for cause
pursuant to Section 29.11 of the AT&T Agreement, and (iv) none of the parties to
the AT&T Agreement is in default under or with respect to any obligation
thereunder which default could reasonably be expected to have a Material Adverse
Effect.
By its execution hereof, the Administrative Agent hereby confirms to the
Borrower that the Effective Date has occurred and the foregoing conditions in
this Section 4.01 have been satisfied or waived.
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SECTION 4.02. EACH BORROWING.
The obligation of each Lender to make a Loan on the occasion of each
Borrowing is subject to the satisfaction of the following conditions:
(a) At the time of and immediately after giving effect to such
Borrowing, the representations and warranties of the Loan Parties set forth in
the Loan Documents shall be true and correct in all respects (or, in the case of
any representation or warranty that is not qualified as to materiality, in all
material respects) on and as of the date of such Borrowing.
(b) At the time of and immediately after giving effect to such Borrowing
no Default shall have occurred and be continuing.
(c) With respect to any Tranche A-1 Loan, at the time of and immediately
after giving effect to such Loan, the amount of such Tranche A-1 Loan shall not
exceed the sum of all amounts paid or payable in respect of the Purchase Price
due in respect of orders or purchases of any Lucent Product or Vendor Product
delivered at any time during the twenty-four month period preceding the date of
such Borrowing and the proceeds of such Tranche A-1 Loan shall be used in
accordance with the requirements of Section 5.10; provided, it is understood and
agreed that Lucent Product or Vendor Product (i) that is subject to a third
party purchase money security interest will not create availability under the
Tranche A-1 Commitment pursuant to this Section 4.02(c) ("Tranche A-1
Availability") unless the invoice with respect to such Lucent Product or Vendor
Product will be paid in full with the proceeds of such Tranche A-1 Loan and (ii)
that has been purchased and paid for by the Borrower or any Subsidiary with the
proceeds from one or more Asset Sales of Lucent Product or Vendor Product will
not create Tranche A-1 Availability to the extent the Lucent Product or Vendor
Product sold in the Asset Sale previously created Tranche A-1 Availability.
(d) With respect to any Tranche A-2 Loan, at the time of and immediately
after giving effect to such Borrowing, the amount of such Tranche A-2 Loan shall
not exceed 25% of the Purchase Price of (i) Lucent Product that was ordered
under the Supply Agreement and (ii) Vendor Product that was ordered or
purchased, in each case against which no Tranche A-2 Loan has yet been made, and
the proceeds of such Tranche A-2 Loan shall be used in accordance with the
requirements of Section 5.10; provided, it is understood and agreed that Lucent
Product or Vendor Product (i) that is subject to a third party purchase money
security interest will not create availability under the Tranche A-2 Commitment
pursuant to this Section 4.02(d) ("Tranche A-2 Availability") unless the invoice
with respect to such Lucent Product or Vendor Product will be paid with the
proceeds of a Tranche A Loan and (ii) that has been purchased and paid for by
the Borrower or any Subsidiary with the proceeds from one or more Asset Sales of
Lucent Product or Vendor Product will not create Tranche A-2 Availability to the
extent the Lucent Product or Vendor Product sold in the Asset Sale previously
created Tranche A-2 Availability.
(e) Solely with respect to Tranche A-1 Loans, the Lucent Product and/or
Vendor Product for which the Purchase Price is to be paid with the proceeds of
such Borrowing is intended to be used in a Permitted UCC Jurisdiction.
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(f) At the time of and immediately after giving effect to such
Borrowing, the Borrower shall have all necessary Real Estate Rights, and
sufficient financing, to build the Segment or portion thereof proposed to be
built with the proceeds of such Borrowing.
(g) Solely with respect to the Revolving Loans, the Borrower shall have
delivered to the Administrative Agent a certificate in the form of Exhibit F
that the Parent has received gross proceeds of at least $350,000,000 pursuant to
the Subscription Agreement and the Bridge Loan Agreement and/or an offering of
High Yield Debt and has contributed such amount to the Borrower as cash equity
(except to the extent otherwise applied to the payment of Permitted Parent
Liabilities or to fund a Permitted Interest Fund or, in the case of the proceeds
of an offering of High Yield Debt, to the payment of Indebtedness and accrued
Interest thereon under the Bridge Facility).
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date thereof as to the matters specified in this Section
4.02.
ARTICLE V
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated, the principal of
and interest on each Loan and all fees and other amounts (other than contingent
or indemnity obligations which by their terms survive the termination of this
Agreement) payable hereunder shall have been paid in full and all LOC
Obligations shall have been terminated or reimbursed, the Borrower covenants and
agrees with the Lenders that:
SECTION 5.01. FINANCIAL STATEMENTS AND OTHER INFORMATION.
The Borrower will furnish to the Administrative Agent:
(a) within 90 days after the end of each fiscal year of each of the
Borrower and the Parent, the audited consolidated balance sheet of such Person
and its consolidated subsidiaries and related statements of operations,
stockholders' equity and cash flows as of the end of and for such year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all reported on by Deloitte & Touche or other independent public accountants of
recognized national standing (without a "going concern" or like qualification or
exception and without any qualification or exception as to the scope of such
audit, PROVIDED that prior to the Conversion Date such financials may include a
"development stage" qualification of the type stated in the August 31, 1999,
audited financials referred to in Section 3.04(a)) and certified by one of its
Financial Officers as presenting fairly in all material respects the financial
condition and results of operations of such Person and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently
applied;
(b) within 45 days after the end of the first three fiscal quarters of
each fiscal year of each of the Borrower and the Parent, the unaudited
consolidated balance sheet of such Person and its consolidated subsidiaries and
related statements of operations and cash flows as of the
64
end of and for such calendar quarter and the then elapsed portion of the fiscal
year, setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet, as of
the end of) the previous fiscal year, all certified by one of its Financial
Officers as presenting fairly in all material respects the financial condition
and results of operations of such Person and its consolidated subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes;
(c) within 30 days after the end of each calendar month, with respect to
the Borrower and the Parent, beginning with March 2000, (i) the unaudited
consolidated balance sheet of such Person and its consolidated subsidiaries and
related statements of operations and cash flows as of the end of and for such
calendar month and the then elapsed portion of the fiscal year, setting forth in
each case in comparative form, beginning with the monthly statements delivered
after March 31, 2001, the figures for the corresponding period or periods of
(or, in the case of the balance sheet, as of the end of) the previous fiscal
year, and with a comparison to the Borrower's annual plan with respect to such
calendar month and such elapsed portion of the fiscal year, (ii) to the extent
prepared for senior management's review, a report illustrating in reasonable
detail construction progress as compared to the Borrower's current construction
plan, (iii) copies of the monthly permitting status report in detail reasonably
acceptable to the Administrative Agent, (iv) a schedule illustrating Tranche A-1
Availability and Tranche A-2 Availability, (v) copies of all invoices and all
wire transfer confirmations or other proof of payment with respect to Lucent
Product and Vendor Product that support Tranche A-1 Availability or Tranche A-2
Availability and have not previously been delivered to the Administrative Agent,
(vi) a report containing the amount (if any) of Net Proceeds from sales of
Lucent Product or Vendor Product that was reinvested in Lucent Product or Vendor
Product during such month, (vii) an updated version of Schedule 6.02(iv), (viii)
(A) all written amendments, notices of default, waivers or extensions of
material deadlines with respect to the AT&T Agreement and (B) notice of the
occurrence of any Default, or any event or occurrence that could reasonably be
expected to result in a Default, pursuant to Section 7.01(p), in each case
certified by one of its Financial Officers as presenting fairly in all material
respects the financial condition and results of operations of such Person and
its consolidated subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes and as true and correct in all material respects and (ix) a
summary of accounts payable under the Supply Agreement which shall include
agings, the status of each account payable as current or past due and as
uncontested or contested (and if past due and contested, an explanation of how
such dispute is being resolved);
(d) concurrently with any delivery of the financial statements under
clause (a) and (b) above, a certificate of a Financial Officer of the Borrower
(i) certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or proposed to be
taken with respect thereto, (ii) setting forth reasonably detailed calculations
demonstrating compliance with Sections 6.01, 6.04, 6.06 and 6.13 through 6.20,
and (iii) stating whether any change in GAAP or in the application thereof that
materially affects the financial statements accompanying such certificate (it
being understood that any change that would affect compliance with any covenant
set forth herein or the Applicable Rate shall be considered material) has
occurred since the date of the Borrower's audited financial statements last
65
delivered pursuant to Section 3.04 and, if any such change has occurred,
specifying the effect of such change on the financial statements accompanying
such certificate;
(e) concurrently with any delivery of financial statements under clause
(a) above, a certificate of the accounting firm that reported on such financial
statements stating whether they obtained knowledge during the course of their
examination of such financial statements of any Default (which certificate may
be limited to the extent required by accounting rules or guidelines);
(f) promptly after the same become available but in any event within 105
days after the end of each fiscal year of the Borrower, the Borrower's monthly
forecasts and annual plan for the current fiscal year;
(g) at any time during each fiscal year but in any event within
eighteen months after the date the last update was provided pursuant to this
Section 5.01(g), an update of the Borrower's financial projections (in
reasonable detail) displaying the projected financial results of the Borrower
and its Subsidiaries for the period from the first day of the current fiscal
year until the first anniversary of the Maturity Date;
(h) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by the
Parent, the Borrower or any Subsidiary with the Securities and Exchange
Commission, or any Governmental Authority succeeding to any or all of the
functions of said Commission, or with any national securities exchange, or
financial information or other material information distributed by the Parent or
the Borrower to either of their stockholders generally, as the case may be;
(i) promptly after the Borrower or any Subsidiary receives same, any
written notice from Lucent that an invoice is past due and that Lucent intends
to take action with respect thereto, together with a letter addressed to the
Administrative Agent from the Borrower containing an explanation as to the
reason such invoice is past due and the actions the Borrower proposes to take
with respect thereto; and
(j) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Parent, the Borrower or any Subsidiary, or compliance with the terms of any Loan
Document, as the Administrative Agent or any Lender may reasonably request.
SECTION 5.02. NOTICES OF MATERIAL EVENTS.
(a) The Borrower will furnish to the Administrative Agent, the
Collateral Trustee and each Lender written notice of the following promptly upon
obtaining knowledge thereof:
(i) the occurrence of any Default;
(ii) the filing or commencement of any action, suit or proceeding
by or before any arbitrator or Governmental Authority against or
affecting the Parent, the Borrower or,
66
to Borrower's knowledge, any Affiliate thereof that, if adversely
determined, could reasonably be expected to result in a Material Adverse
Effect; and
(iii) any other development that results in, or could reasonably
be expected to result in, a Material Adverse Effect, including that AT&T
Corp. has taken any of the actions specified in Section 7.01(p).
(b) The Borrower will furnish to the Administrative Agent and the
Collateral Trustee written notice of the occurrence of any Prepayment Event
promptly after the occurrence of such event.
(c) Each notice delivered under this Section shall be accompanied by a
statement of a Financial Officer or other executive officer of the Borrower
setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken with respect thereto.
SECTION 5.03. INFORMATION REGARDING COLLATERAL.
(a) The Borrower will furnish to the Administrative Agent and the
Collateral Trustee prompt written notice of any change (i) in corporate name of
the Parent, the Borrower or any Subsidiary or in any trade name used to identify
any such Person in the conduct of its business or in the ownership of its
properties, (ii) in the location of the chief executive office of the Parent,
the Borrower or any Subsidiary, its principal place of business or any asset
constituting Collateral (other than the installation of any asset constituting
Collateral in a jurisdiction in which all Uniform Commercial Code financing
statements (including fixture filings, if applicable) and other appropriate
filings, recordings or registrations (other than mortgages or similar
instruments in respect of real property) containing a description of the
Collateral have been filed of record in each governmental, municipal or other
appropriate office in such jurisdiction to the extent necessary to perfect the
security interests under the Security Documents), (iii) in the identity or
corporate structure of the Parent, the Borrower or any Subsidiary or (iv) in the
Federal Taxpayer Identification Number of the Parent, the Borrower or any
Subsidiary. The Borrower agrees not to effect or permit any change referred to
in the preceding sentence unless all filings have been made under the Uniform
Commercial Code or otherwise that are required in order for the Collateral
Trustee to continue at all times following such change to have a valid, legal
and perfected security interest in all the Collateral (except for items of
Collateral released from Liens in favor of the Collateral Trustee as permitted
by Section 6.02(iv)(E)).
(b) No later than June 30, 2000, the Borrower will and will cause each
Subsidiary to deliver to the Administrative Agent and the Collateral Trustee a
certificate of a Financial Officer of the Borrower or such Subsidiary (i)
setting forth the information required pursuant to Sections 1 and 2 of the
Perfection Certificate with respect to the Borrower or such Subsidiary or
confirming that there has been no change in such information (except as
permitted under Section 6.02(iv)(E)) since the date of the Perfection
Certificate delivered on the Effective Date or the date of the most recent
certificate delivered pursuant to this Section and (ii) certifying that all
Uniform Commercial Code financing statements (including fixture filings, as
applicable) or other
67
appropriate filings, recordings or registrations, including all refilings,
rerecordings and reregistrations (other than mortgages or similar instruments in
respect of real property), containing a description of the Collateral have been
filed of record in each governmental, municipal or other appropriate office in
each jurisdiction identified pursuant to clause (i) above to the extent
necessary to protect and perfect the security interests under the Security
Documents (except as permitted under Section 6.02(iv)(E)) for a period of not
less than 18 months after the date of such certificate (except as noted therein
with respect to any continuation statements to be filed within such period).
SECTION 5.04. EXISTENCE; CONDUCT OF BUSINESS.
The Borrower will, and will cause each of the Subsidiaries to, do or
cause to be done all things necessary to preserve, renew and keep in full force
and effect its legal existence and the rights, licenses, permits, privileges and
franchises material to the conduct of the business of the Borrower and the
Subsidiaries, taken as a whole; PROVIDED that the foregoing shall not prohibit
any merger, consolidation, liquidation or dissolution permitted under Section
6.03.
SECTION 5.05. PAYMENT OF OBLIGATIONS.
The Borrower will, and will cause each of the Subsidiaries to, pay its
Indebtedness and other obligations, including Tax liabilities, before the same
shall become delinquent or in default, except where (i) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (ii) the
Parent, the Borrower or such Subsidiary has set aside on its books adequate
reserves with respect thereto in accordance with GAAP, (iii) such contest
effectively suspends collection of the contested obligation and the enforcement
of any Lien securing such obligation and (iv) the failure to make payment
pending the resolution of such contest could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 5.06. MAINTENANCE OF PROPERTIES.
The Borrower will, and will cause each of the Subsidiaries to, keep and
maintain all Collateral, and all other property material to the conduct of the
business of the Parent, the Borrower and the Subsidiaries, taken as a whole, in
good working order and condition, ordinary wear and tear excepted; PROVIDED that
this Section 5.06 shall not prevent sales permitted under Sections 6.03 and
6.04.
SECTION 5.07. INSURANCE.
(a) The Borrower will, and will cause each of the Subsidiaries to,
maintain, with financially sound and reputable insurance companies with AM
Best's rating of A minus (A-) or better, All-Risk property insurance for the
replacement value of all property and other insurance, including public
liability insurance against claims for personal injury, death or property damage
occurring upon, about or in connection with the use of any properties owned,
occupied or controlled by it as well as such other insurance as may be required
by law.
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(b) All policies of All-Risk property insurance maintained by or for the
benefit of the Borrower with respect to the Collateral shall be (i) maintained
in an amount not less than the replacement value of all property thereof, with
deductibles or self insured retention not exceeding $250,000, and (ii) endorsed
or otherwise amended to include a "standard" or "New York" lender's loss payable
endorsement, in favor of and satisfactory to the Administrative Agent, which
endorsement shall provide that the insurance carrier shall pay all proceeds
otherwise payable to any Loan Party under such policies directly to the
Collateral Trustee. All such policies also shall provide that none of the
Borrower, the Administrative Agent, the Collateral Trustee nor any other party
shall be a coinsurer thereunder and shall contain a "Replacement Cost
Endorsement," without any deduction for depreciation, "mortgagee's
interest"/"breach of warranty coverage" and such other provisions as the
Administrative Agent or the Collateral Trustee may reasonably require from time
to time to protect the interests of the Lenders. Each such policy also shall
provide that it shall not be canceled (i) by reason of nonpayment of premium
except upon not less than 10 days' prior written notice thereof by the insurer
to the Administrative Agent (giving the Administrative Agent and the Collateral
Trustee the right to cure defaults in the payment of premiums) or (ii) for any
other reason except upon not less than 30 days' prior written notice thereof by
the insurer to the Administrative Agent and the Collateral Trustee. The Borrower
shall deliver to the Administrative Agent and the Collateral Trustee, upon not
less than 30 days' prior written notice of the cancellation, modification or
non-renewal of any such policy of insurance, a copy of a renewal or replacement
policy (or other evidence of renewal of a policy previously delivered to the
Administrative Agent and the Collateral Trustee) together with evidence
satisfactory to the Administrative Agent and the Collateral Trustee of payment
of the premium therefor.
(c) The Borrower will notify the Administrative Agent and the Collateral
Trustee immediately whenever any separate insurance concurrent in form or
contributing in the event of loss with that required to be maintained under this
Section is taken out by any Loan Party, and shall promptly deliver to the
Administrative Agent and the Collateral Trustee a duplicate original copy of
such policy or policies.
SECTION 5.08. BOOKS AND RECORDS; INSPECTION RIGHTS.
The Borrower will, and will cause each of the Subsidiaries to, keep
proper books of record and account in which full, true and correct entries are
made of all material dealings and transactions in relation to their business and
activities. The Borrower will, and will cause each of the Subsidiaries to,
permit any representatives designated by the Administrative Agent or any Lender,
at the Administrative Agent's or Lender's expense (unless an Event of Default
has occurred and is continuing, in which case at Borrower's expense) upon
reasonable prior notice, to visit and inspect its properties (PROVIDED that,
except upon the occurrence and during the continuation of a Default, such
inspections will not take place more than once each calendar month) to examine
and make extracts from its books and records, and to discuss its affairs,
finances and condition with its officers, independent accountants, performance
bond insurers and contractors, all at such reasonable times and as often as
reasonably requested; provided, however, so long as no Default shall have
occurred and be continuing, any discussions with performance bond insurers and
contractors shall be (at the Borrower's option) in the presence of the
Borrower's representatives and shall be regarding matters relevant to the
successful
69
completion of the Network. Any such inspection shall be subject to the
confidentiality restrictions set forth in Section 9.12.
SECTION 5.09. COMPLIANCE WITH LAWS AND AGREEMENTS.
The Borrower will, and will cause each of the Subsidiaries to, comply
with all laws, rules, regulations and orders of any Governmental Authority
(including ERISA and all Environmental Laws) applicable to it or its property
and all indentures, agreements and other instruments binding upon it or its
property, except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.10. USE OF PROCEEDS.
(a) The Borrower will, and will cause each of the Subsidiaries to, use
the proceeds of Tranche A-1 Loans in an amount not to exceed $160,000,000 solely
(i) to make payments of the Purchase Price, and (ii) to reimburse the Borrower
and the Subsidiaries for amounts previously paid in respect of the Purchase
Price with other funds.
(b) The Borrower will, and will cause the Subsidiaries to, use the
proceeds of Tranche A-2 Loans and Revolving Loans solely to make payments of
Permitted Expenses.
SECTION 5.11. FURTHER ASSURANCES.
The Borrower will, and will cause each other Loan Party to, execute any
and all further documents, financing statements, agreements and instruments, and
take all such further actions (including the filing and recording of financing
statements, fixture filings and other documents), which may be required under
any applicable law, or which the Administrative Agent or the Required Lenders
may reasonably request, to effectuate the transactions contemplated by the Loan
Documents or to grant, preserve, protect or perfect the Liens created or
intended to be created by the Security Documents or the validity or priority of
any such Lien, all at the expense of the Borrower. The Borrower also agrees to
provide to the Administrative Agent and the Collateral Trustee, upon request,
evidence reasonably satisfactory to the Administrative Agent or the Collateral
Trustee, as the case may be, as to the perfection and priority of the Liens
created or intended to be created by the Security Documents.
SECTION 5.12. CASUALTY AND CONDEMNATION.
(a) The Borrower will furnish to the Administrative Agent and the
Collateral Trustee and the Lenders prompt notice of any casualty or other damage
to any portion of the Collateral having a value in excess of $100,000 or the
commencement of any action or proceeding for the taking of any Collateral or any
part thereof or interest therein under power of eminent domain or by
condemnation or similar proceeding.
(b) If any event described in paragraph (a) of this Section results in
Net Proceeds (whether in the form of insurance proceeds, condemnation award or
otherwise), the Collateral Trustee is authorized to collect such Net Proceeds
and, if received by the Parent, the Borrower or
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any Subsidiary, such Net Proceeds shall be paid over to the Collateral Trustee.
All such Net Proceeds retained by or paid over to the Collateral Trustee shall
be held by the Collateral Trustee and released from time to time to pay the
costs of repairing, restoring or replacing the affected property, or reinvesting
such Net Proceeds in the Network, in each case in accordance with the terms of
this Agreement and the applicable provisions of the Security Documents, subject
to the provisions of the Security Documents regarding application of such Net
Proceeds during a Default.
(c) If any Net Proceeds retained by or paid over to the Collateral
Trustee as provided above continue to be held by the Collateral Trustee on the
date that any prepayment is due pursuant to Section 2.09(b) in respect of the
event resulting in such Net Proceeds, then such Net Proceeds shall be applied to
prepay Borrowings as provided in Section 2.09(b).
SECTION 5.13. INTEREST RATE PROTECTION.
The Borrower will from time to time enter into and maintain in effect
one or more Hedging Agreements the effect of which shall be to fix or limit the
interest cost to the Borrower and the Subsidiaries with respect to such portion
of the Loans as shall be necessary in order that, at all times subsequent to the
date that is the earlier to occur of (x) one year after the date hereof, and (b)
ninety days after the date of the first High Yield Indenture, at least 50% of
the aggregate amount of Consolidated Indebtedness and Permitted Parent Debt
shall be comprised of: (a) Indebtedness bearing interest at a fixed rate; (b)
Indebtedness covered by such Hedging Agreements; or (c) a combination of fixed
rate and hedged Indebtedness.
SECTION 5.14. ADDITIONAL SUBSIDIARIES; ADDITIONAL SECURITY DOCUMENTS.
If any Subsidiary is formed or acquired after the date hereof, the
Borrower will notify the Administrative Agent and the Lenders thereof and will
cause such Subsidiary to become a party to an Additional Guarantee and the
Indemnity and Contribution Agreement promptly, and in any event within five
Business Days, thereafter. At the time of such formation or acquisition, the
Borrower or the Parent (i) will cause such Subsidiary to enter into such
Additional Security Documents in favor of the Collateral Trustee, in form and
substance satisfactory to the Required Lenders, to obtain all necessary
consents, and to take all other actions, in each case as necessary or
appropriate to create and perfect Liens upon the assets of such Subsidiary that
would be subject to the Initial Security Documents if owned by a Subsidiary
party thereto or in the case of a Services Subsidiary, if owned by XX.Xxx
Services, (ii) will cause legal counsel to deliver opinions as to the
enforceability of such Security Documents, the creation and perfection of Liens
thereunder, and such other matters as the Collateral Trustee and the
Administrative Agent reasonably may request, (iii) cause any Persons other than
the Borrower that owns or will acquire any equity interest in such Subsidiary to
enter into a pledge agreement in favor of the Collateral Trustee, in form and
substance reasonably satisfactory to the Administrative Agent, to obtain all
necessary consents, and to take all other actions, in each case as necessary or
appropriate to create and perfect Liens upon such equity interest, and (iv) will
take, or cause such Person and its officers to take, such other actions as the
Collateral Trustee or the Administrative Agent reasonably may require in
connection therewith.
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SECTION 5.15. SPECIAL PURPOSE SUBSIDIARIES.
(a) The Borrower will maintain the corporate existence of a Subsidiary
(such Subsidiary, "XX.XXX PROPERTY") the sole business purpose of which will be
to own all of the fee and leasehold interests in and to land and improvements
and Fixtures on owned or leased land (all such interests and rights, the "REAL
ESTATE RIGHTS"), except for the Excluded Real Estate Rights.
(b) The Borrower will maintain the corporate existence of a Subsidiary
(such Subsidiary, "XX.XXX SERVICES") the sole business purpose of which will be
(i) to own all of the interests in and to rights of way, easements, licenses and
other rights and interests with respect to real property and Dedicated Conduit
other than the Real Estate Rights and all certificates, licenses and approvals
of any Governmental Authority (other than certificates, licenses and approvals
acquired by the Borrower or a Subsidiary other than XX.Xxx Services that are (A)
required to operate the business of the Borrower or such Subsidiary in the
ordinary course of business, (B) not essential to the operation of the Network
and (C) permitted pursuant to the terms of the Loan Documents), in each case
required for the acquisition, construction and operation of the Network
(collectively, the "ROW/LICENSE RIGHTS"), except to the extent any such rights
are held by a Services Subsidiary, (ii) to own leasehold interests or other
rights to use in (but not direct ownership of) fiber, equipment and other
personal property (not constituting Dedicated Conduit) owned by the Borrower or
any Subsidiary (other than a Special Purpose Subsidiary) necessary or desirable
to provide services to customers of the Network, (iii) to contract with and
provide services to customers of the Network, maintain and operate the Network,
contract for and provide lit fiber services and engage in other activities
related thereto and (iv) to own 100% of the equity interests in any other
Subsidiary the sole business purpose of which will be the same in scope as
described in the foregoing clauses (i), (ii) and (iii), but with respect only to
a portion of the Network (a "SERVICES SUBSIDIARY").
SECTION 5.16. REQUIRED CASH BALANCE CERTIFICATE.
Concurrently with the delivery of the financial statements under Section
7.01(b) for the first and third fiscal quarters of each fiscal year of the
Borrower prior to the Conversion Date, the Borrower will furnish to the
Administrative Agent a certificate of the Chief Financial Officer of the
Borrower setting forth (i) the total amount of cash, commitments and projected
cash flow from the operations of the Borrower and the Subsidiaries (which total
amount shall be calculated in a manner mutually satisfactory to the
Administrative Agent and the Borrower) as of last day of the fiscal quarter then
ended, and (ii) demonstrating that the amount calculated under the preceding
clause (i) is not less than the sum of the following amounts (without
duplication) for the period of two consecutive calendar quarters ending on the
second Quarterly Date next following such Quarterly Date: (A) projected
Consolidated Debt Service for such period, PLUS (B) projected Capital
Expenditures for such period as set forth in the Annual Business Plan then in
effect (as adjusted for timing differences within that year), PLUS (C) projected
operating losses of the Borrower and its Subsidiaries for such period as set
forth in the Annual Business Plan then in effect (as adjusted for timing
differences within that year), PLUS (D) amounts projected to be required to be
paid to the Parent by the Borrower and its Subsidiaries during such period
pursuant to the Tax Sharing Agreement, PLUS (E) payments made pursuant to
Capital Lease
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Obligations of the Borrower and the Subsidiaries for such period; and such
certificate shall state that all of the projections as to which the calculations
in such certificate are made are based on reasonable assumptions of such Chief
Financial Officer.
ARTICLE VI
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees and other amounts (other than contingent
or indemnity obligations which by their terms survive the termination of this
Agreement) payable hereunder have been paid in full and all LOC Obligations
shall have been terminated or reimbursed, each of the Parent and the Borrower
covenants and agrees with the Lenders that:
SECTION 6.01. INDEBTEDNESS.
The Borrower will not, and will not permit any Subsidiary to, create,
incur, assume or permit to exist any Indebtedness, except:
(i) Indebtedness created under the Loan Documents;
(ii) subject to Section 6.04, Indebtedness of the Borrower to
any Subsidiary and of any Subsidiary to the Borrower or any other
Subsidiary;
(iii) Indebtedness of the Borrower or any Subsidiary outstanding
on the date hereof and set forth on Schedule 6.01 or relating to a Lien
described in clause (iii) of Section 6.02;
(iv) Indebtedness of the Borrower or any Subsidiary (other than a
Special Purpose Subsidiary) incurred after the date of this Agreement to
finance the acquisition, construction or improvement of any equipment,
inventory, real property or other assets (other than, with respect to
the Initial Network, rights of way, easements, licenses, conduit and
intellectual property), including Capital Lease Obligations and any
Indebtedness assumed in connection with the acquisition of any such
assets or secured by a Lien on any such assets prior to the acquisition
thereof; PROVIDED that any such Indebtedness (A) is incurred prior to or
within 90 days after such acquisition or the completion of such
improvement or construction, as the case may be, (B) that is incurred in
connection with any particular acquisition, improvement or construction
does not exceed the cost of such acquisition, improvement or
construction, (C) that is incurred to finance the acquisition of any
real property or the acquisition, construction or improvement of
buildings (or other improvements) on any real property owned or leased
by the Borrower or any Subsidiary, to the extent such real property
and/or buildings (or other improvements) are located within, or related
to, the Initial Network, shall not exceed, when combined with
Indebtedness outstanding pursuant to clause (D), $20,000,000 in the
aggregate, (D) consisting of Capital Lease Obligations that are incurred
to finance the acquisition of any real property or the acquisition,
construction or
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improvement of buildings (or other improvements) on any real property
owned or leased by the Borrower or any Subsidiary, to the extent such
real property and/or buildings (or other improvements) are located
within, or related to, the Initial Network, shall not exceed, when
combined with Indebtedness outstanding pursuant to clause (C),
$20,000,000 in the aggregate and (E) may be secured only by the assets
being financed thereby (and proceeds thereof); PROVIDED, FURTHER, that
the aggregate principal amount of all outstanding Indebtedness incurred
in reliance on this clause (iv) (including Indebtedness incurred
pursuant to clause (v) below to refinance Indebtedness originally
incurred pursuant to this clause (iv) and successive financings thereof)
shall not exceed the Purchase Money Debt Limit at any time; PROVIDED,
FURTHER, that the Purchase Money Debt Limit may be increased by up to
$15,000,000 if the terms of the Indebtedness constituting such increase
are in form and substance reasonably satisfactory to the Administrative
Agent and any league table co-agent from time to time party to this
Agreement;
(v) Indebtedness of the Borrower incurred to refinance any
Indebtedness referred to in clause (iii) or (iv) above or this clause
(v) and Indebtedness of any Subsidiary incurred to refinance any
Indebtedness of such Subsidiary referred to in clause (iii) or (iv)
above or this clause (v); PROVIDED that (A) the principal amount of any
such Indebtedness shall not exceed the principal amount of, plus accrued
interest and any prepayment premiums applicable to, the Indebtedness
refinanced thereby, (B) any such Indebtedness shall have a scheduled
maturity date that is on or after the scheduled maturity date of the
Indebtedness refinanced thereby, (C) any such Indebtedness shall have a
weighted average life to maturity that is equal to or longer than the
remaining weighted average life to maturity of the Indebtedness
refinanced thereby (determined immediately prior to giving effect to
such refinancing), (D) any such Indebtedness shall not include any
provisions that may require mandatory Repayment thereof prior to
scheduled maturity, other than scheduled Repayments taken into account
in determining compliance with clause (C) above and other provisions
that are not materially more burdensome than any such provisions
included in the Indebtedness refinanced thereby, and (E) any
Indebtedness described in this clause (v) shall not be secured by any
Lien other than Liens on assets securing the Indebtedness being
refinanced thereby and shall not be guaranteed by any Subsidiary other
than any Subsidiary that guaranteed the Indebtedness being refinanced;
(vi) Other unsecured Indebtedness of the Borrower and its
Subsidiaries (other than the Special Purpose Subsidiaries) not to exceed
$5,000,000 in the aggregate at any time outstanding;
(vii) Guaranty Obligations by the Borrower or any of its
Subsidiaries (other than the Special Purpose Subsidiaries) of
Indebtedness or other obligations of the Borrower or any of its
Subsidiaries so long as such Indebtedness is permitted pursuant to the
terms of this Agreement;
(viii) Unsecured intercompany Indebtedness among the Borrower and
its Subsidiaries, PROVIDED that any such Indebtedness shall be (A) fully
subordinated to the
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Obligations hereunder on terms reasonably satisfactory to the
Administrative Agent and (B) evidenced by promissory notes which shall
be pledged to Collateral Trustee to secure the Obligations; and
(ix) purchase money Indebtedness incurred under the Supply
Agreement or under a Vendor Supply Agreement.
SECTION 6.02. LIENS.
The Borrower will not, and will not permit any Subsidiary to, create,
incur, assume or permit to exist any Lien on any property or asset now owned or
hereafter acquired by it, or assign or sell any income or revenues (including
accounts receivable) or rights in respect of any thereof, except:
(i) Liens created under the Security Documents;
(ii) Permitted Encumbrances;
(iii) any Lien on any property or asset of the Parent, the
Borrower or any Subsidiary existing on the date hereof and set forth in
Schedule 6.02; PROVIDED that (A) such Lien shall not apply to any other
property or asset of the Borrower or any Subsidiary and (B) such Lien
shall secure only those obligations which it secures on the date hereof;
(iv) Liens on equipment, inventory, real property or other assets
(other than, with respect to the Initial Network, rights of way,
easements, licenses, conduit and intellectual property) acquired,
constructed or improved by the Borrower or a Subsidiary (other than a
Special Purpose Subsidiary); PROVIDED that (A) such Liens secure only
Indebtedness permitted by clause (iv) of Section 6.01 or a refinancing
thereof permitted by clause (v) of Section 6.01, (B) such Liens and the
Indebtedness secured thereby are incurred prior to or within 90 days
after such acquisition, construction or improvement of such equipment,
inventory, real property or other assets, (C) the Indebtedness secured
thereby does not exceed 100% of the cost of acquiring, constructing or
improving such equipment, inventory, real property or other assets, (D)
such Liens shall not apply to any other property or assets of the
Borrower or any Subsidiary and (E) to the extent that the Borrower
requests that the Collateral Trustee terminate its Liens with respect to
any property subject to a Purchase Money Lien and proceeds thereof, such
terminations shall only be with respect to the property (and proceeds
thereof) set forth on Schedule 6.02(iv) hereto as the same may be
updated from time to time pursuant to Section 5.01(c) by the submission
of a certificate of a Responsible Officer identifying the property so
financed, the terms of such financing and the duration of such
agreement, it being expressly understood and agreed that (x) neither the
Borrower nor any Subsidiary shall grant a security interest with respect
to such property and the proceeds thereof to any Person other than the
holder of the Purchase Money Lien and (y) upon the payment in full of
the Indebtedness permitted by clause (iv) of Section 6.01 that is
secured by such Purchase Money Lien, the Borrower shall promptly, but in
any event within 5 Business Days of such event, notify the
Administrative Agent thereof and execute any and all
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documentation required by the Administrative Agent and/or the Collateral
Trustee to reinstate the Lien of the Collateral Trustee with respect to
such property and the proceeds thereof, confirm the release of such
Purchase Money Lien and terminate all financing statements filed in
respect thereof; and
(v) Liens on Lucent Product or Vendor Product pursuant to the
terms of the Supply Agreement or a Vendor Supply Agreement; PROVIDED
that (A) such Liens secure only Indebtedness permitted by clause (ix) of
Section 6.01, on an invoice-by-invoice basis, (B) the amount of
Indebtedness secured by a Lien on Lucent Product or Vendor Product
covered by any particular invoice shall consist solely of the unpaid
purchase price due Lucent or the vendor providing such Vendor Product,
as applicable, as set forth in such invoice, (C) such Liens do not at
any time encumber any property other than Lucent Product or Vendor
Product for which Lucent or the vendor providing such Vendor Product, as
applicable, has not received (on an invoice-by-invoice basis) payment in
full and (D) such Liens shall be released as to Lucent Product or Vendor
Product covered by any particular invoice when the purchase price set
forth in such invoice is paid in full to Lucent or the vendor providing
such Vendor Product, as applicable.
SECTION 6.03. FUNDAMENTAL CHANGES.
(a) The Borrower will not, and will not permit any Subsidiary to, merge
into or consolidate with any other Person, or permit any other Person to merge
into or consolidate with it, or sell, transfer, lease or otherwise dispose of
(in one transaction or in a series of transactions) all or substantially all of
its assets, or all or substantially all of the stock of any of its Subsidiaries
(in each case, whether now owned or hereafter acquired), or liquidate or
dissolve, except that, if at the time thereof and immediately after giving
effect thereto no Default shall have occurred and be continuing (i) the Parent
may merge with or into any other Person so long as the Parent is the surviving
entity, (ii) the Borrower may merge with or into any other Person so long as the
Borrower is the surviving entity and remains a wholly-owned subsidiary of the
Parent, (iii) subject to Section 6.12, any Subsidiary may merge with or into any
other wholly-owned Subsidiary in a transaction in which the surviving entity is
a Subsidiary and any Subsidiary may merge with or into Borrower in a transaction
in which the Borrower is the surviving entity, (iv) subject to Section 6.12, any
Subsidiary may sell, transfer, lease or otherwise dispose of its assets to the
Borrower or to another wholly-owned Subsidiary, and the Borrower may sell,
transfer, lease or otherwise dispose of its assets to any wholly-owned
Subsidiary, and (v) any Subsidiary may liquidate or dissolve if the Borrower
determines in good faith that such liquidation or dissolution is in its best
interests and is not disadvantageous to the Lenders.
(b) The Borrower will not, and will not permit any Subsidiary to, engage
to any material extent in any business other than a Qualifying Business and any
businesses incidental, related or ancillary to, or which are entered into as a
means of facilitating or enhancing, any of the foregoing.
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SECTION 6.04. INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND ACQUISITIONS;
ASSET SALES.
(a) The Borrower will not, and will not permit any Subsidiary to,
purchase, hold or acquire (including pursuant to any merger with any Person that
was not a wholly-owned Subsidiary prior to such merger) any capital stock,
evidences of indebtedness or other securities (including any option, warrant or
other right to acquire any of the foregoing) of, make or permit to exist any
loans or advances to, guarantee any obligations of, or make or permit to exist
any investment or any other interest in, any other Person, or purchase or
otherwise acquire (in one transaction or a series of transactions) any assets of
any other Person constituting a business unit, except:
(i) Permitted Investments;
(ii) investments by the Borrower in the capital stock of the
Subsidiaries and investments by any Subsidiary (other than a Special
Purpose Subsidiary) in the capital stock of other Subsidiaries; PROVIDED
that XX.Xxx Services may invest in the capital stock of any Services
Subsidiary;
(iii) loans, advances or guarantees made by the Borrower to any
Subsidiary or made by any Subsidiary to the Borrower or any other
Subsidiary; PROVIDED that any such Indebtedness shall be subordinated to
the Obligations pursuant to the Guarantees;
(iv) (A) payroll, travel and similar advances made in the
ordinary course of business that are expected at the time such advances
are made ultimately to be treated as expenses in accordance with GAAP
and (B) so long as no Default has occurred and is continuing, other
loans and advances by the Borrower or any Subsidiary to its respective
directors, officers or employees (I) in an aggregate principal amount
not exceeding $500,000 in the aggregate at any one time outstanding in
each fiscal year, (II) in the ordinary course of business, not exceeding
$4,000,000 in the aggregate at any one time outstanding in each fiscal
year for relocation costs, (III) to purchase or otherwise acquire
capital stock of the Parent or options or warrants for the issuance of
capital stock of the Parent; PROVIDED that the aggregate amount so
invested under this clause (III) during any fiscal year of the Borrower,
together with all amounts paid by the Parent to pay Permitted Parent
Liabilities of the type described in clause (iv) of the definition of
"Permitted Parent Liabilities", shall not exceed (x) $3,000,000 PLUS the
amount carried forward from the immediately preceding fiscal year PLUS
(y) net cash proceeds received since the Effective Date from the
issuance of equity interests of the Parent to directors, officers and
employees and (iv) with respect to the hiring of a chief executive
officer and other key employees of the Borrower, loans and/or bonus
payments to such chief executive officer and key employees in an
aggregate amount not to exceed $15,000,000 during the term of this
Agreement;
(v) guarantees by the Borrower or any Subsidiary (other than the
Special Purpose Subsidiaries) of any obligations arising in the ordinary
course of any other Subsidiary or of the Borrower;
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(vi) investments existing on the date hereof and set forth on
Schedule 6.04; and
(vii) the Guarantees.
(b) The Borrower will not, and will not permit any Subsidiary to, make
an Asset Sale or other disposition of the assets or property of the Borrower or
any Subsidiary, nor will the Borrower issue (other than to the Parent), or
permit any Subsidiary to issue (other than to the Borrower or a wholly-owned
Subsidiary), any additional shares of its capital stock or other ownership
interest, except:
(i) sales of Permitted Investments in the ordinary course of
business;
(ii) transfers constituting investments permitted by paragraph
(a) of this Section 6.04 or Restricted Payments permitted by Section
6.06;
(iii) subject to Section 6.12, sales, transfers and dispositions
to the Borrower or a Subsidiary;
(iv) sales, transfers and dispositions of obsolete, uneconomic
or surplus assets made when no Default has occurred and is continuing;
(v) Dark Fiber/Conduit Dispositions, so long as the Borrower
complies with the requirements of Section 2.09, and so long as, after
giving effect to such disposition, the Borrower would retain at least 24
fiber optic strands per route mile on each Segment or at least 12 fiber
optic strands and one empty conduit per route mile on each Segment (in
each case, only if such Segment is a Segment of the original 6400 miles
of the Network that was constructed by the Borrower);
(vi) Fiber Swaps, so long as the Borrower complies with the
requirements of Section 2.09;
(vii) Asset Sales, including sales of Segments, so long as the
Borrower complies with the requirements of Section 2.09;
(viii) transfers of assets to AT&T Corp. pursuant to the AT&T
Agreement as in effect on March 30, 2000, or as amended with the consent
of the Administrative Agent if such consent is required pursuant to
Section 6.11; and
(ix) sales, leases, conveyances and other dispositions of assets
and rights in the ordinary course of business.
PROVIDED that all sales, transfers, leases and other dispositions permitted
hereby (other than pursuant to clause (iii) above) shall be made for fair value
and for consideration that is at least
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75% cash, or in the case of Fiber Swaps, fiber optic strands and conduit and, to
the extent of other consideration, at least 75% cash.
SECTION 6.05. HEDGING AGREEMENTS.
The Borrower will not, and will not permit any Subsidiary to, enter into
any Hedging Agreement, other than Hedging Agreements required by Section 5.13
and other Hedging Agreements entered into in the ordinary course of business to
hedge or mitigate risks to which the Borrower or any Subsidiary is exposed in
the conduct of its business or the management of its liabilities.
SECTION 6.06. RESTRICTED PAYMENTS.
The Borrower will not, and will not permit any Subsidiary to, declare or
make, or agree to pay or make, directly or indirectly, any Restricted Payment,
except: (i) the Borrower may make Restricted Payments to the Parent in
additional shares of its common stock or Permitted Preferred Stock (including
options, warrants and other rights to purchase shares of such common stock or
Permitted Preferred Stock); (ii) the Borrower may make Restricted Payments to
any wholly-owned Subsidiary, and each Subsidiary may make Restricted Payments to
the Borrower or to any wholly-owned Subsidiary; (iii) the Borrower may make
dividends and distributions in respect of its common stock or Permitted
Preferred Stock in cash at such times and in such amounts as shall be necessary
to permit the Parent to pay Permitted Parent Expenses when due and to permit the
Borrower to comply with its obligations under the Tax Sharing Agreement; (iv)
until the date that is 30 months after the Effective Date, so long as no Default
under Section 7.01(a), (b), (h), (i) or (j) has occurred and is continuing, the
Borrower may make cash dividends in respect of its common stock or Permitted
Preferred Stock at such times and in such amounts as shall be necessary to
permit the Parent to pay Permitted Parent Liabilities (other than Permitted
Parent Liabilities described in clause (iv) of the definition thereof) when due
and to permit the Parent to fund any Permitted Interest Fund; (v) on and after
the date that is 30 months after the Effective Date, so long as (A) no Default
under Section 7.01(a), (b), (h), (i) or (j) has occurred and is continuing and
(B) no Blockage Period is then in effect, the Borrower may make dividends and
distributions in respect of its common stock or Permitted Preferred Stock at
such times and in such amounts as shall be necessary (1) to permit the Parent to
pay Permitted Parent Liabilities (other than Permitted Parent Liabilities
described in clause (iv) of the definition thereof) when due and (2) to permit
the Parent to fund any Permitted Interest Fund; and (vi) so long as no Default
has occurred and is continuing, the Borrower may make cash dividends in respect
of its common stock or Permitted Preferred Stock at such times and in such
amounts as shall be necessary to permit the Parent to pay Permitted Parent
Liabilities of the type described in clause (iv) of the definition thereof.
SECTION 6.07. TRANSACTIONS WITH AFFILIATES.
The Borrower will not, and will not permit any Subsidiary to, sell,
lease or otherwise transfer any property or assets to, or purchase, lease or
otherwise acquire any property or assets from, or otherwise engage in any other
transactions with, any of the Affiliates of the Borrower, except (a) in the case
of transactions between the Borrower or any Subsidiary and Affiliates of
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the Borrower or any Subsidiary and Affiliates of the Borrower that are not
wholly-owned Subsidiaries, transactions that are at prices and on terms and
conditions not less favorable to the Borrower or such Subsidiary than could be
obtained on an arm's-length basis from unrelated third parties, (b) transactions
between or among the Borrower and its wholly-owned Subsidiaries not involving
any other Affiliate and (c) the Existing Agreements.
SECTION 6.08. RESTRICTED AGREEMENTS.
The Borrower will not, and will not permit any Subsidiary to, directly
or indirectly, enter into, incur or permit to exist any agreement or other
arrangement that prohibits, restricts or imposes any condition upon the ability
of any Subsidiary to pay dividends or other distributions with respect to any
shares of its capital stock or to make or repay loans or advances to the
Borrower or to guarantee Indebtedness of the Borrower; PROVIDED that (a) the
foregoing shall not apply to restrictions and conditions imposed by law or by
any Loan Document, and (b) the foregoing shall not apply to restrictions and
conditions existing on the date hereof identified on Schedule 6.08 (but shall
apply to any extension or renewal of, or any amendment or modification expanding
the scope of, any such restriction or condition).
SECTION 6.09. REPAYMENT OF INDEBTEDNESS.
The Borrower will not make any Repayment in respect of, or make any
payment in violation of any subordination agreement in respect of, any
Indebtedness of the Borrower or any Subsidiary except (a) Repayment of
Indebtedness resulting in a prepayment of Loans pursuant to Section 2.09(d) and
(b) Repayments described in any of the clauses of the proviso to Section
2.09(d).
SECTION 6.10. LIMITATION ON SALE-LEASEBACK TRANSACTIONS.
The Borrower will not, and will not permit any Subsidiary to, enter into
any arrangement, directly or indirectly, whereby it shall sell or transfer any
property, real or personal, used or useful in its business, whether now owned or
hereafter acquired, and thereafter rent or lease such property or other property
that it intends to use for substantially the same purpose or purposes as the
property sold or transferred, except for any such sale of any fixed or capital
asset that is made for cash consideration in an amount not less than the cost of
such fixed or capital asset and is consummated within 90 days after the Borrower
or such Subsidiary acquires or completes the construction of such fixed or
capital asset.
SECTION 6.11. MATERIAL CONTRACTS.
The Borrower will not, and will not permit any Subsidiary to, amend,
modify, supplement or waive the AT&T Agreement in any manner that, taken as a
whole, is adverse to the interests of Lenders without the prior written consent
of the Administrative Agent. The Borrower will not, and will not permit any
Subsidiary to, amend, waive or terminate the Tax Sharing Agreement in any manner
that is adverse to the interests of the Lenders without the prior written
consent of the Administrative Agent. The Borrower will not, and will not permit
any Subsidiary to, amend, waive or terminate any agreement, instrument or
License related to the
80
acquisition, ownership, construction or operation of the Network, or any other
material agreement, instrument or License to which Borrower or such Subsidiary
is a party in any manner that would have a Material Adverse Effect.
SECTION 6.12. SPECIAL PURPOSE SUBSIDIARIES.
(a) The Borrower will not, and will not permit any Subsidiary or any
other Person other than XX.Xxx Property to, directly own any Real Estate Rights
other than Excluded Real Estate Rights. The Borrower will not (i) permit XX.Xxx
Property to engage in any business or activity other than the acquisition,
ownership, and maintenance of the Real Estate Rights (other than Excluded Real
Estate Rights) and the properties and assets subject thereto, and any activities
incidental or ancillary to, or which are engaged in as a means of facilitating
or enhancing such activities, or (ii) permit XX.Xxx Property to incur or suffer
to exist any Lien on any of the Real Estate Rights (other than Excluded Real
Estate Rights) or any of the property or assets subject thereto other than the
Liens of the Security Documents and Permitted Encumbrances (other than those
described in clauses (c), (d), (i) and (j) of the definition of such term in
Section 1.01).
(b) The Borrower will not, and will not permit any Subsidiary or any
other Person other than XX.Xxx Services or any Services Subsidiary, to directly
own any ROW/License Rights. The Borrower will not (i) permit XX.Xxx Services or
any Services Subsidiary to engage in any business or activity other than the
business and activities described in Section 5.15(b), and any activities
incidental to, or which are engaged in as a means of facilitating such
activities, (ii) permit XX.Xxx Services or any Services Subsidiary to incur or
suffer to exist any Lien on any of the ROW/License Rights or any of the property
or assets subject thereto other than the Liens of the Security Documents and
Permitted Encumbrances or (iii) permit XX.Xxx Services or any Services
Subsidiary to incur or suffer to exist any Indebtedness other than Indebtedness
permitted to be incurred by such Subsidiary under Section 6.01.
(c) The Borrower agrees that all Network supply shall be initially
purchased by XX.Xxx Supply Corp. and all construction activities and/or services
will be conducted by or for XX.Xxx Construction Corp.
SECTION 6.13. MINIMUM ROUTE MILES AND SEGMENTS/LINKS.
Prior to the Conversion Date, the Borrower will not at any time permit
minimum route miles of the Network, or Segments or links of the Network, as of
any date set forth therein, to be less than the number of minimum route miles
required under Section 29.11 of the AT&T Agreement (unless such requirement is
waived by AT&T in accordance with the AT&T Agreement); PROVIDED that so long as
the Borrower is exercising its rights to cure a default under the AT&T Agreement
such that such failure has not become an event of default under the AT&T
Agreement, Borrower shall be deemed to be in compliance with this Section 6.13.
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SECTION 6.14. MINIMUM CUMULATIVE DARK FIBER/CONDUIT REVENUE/PROCEEDS.
The Borrower will not at any time permit the sum of Cumulative Dark
Fiber/Conduit Revenue/Proceeds, as of the most recent Quarterly Date (other than
any such date that has occurred after the Conversion Date) to be less than the
amount set forth in Schedule 6.14 opposite such date.
SECTION 6.15. MINIMUM CONSOLIDATED OPERATING REVENUES.
The Borrower will not at any time permit Consolidated Operating Revenues
for the period of four consecutive calendar quarters then most recently ended
(other than any such period ended after the Conversion Date) to be less than the
amount of such amount set forth in Schedule 6.15 opposite the date on which such
period ended.
SECTION 6.16. CONSOLIDATED EBITDA.
The Borrower will not at any time permit Consolidated EBITDA for the
period of four consecutive calendar quarters then most recently ended (other
than any such period ended after the Conversion Date) to be less than the amount
set forth in Schedule 6.16 opposite the date on which such period ended.
SECTION 6.17. TOTAL LEVERAGE RATIO.
The Borrower will not at any time on or prior to the Conversion Date
permit the Total Leverage Ratio to be greater than 0.60 to 1.00.
SECTION 6.18. CONSOLIDATED LEVERAGE RATIO.
The Borrower will not at any time after the Conversion Date permit the
Consolidated Leverage Ratio during any period set forth below to be greater than
the ratio set forth opposite such period:
-------------------------------------------- ----------------------
Consolidated
Period Leverage Ratio
-------------------------------------------- ----------------------
December 31, 2002 to March 30, 2003 15.00:1.00
-------------------------------------------- ----------------------
March 31, 2003 to June 29, 2003 10.00:1.00
-------------------------------------------- ----------------------
June 30, 2003 to December 30, 2003 7.50:1.00
-------------------------------------------- ----------------------
December 31, 2003 to June 29, 2004 5.00:1.00
-------------------------------------------- ----------------------
June 30, 2004 to June 29, 2005 3.00:1.00
-------------------------------------------- ----------------------
Thereafter 2.00:1.00
-------------------------------------------- ----------------------
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SECTION 6.19. INTENTIONALLY OMITTED.
SECTION 6.20. FIXED CHARGE COVERAGE RATIO.
The Borrower will not at any time permit the Fixed Charge Coverage Ratio
during any period set forth below to be less then the ratio set forth below
opposite such period:
--------------------------------------------- ----------------------
Fixed Charge
Period Coverage Ratio
--------------------------------------------- ----------------------
At any time after the Conversion Date to 0.25:1.00
September 29, 2003
--------------------------------------------- ----------------------
September 30, 2003 to December 30, 2003 0.50:1.00
--------------------------------------------- ----------------------
December 31, 2003 to March 30, 2004 0.75:1.00
--------------------------------------------- ----------------------
March 31, 2004 to March 30, 2006 1.00:1.00
--------------------------------------------- ----------------------
March 31, 2006 to March 30, 2007 1.15:1.00
--------------------------------------------- ----------------------
Thereafter 1.25:1.00
--------------------------------------------- ----------------------
SECTION 6.21. USE OF COLLATERAL.
(a) Except as otherwise provided in clause (c) of this Section 6.21, the
Borrower will not permit, and will not permit any Subsidiary to permit, any
tangible asset constituting Collateral to be located (i) outside a Permitted UCC
Jurisdiction, (ii) outside the possession of the Borrower or a Subsidiary or
(iii) on any property not (A) owned by the Borrower or a Subsidiary, (B) subject
to the ROW License, or (C) leased by the Borrower or a Subsidiary (or subject to
an interconnection agreement granting rights to the Borrower or Subsidiary
substantially similar to a lease); provided that in the case of this clause (C)
the Borrower will use commercially reasonable efforts to obtain a letter from
each lessor agreeing, on commercially reasonable terms, not to assert liens
against any Collateral on its premises and to provide access to the premises to
the Collateral Trustee when a Default has occurred and is continuing.
(b) This Section 6.21 shall not be construed to prohibit (i) the return
of any asset constituting Collateral to the vendor thereof for repairs,
services, modifications or other similar purposes or (ii) the storage of any
asset constituting Collateral in any warehouse or similar facility.
(c) The Borrower will not permit any asset constituting Collateral to be
located outside a Permitted UCC Jurisdiction unless (i) the Borrower shall have
notified the Administrative Agent reasonably in advance of any such assets being
transferred outside the Permitted UCC Jurisdiction and (ii) the Required Lenders
shall be reasonably satisfied that (A) the laws of the jurisdiction in which
such assets are to be located adequately protect the interests of the Lenders in
such Collateral, (B) the security interests in such Collateral granted under the
Security Documents will continue to be adequately protected and perfected, (C)
there are not any material risks relating to the political or economic stability
of the jurisdiction in which such Collateral is to be located or the Person that
will possess such Collateral in such jurisdiction, and (D) the location of such
Collateral in such jurisdiction is not otherwise materially disadvantageous to
the Lenders. The Borrower shall deliver to the Administrative Agent such
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legal opinions addressed to the Lenders and other documentation as the
Administrative Agent or the Required Lenders shall reasonably request in
connection with their consideration or approval of any proposed transfer of
Collateral outside a Permitted UCC Jurisdiction.
SECTION 6.22. CHANGES TO FISCAL YEAR.
The Borrower will not change the fiscal year applicable to it and its
consolidated Subsidiaries without the prior consent of the Administrative Agent.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.01. EVENTS OF DEFAULT.
If any of the following events ("EVENTS OF DEFAULT") shall occur:
(a) the Borrower shall fail to pay any principal of any Loan when and as
the same shall become due and payable, whether at the due date thereof or at a
date fixed for prepayment thereof or otherwise, or the Borrower shall fail to
reimburse the Issuing Lender for any LOC Obligations when due (other than as a
result of a Lender's failure to make a Mandatory Borrowing with respect to such
unreimbursed LOC Obligations) in accordance with the terms hereof;
(b) the Borrower shall fail to pay any interest on any Loan or any fee
or any other amount (other than an amount referred to in clause (a) of this
Article) payable under the Loan Documents, when and as the same shall become due
and payable, and such failure shall continue unremedied for a period of three
(3) days;
(c) any representation or warranty made or deemed made by or on behalf
of any Loan Party in or in connection with any Loan Document or any amendment or
modification thereof or waiver thereunder, or in any report, certificate,
financial statement or other document furnished pursuant to or in connection
with any Loan Document or any amendment or modification thereof or waiver
thereunder, shall prove to have been incorrect in any respect (or, in the case
of any representation or warranty that is not qualified as to materiality, in
any material respect) when made or deemed made;
(d) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Section 5.02(a)(i), 5.04 (with respect to
its legal existence and subject to the proviso contained therein) or 5.10 or in
Article VI;
(e) any Loan Party shall fail to observe or perform any covenant,
condition or agreement contained in any Loan Document (other than those
specified in clause (a), (b) or (d) of this Article), and such failure shall
continue unremedied for a period of 30 days after notice thereof from the
Administrative Agent to the Borrower (which notice will be given at the request
of any Lender);
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(f) any Loan Party shall fail to make any payment (whether of principal
or interest and regardless of amount) in respect of any Material Indebtedness,
when and as the same shall become due and payable (after giving effect to any
period of grace expressly applicable thereto);
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables or
permits (after giving effect to any period of grace expressly applicable
thereto) the holder or holders of any Material Indebtedness or any trustee or
agent on its or their behalf to cause any Material Indebtedness to become due,
or to require the prepayment, repurchase, redemption or defeasance thereof,
prior to its scheduled maturity; PROVIDED that this clause (g) shall not apply
to secured Indebtedness that becomes due as a result of the voluntary sale or
transfer of the property or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of the Parent, the Borrower or any Subsidiary or its debts, or of a
substantial part of its assets, under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Parent, the Borrower or any Subsidiary or for a
substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall be entered;
(i) the Parent, the Borrower or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation, reorganization
or other relief under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to contest in a timely and appropriate manner, any
proceeding or petition described in clause (h) of this Article, (iii) apply for
or consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Parent, the Borrower or any Subsidiary
or for a substantial part of its assets, (iv) file an answer admitting the
material allegations of a petition filed against it in any such proceeding, (v)
make a general assignment for the benefit of creditors or (vi) take any action
for the purpose of effecting any of the foregoing;
(j) the Parent, the Borrower or any Subsidiary shall become unable,
admit in writing its inability or fail generally to pay its debts as they become
due;
(k) one or more judgments for the payment of money in an aggregate
amount in excess of $6,000,000 shall be rendered against the Parent, the
Borrower or any Subsidiary or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days during which execution shall
not be effectively stayed, or any action shall be legally taken by a judgment
creditor to attach or levy upon any assets of the Parent, the Borrower or any
Subsidiary to enforce any such judgment;
(l) any Lien on any material portion of the Collateral purported to be
created under the Security Documents shall cease to be, or shall be asserted by
the Parent, the Borrower or any Subsidiary not to be, a valid and perfected Lien
on any Collateral, with the priority required by
85
the Security Documents, except as a result of the sale or other disposition of
the applicable Collateral in a transaction permitted under the Loan Documents;
(m) a Change in Control shall occur;
(n) the loss, revocation, suspension or material impairment of any
license or agreement (or combination of licenses and agreements) of the Parent,
or the Borrower or any of the Subsidiaries shall occur that results in or could
reasonably be expected to result in a Material Adverse Effect;
(o) expiration, termination or cancellation of, or suspension of
performance under, or unenforceability in whole or in part of, any Loan
Document, or the exercise by any Loan Party of its rights to cancel, terminate,
suspend or discontinue performance thereunder, or the assertion by any Loan
Party that such Loan Document is unenforceable against it in whole or in part;
(p) (i) AT&T shall have delivered a notice of termination of the AT&T
Agreement, or (ii) AT&T shall have failed to pay the amount due pursuant to
Section 10.2A of the AT&T Agreement and such failure shall have continued for 30
days after such due date, (iii) AT&T shall be in arrears for 45 days or more in
payments due under the AT&T Agreement in an aggregate amount of $10 million or
more, (iv) AT&T shall have repudiated its obligations under the AT&T Agreement
or shall generally refuse to make payments thereunder and such repudiation or
refusal to pay shall have continued for 10 days or more after notice thereof, or
(v) the AT&T Agreement shall have been terminated for any reason;
(q) an ERISA Event shall have occurred that when taken together with all
other ERISA Events that have occurred, could reasonably be expected to result in
a Material Adverse Effect;
(r) the Parent shall have failed to do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of the business of the Borrower and the Subsidiaries, taken as a
whole and such failure shall continue unremedied for thirty (30) days after
notice thereof from the Administrative Agent to the Borrower (which notice will
be given at the request of any Lender);
(s) the Parent shall have merged into or consolidated with any other
Person, or shall have permitted any other Person to merge into or consolidate
with it, or sell, transfer, lease or otherwise dispose of (in one transaction or
in a series of transactions) all or substantially all of its assets, or all or
substantially all of the stock of any of its subsidiaries (in each case, whether
now owned or hereafter acquired), or liquidate or dissolve (except that, if at
the time thereof and immediately after giving effect thereto no other Default
shall have occurred and be continuing, the Parent may merge with or into any
other Person so long as the Parent is the surviving entity);
(t) the Parent shall have issued, or entered into a contract or
otherwise obligated itself to issue, any shares of capital stock or other direct
ownership interest in the Borrower;
86
(u) the Parent shall have amended, waived or terminated the Bridge Loan
Agreement or (prior to the full funding thereunder) the Subscription Agreement
in any manner that, taken as a whole, is adverse to the Borrower as compared to
the terms as in effect immediately prior to such change, or shall have amended
either the Term Loan Agreement or Exchange Notes Indenture without the consent
of the Required Lenders; or
(v) the Parent shall fail, on the first date, if any, on which an
issuance and sale of High Yield Debt is consummated, to apply the proceeds of
such issuance and sale in a manner such that all of such High Yield Debt is
Permitted Parent Debt;
then, and in every such event (other than an event with respect to the
Borrower described in clause (h) or (i) of this Article), and at any time
thereafter during the continuance of such event, the Administrative Agent may,
and at the request of the Required Lenders shall, by notice to the Borrower,
take either or both of the following actions, at the same or different times:
(i) terminate the Commitments, and thereupon the Commitments shall terminate
immediately, and (ii) declare the Loans then outstanding and all other amounts
owing under this Agreement to be due and payable in whole (or in part, in which
case any principal not so declared to be due and payable may thereafter be
declared to be due and payable) and direct the Borrower to pay to the
Administrative Agent cash collateral as security for the LOC Obligations for
subsequent drawings under outstanding Letters of Credit in an amount equal to
the maximum amount of which may be drawn under such Letters of Credit, and
thereupon the principal of the Loans so declared to be due and payable, together
with accrued interest thereon and all fees and other obligations of the Borrower
accrued hereunder (including the amount necessary to cash collateralize the
outstanding Letters of Credit), shall become due and payable immediately,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower; and in case of any event with respect to the
Borrower described in clause (h) or (i) of this Article, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Borrower accrued hereunder (including the amount necessary to cash collateralize
the outstanding Letters of Credit), shall automatically become due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower.
SECTION 7.02. CURE BY THE PARENT.
So long as First Union is the sole Lender, in the event that the
Borrower fails to comply with any of the covenants set forth in Section 6.16,
6.17, 6.18, 6.19 or 6.20, for any period or as of any date set forth therein,
the Parent shall have the right, but not the obligation, to make, within 10
Business Days of such failure by Borrower a cash equity contribution to Borrower
in an amount (i) in the case of a failure to comply with any of the covenants
set forth in Sections 6.16, 6.17 and 6.18, sufficient to cure such failure, or
(ii) in the case of a failure to comply with either of the covenants set forth
in Sections 6.19 and 6.20, sufficient to enable the Borrower to repay
Indebtedness in an amount such that, giving effect to such repayment (and
determining compliance by the Borrower with any such covenant on a pro forma
basis (and as if such repayment had been made at the first day of the relevant
period)), the Borrower shall be in compliance with such covenant.
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ARTICLE VIII
THE AGENTS
Each of the Lenders hereby irrevocably appoints the Administrative Agent
as its agent and authorizes the Administrative Agent to take such actions on its
behalf and to exercise such powers as are delegated to such Agent by the terms
of the Loan Documents, together with such actions and powers as are reasonably
incidental thereto.
Any Person serving as an Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not an Agent, and such Person and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Parent or any Subsidiary or other Affiliate thereof as
if it were not an Agent hereunder.
Neither Agent shall have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the generality of
the foregoing, (a) neither Agent shall be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing,
(b) neither Agent shall have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated by the Loan Documents that such Agent is required to
exercise in writing by the Required Lenders (or such other number or percentage
of the Lenders as shall be necessary under the circumstances as provided in
Section 9.02), and (c) except as expressly set forth in the Loan Documents,
neither Agent shall have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to the Parent or any of its
Subsidiaries that is communicated to or obtained by the Person serving as Agent
or any of its Affiliates in any capacity. Neither Agent shall be liable for any
action taken or not taken by it with the consent or at the request of the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.02) or in the absence
of its own gross negligence or willful misconduct. The Administrative Agent
shall be deemed not to have knowledge of any Default unless and until written
notice thereof is given to such Agent by a Loan Party or a Lender, and neither
Agent shall be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with any Loan
Document, (ii) the contents of any certificate, report or other document
delivered thereunder or in connection therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth in any Loan Document, (iv) the validity, enforceability, effectiveness or
genuineness of any Loan Document or any other agreement, instrument or document,
or (v) the satisfaction of any condition set forth in Article IV or elsewhere in
any Loan Document, other than to confirm receipt of items expressly required to
be delivered to such Agent.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying
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thereon. The Administrative Agent may consult with legal counsel (who may be
counsel for the Parent or the Borrower), independent accountants and other
experts selected by it, and shall not be liable for any action taken or not
taken by it in accordance with the advice of any such counsel, accountants or
experts.
The Administrative Agent may perform any and all its duties and exercise
its rights and powers by or through any one or more sub-agents appointed by such
Agent. The Administrative Agent and any such sub-agent may perform any and all
its duties and exercise its rights and powers through their respective Related
Parties. The exculpatory provisions of the preceding paragraphs shall apply to
any such sub-agent and to the Related Parties of the Administrative Agent and
any such sub-agent, and shall apply to their respective activities in connection
with the syndication of the credit facilities provided for herein as well as
activities as Agent.
Subject to the appointment and acceptance of a successor Agent as
provided in this paragraph, an Agent may resign at any time by notifying the
Lenders and the Borrower. Upon any such resignation, the Required Lenders shall
have the right to appoint a successor with the approval of the Borrower (which
approval shall not be unreasonably withheld or delayed and, if an Event of
Default has occurred and is continuing, shall not be required). If no successor
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within 30 days after the retiring Agent gives notice of its
resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent which shall be a bank with an office in New York, New York, or
an Affiliate of any such bank. Upon the acceptance of its appointment as Agent
hereunder by a successor, such successor shall succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder.
The fees payable by the Borrower to a successor Agent shall be the same as those
payable to its predecessor unless otherwise agreed between the Borrower and such
successor. After an Agent's resignation hereunder, the provisions of this
Article and Section 9.03 shall continue in effect for the benefit of such
retiring Agent, its sub-agents and their respective Related Parties in respect
of any actions taken or omitted to be taken by any of them while it was acting
as Agent.
Each Lender acknowledges that it has, independently and without reliance
upon any Agent or any other Lender and based on such documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender also acknowledges that it will, independently
and without reliance upon any Agent or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any other Loan Document or related agreement or any
document furnished hereunder or thereunder.
None of the Persons identified from time to time on the facing pages or
signature pages of, or otherwise in, this Agreement as a "co-agent," an
"arranger," a "syndication agent," a "book manager," a "documentation agent" or
a "co-documentation agent" shall have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Lenders as such. Without limiting the foregoing, none of the Lenders so
identified as a "co-agent," an "arranger," a "syndication agent," a "book
manager," a "documentation agent" or
89
a "co-documentation agent" shall have or be deemed to have any fiduciary
relationship with any Lender. Each Lender acknowledges that it has not relied,
and will not rely, on any of the Lenders so identified in deciding to enter into
this Agreement or in taking or not taking action hereunder.
Each Lender hereby irrevocably authorizes the Collateral Trustee to take
the following actions and hereby irrevocably authorizes the Administrative
Agent, on behalf of such Lender, to direct the Collateral Trustee (and the
Administrative Agent agrees to so direct the Collateral Trustee) to take such
actions, at the request of the Borrower in respect of any and all Liens granted
to the Collateral Trustee pursuant to the Security Documents: (i) to release
such Liens insofar as they attach to property that is sold, leased, or otherwise
disposed of in a transaction not prohibited by Section 6.04(b), (ii) to release
such Liens upon any and all property of the Loan Parties (and to terminate the
trust under the Trust Agreement) upon payment in full of the Loans, LOC
Obligations and all other amounts (other than contingent or indemnity
obligations which by their terms survive the termination of this Agreement) to
be paid pursuant to the Loan Documents and upon termination of the Commitments,
(iii) to release or, at the option of the Borrower, to subordinate such Liens,
upon the request of the Borrower, insofar as they attach to any property that is
the subject of a Purchase Money Lien listed on Schedule 6.02(iv) (as from time
to time supplemented by the Borrower) and the proceeds of such property.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01. NOTICES.
Except in the case of notices and other communications expressly
permitted to be given by telephone, all notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
telecopy, as follows:
(a) if to the Borrower, to it at 0000 X Xxxxxx, Xxxxxxxxx, XX 00000,
Attention: Chief Financial Officer (Telecopy No. 000-000-0000/99);
(b) if to the Collateral Trustee, to it at 0 Xxxxxx xx Xxxxxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Corporate Trust-Lucent/XX.Xxx Collateral
Trust (Telecopy No. 617-664-5371);
(c) if to the Administrative Agent, to it at Xxx Xxxxx Xxxxx Xxxxxx,
XX00, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, Attention: Syndication Agency
Services (Telecopy No. 000-000-0000;
(d) if to any other Lender, to it at its address (or telecopy number)
set forth in its Administrative Questionnaire.
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Any party hereto may change its address or telecopy number for notices
and other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.
SECTION 9.02. WAIVERS; AMENDMENTS.
(a) No failure or delay by any Agent or any Lender in exercising any
right or power hereunder or under any other Loan Document shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Administrative Agent and
the Lenders hereunder and under the other Loan Documents are cumulative and are
not exclusive of any rights or remedies that they would otherwise have. No
waiver of any provision of any Loan Document or consent to any departure by any
Loan Party therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. Without limiting the generality of the foregoing, the making of a Loan
shall not be construed as a waiver of any Default, regardless of whether an
Agent or any Lender may have had notice or knowledge of such Default at the
time.
(b) Subject to the terms of Section 2.06(g), neither this Agreement nor
any other Loan Document nor any provision hereof or thereof may be waived,
amended or modified except, in the case of this Agreement, pursuant to an
agreement or agreements in writing entered into by the Borrower and the Required
Lenders or, in the case of any other Loan Document, pursuant to an agreement or
agreements in writing entered into by the Administrative Agent and the Loan
Party or Loan Parties that are parties thereto with the consent of the Required
Lenders; PROVIDED that no such agreement shall (i) increase the Commitment of
any Lender without the written consent of such Lender, (ii) reduce the principal
amount of any Loan or reduce the rate of interest on such Loan, or reduce any
fees payable hereunder, without the written consent of each Lender directly
affected thereby, (iii) postpone the scheduled date of payment of the principal
amount of any Loan or any interest thereon, or any fees payable hereunder, or
reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of any Commitment, without the written consent of
each Lender directly affected thereby, (iv) change Sections 2.16(b) or (c) in a
manner that would alter the pro rata sharing of payments required thereby,
without the written consent of each Lender (it being understood that Lenders
that fund any increase in the Commitments under Section 2.06(f) shall be
entitled and obligated to share equally and ratably as set forth in such
Sections), (v) change any of the provisions of this Section or the definition of
"Required Lenders" or any other provision of any Loan Document specifying the
number or percentage of Lenders required to waive, amend or modify any rights
thereunder or make any determination or grant any consent thereunder, without
the written consent of each Lender (it being understood that Lenders that commit
to fund any increase in the Commitments under Section 2.06(f) shall be entitled
to vote their Commitments as increased, and such increased Commitments shall be
taken into account for purposes of determining whether any action has been taken
or approved by the Required Lenders), (vi) release all or any substantial part
of the Collateral from the Liens of the Security Documents (except as expressly
provided
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therein), without the written consent of each Lender, (vii) release the Parent
or any Subsidiary from its guarantee under the Guarantees (except as expressly
provided in such Guarantees) or limit or condition its obligations thereunder,
without the written consent of each Lender, or (viii) change any provisions of
any Loan Document in a manner that by its terms adversely affects the rights in
respect of payments due to Lenders holding Loans of any Class differently than
those holding Loans of any other Class, without the written consent of Lenders
holding a majority in interest of the outstanding Loans of each affected Class
and, in the case of a Class with respect to which the Availability Period has
not ended, a majority in interest of the Commitments (in addition to any other
consents required by this sentence); PROVIDED, FURTHER, that no such agreement
shall amend, modify or otherwise affect the rights or duties of any Agent or the
Issuing Lender without the prior written consent of such Agent or the Issuing
Lender, as applicable.
SECTION 9.03. EXPENSES; INDEMNITY; DAMAGE WAIVER.
(a) The Borrower shall pay (i) all costs and expenses incurred by First
Union and the Administrative Agent, including the reasonable fees, charges and
disbursements of counsel for First Union or the Administrative Agent, in
connection with the negotiation, preparation, execution and delivery of the Loan
Documents (including, in the case of First Union, expenses incurred in
connection with its due diligence activities) and (ii) all costs and expenses
incurred by the Administrative Agent or any Lender, including the reasonable
fees, charges and disbursements of any counsel for the Administrative Agent or
any Lender, in connection with (A) the enforcement or protection of its rights
in connection with the Loan Documents, including its rights under this Section,
or in connection with the Loans made hereunder, including all such costs and
expenses incurred during any workout, restructuring or negotiations in respect
of such Loans, and (B) in the case of First Union and the Administrative Agent,
the administration of, and any amendments, modifications, waivers or supplements
of or to the provisions of, any of the Loan Documents.
(b) The Borrower hereby indemnifies and holds harmless each Agent and
each Lender, and each Related Party of any of the foregoing Persons (each such
Person being called an "INDEMNITEE"), against, and holds each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including the reasonable fees, charges and disbursements of any
counsel for any Indemnitee, incurred by or asserted against any Indemnitee
arising out of, in connection with, or as a result of (i) the execution or
delivery of any Loan Document or any other agreement or instrument contemplated
hereby, the performance by the parties to the Loan Documents of their respective
obligations thereunder or the consummation of the Transactions or any other
transactions contemplated hereby, (ii) any Loan or the use of the proceeds
therefrom, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Parent, the Borrower
or any of the Subsidiaries or at which any Collateral is located, or any
Environmental Liability related in any way to the Parent, the Borrower or any of
its Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a
party thereto; PROVIDED that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims,
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damages, liabilities or related expenses have resulted from the gross negligence
or willful misconduct of such Indemnitee.
(c) To the extent that the Borrower fails to pay any amount required to
be paid by it to any Agent under paragraph (a) or (b) of this Section, each
Lender severally agrees to pay to such Agent such Lender's pro rata share
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount; PROVIDED that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against such Agent in its capacity as such.
For purposes hereof, a Lender's "pro rata share" shall be determined based upon
its share of the sum of the total outstanding Loans and Commitments at the time.
(d) To the extent permitted by applicable law, the Borrower shall not
assert, and the Borrower hereby waives, any claim against any Indemnitee, on any
theory of liability, for special, indirect, consequential or punitive damages
(as opposed to direct or actual damages) arising out of, in connection with, or
as a result of, this Agreement or any agreement or instrument contemplated
hereby, the Transactions, any Loan or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable not later than
30 days after written demand therefor.
SECTION 9.04. SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender (and any attempted assignment or transfer by the Borrower without
such consent shall be null and void). Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby and, to the
extent expressly contemplated hereby, the Related Parties, the Administrative
Agent and of each the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.
(b) Any Lender may assign to one or more Eligible Persons all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); PROVIDED that
(i) except in the case of an assignment to a Lender or an Affiliate of a Lender,
so long as no Default shall have occurred and be continuing prior consent of the
Borrower must be obtained for such assignment (which consent shall not be
unreasonably withheld (for purposes of this provision, it shall not be
unreasonable for the Borrower to withhold its consent to assignment to a Xxxxxxx
Xxxx Entity)) and if a Default is continuing prior consent of the Borrower must
be obtained for any assignment to a Xxxxxxx Xxxx Entity, (ii) the Administrative
Agent must give its prior written consent to such assignment (which consent
shall not be unreasonably withheld or delayed), (iii) except in the case of an
assignment to a Lender or an Affiliate of a Lender or an assignment of the
entire remaining amount of the assigning Lender's Commitment or entire remaining
Loans of any Class, the amount of the Commitment and Loans of such Class of the
assigning Lender subject to each such
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assignment (determined as of the date the Assignment and Acceptance with respect
to such assignment is delivered to the Administrative Agent) shall not be less
than $5,000,000 unless the Borrower otherwise consents, (iii) each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender's rights and obligations under this Agreement, except that this
clause (iii) shall not be construed to prohibit the assignment of a
proportionate part of all of the assigning Lender's rights and obligations in
respect of (A) one or more Classes of Loans, (B) one or more Classes of Loans
separately from (or without assigning) Commitments or (C) Commitments separately
from (or without assigning) Loans, (iv) the parties to each assignment shall
execute and deliver to the Administrative Agent an Assignment and Acceptance,
together with a processing fee of $3,500, and (v) the assignee, if it shall not
be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire. Each Lender making an assignment pursuant to this Section 9.04(b)
shall give written notice to the Borrower stating that (i) the Lender desires to
make such assignment or sale, and (ii) the name and address of the proposed
assignee. Within ten (10) days after receipt of the Lender's written notice, if
the Borrower delivers a written notice to the Lender stating that the proposed
assignee is unacceptable, then, unless a Default shall have occurred and be
continuing, such Lender shall have no right to assign all or any portion of its
rights and obligations under this Agreement to such proposed assignee. If the
Borrower does not provide such written notice within ten (10) days of its
receipt of such assignment request, the Borrower shall be deemed to have
consented to such transfer. Subject to acceptance and recording thereof pursuant
to paragraph (d) of this Section 9.04, from and after the effective date
specified in each Assignment and Acceptance the assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all of the assigning Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.13, 2.14, 2.15 and 9.03). Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitments of, and principal amount of the
Loans owing to, each Lender pursuant to the terms hereof from time to time (the
"REGISTER"). The entries in the Register shall be conclusive, and the Borrower,
the Administrative Agent, the Collateral Trustee and the Lenders may treat each
Person whose name is recorded in the Register pursuant to the terms hereof as a
Lender hereunder for all purposes of this Agreement, notwithstanding notice to
the contrary. The Register shall be available for inspection by the Borrower and
any Lender, at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder) and the processing fee referred to in
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clause (iv) of paragraph (b) of this Section, subject to the Borrower's and
Administrative Agent's right to consent to such assignment to the extent
provided in paragraph (b) of this Section, the Administrative Agent shall accept
such Assignment and Acceptance and record the information contained therein in
the Register. No assignment shall be effective for purposes of this Agreement
unless it has been recorded in the Register as provided in this paragraph.
(e) Any Lender may, with the consent of the Borrower and the
Administrative Agent (which shall not be unreasonably withheld (for purposes of
this provision it shall not be unreasonable for the Borrower to withhold its
consent for a sale of a participation to a Xxxxxxx Xxxx Entity)), sell
participations to one or more Eligible Persons (a "PARTICIPANT") in all or a
portion of such Lender's rights and obligations under this Agreement (including
all or a portion of its Commitments and the Loans owing to it); PROVIDED that
(i) such Lender's obligations under this Agreement shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations and (iii) the Borrower, the Administrative
Agent, the Collateral Trustee and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce the Loan Documents and to approve any amendment,
modification or waiver of any provision of the Loan Documents; PROVIDED that
such agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 9.02(b) that affects such Participant.
Subject to paragraph (f) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Sections 2.13, 2.14 and 2.15 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section, PROVIDED that such
Participant agrees for the benefit of Borrower and the other parties hereto to
be subject to Sections 2.15(f) and 2.17 as though it was a Lender. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 9.08 as though it were a Lender, provided such Participant agrees to be
subject to Section 2.16(c) as though it were a Lender.
(f) A Participant that would be a Foreign Lender if it were a Lender
shall not be entitled to the benefits of Section 2.15 unless the Borrower is
notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 2.15(e) as
though it were a Lender.
(g) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; PROVIDED that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.
SECTION 9.05. SURVIVAL.
All covenants, agreements, representations and warranties made by the
Loan Parties in the Loan Documents and in the certificates or other instruments
delivered in connection with or
95
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of the Loan Documents and the making of any Loans,
regardless of any investigation made by any such other party or on its behalf
and notwithstanding that any Agent or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid and so long
as the Commitments have not expired or terminated. The provisions of Sections
2.13, 2.14, 2.15 and 9.03 and Article VIII shall survive and remain in full
force and effect regardless of the consummation of the transactions contemplated
hereby, the Repayment of the Loans, the expiration or termination of the
Commitments or the termination of this Agreement or any provision hereof.
SECTION 9.06. COUNTERPARTS; INTEGRATION; EFFECTIVENESS.
This Agreement may be executed in counterparts (and by different parties
hereto on different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single contract. This
Agreement, the other Loan Documents, each Assignment and Acceptance and any
additional letter agreements with respect to the agreement of the Parent and the
Borrower to cooperate with First Union with respect to marketing, selling or
syndicating Loans and Commitments or with respect to fees payable to First Union
or any Agent, constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.01(a), this Agreement shall become effective when it
shall have been executed by the Administrative Agent and when the Administrative
Agent shall have received counterparts hereof which, when taken together, bear
the signatures of each of the other parties hereto, and thereafter shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 9.07. SEVERABILITY.
Any provision of this Agreement held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity, illegality or unenforceability without
affecting the validity, legality and enforceability of the remaining provisions
hereof; and the invalidity of a particular provision in a particular
jurisdiction shall not invalidate such provision in any other jurisdiction.
SECTION 9.08. RIGHT OF SETOFF.
If an Event of Default shall have occurred and be continuing, each
Lender and each of its Affiliates is hereby authorized at any time and from time
to time, to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held and other obligations at any time owing by such Lender or Affiliate to
or for the credit or the account of the Borrower against any of and all the
obligations of the
96
Borrower now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Agreement and although such obligations may be unmatured. The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
SECTION 9.09. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS.
(a) This Agreement shall be construed in accordance with and governed by
the law of the State of New York.
(b) The Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Supreme Court
of the State of New York sitting in New York County and of the United States
District Court of the Southern District of New York, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to any
Loan Document, or for recognition or enforcement of any judgment, and each of
the parties hereto hereby irrevocably and unconditionally agrees that all claims
in respect of any such action or proceeding may be heard and determined in such
New York State or, to the extent permitted by law, in such Federal court. Each
of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement or any other Loan Document shall affect any right that any Agent or
any Lender may otherwise have to bring any action or proceeding relating to this
Agreement or any other Loan Document against the Borrower or its properties in
the courts of any jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or any other Loan Document in any
court referred to in paragraph (b) of this Section. The Borrower hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(d) The Borrower hereby irrevocably appoints and designates Corporation
Service Company, whose address is Two World Xxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx,
Xxx Xxxx 00000, or any other person having and maintaining a place of business
in the State of New York whom the Borrower may from time to time hereafter
designate (having given 30 days' notice thereof to the Administrative Agent,
each Lender and the Collateral Trustee), as the true and lawful attorney and
duly authorized agent for acceptance of service of legal process of the
Borrower. Without prejudice to the foregoing, each party to this Agreement
irrevocably consents to service of process in the manner provided for notices in
Section 9.01. Nothing in this Agreement or any other Loan Document will affect
the right of any party to this Agreement to serve process in any other manner
permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL.
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY
97
IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO
THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY
(WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
SECTION 9.11. HEADINGS.
Article and Section headings and the Table of Contents used herein are
for convenience of reference only, are not part of this Agreement and shall not
affect the construction of, or be taken into consideration in interpreting, this
Agreement.
SECTION 9.12. CONFIDENTIALITY.
The Administrative Agent and each of the Lenders agrees to maintain the
confidentiality of the Information (as defined below) and not use the
Information for any purpose not contemplated by this Agreement, except that
Information may be disclosed (a) to its and its Affiliates' directors, officers,
employees and agents, including accountants, legal counsel and other advisors
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this Agreement,
(e) in connection with the exercise of any remedies hereunder or any suit,
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) pursuant to customary
market practices with respect to the sharing of and preservation of confidential
information in connection with the syndication of this Agreement and the
Commitments hereunder or the assignment or participation to any assignee of or
Participant in, or any prospective assignee of or Participant in, any of the
Administrative Agent's or such Lender's rights or obligations under this
Agreement that is bound by the provisions hereof; provided, however, it is
understood and agreed that, until the earlier of (i) the date on which the first
issuance of High Yield Debt is priced by the underwriters thereof and (ii) April
30, 2000, each assignee of or Participant in, or any prospective assignee of or
Participant in, any of the Administrative Agent's or such Lender's rights or
obligations under this Agreement shall have executed an agreement containing
provisions substantially the same as those of this Section, (g) with the consent
of the Parent or the Borrower or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or (ii)
becomes available to any Agent or any Lender on a non-confidential basis from a
source other than the Parent or the Borrower. For the purposes of this Section,
"INFORMATION" means all information received from the Parent or the Borrower
relating to the Parent, the Borrower or their businesses, other than any such
information that is publicly available or available to any Agent or any Lender
on a non-confidential basis prior to disclosure by the Parent or the
98
Borrower, PROVIDED that such information is identified at the time of delivery
as confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.
SECTION 9.13. INTEREST RATE LIMITATION.
Notwithstanding anything herein to the contrary, if at any time the
interest rate applicable to any Loan, together with all fees, charges and other
amounts which are treated as interest on such Loan under applicable law
(collectively the "CHARGES"), shall exceed the maximum lawful rate (the "MAXIMUM
RATE") which may be contracted for, charged, taken, received or reserved by the
Lender holding such Loan in accordance with applicable law, the rate of interest
payable in respect of such Loan hereunder, together with all Charges payable in
respect thereof, shall be limited to the Maximum Rate and, to the extent lawful,
the interest and Charges that would have been payable in respect of such Loan
but were not payable as a result of the operation of this Section shall be
cumulated and the interest and Charges payable to such Lender in respect of
other Loans or periods shall be increased (but not above the Maximum Rate
therefor) until such cumulated amount, and if lawful, together with interest
thereon at the Federal Funds Effective Rate to the date of repayment, shall have
been received by such Lender.
SECTION 9.14. NON-RECOURSE.
The parties hereto each acknowledge and agree that the obligations of
the Loan Parties under the Loan Documents shall be non-recourse against the
officers, directors and employees of the Loan Parties and the stockholders of
the Parent.
(Signatures Follow on Next Page)
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
XX.XXX CORP.
By:__________________________________________
Name:________________________________________
Title:_______________________________________
FIRST UNION NATIONAL BANK, individually
in its capacity as a Lender and in its capacity as
Administrative Agent
By:__________________________________________
Name:________________________________________
Title:_______________________________________
100
Schedule 2.01
COMMITMENTS
LENDER COMMITMENT AMOUNTS
First Union National Bank Tranche A-1 Commitment: $160,000,000
Tranche A-2 Commitment: $ 40,000,000
Revolving Commitment: $150,000,000
TOTAL COMMITMENTS: $350,000,000
101
Schedule 3.05
LICENSES
XX.XXX CERTIFICATES
I. STATE AUTHORIZATIONS
XX.Xxx Network Services Corp. has authority to provide
telecommunications service in the following states:
ALABAMA (resold and facilities-based IXC)
* CALIFORNIA (resold IXC)
* FLORIDA (resold and facilities-based IXC)
ILLINOIS (resold and facilities-based IXC)
KANSAS (resold and facilities-based IXC)
LOUISIANA (facilities-based CLEC)
MISSISSIPPI (resold and facilities-based IXC)
MISSOURI (resold and facilities-based IXC and non-switched CLEC)
OREGON (resold and facilities-based competitive (IXC) services)
TEXAS (IXC registration)
102
Schedule 3.05 (cont.)
Exceptions To State Approvals
XX.Xxx Network Services Corp. was formerly known and organized as
XX.Xxx, LLC. XX.Xxx Network Services Corp. has not completed the filings
necessary to effect the change in XX.Xxx Network Services Corp.'s name and
organization from XX.Xxx, LLC, including seeking approval for such changes in
California, Louisiana and Mississippi.
XX.Xxx Network Services Corp. recently became a wholly-owned subsidiary
of a new intermediate holding company, XX.Xxx Corp. XX.Xxx Network Services
Corp. has not completed any filings, including required approvals in California,
Florida or Louisiana, to complete this reorganization.
XX.Xxx Network Services Corp. has not filed for or obtained authority in
Louisiana required to complete the transfer of control of a minority interest in
XX.Xxx Network Services Corp. To the extent that actual or legal control of
XX.Xxx Network Services Corp. may be contemplated or effected by the Loan
documents, XX.Xxx Network Services Corp. has not sought or obtained approval for
such transfer of control in any jurisdiction.
On October 20, 1999, the Florida Public service Commission issued
XX.Xxx, LLC (now XX.Xxx Network Services Corp.) an order granting interexchange
carrier certification. That Order becomes effective if no party files for
reconsideration by November 10, 1999. Certain of the State licenses are subject
to satisfaction of various customary conditions set forth therein.
103
Schedule 3.06
DISCLOSED MATTERS
None.
104
Schedule 3.14
SUBSIDIARIES
The following are wholly owned subsidiaries of the Borrower:
1. XX.Xxx Supply Corp.
2. XX.Xxx Construction Corp.
3. XX.Xxx Network Services Corp.
4. XX.Xxx Property Corp.
5. XX.Xxx Virginia, LLC
6. XX.Xxx Virginia Corp.
105
Schedule 3.15
INSURANCE
106
Schedule 6.01
EXISTING INDEBTEDNESS
None.
107
Schedule 6.02
EXISTING LIENS
NONE.
108
Schedule 6.04
EXISTING INVESTMENTS
NONE.
109
Schedule 6.08
EXISTING RESTRICTIONS
NONE.
110
SCHEDULE 6.14
MINIMUM CUMULATIVE DARK FIBER/CONDUIT REVENUE/PROCEEDS
------------------------------------------------------
--------------------------------------------------------------------
QUARTERLY DATE MINIMUM CUMULATIVE DARK
FIBER/CONDUIT
REVENUE/PROCEEDS (IN 000'S)
----------------------------------- --------------------------------
December 31, 1999 0
----------------------------------- --------------------------------
March 31, 2000 0
----------------------------------- --------------------------------
June 30, 2000 0
----------------------------------- --------------------------------
September 30, 2000 5,000
----------------------------------- --------------------------------
December 31, 2000 13,345
----------------------------------- --------------------------------
March 31, 2001 34,372
----------------------------------- --------------------------------
June 30, 2001 106,745
----------------------------------- --------------------------------
September 30, 2001 126,209
----------------------------------- --------------------------------
December 31, 2001 150,327
----------------------------------- --------------------------------
March 31, 2002 156,945
----------------------------------- --------------------------------
June 30, 2002 163,308
----------------------------------- --------------------------------
September 30, 2002 169,416
----------------------------------- --------------------------------
December 31, 2002 182,814
----------------------------------- --------------------------------
March 31, 2003 195,851
----------------------------------- --------------------------------
June 30, 2003 208,527
----------------------------------- --------------------------------
111
SCHEDULE 6.15
MINIMUM CONSOLIDATED OPERATING REVENUES
---------------------------------------
----------------------------------- --------------------------------
Four Calendar Minimum Consolidated Operating
Quarters Ended Revenues (in 000's)
----------------------------------- --------------------------------
December 31, 1999 0
----------------------------------- --------------------------------
March 31, 2000 0
----------------------------------- --------------------------------
June 30, 2000 0
----------------------------------- --------------------------------
September 30, 2000 0
----------------------------------- --------------------------------
December 31, 2000 0
----------------------------------- --------------------------------
March 31, 2001 0
----------------------------------- --------------------------------
June 30, 2001 0
----------------------------------- --------------------------------
September 30, 2001 1,400
----------------------------------- --------------------------------
December 31, 2001 20,000
----------------------------------- --------------------------------
March 31, 2002 49,000
----------------------------------- --------------------------------
June 30, 2002 79,000
----------------------------------- --------------------------------
September 30, 2002 101,000
----------------------------------- --------------------------------
December 31, 2002 134,000
----------------------------------- --------------------------------
March 31, 2003 165,000
----------------------------------- --------------------------------
June 30, 2003 200,000
----------------------------------- --------------------------------
112
SCHEDULE 6.16
CONSOLIDATED EBITDA
-------------------
----------------------------------- --------------------------------
Four Calendar Quarters Ended Consolidated EBITDA
(in 000's)
----------------------------------- --------------------------------
June 30, 2000 (19,550)
----------------------------------- --------------------------------
September 30, 2000 (23,900)
----------------------------------- --------------------------------
December 31, 2000 (34,000)
----------------------------------- --------------------------------
March 31, 2001 (42,000)
----------------------------------- --------------------------------
June 30, 2001 (59,000)
----------------------------------- --------------------------------
September 30, 2001 (72,000)
----------------------------------- --------------------------------
December 31, 2001 (74,000)
----------------------------------- --------------------------------
March 31, 2002 (64,000)
----------------------------------- --------------------------------
June 30, 2002 (50,000)
----------------------------------- --------------------------------
September 30, 2002 (26,000)
----------------------------------- --------------------------------
December 31, 2002 (3,094)
----------------------------------- --------------------------------
March 31, 2003 22,095
----------------------------------- --------------------------------
June 30, 2003 50,000
----------------------------------- --------------------------------
113
EXHIBIT A
[FORM OF ASSIGNMENT AND ACCEPTANCE]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement, dated as of October 29, 1999
(as the same may be amended, supplemented or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among XX.XXX HOLDINGS, LIMITED, a Delaware
corporation ("PARENT"), XX.XXX CORP., a Delaware corporation (the "BORROWER"),
the Lenders party thereto and FIRST UNION NATIONAL BANK, as Administrative
Agent. Capitalized terms used herein but not defined herein shall have the
meanings assigned to such terms in the Credit Agreement.
1. The assignor named below (the "ASSIGNOR") sells and assigns, without
recourse, to the assignee named below (the "ASSIGNEE"), and the Assignee hereby
purchases and assumes, without recourse, from the Assignor, effective as of the
Effective Date set forth below, the interests set forth below (the "ASSIGNED
INTEREST") in the Assignor's rights and obligations under the Credit Agreement,
including, without limitation, the percentages and amounts set forth on the
reverse hereof of (a) the Commitments of the Assignor on the Effective Date and
(b) the Loans and Borrowings owing to the Assignor that are outstanding on the
Effective Date. The Assignee hereby acknowledges receipt of a copy of the Credit
Agreement. From and after the Effective Date (a) the Assignee shall be a party
to and be bound by the provisions of the Credit Agreement and, to the extent of
the interests assigned by this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and under the Loan Documents and (b) the
Assignor shall, to the extent of the interests assigned by this Assignment and
Acceptance, relinquish its rights and be released from its obligations under the
Credit Agreement (and in the event that this Assignment and Acceptance covers
all or the remaining portion of the Assignor's rights and obligations under the
Credit Agreement, the Assignor shall cease to be a party thereto but shall
continue to be entitled to the benefits of Sections 2.13, 2.14, 2.15, and 9.03
thereof, as well as to any fees accrued for its account and not yet paid).
2. This Assignment and Acceptance is being delivered to the
Administrative Agent together with (a) if the Assignee is organized under the
laws of a jurisdiction outside the United States, the forms specified in Section
2.15 of the Credit Agreement, duly completed and executed by such Assignee, (b)
if the Assignee is not already a Lender under the Credit Agreement, an
Administrative Questionnaire and (c) a processing and recordation fee of $5,000.
3. This Agreement and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of New York.
Date of Assignment:
Legal Name of Assignee:
Legal Name of Assignor:
114
Assignee's Address for Notices
Effective Date of Assignment (may not be fewer than five Business Days
after the Date of Assignment):
Commitment Principal Amount Assigned Percentage Assigned of
facility and Commitments
thereunder (set forth to at
least eight decimals, as a
percentage of the facility
and the aggregate
Commitments of all Lenders
thereunder)
Loans :
Tranche A: $ %
Tranche B: $ %
Revolving: $ %
Loan Commitments:
Tranche A: $ %
Tranche B: $ %
Revolving: $ %
The terms set forth above are hereby agreed to:
[-------------------------]
as Assignor,
By:
Name:
Title:
[-------------------------]
as Assignee,
By:
Name:
Title:
Consented to by (if required under Section
9.04(b)(i) of the Credit Agreement):
FIRST UNION NATIONAL BANK,
as Administrative Agent
By:
------------------------------------
Name:
Title:
XX.XXX CORP.
By:
------------------------------------
Name:
Title:
EXHIBIT B
[FORM OF TRUST AGREEMENT]
EXHIBIT C
[FORM OF SECURED PROMISSORY NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR ANY STATE SECURITIES LAWS. NO TRANSFER OF THIS NOTE SHALL BE VALID OR
EFFECTIVE UNLESS MADE IN ACCORDANCE WITH THE APPLICABLE REQUIREMENTS OF THE
SECURITIES ACT OF 1933, AS AMENDED, AND STATE SECURITIES LAWS, OR ANY AVAILABLE
EXEMPTION THEREUNDER.
XX.XXX CORP.
SECURED PROMISSORY NOTE
$[_________] __________ __, 2000
FOR VALUED RECEIVED, the undersigned, XX.XXX CORP., a Delaware
corporation (the "MAKER"), hereby promises to pay to the order of
_______________ (the "PAYEE"), the lesser of (a) the cumulative aggregate amount
of the Loans made to the Maker under the Credit Agreement (as defined below),
and (b) the principal sum of [______________________] ($[__________]) together
with interest on the outstanding principal balance. All payments of principal or
interest or both shall be made in lawful money of the United States of America.
This note is the note referred to in Section 2.07(e) of the Credit Agreement,
dated as of October 29, 1999, by and among XX.Xxx Holdings, Limited (the
"PARENT"), the Maker, the Lenders Party thereto and First Union National Bank,
as administrative agent (as amended, modified, supplemented or restated from
time to time, the "CREDIT AGREEMENT") and evidences Loans made to the Maker
thereunder. Terms used herein but not otherwise defined, shall have the meanings
assigned to them in the Credit Agreement.
This note is (i) secured pursuant to (a) a Security Agreement
(Borrower), dated as of October 29, 1999, by and between the Maker and State
Street Bank and Trust Company, a Massachusetts trust company, as corporate
trustee (together with its successors in such capacity, the "CORPORATE TRUSTEE")
and Xxxxxxx Xxxxxxx, as individual trustee (the Corporate Trustee and such
individual trustee, together with his successors in such capacity, collectively,
the "TRUSTEES") for the benefit of the Secured Parties (as such term is defined
in the Trust Agreement, dated as of October 29, 1999, among the Maker and the
Trustees (the "TRUST AGREEMENT")) and (b) the other Security Documents among the
Maker and the Trustees and (ii) supported by the Guarantee and Subordination
Agreement, dated as of October 29, 1999, by the Parent and the subsidiaries of
the Maker (each of the Parent and such subsidiaries, together with their
successors, a "GUARANTOR") in favor of the Trustees for the benefit of the
Secured Parties (as such term is defined in the Trust Agreement).
PAYMENTS OF PRINCIPAL AND INTEREST. The entire principal balance of this
note, together with all unpaid accrued interest hereunder, shall be due and
payable on the earlier to occur of (a) the Maturity Date and (b) the date of
acceleration of the maturity of this note upon the occurrence of certain events
as specified in the Credit Agreement. Interest on this note shall be
payable to the Payee on the date of any prepayment of this note and at maturity,
whether by acceleration or otherwise. If any payment on this note is due on a
Saturday, Sunday or other day on which commercial banks in New York City are
authorized or required by law to remain closed, such payment shall be made on
the next succeeding business day and such extension of time shall be included in
computing any interest due in connection with such payment. The Maker shall make
each payment required to be made by it hereunder in the manner set forth in
Section 2.16(a) of the Credit Agreement.
INTEREST RATE. This note will bear interest on the outstanding principal
under this note at the rate and in the manner specified in Section 2.11 of the
Credit Agreement.
PREPAYMENT. The Maker shall have the right and under certain
circumstances the obligation to prepay the Loans, in whole or in part, in the
manner provided in Sections 2.08 and 2.09 of the Credit Agreement.
REPRESENTATIONS AND WARRANTIES. The Maker represents and warrants to the
Payee as follows:
(a) The Maker is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization and has all
requisite corporate power and authority to carry on its business as now
conducted;
(b) The execution and delivery of this note (i) is within the
Maker's corporate powers and has been duly authorized by all necessary corporate
and, if required, stockholder, action; (ii) has been duly executed and delivered
by the Maker and constitutes a legal, valid and binding obligation of the maker
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency or other laws affecting creditors' rights generally and subject to
general principles of equity; and
(c) The execution and delivery of this note (i) does not
require any consent or approval of, registration or filing with, or any other
action by, any Governmental Authority, (ii) will not violate any applicable law
or regulation or the certificate of incorporation or bylaws of the Maker or any
order of any Governmental Authority, (iii) will not violate or result in a
default under any agreement or instrument evidencing or governing any Material
Indebtedness or its assets or give rise to a right thereunder to require any
payment to be made, and (iv) will not result in the creation or imposition of
any Lien on any asset of the Maker.
REMEDIES ON DEFAULT. If any Event of Default shall occur and be
continuing, then in addition to the rights reserved to the holder under the
Credit Agreement, the entire principal balance and all accrued interest under
this note shall, at the option of the holder hereof, become immediately due and
payable, without notice or demand.
CERTAIN WAIVERS. Except as otherwise expressly provided in this note,
the Maker hereby waives diligence, demand, presentment for payment, protest,
dishonor, nonpayment, default, and notice of any and all of the foregoing.
AMENDMENTS. This note may not be changed orally, but only by an
agreement in writing and signed by the party against whom enforcement of any
waiver, change, modification or discharge is sought.
GOVERNING LAW; WAIVER OF JURY TRIAL. THIS NOTE SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE MAKER
HEREBY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING FOR THE
ENFORCEMENT OR COLLECTION OF THIS NOTE. Any such action or proceeding shall be
brought only in the federal or state courts situated in the County and State of
New York.
COLLECTION COSTS. In the event that the Payee shall, after the
occurrence and during the continuance of an Event of Default (and PROVIDED that
the Payee shall be permitted, at such time, to enforce its rights hereunder and
retain payments received hereunder), turn this note over to an attorney for
collection, the Maker shall further be obligated to the Payee for the Payee's
reasonable attorneys' fees and expenses incurred in connection with such
collection as well as any other costs incurred by Payee in connection with the
collection of all amounts due hereunder.
IN WITNESS WHEREOF, the Maker has duly caused this note to be signed on
its behalf, in its corporate name and by its duly authorized officer as of the
date first set forth above.
XX.XXX CORP.
By:
------------------------------------
Name:
Title:
SCHEDULE OF LOANS
THIS NOTE EVIDENCES LOANS MADE UNDER THE WITHIN-DESCRIBED CREDIT
AGREEMENT TO THE MAKER, ON THE DATES, IN THE PRINCIPAL AMOUNTS, OF THE TYPES,
BEARING INTEREST AT THE RATES AND HAVING INTEREST PERIODS (IF APPLICABLE) OF THE
DURATIONS SET FORTH BELOW, SUBJECT TO THE PAYMENTS AND PREPAYMENTS OR PRINCIPAL
SET FORTH BELOW:
Principal Unpaid
Amount Duration of Amount Paid Principal Notation
Date Made of Loan Type of Loan Interest Rate Interest Rate or Prepaid Amount Made by
EXHIBIT D
[FORM OF BORROWING REQUEST]
TO: First Union National Bank
FROM: XX.Xxx Corp.
RE: Borrowing Request
DATE: [_______]
Reference is made to the Credit Agreement, dated as of October 29, 1999 (the
"Credit Agreement"), among XX.Xxx Corp., a Delaware corporation (the
"Borrower"), the Lenders party thereto and First Union National Bank, as
Administrative Agent. Capitalized terms used in this Borrowing Request and not
otherwise defined herein shall have the meanings assigned to them in the Credit
Agreement.
1. The amount of the Borrowing is: ____________
2. The date of such Borrowing (which shall be a
Business Day) is:
$____________
3. The type of the Borrowing is:
AMOUNT OF LOAN
(A) LIBOR Borrowing $___________
(B) ABR Borrowing $___________
4. The initial Interest Period(s) of the
LIBOR Borrowing is (if applicable): ___________
one/two/three/six
months
5. The conditions to funding such Borrowing set forth in Section 4.02 have
been satisfied.
6. The location and number of the account
or accounts to which funds (if any) are
to be disbursed, which shall comply with
the requirements of Section 2.04 are: ____________________
7. If the proceeds of this Borrowing Request are to be used to build any
Segment of the Network, then pursuant to Section 4.02(f) of the Credit
Agreement, the Borrower certifies that:
(a) On and as of the date hereof and immediately after giving effect to any
Borrowing used to build any Segment of the Network, the Borrower has all
necessary Real Estate Rights, and sufficient financing, to complete such
Segment or portion thereof to be financed with the proceeds of such
Borrowing;
(b) The cost of such Segment is $_________________; and
(c) The sources and amounts of funding for such Segment are as follows:
Source Amount
----------------- ------------------
----------------- ------------------
----------------- ------------------
XX.Xxx Corp.
By:
---------------------------------
Name:
Title:
Accepted by:
FIRST UNION NATIONAL BANK,
as Administrative Agent
By:
-----------------------------
Name:
Title:
EXHIBIT E
[FORM OF CAPITALIZATION CERTIFICATE]
OFFICER'S CERTIFICATE
BORROWER
___________________ hereby certifies that he is the duly elected,
qualified and acting _______________ of XX.Xxx Corp., a Delaware corporation
(the "BORROWER"), and further certifies as follows pursuant to Section 4.02(g)
of the Credit Agreement, dated as of October 29, 1999, among the Borrower, the
Lenders party thereto and First Union National Bank, as Administrative Agent (as
amended, modified, supplemented or restated from time to time, the "CREDIT
AGREEMENT") (capitalized terms used herein without definition have the meani gs
assigned to them in the Credit Agreement):
XX.Xxx Holdings, Limited (the "PARENT") has received at least
$350,000,000 pursuant to (i) the Subscription Agreement, dated as
of October 29, 1999, among the Parent, Odyssey Investment
Partners Fund LP, Odyssey Coinvestors, LLC and UBS Capital II
LLC, (ii) the Bridge Loan Agreement, dated as of October 29,
1999, among the Parent, the lenders party thereto from time to
time and Warburg Dillon Read LLC and Credit Suisse First Boston,
as Agents, (the "BRIDGE LOAN Agreement"), and/or (iii) an
offering of High Yield Debt, and has contributed such amount to
the Borrower as cash equity (except to the extent otherwise
applied to the payment of Permitted Parent Liabilities or to fund
a Permitted Interest Fund or, in the case of the proceeds of High
Yield Debt, to the payment of Indebtedness and accrued Interest
thereon under the Bridge Facility). Attached hereto as Exhibit B
is a copy of the audited balance sheet of the Borrower reflecting
receipt of the net amount of such proceeds from the Parent.
IN WITNESS WHEREOF, the undersigned has executed this certificate on
the ____ day of _________,_____.
By: ________________________
Name:
Title:
