EXHIBIT 10
EXECUTION COPY
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CREDIT AGREEMENT
dated as of
June 3, 1999
among
RCN CORPORATION
The Borrowers named herein
The Lenders Party hereto
and
THE CHASE MANHATTAN BANK,
as Agent
___________________________
CHASE SECURITIES INC.,
as Lead Arranger and Book Manager
___________________________
DEUTSCHE BANK A.G., XXXXXXX XXXXX CAPITAL CORP.
AND XXXXXX XXXXXXX SENIOR FUNDING,
as Documentation Agents
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TABLE OF CONTENTS
Page
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ARTICLE I
Definitions
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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; Adjusted Accounting Principles 32
ARTICLE II
The Credits
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SECTION 2.01. Commitments 32
SECTION 2.02. Loans and Borrowings 33
SECTION 2.03. Requests for Borrowings 34
SECTION 2.04. Letters of Credit 35
SECTION 2.05. Funding of Borrowings 40
SECTION 2.06. Interest Elections 41
SECTION 2.07. Termination and Optional Reduction of Commitments 43
SECTION 2.08. Repayment of Loans; Evidence of Debt 44
SECTION 2.09. Automatic Revolving Commitment Reductions; Amortization of Term Loans 45
SECTION 2.10. Prepayment of Loans 46
SECTION 2.11. Tranche B Facility Prepayment Fee 48
SECTION 2.12. Fees 49
SECTION 2.13. Interest 50
SECTION 2.14. Alternate Rate of Interest 51
SECTION 2.15. Increased Costs 52
SECTION 2.16. Break Funding Payments 54
SECTION 2.17. Taxes 54
SECTION 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-Offs 57
SECTION 2.19. Mitigation Obligations; Replacement of Lenders 59
ARTICLE III
Representations and Warranties
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SECTION 3.01. Organization; Powers 60
SECTION 3.02. Authorization; Enforceability 60
SECTION 3.03. Governmental Approvals; No Conflicts 61
SECTION 3.04. Financial Condition; No Material Adverse Change 61
SECTION 3.05. Properties 62
SECTION 3.06. Litigation and Environmental Matters 63
SECTION 3.07. Compliance with Laws and Agreements 63
SECTION 3.08. Investment and Holding Company Status 64
SECTION 3.09. Taxes 64
SECTION 3.10. ERISA 64
SECTION 3.11. Disclosure 64
SECTION 3.12. Subsidiaries 65
SECTION 3.13. Insurance 65
SECTION 3.14. Labor Matters 65
SECTION 3.15. Intellectual Property 66
SECTION 3.16. Year 2000 66
SECTION 3.17. Security Interests 66
ARTICLE IV
Conditions
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SECTION 4.01. Effective Date 68
SECTION 4.02. Each Credit Event 71
ARTICLE V
Affirmative Covenants
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SECTION 5.01. Financial Statements and Other Information 71
SECTION 5.02. Notices of Material Events 74
SECTION 5.03. Information Regarding Collateral 74
SECTION 5.04. Existence; Conduct of Business 75
SECTION 5.05. Payment of Obligations 76
SECTION 5.06. Maintenance of Properties 76
SECTION 5.07. Insurance 76
SECTION 5.08. Casualty and Condemnation 76
SECTION 5.09. Books and Records, Inspection and Audit Rights 77
SECTION 5.10. Compliance with Laws 77
SECTION 5.11. Use of Proceeds and Letters of Credit 77
SECTION 5.12. Additional Subsidiaries 78
SECTION 5.13 Further Assurances 78
SECTION 5.14. Interest Rate Protection 79
ARTICLE VI
Negative Covenants
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SECTION 6.01. Limitations on Indebtedness 80
SECTION 6.02. Limitation on Liens 81
SECTION 6.03. Fundamental Changes 83
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions 85
SECTION 6.05 Asset Sales 87
SECTION 6.06. Sale and Leaseback Transactions 89
SECTION 6.07. Hedging Agreements 89
SECTION 6.08. Restricted Payments; Payments of Indebtedness 89
SECTION 6.09. Transactions with Affiliates 91
SECTION 6.10. Restrictive Agreements 91
SECTION 6.11. Designation of Unrestricted Subsidiaries 92
SECTION 6.12. Financial Covenants 93
ARTICLE VII
Events of Default 97
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ARTICLE VIII
The Agent 92
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ARTICLE IX
Miscellaneous
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SECTION 9.01. Notices 103
SECTION 9.02. Waivers; Amendments 104
SECTION 9.03. Expenses; Indemnity; Damage Waiver 106
SECTION 9.04. Successors and Assigns 108
SECTION 9.05. Survival 111
SECTION 9.06. Counterparts; Integration; Effectiveness 112
SECTION 9.07. Severability 112
SECTION 9.08. Right of Setoff 112
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process 113
SECTION 9.10. Waiver of Jury Trial 113
SECTION 9.11. Headings 114
SECTION 9.12. Confidentiality 114
SECTION 9.13. Liability of Borrowers 115
SECTION 9.14. Interest Rate Limitation 115
SECTION 9.15. Release of Subsidiaries and Borrowers 116
SCHEDULES:
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Schedule 2.01 -- Commitments
Schedule 2.04(a) -- Existing Letters of Credit
Schedule 3.05 -- Real Property
Schedule 3.06 -- Disclosed Matters
Schedule 3.12 -- Subsidiaries
Schedule 3.17 -- Offices for Mortgage Filings
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.04 -- Existing Investments
Schedule 6.09 -- Existing Agreements
Schedule 6.10 -- Existing Restrictions
EXHIBITS:
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Exhibit A -- Form of Administrative Questionnaire
Exhibit B -- Form of Assignment and Acceptance
Exhibit C -- Form of Borrowing Request
Exhibit D-1 -- Form of Opinion of Company Counsel
Exhibit D-2 -- Form of Opinion of Xxxxx, Xxxx & Xxxxxxxx
Exhibit E -- Form of Company Guarantee Agreement
Exhibit F -- Form of Subsidiary Guarantee Agreement
Exhibit G -- Form of Pledge Agreement
Exhibit H -- Form of Security Agreement
Exhibit I -- Form of Indemnity, Subrogation and Contribution Agreement
Exhibit J -- Form of Mortgage
Exhibit K -- Form of Revolving Note
Exhibit L -- Form of Term Note
CREDIT AGREEMENT dated as of June 3, 1999, among RCN
CORPORATION, a Delaware corporation (the "Company"), RCN TELECOM
SERVICES OF PENNSYLVANIA, INC., RCN CABLE SYSTEMS, INC., JAVANET,
INC., RCN FINANCIAL MANAGEMENT, INC., UNET HOLDING, INC.,
INTERPORT COMMUNICATIONS CORP. and ENET HOLDING, INC.
(collectively, the "Borrowers"), the LENDERS party hereto, and
THE CHASE MANHATTAN BANK, as Administrative Agent and Collateral
Agent.
The parties hereto agree as follows:
ARTICLE I
Definitions
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SECTION 1.01. Defined Terms. As used in this Agreement, the following
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terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
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whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Adjusted Accounting Principles" means, subject to the provisions of
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Section 1.04, a modification of generally accepted accounting principles in the
United States of America such that, for all purposes of this Agreement including
the financial covenants herein, Starpower and its consolidated subsidiaries will
be accounted for as a consolidated Subsidiary of the Company so long as the
Company and its Subsidiaries own not less than 50% of the voting power of the
outstanding Equity Interests of Starpower.
"Adjusted Consolidated Net Income" means, for any period, Consolidated
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Net Income for such period adjusted (i) to exclude the net income or net loss of
the Joint Venture Subsidiaries for such period (and accordingly to exclude the
revenues, earnings, gains, expenses, costs and losses of the Joint Venture
Subsidiaries giving rise to such excluded net income or net loss), (ii) to
include, without duplication, income tax expenses, savings or benefits of the
Company attributable to the Company's proportionate share of the net income or
net loss of the Joint Venture Subsidiaries for such period and (iii) to include,
without duplication, as income of the Company the amount of all dividends or
other distributions actually paid to the Company or the Company Group
Subsidiaries during such period by the Joint Venture Subsidiaries.
"Adjusted Total Capitalization" means, as of any date, without
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duplication, the sum of (i) Funded Debt outstanding on such date plus (ii)
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Consolidated Stockholders' Equity of the Company and the Restricted Subsidiaries
as of September 30, 1997 plus (iii) the aggregate amount of Capital Payments
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received by the Company after September 30, 1997 and on or prior to such date
plus (iv) if RCN-BecoCom or Starpower, as the case may be, continues to be a
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Restricted Subsidiary on such date, the net cash consideration, without
duplication, theretofore received by RCN-BecoCom or Starpower or to be received
by RCN-BecoCom or Starpower, as the case may be, during the 12-month period
commencing on such date, for the issuance and sale of capital stock of RCN-
BecoCom or Starpower, as the case may be, pursuant to irrevocable binding stock
purchase commitments of third parties (other than subsidiaries or other
Affiliates controlled by the Company) in effect on such date (provided that such
commitments may contain customary funding conditions).
"Administrative Questionnaire" means an Administrative Questionnaire
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in a form attached as Exhibit A hereto.
"Affiliate" means, with respect to a specified Person, another Person
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that directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Agent" means The Chase Manhattan Bank, in its capacity as
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administrative agent and collateral agent for the Lenders hereunder.
"Alternate Base Rate" means, for any day, a rate per annum equal to
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the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate.
"Annualized Cash Interest Expense" means, as of the last day of any
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fiscal quarter, the product of (a) Cash Interest Expense for the two consecutive
fiscal quarters ending on such day, multiplied by (b) two.
"Annualized EBITDA" means, as of the last day of any fiscal quarter,
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the product of (a) EBITDA for the two consecutive fiscal quarters ending on such
day, multiplied by (b) two.
"Annualized Fixed Charges" means, as of the last day of any fiscal
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quarter, the product of (a) Fixed Charges
for the two consecutive fiscal quarters ending on such day, multiplied by (b)
two.
"Applicable Percentage" means, with respect to any Revolving Lender,
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the percentage of the total Revolving Commitments represented by such Lender's
Revolving Commitment. If the Revolving Commitments have terminated or expired,
the Applicable Percentages shall be determined based upon the Revolving
Commitments most recently in effect, giving effect to any assignments.
"Applicable Rate" means, with respect to the commitment fee payable
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pursuant to Section 2.12(a), a rate per annum equal to (i) 1.25% until the date
of delivery to the Agent pursuant to Section 5.01(a) or (b) of consolidated
financial statements in respect of a fiscal quarter which is the second
consecutive fiscal quarter in which EBITDA is positive and (ii) on and after the
date referred to in clause (i), (x) 1.25% for each day on which Usage is less
than 50%, (y) 1.00% for each day on which Usage is equal to or greater than 50%
but less than 75% and (z) 0.50% for each day on which Usage is equal to or
greater than 75%. For purposes of the foregoing, "Usage" means, on any date,
the percentage obtained by dividing (i) the sum of the aggregate outstanding
Tranche A Term Loans and the aggregate Revolving Exposure on such date by (ii)
the sum of the aggregate outstanding Tranche A Term Loans, unutilized Tranche A
Commitments and Revolving Commitments on such date.
"Applicable Spread" means, for any day (a) with respect to any Tranche
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B Term Loan, (i) 2.50% per annum, in the case of an ABR Loan, or (ii) 3.50% per
annum, in the case of a Eurodollar Loan, (b) with respect to any ABR Loan or
Eurodollar Loan that is a Revolving Loan or a Tranche A Term Loan, as the case
may be, the applicable rate per annum set forth below under the caption "ABR
Spread" or "Eurodollar Spread", as the case may be, based upon the Debt Ratio as
of the most recent determination date; provided that until the date of delivery
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to the Agent pursuant to Section 5.01(a) or (b) of consolidated financial
statements prepared in accordance with Adjusted Accounting Principles in respect
of a fiscal quarter which is the second consecutive fiscal quarter in which
EBITDA is positive, the "Applicable Spread" for purposes of clause (b) shall be
the applicable rate per annum set forth below in Category 1:
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Debt Ratio: ABR Eurodollar
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Spread Spread
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Category 1 2.00% 3.00%
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[Redacted]
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Category 2 1.75% 2.75%
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[Redacted]
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Category 3 1.50% 2.50%
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[Redacted]
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Category 4 1.25% 2.25%
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[Redacted]
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Category 5 1.00% 2.00%
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[Redacted]
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For purposes of the foregoing, (i) the Debt Ratio shall be determined
as of the end of each fiscal quarter of the Company's fiscal year based upon the
Company's consolidated financial statements prepared in accordance with Adjusted
Accounting Principles delivered pursuant to Section 5.01(a) or (b) and (ii) each
change in the Applicable Spread resulting from a change in the Debt Ratio shall
be effective during the period commencing on and including the date of delivery
to the Agent of such consolidated financial statements indicating such change
and ending on the date immediately preceding the effective date of the next such
change; provided that the Debt Ratio shall be deemed to be in Category 1 (A) at
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any time that an Event of Default has occurred and is continuing or (B) at the
option of the Agent or at the request of the Required Lenders if the Company
fails to deliver the consolidated financial statements prepared in accordance
with Adjusted Accounting Principles required to be delivered by it pursuant to
Section 5.01(a) or (b), during the period from the expiration of the time for
delivery thereof (without
giving effect to any grace period) until such consolidated financial statements
are delivered.
"Assignment and Acceptance" means an assignment and acceptance entered
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into by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Agent, in the form of Exhibit B
or any other form approved by the Agent.
"Attributable Debt" means, on any date, in respect of any lease of the
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Company or any Restricted Subsidiary entered into as part of a sale and
leaseback transaction subject to Section 6.06, (i) if such lease is a Capital
Lease Obligation, the capitalized amount thereof that would appear on a balance
sheet of such Person prepared as of such date in accordance with Adjusted
Accounting Principles, and (ii) if such lease is not a Capital Lease Obligation,
the capitalized amount of the remaining lease payments under such lease that
would appear on a balance sheet of such Person prepared as of such date in
accordance with Adjusted Accounting Principles if such lease were accounted for
as a Capital Lease Obligation.
"Board" means the Board of Governors of the Federal Reserve System of
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the United States of America.
"Borrower" means each of RCN Telecom Services of Pennsylvania, Inc.,
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RCN Cable Systems, Inc., JavaNet, Inc., RCN Financial Management, Inc., UNET
Holding, Inc., Interport Communications Corp and ENET Holding, Inc., each of
which is a wholly owned Subsidiary of the Company.
"Borrowing" means Loans of the same Class and Type, made, converted or
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continued on the same date and, in the case of Eurodollar Loans, as to which a
single Interest Period is in effect.
"Borrowing Request" means a request by any Borrower (or by the Company
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on behalf of a Borrower) for a Borrowing in accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or other
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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 Eurodollar Loan,
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the term "Business Day" shall also exclude any day on which banks are not open
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for dealings in dollar deposits in the London interbank market.
"Capital Expenditures" means, for any period, the sum, without
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duplication, of (a) the additions to property, plant and equipment and other
capital expenditures of the Company and its Restricted Subsidiaries that are (or
would be) set forth in a consolidated statement of cash flows of
the Company and its Restricted Subsidiaries for such period prepared in
accordance with Adjusted Accounting Principles, (b) assets acquired pursuant to
Capital Lease Obligations incurred by the Company and its Restricted
Subsidiaries during such period and (c) Permitted Business Acquisitions made
during such period; provided, that the effect of such Permitted Business
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Acquisition is essentially equivalent to an addition to the property, plant and
equipment of the Company and its Restricted Subsidiaries; provided, however,
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that Capital Expenditures of the Company and its Restricted Subsidiaries shall
not include (i) expenditures to the extent they are made with the proceeds of
(A) cash consideration (i) received by the Company from the offering and sale of
approximately 8,000,000 shares of common stock of the Company consummated on
June 2, 1999, and (ii) received by the Company after the Effective Date from
other issuances of its capital stock (including preferred stock) or Permitted
Debt and not previously used for any other purpose (other than the temporary
repayment of Revolving Loans or Investments in Permitted Investments) or (B)
cash capital contributions to, or cash payments for the issuance of Equity
Interests of, RCN-BecoCom or Starpower made by third parties (other than
Subsidiaries or controlled Affiliates of the Company), (ii) Permitted Business
Acquisitions or acquisitions of capital assets to the extent made in exchange
for shares of capital stock (including preferred stock) of the Company; (iii)
expenditures to the extent made with the proceeds of insurance policies,
insurance settlements or condemnation awards in respect of lost, destroyed,
damaged or condemned equipment, property or other capital assets to the extent
such expenditures are made to replace or repair such assets or acquire other
Telecommunications Assets within 270 days of the receipt of such proceeds or
(iv) expenditures, including pursuant to a Permitted Business Acquisition, to
the extent they are made with Net Proceeds from asset sales in accordance with
the provisions of Sections 2.10(c) and 6.05 which have not previously been used
for any other purpose (other than the temporary repayment of Revolving Loans or
Investments in Permitted Investments).
"Capital Lease Obligations" of any Person means the obligations of
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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 Adjusted
Accounting Principles, and the amount of such obligations shall be the
capitalized amount thereof determined in accordance with Adjusted Accounting
Principles.
"Capital Payments" means, for any period, the aggregate amount (valued
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at market value, in the case of non-cash consideration) which shall have been
received by
the Company during such period as consideration for the issuance of capital
stock of the Company.
"Cash Adjustment" means, as of any date, the amount of cash and cash
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equivalents that is or would be reflected on a consolidated balance sheet of the
Company and its Restricted Subsidiaries prepared as of such date in accordance
with Adjusted Accounting Principles in excess of $500,000,000.
"Cash Interest Expense" means, for any fiscal period, (a) the Interest
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Expense (minus the amount of interest income for such period) for such period
minus (b) to the extent included in determining Interest Expense for such fiscal
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period, the aggregate amount of pay-in-kind or accreted Interest Expense for
such period not involving any payment of cash (as opposed to accruals of cash
interest expense during such period).
"Change in Control" means (a) the acquisition of ownership, directly
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or indirectly, beneficially or of record, by any Person or group (within the
meaning of Rule 13d-5 under the Securities Exchange Act of 1934 as in effect on
the date hereof), other than one or more of, or a group consisting entirely or
in part of, Xxxxx 0 Xxxxxxxxxxxxxx, Xxx., its Controlled Affiliates and Xxxxx
XxXxxxx, of shares representing more than 30% of the aggregate ordinary voting
power represented by the issued and outstanding capital stock of the Company;
(b) occupation of a majority of the seats (other than vacant seats) on the board
of directors of the Company by Persons who were neither (i) nominated by the
board of directors of the Company nor (ii) appointed by directors so nominated;
or (c) the failure of the Company, either directly or through one or more wholly
owned Subsidiaries, to own 100% of the outstanding Equity Interests of each
Borrower (including any successor by merger to any Borrower that is merged or
consolidated with or into any Restricted Subsidiary or other Borrower in
compliance with Section 6.03), other than any Borrower sold in compliance with
Section 6.05 hereof.
"Change in Law" means (a) the adoption of any law, rule or regulation
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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 the Issuing
Bank (or, for purposes of Section 2.15(b), by any lending office of such Lender
or by such Lender's or the Issuing Bank's holding company, if any) with any
request, guideline or directive (whether or not having the force of law) of any
Governmental Authority made or issued after the date of this Agreement.
"Class", when used in reference to any Loan or Borrowing, refers to
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whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans,
Tranche A Term Loans or Tranche B Term Loans and, when used in reference to any
Commitment, refers to whether such Commitment is a Revolving Commitment, Tranche
A Commitment or Tranche B Commitment.
"Code" means the Internal Revenue Code of 1986, as amended from time
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to time.
"Collateral" means any and all "Collateral", as defined in any
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applicable Security Document.
"Commitment" means a Revolving Commitment, Tranche A Commitment or
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Tranche B Commitment, or any combination thereof (as the context requires).
"Communications Act" means the Communications Act of 1934 and any
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similar or successor Federal statute and the rules, regulations and published
policies of the Federal Communications Commission thereunder, all as amended and
as the same may be in effect from time to time.
"Company" means RCN Corporation, a Delaware corporation.
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"Company Guarantee Agreement" means the Company Guarantee Agreement,
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substantially in the form of Exhibit E, made by the Company in favor of the
Agent for the benefit of the Secured Parties.
"Company Group" means the Company and each Subsidiary other than a
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Joint Venture Subsidiary or an Unrestricted Subsidiary.
"Company Group Subsidiary" means each Subsidiary other than a Joint
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Venture Subsidiary or an Unrestricted Subsidiary.
"Company Indentures" means the indentures in effect on the date hereof
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relating to various series of senior unsecured notes of the Company outstanding
on the date hereof and issued in offerings pursuant to Rule 144A under the
Securities Act of 1933 or in offerings registered under the Securities Act, as
the same may be amended and in effect from time to time.
"Consolidated Net Income" means, for any period, the net income or
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loss of the Company and the Restricted Subsidiaries for such period determined
on a consolidated basis in accordance with Adjusted Accounting Principles.
"Consolidated Revenue" means, for any period, the consolidated
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revenues of the Company and the Restricted
Subsidiaries for such period, calculated in accordance with Adjusted Accounting
Principles.
"Consolidated Stockholders' Equity" means, on any date, the
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consolidated stockholders equity of the Company and its Subsidiaries that would
be reflected on a consolidated balance sheet of the Company and its Subsidiaries
prepared as of such date in accordance with Adjusted Accounting Principles.
"Control" means the possession, directly or indirectly, of the power
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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.
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"Debt Ratio" means, on any date, the ratio of (i) Total Debt
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outstanding on such date to (ii) Annualized EBITDA determined as of the last day
of the fiscal quarter most recently ended on or prior to such date.
"Default" means any event or condition which constitutes an Event of
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Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Designation" has the meaning assigned to such term in Section 6.11.
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"Disclosed Matters" means the actions, suits and proceedings and the
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environmental matters disclosed in Schedule 3.06.
"dollars" or "$" refers to lawful money of the United States of
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America.
"EBITDA" means, for any period, Consolidated Net Income of the Company
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and its Restricted Subsidiaries for such period plus, without duplication and to
the extent deducted from revenues in determining such Consolidated Net Income,
the sum of (a) the aggregate amount of 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) all non-cash
non-recurring charges during such period (it being understood that charges shall
be deemed non-cash charges until the period that cash disbursements attributable
to such charges are made, at which point such charges shall be deemed cash
charges), and minus, without duplication and to the extent added to revenues in
determining Consolidated Net Income for such period, all non-cash non-recurring
gains during such period (it being understood that gains shall be deemed non-
cash gains until the period that cash receipts
attributable to such gains are received, at which point such gains shall be
deemed cash gains), all as determined on a consolidated basis with respect to
the Company and the Restricted Subsidiaries in accordance with Adjusted
Accounting Principles. For purposes of Section 6.12, if the Company or any of
its Restricted Subsidiaries makes any Permitted Business Acquisition during any
period in respect of which EBITDA is to be determined hereunder, such EBITDA
will be determined on a pro forma basis as if such acquisition were consummated
on the first day of the relevant period.
"Effective Date" means the date on which the conditions specified in
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Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"Environmental Laws" means all laws, rules, regulations, codes,
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ordinances, orders, decrees, judgments, injunctions or written, binding notices
or 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, exposure to, or release threatened release of any
Hazardous Material.
"Environmental Liability" means any liability, contingent or otherwise
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(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Company, the Borrower or any Subsidiary
directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials into
the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"Equity Interests" means shares of capital stock, partnership
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interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
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incorporated) that, together with the Company or any Borrower, is treated as a
single employer under Section 414(b) or (c) of the Code or, solely for purposes
of Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section
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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 Company 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 Company 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
Company 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 Company or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Company 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.
"Eurocurrency Reserve Requirements" means the aggregate of the maximum
---------------------------------
reserve percentages (including any marginal, special, emergency or supplemental
reserves) expressed as a decimal established by the Board and any other banking
authority to which the Agent is subject and applicable to "Eurocurrency
Liabilities", as such term is defined in Regulation D of the Board, or any
similar category of assets or liabilities relating to eurocurrency fundings.
Eurocurrency Reserve Requirements shall be adjusted automatically on and as of
the effective date of any change in any reserve percentage.
"Eurodollar", 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 LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article
----------------
VII.
"Excess Cash Flow" means, for any fiscal year, the sum (without
----------------
duplication) of:
(a) Adjusted Consolidated Net Income (or loss) for such fiscal year,
adjusted to exclude any gains or losses of the Company Group attributable
to Prepayment Events; plus
----
(b) the excess, if any, of the Net Proceeds received during such
fiscal year by the Company and the Company Group Subsidiaries in respect of
any Prepayment Events (other than Reinvestment Proceeds, but including Net
Proceeds consisting of former Reinvestment Proceeds the time for
reinvestment of which elapsed during such fiscal year without such
reinvestment having been effected) over the aggregate principal amount of
Term Loans prepaid pursuant to Section 2.10(c) in respect of such Net
Proceeds; plus
----
(c) depreciation, amortization, non-cash Interest Expense and other
non-cash charges or losses, in each case, of the Company Group deducted in
determining such Adjusted Consolidated Net Income (or loss) for such fiscal
year; plus
----
(d) the amount, if any, by which Net Working Capital decreased during
such fiscal year; minus
-----
(e) the sum of (i) any non-cash gains of the Company Group included in
determining such Adjusted Consolidated Net Income (or loss) for such fiscal
year plus (ii) the amount, if any, by which Net Working Capital increased
during such fiscal year; minus
-----
(f) the sum of (i) Capital Expenditures of the Company Group for such
fiscal year (except to the extent attributable to the incurrence of Capital
Lease Obligations or otherwise financed by incurring Indebtedness) plus
----
(ii) cash consideration paid by the Company Group during such fiscal year
to make Permitted Business Acquisitions or other capital investments
(except to the extent financed by incurring Indebtedness); minus
-----
(g) the aggregate principal amount of long-term Indebtedness
(including pursuant to Capital Lease Obligations) repaid or prepaid by the
Company and the Company Group Subsidiaries during such fiscal year,
excluding (i) Indebtedness in respect of Revolving Loans and Letters of
Credit, (ii) Term Loans prepaid pursuant to Section 2.10(c) or (d), and
(iii) repayments or prepayments of long-term Indebtedness financed by
incurring other Indebtedness.
"Excluded Taxes" means, with respect to the Agent, any Lender, the
--------------
Issuing Bank, a Participant or any other recipient of any payment to be made by
or on account of any obligation of the Company or any Borrower hereunder, (a)
income or franchise taxes imposed on (or measured by) its net income by the
United States of America, or by any jurisdiction under the laws of which such
recipient is authorized to do business 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
described in clause (a) above, (c) taxes imposed by reason of the Agent, any
Lender, the Issuing Bank or any other recipient of any payment described herein
doing business in the jurisdiction imposing such tax, other than solely as a
result of the Loan Documents or any transaction contemplated hereby, and (d) in
the case of a Foreign Lender (other than an assignee pursuant to a request by
the Company under Section 2.19(b)) or a Participant that would be a Foreign
Lender if it were a Lender, any withholding tax that (i) is in effect and would
apply to amounts payable to such Foreign Lender or Participant at the time such
Foreign Lender becomes a party to this Agreement (or designates a new lending
office) or such Participant becomes a Participant, 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 Company with respect to any withholding tax pursuant to Section
2.17(a), or (ii) is attributable to such Foreign Lender's failure to comply with
Section 2.17(e) or such Participant's failure to comply with Section 9.04(f).
"Executive Officer" means the chief executive officer, the president,
-----------------
the chief financial officer or the treasurer of the Company.
"Existing Letter of Credit" means each letter of credit previously
-------------------------
issued by Summit Bank for the account of the Company or a Borrower that (i) is
outstanding on the Effective Date and (ii) is listed on Schedule 2.04(a).
"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 Agent from three Federal funds brokers of
recognized standing selected by it.
"Financial Officer" means the chief financial officer, chief
-----------------
accounting officer, treasurer or controller of the Company.
"Financing 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, the use of the proceeds thereof and the issuance of Letters
of Credit hereunder.
"Fixed Charges" means, for any fiscal period, the sum of (a) Cash
-------------
Interest Expense for such period, plus (b) all cash payments of Federal, state,
----
local and foreign income taxes of the Company and its Restricted Subsidiaries
during such period, plus (c) scheduled principal amortization of Total Debt for
----
such period.
"Foreign Lender" means any Lender that is organized under the laws of
--------------
a jurisdiction other than that in which the Company or any Borrower is located.
For purposes of this definition, the United States of America, each State
thereof and the District of Columbia shall be deemed to constitute a single
jurisdiction.
"Foreign Subsidiary" means any Subsidiary that is organized under the
------------------
laws of a jurisdiction other than the United States of America or any State
thereof or the District of Columbia.
"Funded Debt" means, as of any date, all Indebtedness for borrowed
-----------
money of the Company and its Restricted Subsidiaries, determined on a
consolidated basis, which by its terms matures more than one year after such
date, and any such Indebtedness for borrowed money maturing within one year from
such date which is renewable or extendible at the option of the obligor to a
date more than one year from such date.
"GAAP" means generally accepted accounting principles in the United
----
States of America.
"GC Revolving Borrowing" means a Revolving Borrowing (or portion
----------------------
thereof) designated as a GC Revolving Borrowing by a Borrower (or by the Company
on behalf of a Borrower) in the Borrowing Request relating thereto.
"Governmental Authority" means the government of the United States of
----------------------
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Guarantee" of or by any Person (the "guarantor") means any
--------- ---------
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or operating lease payment
obligations 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 lease 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 lease 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 lease obligation or (d) as an
account party in respect of any letter of credit or letter of guaranty issued to
support such Indebtedness or lease obligation; provided, that the term Guarantee
--------
shall not include endorsements for collection or deposit in the ordinary course
of business.
"Guarantee Agreements" means the Company Guarantee Agreement and the
--------------------
Subsidiary Guarantee Agreement.
"Hazardous Materials" means all explosive or radioactive substances
-------------------
or wastes and all hazardous or toxic materials, substances, wastes or other
pollutants or contaminants, including petroleum or petroleum distillates,
asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes, in each case, which are regulated pursuant to any
Environmental Law.
"Hedging Agreement" means any interest rate protection agreement,
-----------------
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"HomeLink" means HomeLink Communications of Princeton, L.P., a New
--------
Jersey limited partnership, 80% of the outstanding Equity Interests of which
are, on the date hereof, owned by the Company.
"Homes Passed" means the total number of residential premises which
------------
have the potential to be connected to the advanced fiber network operated by the
Company or a Restricted Subsidiary (excluding any areas where required
regulatory authorizations for such connections have not been obtained).
"Indebtedness" of any Person means, without duplication, (a) all
------------
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by any Lien on property owned or acquired by such
Person, whether
or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by
such Person of Indebtedness of others, (h) all Capital Lease Obligations of such
Person, (i) all obligations, contingent or otherwise, of such Person as an
account party in respect of letters of credit and letters of guaranty, (j) all
net payments that such Person would have to make in the event of an early
termination, on the date on which Indebtedness is being determined, in respect
of outstanding Hedging Agreements and (k) all obligations, contingent or
otherwise, of such Person in respect of bankers' acceptances. 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.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
-----------------
"Information Memorandum" means the Confidential Information Memorandum
----------------------
dated April, 1999, relating to the Company and the Financing Transactions.
"Interest Election Request" means a request by a Borrower (or by the
-------------------------
Company on behalf of a Borrower) to convert or continue a Revolving Borrowing or
Term Borrowing in accordance with Section 2.06.
"Interest Expense" means, for any fiscal period, the amount of
----------------
interest expense of the Company and its Restricted Subsidiaries on a
consolidated basis for such fiscal period, determined in accordance with
Adjusted Accounting Principles.
"Interest Payment Date" means (a) with respect to any ABR Loan, the
---------------------
last day of each March, June, September and December, (b) with respect to any
Eurodollar 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 Eurodollar 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 Eurodollar Borrowing, the
---------------
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as a Borrower (or the Company on its behalf) 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.
"Intertainer" means Intertainer Inc., a Delaware corporation, of
-----------
which, on the date hereof, the Company owns 272,728 shares of Series C
convertible preferred stock, Sub Series 1, par value $.001 which represents less
than 10% of all outstanding convertible preferred stock in that class.
"Investment Subsidiary" means a Wholly Owned Restricted Subsidiary of
---------------------
the Company and a Subsidiary Loan Party hereunder which is formed or utilized
for the sole purpose of holding and owning Equity Interests of Subsidiaries
(including Joint Venture Subsidiaries) and other Equity Interests and
investments in third parties. On the date hereof, RCN International Holdings,
Inc. and RCN Telecom Services of Washington D.C., Inc. are Investment
Subsidiaries.
"Issuing Bank" means each of The Chase Manhattan Bank, in its capacity
------------
as the issuer of Letters of Credit hereunder, and Summit Bank, in its capacity
as the issuer of the Existing Letters of Credit, and, in each case, its
successors in such capacity as provided in Section 2.04(i). Each Issuing Bank
may, in its discretion, arrange for one or more Letters of Credit to be issued
by Affiliates of the Issuing Bank, in which case the term "Issuing Bank" shall
include any such Affiliate with respect to Letters of Credit issued by such
Affiliate.
"Joint Venture Subsidiary" means RCN-BecoCom and its subsidiaries,
------------------------
Starpower and its subsidiaries and any other Subsidiary of the Company that is
not a Wholly Owned Subsidiary, in each case, so long as it remains a Subsidiary
that is not a Wholly Owned Subsidiary.
"JuniorNet" means JuniorNet Corporation, a Delaware corporation, 47%
---------
of the outstanding Equity Interests of which are, on the date hereof, owned by
the Company.
"LC Disbursement" means a payment made by the Issuing Bank pursuant to
---------------
a Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate undrawn
-----------
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf
of any Borrower at such time. The LC Exposure of any Revolving Lender at any
time shall be its Applicable Percentage of the total LC Exposure at such time.
"Lenders" means the Persons listed on Schedule 2.01 and any other
-------
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance.
"Letter of Credit" means any letter of credit (including each Existing
----------------
Letter of Credit) issued pursuant to this Agreement.
"Leverage Ratio" means, on any date, the ratio of (i) Total Debt,
--------------
minus the Cash Adjustment, outstanding on such date to (ii) Annualized EBITDA
determined as of the last day of the fiscal quarter most recently ended on or
prior to such date.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
---------
Interest Period, the rate appearing on Page 3750 of the Telerate Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the Agent from
time to time for purposes of providing quotations of interest rates applicable
to dollar deposits in the London interbank market) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period, as the rate for dollar deposits with a maturity comparable to such
Interest Period. In the event that such rate is not available at such time for
any reason, then the "LIBO Rate" with respect to such Eurodollar Borrowing for
---------
such Interest Period shall be the rate (rounded upwards, if necessary, to the
next 1/16 of 1%) 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 Agent 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.
"License" means any license issued by the Federal Communications
-------
Commission to the Company or any Subsidiary under the Communications Act.
"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 intended as security) 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 and the Security Documents.
--------------
"Loan Parties" means the Company, the Borrowers and the Subsidiary
------------
Loan Parties.
"Loans" means the loans made by the Lenders to the Borrowers pursuant
-----
to this Agreement.
"Material Adverse Effect" means a material adverse effect on (a) the
-----------------------
business, operations or financial condition of the Company, the Borrowers and
the Restricted Subsidiaries taken as a whole, (b) the ability of the Loan
Parties and their subsidiaries, taken as a whole, to perform the obligations
under the Loan Documents or (c) the rights of or benefits available to the
Lenders under the Loan Documents.
"Material Indebtedness" means Indebtedness (other than the Loans and
---------------------
Letters of Credit), or obligations in respect of one or more Hedging Agreements,
of any one or more of the Company, the Borrowers and the Restricted Subsidiaries
in an aggregate principal amount exceeding $10,000,000. For purposes of
determining Material Indebtedness, the "principal amount" of the obligations of
the Company, the Borrowers or any Restricted Subsidiary in respect of any
Hedging Agreement at any time shall be the maximum aggregate amount (giving
effect to any netting agreements) that the Company, the Borrowers or any
Restricted Subsidiary would be required to pay if such Hedging Agreement were
terminated at such time.
"Megacable" means Megacable S.A. DE C.V., a sociedad anonima de
---------
capital variable organized under the laws of the United Mexican States, 40% of
the outstanding Equity Interests of which are, on the date hereof, owned by the
Company.
"Moody's" means Xxxxx'x Investors Service, Inc.
-------
"Mortgage" means a mortgage, deed of trust, assignment of leases and
--------
rents, leasehold mortgage or other security document granting a Lien on any
Mortgaged Property to secure the Obligations.
"Mortgaged Property" means, initially, each parcel of real property
------------------
with a book value of at least $100,000 (provided that the aggregate book value
of such properties
with a book value not in excess of $100,000 shall not exceed $1,000,000) and the
improvements thereto owned by a Loan Party and identified on Schedule 3.05, and
includes each other parcel of real property and improvements thereto with
respect to which a Mortgage is granted pursuant to Section 5.12 or 5.13.
"Multiemployer Plan" means a multiemployer plan as defined in Section
------------------
4001(a)(3) of ERISA to which any Borrower or any ERISA Affiliate has any actual
or contingent liability.
"Net Proceeds" means, with respect to any event (a) the cash proceeds
------------
received in respect of such event including (i) any cash received in respect of
any non-cash proceeds, but only as and when received, (ii) in the case of a
casualty, insurance proceeds, and (iii) in the case of a condemnation or similar
event, condemnation awards and similar payments, net of (b) the sum of (i) all
reasonable fees and out-of-pocket expenses paid by the Company, the Borrowers
and the Restricted Subsidiaries to third parties (other than Affiliates) in
connection with such event, (ii) in the case of a sale, transfer or other
disposition of an asset (including pursuant to a sale and leaseback transaction
or a casualty or a condemnation or similar proceeding), the amount of all
payments required to be made by the Company, the Borrowers and the Restricted
Subsidiaries as a result of such event to repay Indebtedness (other than Loans)
secured by such asset or otherwise subject to mandatory prepayment as a result
of such event, and (iii) the amount of all taxes paid (or reasonably estimated
to be payable) by the Company, the Borrowers and the Restricted Subsidiaries and
the amount of any reserves established by the Company, the Borrowers and the
Restricted Subsidiaries to fund contingent liabilities reasonably estimated to
be payable, and that are directly attributable to such event (as determined
reasonably and in good faith by the chief financial officer of the Company),
provided that if any such reserves are subsequently reversed or released an
amount equal to the amount of such reversal or release shall be deemed to
constitute Net Proceeds received at the time of such reversal or release.
"Net Working Capital" means, at any date, (a) the consolidated current
-------------------
assets of the Company and the Company Group Subsidiaries as of such date
(excluding cash and Permitted Investments) minus (b) the consolidated current
liabilities of the Company and the Company Group Subsidiaries as of such date
(excluding current liabilities in respect of Indebtedness). 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.
"Obligations" has the meaning assigned to such term in the Security
-----------
Agreement.
"On-Net Connections" means the number of customer connections for
------------------
customers receiving internet access, cable TV or telephony communications
services (each such service being deemed a separate connection) on the advanced
fiber network of the Company, the Borrowers or any of their Subsidiaries and
whose service payments are not overdue to a point where service is generally
disconnected.
"Other Taxes" means any and all present or future recording, stamp,
-----------
documentary, excise, transfer, sales, property or similar taxes, charges or
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.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
----
defined in ERISA and any successor entity performing similar functions.
"Perfection Certificate" means a certificate in the form of Annex 1 to
----------------------
the Security Agreement or any other form approved by the Agent.
"Permitted Business Acquisitions" means any acquisition by the Company
-------------------------------
or a Company Group Subsidiary of all or substantially all the assets of, or
Equity Interests in, a Person or division or line of business of a Person which,
in any case, is engaged in a telecommunications business contemplated by the
definition of Telecommunications Assets and is acquired as a going concern;
provided, that any entity acquired in connection with a Permitted Business
--------
Acquisition executes and delivers a Subsidiary Guarantee Agreement, the Security
Agreement and all other applicable Security Documents, including, if applicable,
the Pledge Agreement.
"Permitted Debt" means unsecured senior or subordinated Indebtedness
--------------
of the Company issued after the Effective Date which (i) does not mature or
provide for any scheduled amortization (by way of repurchase, sinking fund,
repayment or otherwise) until the date that is six months after the Tranche B
Maturity Date and (ii) is not Guaranteed by any Subsidiary.
"Permitted Encumbrances" means:
----------------------
(a) Liens imposed by law for taxes that are not yet due or are being
contested in compliance with Section 5.05;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's,
processors' and other like Liens imposed by law, arising in the ordinary
course of
business and securing obligations that are not overdue by more than 60 days
or are being contested in compliance with Section 5.05;
(c) pledges and deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other
social security laws or regulations and deposits securing liability to
insurance carriers under insurance or self-insurance arrangements;
(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature, in each case in the ordinary course
of business;
(e) liens of attachments, judgments or awards in respect of judgments
that do not constitute an Event of Default hereunder and in respect of
which adequate reserves have been established in accordance with Adjusted
Accounting Principles;
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business and customary landlord's reservations under leases under
which the Company or a Subsidiary is a lessee, that do not secure any
monetary obligations and do not materially detract from the value of the
affected property or interfere with the ordinary conduct of business of the
Company, the Borrowers or any Subsidiary;
(g) restrictions on the transfer or pledge of assets contained in any
License or imposed by the Communications Act, comparable state or local
legislation, regulations or ordinances or the terms of cable TV franchises.
(h) leases or subleases granted to others not interfering in any
material respect with the business of the Company, the Borrowers and their
Subsidiaries taken as a whole and any interest or title of a lessor under
any lease not prohibited by this Agreement;
(i) ground leases in respect of real property on which facilities
owned or leased by the Company, the Borrowers or their Subsidiaries are
located;
(j) the filing of financing statements regarding leases not prohibited
by this Agreement; and
(k) with respect to each Mortgaged Property, the exceptions listed in
the title insurance policy relating to such Mortgaged Property;
provided that the term "Permitted Encumbrances" shall not include any Lien
--------
securing Indebtedness for borrowed money.
"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 within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, the
highest credit rating obtainable from S&P or from Moody's;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within 180 days from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts
issued or offered by, any domestic office of any commercial bank organized
under the laws of the United States of America or any State thereof which
has a combined capital and surplus and undivided profits of not less than
$500,000,000;
(d) fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (a) above and entered into
with a financial institution satisfying the criteria described in clause
(c) above; and
(e) such other investments as are approved by the Agent (any
investment consistent with the RCN Investment Policy Guidelines in effect
on the date hereof and heretofore delivered to the Agent being deemed
approved).
"Person" means any natural person, corporation, limited liability
------
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
----
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which a Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) a "contributing sponsor" as defined in Section
4001(a)(13) of ERISA.
"Pledge Agreement" means the Pledge Agreement, substantially in the
----------------
form of Exhibit G, among the Company, the Borrower, the Subsidiary Loan Parties
and the Agent for the benefit of the Secured Parties.
"Prepayment Event" means:
----------------
(a) any sale, transfer or other disposition (including pursuant to a
sale and leaseback transaction) of any property or asset of the Company or
any Company Group Subsidiary (including of any Equity Interest in a
Subsidiary owned by the Company or any Company Group Subsidiary) and any
return of capital to the Company or any Company Group Subsidiary of all or
any portion of its investment in any Joint Venture Subsidiary other than
(i) dispositions described in clauses (a) and (b) of Section 6.05 and (ii)
any such dispositions of property or assets by, or returns of capital to,
the Company or Company Group Subsidiaries resulting in aggregate Net
Proceeds not exceeding $5,000,000 during any fiscal year of the Company; or
(b) any casualty or other insured damage to, or any taking under power
of eminent domain or by condemnation or similar proceeding of, any property
or asset of the Company or any Company Group Subsidiary, but only to the
extent that the Net Proceeds therefrom have not been applied to repair,
restore or replace such property or asset within 270 days of the receipt
thereof (or within 6 months of a binding commitment entered into during
such 270 day period); or
(c) the receipt by the Company or any Company Group Subsidiary of any
dividend or distribution from any Joint Venture Subsidiary that is
designated or otherwise identifiable as a dividend or distribution of any
portion of the proceeds to such Joint Venture Subsidiary of a sale or
disposition of any of its property or assets, a casualty or condemnation
affecting its assets or property or any similar event or the issuance of
any Equity Interest in such Joint Venture Subsidiary.
"Prime Rate" means the rate of interest per annum publicly announced
----------
from time to time by The Chase Manhattan Bank as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"Purchase Money Indebtedness" means Indebtedness incurred to finance
---------------------------
the acquisition, construction or improvement of any fixed or capital assets,
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, and
extensions, renewals and replacements of any such Indebtedness that do not
increase the outstanding principal amount thereof; provided such Indebtedness is
--------
incurred prior to or within 270 days after such acquisition or the completion of
such construction or improvement.
"RCN-BecoCom" means RCN-BecoCom LLC, a Massachusetts limited liability
-----------
company, approximately 56% of the outstanding Equity Interests of which are, on
the date hereof, owned by the Company.
"RCN-BecoCom Group" means RCN-BecoCom and its subsidiaries.
-----------------
"Register" has the meaning set forth in Section 9.04.
--------
"Reinvestment Proceeds" means Net Proceeds (i) received from an event
---------------------
described in clause (a) or (c) of the definition of the term Prepayment Event
relating to the sale of Telecommunications Assets as to which the Company has
made an election to reinvest in Telecommunications Assets in accordance with the
provisions of Section 2.10 and in respect of which the time for such
reinvestment under Section 2.10 has not expired and (ii) insurance proceeds or
condemnation awards received in respect of casualty or condemnation events which
do not yet constitute a Prepayment Event because the period provided for by
clause (b) of the definition of Prepayment Event for utilizing such proceeds to
repair, restore or replace the relevant asset has not yet expired. Upon
expiration of the period referred to above for reinvestment or for utilization
to repair, restore or replace, as the case may be, such Net Proceeds shall, if
not theretofore utilized for such purpose, automatically cease to be
Reinvestment Proceeds for purposes hereof and for purposes of the definition of
Excess Cash Flow, shall be deemed to have been received at such time by the
Company as Net Proceeds.
"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.
"Related Fund" means with respect to any Lender that is a fund that
------------
invests in bank loans in the ordinary course in business, any other fund that
invests in bank loans in the ordinary course of business and is advised or
managed by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.
"Required Lenders" means, at any time, Lenders having Revolving
----------------
Exposures, Term Loans and unused Commitments representing more than 50% of the
sum of the total Revolving Exposures, outstanding Term Loans and unused
Commitments at such time.
"Required Reductions" shall have the meaning assigned to such term in
-------------------
Section 2.09(a).
"Restricted Payment" means any dividend or other distribution (whether
------------------
in cash, securities or other property) with respect to any Equity Interests of
the Company, the Borrowers or any Restricted Subsidiary, or any payment (whether
in cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancelation or termination of any such Equity Interests of the Company, the
Borrowers or any Restricted Subsidiary or any option, warrant or other right to
acquire any such Equity Interests of the Company, the Borrowers or any
Restricted Subsidiary.
"Restricted Subsidiary" means each Borrower and each other Subsidiary
---------------------
of the Company that has not been designated by the Company as an Unrestricted
Subsidiary pursuant to and in compliance with Section 6.11. On the date hereof,
all Subsidiaries of the Company are Restricted Subsidiaries.
"Revolving Availability Period" means the period from and including
-----------------------------
the Effective Date to but excluding the earlier of the Revolving Maturity Date
and the date of termination of the Revolving Commitments.
"Revolving Commitment" means, with respect to each Lender, the
--------------------
commitment, if any, of such Lender to make Revolving Loans and to acquire
participations in Letters of Credit hereunder, expressed as an amount
representing the maximum aggregate amount of such Lender's Revolving Exposure
hereunder, as such commitment may be (a) reduced from time to time pursuant to
Section 2.07 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 Revolving Commitment is set forth on Schedule 2.01, or in the
Assignment and Acceptance pursuant to which such Lender shall have assumed its
Revolving Commitment, as applicable. The initial aggregate amount of the
Lenders' Revolving Commitments is $250,000,000.
"Revolving Exposure" means, with respect to any Lender at any time,
------------------
the sum of the outstanding principal amount of such Lender's Revolving Loans and
its LC Exposure at such time.
"Revolving Lender" means a Lender with a Revolving Commitment or, if
----------------
the Revolving Commitments have terminated or expired, a Lender with Revolving
Exposure.
"Revolving Loan" means a Loan made pursuant to clause (c) of Section
--------------
2.01.
"Revolving Maturity Date" means the date that is seven years after the
-----------------------
Effective Date.
"S&P" means Standard & Poor's Ratings Services, a division of the
---
McGraw Hill Companies.
"Secured Parties" has the meaning assigned to such term in the
---------------
Security Agreement.
"Security Agreement" means the Security Agreement, substantially in
------------------
the form of Exhibit F, among the Borrowers, the Company, the Subsidiary Loan
Parties and the Agent for the benefit of the Secured Parties.
"Security Documents" means the Security Agreement, the Pledge
------------------
Agreement, the Guarantee Agreements, the Indemnity, Subrogation and Contribution
Agreement, the Mortgages and each other security agreement or other instrument
or document executed and delivered pursuant to Section 5.12 or 5.13 to secure
any of the Obligations.
"Senior Secured Debt" means, at any date, all Indebtedness of the
-------------------
Company and its Restricted Subsidiaries on such date (i) that would be reflected
as a liability on a consolidated balance sheet of the Company and its Restricted
Subsidiaries prepared as of such date in accordance with Adjusted Accounting
Principles and (ii) is secured by any Lien on any of the assets or properties
(including, without limitation, Equity Interests of Subsidiaries) of the Company
and the Restricted Subsidiaries.
"Significant Subsidiary" means any Restricted Subsidiary of the
----------------------
Company with either (i) total assets with a book value of at least $50,000 or
(ii) revenue totaling at least $1,000,000 in the fiscal year most recently
ended.
"Starpower" means Starpower Communications, LLC, a Delaware limited
---------
liability company, 50% of the outstanding Equity Interests of which are, on the
date hereof, owned by the Company.
"Starpower Group" means Starpower and its subsidiaries.
---------------
"subsidiary" means, with respect to any Person (the "parent") at any
---------- ------
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance
with Adjusted Accounting Principles as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
of which securities or other ownership interests representing more than 50% of
the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held by the parent and one or more subsidiaries of
the parent.
"Subsidiary" means any subsidiary of the Company; provided that RCN-
---------- --------
BecoCom and Starpower (and their subsidiaries) shall be deemed Subsidiaries (and
consolidated Subsidiaries of the Company for purposes of Adjusted Accounting
Principles) so long as the Company owns, directly or through Subsidiaries,
Equity Interests representing at least 50% of the ordinary voting power or at
least 50% of the outstanding Equity Interests of RCN-BecoCom or Starpower, as
the case may be.
"Subsidiary Guarantee Agreement" means the Subsidiary Guarantee
------------------------------
Agreement, substantially in the form of Exhibit D, made by the Subsidiary Loan
Parties in favor of the Agent for the benefit of the Secured Parties.
"Subsidiary Loan Party" means any Wholly Owned Restricted Subsidiary
---------------------
that is a Significant Subsidiary and is not a Foreign Subsidiary.
"TA Revolving Borrowing" means a Revolving Borrowing (or portion
----------------------
thereof) designated as a TA Revolving Borrowing by a Borrower (or by the Company
on behalf of a Borrower) in the Borrowing Request relating thereto.
"Taxes" means any and all present or future taxes, levies, imposts,
-----
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Telecommunications Assets" means properties or assets to be utilized
-------------------------
directly or indirectly for the design, development, construction, installation,
integration, management or provision of any telecommunications business,
including voice, video and data transmission products, services and systems and
any business reasonably related to the foregoing.
"Term Loans" means Tranche A Term Loans and Tranche B Term Loans.
----------
"Total Debt" means, at any date, all Indebtedness of the Company and
----------
its Restricted Subsidiaries on such date that would be reflected as a liability
on a consolidated balance sheet of the Company and its Restricted Subsidiaries
prepared as of such date in accordance with Adjusted Accounting Principles.
"Tranche A Availability Period" means the period from and including
-----------------------------
the Effective Date to but excluding the earlier of the Tranche A Commitment
Termination Date and the date of termination of the Tranche A Commitments.
"Tranche A Commitment" means, with respect to each Lender, the
--------------------
commitment, if any, of such Lender to make Tranche A Term Loans hereunder,
expressed as an amount representing the maximum principal amount of the Tranche
A Term Loans to be made by such Lender hereunder, as such commitment may be (a)
reduced from time to time pursuant to Section 2.07 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 Tranche A Commitment is set
forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to which
such Lender shall have assumed its Tranche A Commitment, as applicable. The
initial aggregate amount of the Lenders' Tranche A Commitments is $250,000,000.
"Tranche A Commitment Termination Date" means the date that is two
-------------------------------------
years and six months after the Effective Date.
"Tranche A Lender" means a Lender with a Tranche A Commitment or an
----------------
outstanding Tranche A Term Loan.
"Tranche A Maturity Date" means the date that is seven years after the
-----------------------
Effective Date.
"Tranche A Term Loan" means a Loan made pursuant to clause (a) of
-------------------
Section 2.01.
"Tranche B Commitment" means, with respect to each Lender, the
--------------------
commitment, if any, of such Lender to make a Tranche B Term Loan hereunder on
the Effective Date, expressed as an amount representing the maximum principal
amount of the Tranche B Term Loan to be made by such Lender hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.07 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 Tranche B
Commitment is set forth on Schedule 2.01, or in the Assignment and Acceptance
pursuant to which such Lender shall have assumed its Tranche B Commitment, as
applicable. The initial aggregate amount of the Lenders' Tranche B Commitments
is $500,000,000.
"Tranche B Lender" means a Lender with a Tranche B Commitment or an
----------------
outstanding Tranche B Term Loan.
"Tranche B Maturity Date" means the date that is eight years after the
-----------------------
Effective Date.
"Tranche B Term Loan" means a Loan made pursuant to clause (b) of
-------------------
Section 2.01.
"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 LIBO Rate or the Alternate Base
Rate.
"Unrestricted Subsidiary" means any Subsidiary of the Company other
-----------------------
than a Borrower that has been designated as an Unrestricted Subsidiary by the
Company pursuant to and in compliance with Section 6.11. Any such designation
shall be irrevocable, and no Unrestricted Subsidiary may become a Restricted
Subsidiary (including pursuant to any merger, consolidation or transfer of
assets involving a Restricted Subsidiary).
"Wholly Owned subsidiary" of any Person shall mean a subsidiary of
-----------------------
such Person of which securities or other ownership interests (except for
directors' qualifying shares and other de minimis amounts of outstanding
securities or ownership interests) representing 100% of the equity or 100% of
the ordinary voting power or 100% of the general partnership interests are, at
the time any determination is being made, owned, controlled or held by such
Person or one or more Wholly Owned subsidiaries of such Person or by such Person
and one or more Wholly Owned subsidiaries of such Person.
"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
----
"Revolving Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type
----
(e.g., a "Eurodollar Revolving Loan"). Borrowings also may be classified and
-----
referred to by Class (e.g., a "Revolving Borrowing") or by Type (e.g., a
---- ----
"Eurodollar Borrowing") or by Class and Type (e.g., a "Eurodollar Revolving
----
Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein shall
----------------
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including"
shall be deemed to be followed by the phrase "without limitation". The word
"will" shall be construed to have the same meaning and effect as the word
"shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to
such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.04. Accounting Terms; Adjusted Accounting Principles.
-------------------------------------------------
Except as otherwise expressly provided herein, all terms of an accounting or
financial nature shall be construed in accordance with Adjusted Accounting
Principles, including GAAP as in effect from time to time; provided that, if the
--------
Company notifies the Agent that the Company requests an amendment to any
provision hereof to eliminate the effect of any change occurring after the date
hereof in GAAP or in the application thereof on the operation of such provision
(or if the Agent notifies the Company 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 Adjusted
Accounting Principles and 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. Whenever financial statements
are required to be prepared or delivered hereunder in accordance with Adjusted
Accounting Principles, such financial statements need not include footnotes and
other disclosures that would otherwise be required by GAAP in respect of
financial statements including Starpower as a consolidated Subsidiary of the
Company.
ARTICLE II
The Credits
-----------
SECTION 2.01. Commitments. Subject to the terms and conditions set
------------
forth herein, each Lender agrees (a) to make Tranche A Term Loans to the
Borrowers from time to time during the Tranche A Availability Period in an
aggregate principal amount not exceeding its Tranche A Commitment, (b) to make
a Tranche B Term Loan to the Borrowers on the Effective Date in a principal
amount not exceeding its Tranche B Commitment and (c) to make Revolving Loans to
the Borrowers from time to time during the Revolving Availability Period in an
aggregate principal amount that will not result in such Lender's Revolving
Exposure exceeding such Lender's Revolving Commitment; provided that no GC
Revolving Borrowing shall be made to the extent that, after giving effect
thereto, the aggregate amount of GC Revolving Borrowings outstanding would
exceed $150,000,000. Within the foregoing limits and subject to the terms and
conditions set forth herein, the Borrowers may borrow, prepay and reborrow
Revolving Loans. Amounts repaid in respect of Term Loans may not be reborrowed.
SECTION 2.02. Loans and Borrowings. (a) Each Loan shall be made as
---------------------
part of a Borrowing consisting of Loans of the same Class and Type made by the
Lenders ratably in accordance with their respective Commitments of the
applicable Class. 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.
(b) Subject to Section 2.14, each Revolving Borrowing and Term
Borrowing shall be comprised entirely of ABR Loans or Eurodollar Loans as the
Borrowers may request in accordance herewith. The entire amount of each
Revolving Borrowing shall consist of a TA Revolving Borrowing, a GC Revolving
Borrowing or a combination thereof. Each Lender at its option may make any
Eurodollar 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 Borrowers to repay such Loan in accordance with the
terms of this Agreement.
(c) At the commencement of each Interest Period for any Eurodollar
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $1,000,000 and not less than $10,000,000. At the time that each ABR
Borrowing is made, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000 and not less than $5,000,000; provided that a
--------
Eurodollar Borrowing or an ABR Revolving Borrowing may be in an aggregate amount
that is equal to the entire unused balance of the total
Revolving Commitments or that is required to finance the reimbursement of an LC
Disbursement as contemplated by Section 2.04(e). Each Tranche A Term Borrowing
shall be in an amount that is an integral multiple of $1,000,000 and not less
than $50,000,000. Borrowings of more than one Type and Class may be outstanding
at the same time; provided that there shall not at any time be more than a total
--------
of 15 Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrowers shall not be entitled to (i) request, or to elect to convert or
continue, any Borrowing if the Interest Period requested with respect thereto
would end after the Revolving Maturity Date, Tranche A Maturity Date or Tranche
B Maturity Date, as applicable, or (ii) request any GC Revolving Borrowing
which, if made, would cause the aggregate outstanding amount of GC Revolving
Borrowings to exceed $150,000,000.
SECTION 2.03. Requests for Borrowings. To request a Revolving
------------------------
Borrowing or Term Borrowing, a Borrower (or the Company on behalf of a Borrower)
shall notify the Agent of such request by telephone (a) in the case of a
Eurodollar Borrowing, not later than 12:00 p.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 10:00 a.m., New York City time, on the date of the
proposed Borrowing; provided that any such notice of an ABR Revolving Borrowing
--------
to finance the reimbursement of an LC Disbursement as contemplated by Section
2.04(e) may be given not later than 11:00 a.m., New York City time, on 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
Agent of a written Borrowing Request in a form approved by the Agent and signed
by the relevant Borrower or by the Company on behalf of a Borrower. Each such
telephonic and written Borrowing Request shall specify the following information
in compliance with Section 2.02:
(i) whether the requested Borrowing is to be a Revolving Borrowing,
a Tranche A Term Borrowing or a Tranche B Term Borrowing;
(ii) the aggregate amount of such Borrowing and, in the case of a
Revolving Borrowing, the amount or amounts thereof that are to constitute a
TA Revolving Borrowing or a GC Revolving Borrowing;
(iii) the date of such Borrowing, which shall be a Business Day;
(iv) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;
(v) in the case of a Eurodollar Borrowing, the initial Interest Period
to be applicable thereto, which shall be a period contemplated by the
definition of the term "Interest Period"; and
(vi) the relevant Borrower and the location and number of such
Borrower's account to which funds are to be disbursed, which shall comply
with the requirements of Section 2.07.
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 Eurodollar Revolving Borrowing, then the relevant
Borrower shall be deemed to have selected an Interest Period of one month's
duration. Promptly following receipt of a Borrowing Request in accordance with
this Section, the 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. Letters of Credit. (a) General. Upon the Effective
------------------ --------
Date, the Existing Letters of Credit will automatically, without any action on
the part of any Person, be deemed to be Letters of Credit issued hereunder for
the account of the Borrowers for all purposes of this Agreement and the other
Loan Documents. In addition, subject to the terms and conditions set forth
herein, any Borrower (or the Company on behalf of a Borrower) may request the
issuance of Letters of Credit for such Borrower's account, in a form reasonably
acceptable to the Agent and the Issuing Bank, at any time and from time to time
during the Revolving Availability Period. In the event of any inconsistency
between the terms and conditions of this Agreement and the terms and conditions
of any form of letter of credit application or other agreement submitted by or
on behalf of the relevant Borrower to, or entered into by the relevant Borrower
with, an Issuing Bank relating to any Letter of Credit, the terms and conditions
of this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
----------------------------------------------------------
Conditions. To request the issuance of a Letter of Credit (or the amendment,
-----------
renewal or extension of an outstanding Letter of Credit), a Borrower (or the
Company on behalf of a Borrower) shall hand deliver or telecopy (or transmit by
electronic communication, if arrangements for doing so have been approved by the
Issuing Bank) to the Issuing Bank and the Agent (reasonably in advance of the
requested date of issuance, amendment, renewal or extension) a notice requesting
the issuance of a Letter of Credit, or identifying the Letter of Credit to be
amended, renewed or extended, and specifying the date of issuance, amendment,
renewal or extension (which shall be a Business Day), the date on which such
Letter of Credit is to expire (which
shall comply with paragraph (c) of this Section), the amount of such Letter of
Credit, the name and address of the beneficiary thereof and such other
information as shall be necessary to prepare, amend, renew or extend such Letter
of Credit. If requested by the Issuing Bank, the relevant Borrower also shall
submit a letter of credit application on the Issuing Bank's standard form in
connection with any request for a Letter of Credit. A Letter of Credit shall be
issued, amended, renewed or extended only if (and upon issuance, amendment,
renewal or extension of each Letter of Credit the Borrowers shall be deemed to
represent and warrant that), after giving effect to such issuance, amendment,
renewal or extension (i) the LC Exposure shall not exceed $15,000,000 and (ii)
the total Revolving Exposures shall not exceed the total Revolving Commitments.
(c) Expiration Date. Each Letter of Credit shall expire at or prior
----------------
to the close of business on the earlier of (i) the date one year after the date
of the issuance of such Letter of Credit (provided that, subject to clause (ii)
--------
of this sentence, a Letter of Credit issued hereunder may provide for automatic
renewal for successive periods of one year if the Issuing Bank has the option to
cancel such Letter of Credit by giving notice not less than 60 days prior to
each renewal date) and (ii) the date that is five Business Days prior to the
Revolving Maturity Date.
(d) Participations. By the issuance of a Letter of Credit (or an
---------------
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Revolving Lender, and each Revolving Lender hereby
acquires from the Issuing Bank, a participation in such Letter of Credit equal
to such Lender's Applicable Percentage of the aggregate amount available to be
drawn under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Revolving Lender hereby absolutely and unconditionally agrees to
pay to the Agent, for the account of the Issuing Bank, such Lender's Applicable
Percentage of each LC Disbursement made by the Issuing Bank and not reimbursed
by the relevant Borrower on the date due as provided in paragraph (e) of this
Section, or of any reimbursement payment required to be refunded to the
Borrowers for any reason. Each Lender acknowledges and agrees that its
obligation to acquire participations pursuant to this paragraph in respect of
Letters of Credit is absolute and unconditional and shall not be affected by any
circumstance whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or reduction or
termination of the Commitments, and that each such payment shall be made without
any offset, abatement, withholding or reduction whatsoever.
(e) Reimbursement. If an Issuing Bank shall make any LC Disbursement
--------------
in respect of a Letter of Credit, the relevant Borrower shall reimburse such LC
Disbursement by paying to the Agent an amount equal to such LC Disbursement not
later than 12:00 noon, New York City time, on the date that such LC Disbursement
is made, if the relevant Borrower shall have received notice of such LC
Disbursement prior to 10:00 a.m., New York City time, on such date and such day
is a Business Day, or, if such notice has not been received by the relevant
Borrower prior to such time on such date, then not later than 12:00 noon, New
York City time, on (i) the Business Day that the relevant Borrower receives such
notice, if such notice is received prior to 10:00 a.m., New York City time, on
the day of receipt, or (ii) the Business Day immediately following the day that
the relevant Borrower receives such notice, if such notice is not received prior
to such time on the day of receipt; provided that, if such LC Disbursement is
--------
not less than $5,000,000, the relevant Borrower may, subject to the conditions
to borrowing set forth herein, request in accordance with Section 2.03 that such
payment be financed with an ABR Revolving Borrowing in an equivalent amount and,
to the extent so financed, the relevant Borrower's obligation to make such
payment shall be discharged and replaced by the resulting ABR Revolving
Borrowing. If the relevant Borrower fails to make such payment when due, the
Agent shall notify each Revolving Lender of the applicable LC Disbursement, the
payment then due from the relevant Borrower in respect thereof and such Lender's
Applicable Percentage thereof. Promptly following receipt of such notice, each
Revolving Lender shall pay to the Agent its Applicable Percentage of the payment
then due from the relevant Borrower, in the same manner as provided in Section
2.05 with respect to Loans made by such Lender (and Section 2.05 shall apply,
mutatis mutandis, to the payment obligations of the Revolving Lenders), and the
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Agent shall promptly pay to the Issuing Bank the amounts so received by it from
the Revolving Lenders. Promptly following receipt by the Agent of any payment
from the relevant Borrower pursuant to this paragraph, the Agent shall
distribute such payment to the Issuing Bank or, to the extent that Revolving
Lenders have made payments pursuant to this paragraph to reimburse the Issuing
Bank, then to such Lenders and the Issuing Bank as their interests may appear.
Any payment made by a Revolving Lender pursuant to this paragraph to reimburse
the Issuing Bank for any LC Disbursement (other than the funding of ABR
Revolving Loans as contemplated above) shall not constitute a Loan and shall
not relieve the relevant Borrower of its obligation to reimburse such LC
Disbursement.
(f) Obligations Absolute. A Borrower's obligation to reimburse LC
---------------------
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not strictly
comply with the terms of such Letter of Credit, or (iv) any other event or
circumstance whatsoever, whether or not similar to any of the foregoing, that
might, but for the provisions of this Section, constitute a legal or equitable
discharge of, or provide a right of setoff against, a Borrower's obligations
hereunder. Neither the Agent, the Lenders nor the Issuing Bank, nor any of
their Related Parties, shall have any liability or responsibility by reason of
or in connection with the issuance or transfer of any Letter of Credit or any
payment or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; provided that the foregoing shall not be construed to excuse the
--------
Issuing Bank from liability to the relevant Borrower to the extent of any direct
damages (as opposed to consequential damages, claims in respect of which are
hereby waived by the Borrowers to the extent permitted by applicable law)
suffered by the relevant Borrower that are caused by the Issuing Bank's failure
to exercise commercially reasonable care when determining whether drafts and
other documents presented under a Letter of Credit comply with the terms
thereof. The parties hereto expressly agree that, in the absence of gross
negligence or wilful misconduct on the part of the Issuing Bank (as finally
determined by a court of competent jurisdiction), the Issuing Bank shall be
deemed to have exercised care in each such determination. In furtherance of the
foregoing and without limiting the generality thereof, the parties agree that,
with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Bank
may, in its sole discretion, either accept and make payment upon such documents
without responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make
payment upon such documents if such documents are not in strict compliance with
the terms of such Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly
------------------------
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Agent and the relevant Borrower by telephone (confirmed by telecopy)
of such demand for payment and whether the Issuing Bank has made or will make an
LC Disbursement thereunder; provided that any failure to give or delay in giving
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such notice shall not relieve the relevant Borrower of its obligation to
reimburse the Issuing Bank and the Revolving Lenders with respect to any such LC
Disbursement.
(h) Interim Interest. If an Issuing Bank shall make any LC
-----------------
Disbursement, then, unless the relevant Borrower shall reimburse such LC
Disbursement in full on the date such LC Disbursement is made, the unpaid amount
thereof shall bear interest, for each day from and including the date such LC
Disbursement is made to but excluding the date that the relevant Borrower
reimburses such LC Disbursement, at the rate per annum then applicable to ABR
Revolving Loans; provided that, if the relevant Borrower fails to reimburse such
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LC Disbursement when due pursuant to paragraph (e) of this Section, then Section
2.13(c) shall apply. Interest accrued pursuant to this paragraph shall be for
the account of the Issuing Bank, except that interest accrued on and after the
date of payment by any Revolving Lender pursuant to paragraph (e) of this
Section to reimburse the Issuing Bank shall be for the account of such Lender to
the extent of such payment.
(i) Replacement of an Issuing Bank. An Issuing Bank may be replaced
-------------------------------
at any time by written agreement among the Borrowers, the Agent, the replaced
Issuing Bank and the successor Issuing Bank. The Agent shall notify the Lenders
in writing of any such replacement of an Issuing Bank. At the time any such
replacement shall become effective, the Borrowers shall pay all unpaid fees
accrued for the account of the replaced Issuing Bank pursuant to Section
2.12(b). From and after the effective date of any such replacement, (i) the
successor Issuing Bank shall have all the rights and obligations of an Issuing
Bank under this Agreement with respect to Letters of Credit to be issued
thereafter and (ii) references herein to the term "Issuing Bank" shall be deemed
to refer to such successor or to any previous Issuing Bank, or to such successor
and all previous Issuing Banks, as the context shall require. After the
replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain
a party hereto and shall continue to have all the rights and obligations of an
Issuing Bank under this Agreement with respect to Letters of Credit issued by it
prior to such replacement, but shall not be required to issue additional Letters
of Credit.
(j) Cash Collateralization. If any Event of Default shall occur and
-----------------------
be continuing, on the Business Day that the Company receives notice from the
Agent or the Required Lenders (or, if the maturity of the Loans has been
accelerated, Revolving Lenders with LC Exposure representing greater than 50% of
the total LC Exposure) demanding the deposit of cash collateral pursuant to this
paragraph, the Borrowers shall deposit in an account with the Agent, in the name
of the Agent and for the benefit of the Lenders, an amount in cash equal to the
LC Exposure as of such date plus any accrued and unpaid interest thereon;
provided that the obligation to deposit such cash collateral shall become
--------
effective immediately, and such deposit shall become immediately due and
payable, without demand or other notice of any kind, upon the occurrence of any
Event of Default with respect to the Company or any Borrower described in clause
(h) or (i) of Article VII. Each such deposit shall be held by the Agent as
collateral for the payment and performance of the obligations of the Borrowers
under this Agreement. The Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal, over such account. Other than any
interest earned on the investment of such deposits, which investments shall be
made at the option and sole discretion of the Agent and at the Borrowers' risk
and expense, such deposits shall not bear interest. Interest or profits, if
any, on such investments shall accumulate in such account. Moneys in such
account shall be applied by the Agent to reimburse the Issuing Bank for LC
Disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of
the Borrowers for the LC Exposure at such time or, if the maturity of the Loans
has been accelerated (but subject to the consent of Revolving Lenders with LC
Exposure representing greater than 50% of the total LC Exposure), be applied to
satisfy other obligations of the Borrowers under this Agreement. If any
Borrower is required to provide an amount of cash collateral hereunder as a
result of the occurrence of an Event of Default, such amount (to the extent not
applied as aforesaid) shall be returned to such Borrower within three Business
Days after all Defaults have been cured or waived.
SECTION 2.05. 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 Agent most recently designated by it for such purpose by
notice to the Lenders. The Agent will make such Loans available to the
requesting Borrower by promptly crediting the amounts so received, in like
funds, to an account of such Borrower maintained with the Agent in New York City
and designated in the applicable Borrowing Request; provided that ABR Revolving
--------
Loans made to finance
the reimbursement of an LC Disbursement as provided in Section 2.04(e) shall be
remitted by the Agent to the Issuing Bank.
(b) Unless the 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 Agent such Lender's share of such Borrowing, the 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 relevant Borrower a corresponding amount. In such event, if a
Lender has not in fact made its share of the Borrowing available to the Agent,
then the applicable Lender and the relevant Borrower severally agree to pay to
the Agent forthwith on demand such corresponding amount with interest thereon,
for each day from and including the date such amount is made available to such
Borrower to but excluding the date of payment to the Agent, at (i) in the case
of such Lender, the greater of the Federal Funds Effective Rate and a rate
determined by the Agent in accordance with banking industry rules on interbank
compensation or (ii) in the case of a Borrower, the interest rate applicable to
ABR Loans. If such Lender pays such amount to the Agent, then such amount shall
constitute such Lender's Loan included in such Borrowing.
SECTION 2.06. Interest Elections. (a) Each Revolving Borrowing and
-------------------
Term Borrowing initially shall be of the Type specified in the applicable
Borrowing Request and, in the case of a Eurodollar Borrowing, shall have an
initial Interest Period as specified in such Borrowing Request. Thereafter, the
relevant Borrower (or the Company on its behalf) may elect to convert such
Borrowing to a different Type or to continue such Borrowing and, in the case of
a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section. The relevant Borrower (or the Company on its behalf) may elect
different options with respect to different portions of the affected Borrowing,
in which case each such portion shall be allocated ratably among the Lenders
holding the Loans comprising such Borrowing, and the Loans comprising each such
portion shall be considered a separate Borrowing.
(b) To make an election pursuant to this Section, the applicable
Borrower (or the Company on its behalf) shall notify the Agent of such election
by telephone by the time that a Borrowing Request would be required under
Section 2.03 if the Borrower were requesting a Revolving 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 Agent of a written
Interest Election Request in a form approved by the Agent and signed by the
relevant Borrower (or the Company on its behalf).
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:
(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 an ABR Borrowing or a
Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar 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 Eurodollar 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
Agent shall advise each Lender of the details thereof and of such Lender's
portion of each resulting Borrowing.
(e) If a Borrower or the Company fails to deliver a timely Interest
Election Request with respect to a Eurodollar 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 and the Agent, at the request
of the Required Lenders, so notifies the Borrowers, then, so long as an Event of
Default is continuing (i) no outstanding Borrowing may be converted to or
continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar
Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.
SECTION 2.07. Termination and Optional Reduction of Commitments. (a)
--------------------------------------------------
Unless previously terminated, (i) the Tranche B Commitments shall terminate at
5:00 p.m., New York
City time, on the Effective Date, (ii) the Tranche A Commitments shall terminate
on the Tranche A Commitment Termination Date and (iii) the Revolving Commitments
shall terminate on the Revolving Maturity Date.
(b) The Borrowers may at any time terminate, or from time to time
reduce, the Commitments of any Class; provided that (i) each reduction of the
--------
Commitments of any Class shall be in an amount that is an integral multiple of
$1,000,000 and not less than $5,000,000 and (ii) the Borrowers shall not
terminate or reduce the Revolving Commitments if, after giving effect to any
concurrent prepayment of the Revolving Loans in accordance with Section 2.11,
the sum of the Revolving Exposures would exceed the total Revolving Commitments.
Each optional reduction of the Revolving Commitments occurring after the sixth
anniversary of the Effective Date will be applied to ratably reduce the amounts
of any remaining Required Reductions.
(c) The Company shall, on behalf of the Borrowers, notify the Agent
of any election to terminate or reduce the Commitments under paragraph (b) of
this Section, at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Agent shall advise the
Lenders of the contents thereof. Each notice delivered by the Company pursuant
to this Section shall be irrevocable; provided that a notice of termination of
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the Revolving Commitments delivered by the Company may state that such notice is
conditioned upon the effectiveness of other credit facilities, in which case
such notice may be revoked by the Company (by notice to the Agent on or prior to
the specified effective date) if such condition is not satisfied. Any
termination or reduction of the Commitments of any Class shall be permanent.
Each reduction of the Commitments of any Class shall be made ratably among the
Lenders in accordance with their respective Commitments of such Class.
SECTION 2.08. Repayment of Loans; Evidence of Debt. (a) Each
-------------------------------------
Borrower, on a joint and several basis, hereby unconditionally promises to pay
(i) to the Agent for the account of each Lender the then unpaid principal amount
of each Revolving Loan of such Lender on the Revolving Maturity Date and (ii) to
the Agent for the account of each Lender the then unpaid principal amount of
each Term Loan of such Lender as provided in Section 2.09.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of each of the Borrowers 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.
(c) The 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 each of the Borrowers to each
Lender hereunder and (iii) the amount of any sum received by the 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
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amounts of the obligations recorded therein; provided that the failure of any
--------
Lender or the Agent to maintain such accounts or any error therein shall not in
any manner affect the obligations of the Borrowers 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 Borrowers shall prepare,
execute and deliver to such Lender a promissory note payable to the order of
such Lender (or, if requested by such Lender, to such Lender and its registered
assigns) and in a form approved by the Agent. 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 2.09. Automatic Revolving Commitment Reductions; Amortization
-------------------------------------------------------
of Term Loans. (a) The aggregate amount of the Lenders' Revolving Commitments
--------------
shall automatically and permanently reduce (i) on the sixth anniversary of the
Effective Date, by an amount, if any, necessary to reduce the outstanding
Revolving Commitments to $175,000,000 and (ii) on each of the dates that are
three months, six months, nine months and one year after the sixth anniversary
of the Effective Date, by an amount equal to 25% of the amount of the Revolving
Commitments in effect on such sixth anniversary, after giving effect to any
reduction pursuant to clause (i) of this sentence (the reductions required by
this clause (ii) being referred to as "Required Reductions").
(b) Subject to adjustment pursuant to paragraph (e) of this Section,
the Borrowers shall repay Tranche A Term Borrowings outstanding on the Tranche A
Commitment Termination Date in 16 consecutive quarterly installments of
principal, the first of which will be due and payable on the date that is three
years and three months after the Effective Date and each subsequent installment
of which will be due and payable on each successive date which is three
months after the preceding installment date, in each case in the amount
(expressed as a percentage of the aggregate amount of Tranche A Term Loans
outstanding on the Tranche A Commitment Termination Date) set forth opposite
such quarterly installment below:
Installments Amount Per Installment
------------ ----------------------
1-4 3.75%
5-8 5.00%
9-12 6.25%
13-16 10.00%
(c) Subject to adjustment pursuant to paragraph (e) of this Section,
the Borrowers shall repay all outstanding Tranche B Term Borrowings in 20
consecutive quarterly installments of principal the first of which will be due
and payable on the date that is three years and three months after the Effective
Date and each subsequent installment of which will be due and payable on each
successive date which is three months after the preceding installment date, in
each case in the amount set forth opposite such quarterly installment below:
Installments Amount Per Installment
------------ ----------------------
1-16 $ 1,000,000
17-20 $121,000,000
(d) To the extent not previously paid, (i) all Tranche A Term Loans
shall be due and payable on the Tranche A Maturity Date and (ii) all Tranche B
Term Loans shall be due and payable on the Tranche B Maturity Date.
(e) So long as both Tranche A Term Borrowings and Tranche B Term
Borrowings are outstanding, each prepayment of Term Borrowings (other than
pursuant to paragraph (b) or (c) of this Section) will be allocated ratably
between outstanding Tranche A Term Borrowings and Tranche B Term Borrowings
based on the aggregate outstanding principal amounts thereof. Any prepayment of
a Term Borrowing of either Class shall be applied to reduce the subsequent
scheduled repayments of the Term Borrowings of such Class to be made pursuant to
this Section ratably. If the initial aggregate amount of the Lenders' Tranche B
Term Commitments exceeds the aggregate principal amount of Term Loans of such
Class that are made on the Effective Date, then the scheduled repayments of Term
Borrowings of such Class to be made pursuant to this Section shall be reduced
ratably by an aggregate amount equal to such excess.
(f) Prior to any repayment of any Term Borrowings of either Class
pursuant to paragraph (b) or (c) of this Section, the Company shall select the
Borrowing or Borrowings of the applicable Class to be repaid and shall notify
the Agent by telephone (confirmed by telecopy) of such selection not later than
12:00 p.m., New York City time, three Business Days before the scheduled date of
such
repayment. At the election of the Company, each repayment of a Borrowing shall
be applied ratably to the Loans included in the repaid Borrowing. Repayments of
Term Borrowings shall be accompanied by accrued interest on the amount repaid.
SECTION 2.10. Prepayment of Loans. (a) The Borrowers shall have the
--------------------
right at any time and from time to time to prepay any Borrowing in whole or in
part, subject to the requirements of this Section and Section 2.11.
(b) In the event and on such occasion that the sum of the Revolving
Exposures exceeds the total Revolving Commitments, the Borrowers shall prepay
Revolving Borrowings (or, if no such Borrowings are outstanding, deposit cash
collateral in an account with the Agent pursuant to Section 2.04(j)) in an
aggregate amount equal to such excess.
(c) In the event and on each occasion that any Net Proceeds are
received by or on behalf of the Company or any Company Group Subsidiary in
respect of any Prepayment Event, the Borrowers shall, within five Business Days
after such Net Proceeds are received, prepay Term Borrowings in an aggregate
amount equal to such Net Proceeds; provided that, in the case of any event
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described in clause (a) of the definition of the term Prepayment Event relating
to the sale of Telecommunications Assets or any event described in clause (c) of
such definition constituting a distribution by a Joint Venture Subsidiary of Net
Proceeds received by it from the sale of Telecommunications Assets, if the
Company shall deliver to the Agent a certificate of a Financial Officer to the
effect that the Company and the Borrowers intend to apply the Net Proceeds from
such event (or a portion thereof specified in such certificate), within 12
months of the receipt of such Net Proceeds or within 6 months of a binding
commitment entered into during such 12 month period to acquire other
Telecommunications Assets and certifying that no Event of Default has occurred
and is continuing, then no prepayment shall be required pursuant to this
paragraph in respect of the Net Proceeds in respect of such event (or the
portion of such Net Proceeds specified in such certificate, if applicable)
except to the extent of any such Net Proceeds therefrom that have not been so
applied by the end of such period, at which time a prepayment shall be required
in an amount equal to such Net Proceeds that have not been so applied.
(d) Following the end of each fiscal year of the Company, commencing
with the fiscal year ending December 31, 2002, the Borrowers shall prepay Term
Borrowings in an aggregate amount equal to 50% of Excess Cash Flow for such
fiscal year. Each prepayment pursuant to this paragraph shall be made on or
before the date on which financial
statements are delivered pursuant to Section 5.01 with respect to the fiscal
year for which Excess Cash Flow is being calculated (and in any event within 90
days after the end of such fiscal year).
(e) Prior to any optional or mandatory prepayment of Borrowings
pursuant to this Section, the Company shall select the Borrowing or Borrowings
to be prepaid and shall specify such selection in the notice of such prepayment
pursuant to paragraph (f) of this Section. In the event of any optional or
mandatory prepayment of Term Borrowings made at a time when Term Borrowings of
both Classes remain outstanding, the Company shall select Term Borrowings to be
prepaid so that the aggregate amount of such prepayment is allocated between the
Tranche A Term Borrowings and Tranche B Term Borrowings pro rata based on the
aggregate principal amount of outstanding Borrowings of each such Class.
(f) The Company shall notify the Agent (confirmed by telecopy) of any
prepayment hereunder (i) in the case of prepayment of a Eurodollar Borrowing,
not later than 11:00 a.m., New York City time, three Business Days before the
date of prepayment or (ii) in the case of prepayment of an ABR Borrowing, not
later than 11:00 a.m., New York City time, one Business Day before the date of
prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date, the principal amount of each Borrowing or portion thereof to be
prepaid (including, in the case of a Revolving Borrowing, whether the Borrowing
or portion thereof being repaid is a GC Revolving Borrowing or a TA Revolving
Borrowing) and, in the case of a mandatory prepayment, a reasonably detailed
calculation of the amount of such prepayment; provided that, if a notice of
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optional prepayment is given in connection with a conditional notice of
termination of the Revolving Commitments as contemplated by Section 2.07(c),
then such notice of prepayment may be revoked if such notice of termination is
revoked in accordance with Section 2.07(c). Promptly following receipt of any
such notice, the Agent shall advise the Lenders of the contents thereof. Each
partial prepayment of any Borrowing shall be in an amount that would be
permitted in the case of an advance of a Borrowing of the same Type as provided
in Section 2.02, except as necessary to apply fully the required amount of a
mandatory prepayment. Each prepayment of a Borrowing shall be applied ratably
to the Loans included in the prepaid Borrowing. Prepayments shall be
accompanied by accrued interest to the extent required by Section 2.13 and
provided further that no prepayment of Term Loans need be made under this
paragraph (c) until the aggregate amount of Net Proceeds received in respect of
which prepayments are otherwise required to be made equals or exceeds
$5,000,000, at which time a prepayment shall be made in an aggregate amount
equal to all such Net Proceeds in respect of which no such prepayment has yet
been made.
Section 2.11. Tranche B Facility Prepayment Fee. Voluntary and
----------------------------------
mandatory prepayments of Tranche B Term Loans pursuant to Section 2.10, and
repayments of Tranche B Term Loans as a result of acceleration upon an Event of
Default consisting of the occurrence of a Change in Control, in each case made
prior to the second anniversary of the Effective Date, shall be accompanied by
payment by the Borrowers of a prepayment fee as follows:
(A) if such prepayment or repayment is made on or before the first
anniversary of the Effective Date, a fee equal to 2% of the
amount of such prepayment or repayment, and
(B) if such prepayment or repayment is made thereafter but on or
before the second anniversary of the Effective Date, a fee equal
to 1% of the amount of such prepayment or repayment.
SECTION 2.12. Fees. (a) The Borrowers, jointly and severally, agree
-----
to pay to the Agent for the account of each Lender a commitment fee, which shall
accrue at the Applicable Rate on the daily unused amount of each Commitment of
such Lender for each day during the period from and including the date of this
Agreement to but excluding the date on which such Commitment terminates.
Accrued commitment fees shall be payable in arrears on the last day of March,
June, September and December of each year and on the date on which any
Commitment of such Lender shall expire or terminate, commencing on the first
such date to occur after the date hereof. All commitment fees shall be computed
on the basis of a year of 365 or 366 days and actual days elapsed. For purposes
of computing commitment fees with respect to Revolving Commitments, a Revolving
Commitment of a Lender shall be deemed to be used to the extent of the
outstanding Revolving Loans and LC Exposure of such Lender.
(b) The Borrowers, jointly and severally, agree to pay (i) to the
Agent for the account of each Revolving Lender a participation fee with respect
to its participations in Letters of Credit, which shall accrue at the same
Applicable Rate as interest on Eurodollar Revolving Loans on the average daily
amount of such Lender's LC Exposure (excluding any portion thereof attributable
to unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date on which such Lender's
Revolving Commitment terminates and the date on which such Lender ceases to have
any LC Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue
at the rate or rates per annum separately agreed upon between the relevant
Borrower and the Issuing Bank in a fee letter dated as of the Effective Date
on the average daily amount of the LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the date of
termination of the Revolving Commitments and the date on which there ceases to
be any LC Exposure, as well as the Issuing Bank's standard fees with respect to
the issuance, amendment, renewal or extension of any Letter of Credit or
processing of drawings thereunder. Participation fees and fronting fees accrued
through and including the last day of March, June, September and December of
each year shall be payable on the third Business Day following such last day,
commencing on the first such date to occur after the Effective Date; provided
--------
that all such fees shall be payable on the date on which the Revolving
Commitments terminate and any such fees accruing after the date on which the
Revolving Commitments terminate shall be payable on demand. Any other fees
payable to the Issuing Bank pursuant to this paragraph shall be payable within
10 days after demand. All participation fees and fronting fees shall be
computed on the basis of a year of 365 or 366 days, as the case may be, and
shall be payable for the actual number of days elapsed (including the first day
but excluding the last day).
(c) The Company agrees to pay to the Agent, for its own account, fees
payable in the amounts and at the times separately agreed upon between the
Company and the Agent.
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Agent (or to the Issuing Bank, in the case
of fees payable to it) for distribution, in the case of commitment fees and
participation fees, to the Lenders entitled thereto. Fees paid shall not be
refundable under any circumstances unless paid in the absence of an obligation
to pay such fee.
SECTION 2.13. Interest. (a) The Loans comprising each ABR Borrowing
---------
shall bear interest at the Alternate Base Rate plus the Applicable Spread.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at the LIBO Rate for the Interest Period in effect for such Borrowing
plus the Applicable Spread.
(c) Notwithstanding the foregoing, if any principal of or interest on
any Loan or any fee or other amount payable by any 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 (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided in the preceding paragraphs
of this Section or (ii) in the case of any other amount, 2% plus the rate
applicable to ABR
Revolving Loans as provided in paragraph (a) of this Section.
(d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and, in the case of Revolving Loans, upon
termination of the Revolving Commitments; 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 (other than a prepayment of
an ABR Revolving Loan prior to the end of the Revolving Availability Period),
accrued interest on the principal amount repaid or prepaid shall be payable on
the date of such repayment or prepayment and (iii) in the event of any
conversion of any Eurodollar 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
LIBO Rate shall be determined by the Agent, and such determination shall be
conclusive absent manifest error.
SECTION 2.14. Alternate Rate of Interest. If prior to the
---------------------------
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Agent determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for
ascertaining the LIBO Rate for such Interest Period; or
(b) the Agent is advised by the Required Lenders that the LIBO Rate
for such Interest Period will not adequately and fairly reflect the cost to
such Lenders (or Lender) of making or maintaining their Loans (or its Loan)
included in such Borrowing for such Interest Period;
then the Agent shall give notice thereof to the Company and the Lenders by
telephone or telecopy as promptly as practicable thereafter and, until the Agent
notifies the Company 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
Eurodollar Borrowing shall be ineffective and (ii) if any Borrowing Request
requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR
Borrowing.
SECTION 2.15. Increased Costs. (a) If any Lender shall give notice
----------------
to the Agent and the Company at any time to the effect that Eurocurrency Reserve
Requirements are, or are scheduled to become, effective and that such Lender is
or will be generally subject to such Eurocurrency Reserve Requirements as a
result of which such Lender will incur additional costs (other than Taxes or
amounts relating to Taxes), then such Lender shall, for each day from the later
of the date of such notice and the date on which such Eurocurrency Reserve
Requirements become effective, be entitled to additional interest on each
Eurodollar Loan made by it at a rate per annum determined for such day (rounded
upward to the nearest 100th of 1%) equal to the remainder obtained by
subtracting (i) the LIBO Rate for such Eurodollar Loan from (ii) the rate
obtained by dividing such LIBO Rate by a percentage equal to 100% minus the
then-applicable Eurocurrency Reserve Requirements. Such additional interest
will be payable in arrears to the Agent, for the account of such Lender, on each
Interest Payment Date relating to such Eurodollar Loan and on any other date
when interest is required to be paid hereunder with respect to such Loan. Any
Lender which gives a notice under this paragraph (a) shall promptly withdraw
such notice (by written notice of withdrawal given to the Agent and the Company)
in the event Eurocurrency Reserve Requirements cease to apply to it or the
circumstances giving rise to such notice otherwise cease to exist.
(b) 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 Eurocurrency Reserve
Requirement in respect of which an interest rate adjustment in favor of
such Lender is in effect pursuant to paragraph (a) of this Section) or the
Issuing Bank; or
(ii) impose on any Lender or the Issuing Bank or the London interbank
market any other condition affecting this Agreement or Eurodollar Loans
made by such Lender or any Letter of Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost (other than
Taxes or amounts relating to Taxes) to such Lender of making or maintaining any
Eurodollar Loan (or of maintaining its obligation to make any such Loan) or to
increase the cost (other than Taxes or amounts relating to Taxes) to such Lender
or the Issuing Bank of participating in, issuing or maintaining any Letter of
Credit or to reduce the amount of any sum received or receivable by such Lender
or the Issuing Bank hereunder (whether of principal, interest or otherwise),
then the Borrowers will pay to such Lender or the Issuing Bank, as the case may
be, such additional amount or amounts as will compensate such Lender or the
Issuing Bank, as the case may be, for such additional costs incurred or
reduction suffered.
(c) If any Lender or the Issuing Bank 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 or the Issuing Bank's capital or on the capital
of such Lender's or the Issuing Bank's holding company, if any, as a consequence
of this Agreement or the Loans made by, or participations in Letters of Credit
held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a
level below that which such Lender or the Issuing Bank or such Lender's or the
Issuing Bank's holding company could have achieved but for such Change in Law
(taking into consideration such Lender's or the Issuing Bank's policies and the
policies of such Lender's or the Issuing Bank's holding company with respect to
capital adequacy), then from time to time the Borrowers will pay to such Lender
or the Issuing Bank, as the case may be, such additional amount or amounts as
will compensate such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company for any such reduction suffered.
(d) A certificate of a Lender or the Issuing Bank setting forth in
reasonable detail the amount or amounts necessary to compensate such Lender or
the Issuing Bank or its holding company, as the case may be, as specified in
paragraph (b) or (c) of this Section and the determination thereof shall be
delivered to the Company and shall be conclusive absent demonstrable error. The
Borrowers shall pay such Lender or the Issuing Bank, as the case may be, the
amount shown as due on any such certificate within 10 days after receipt
thereof.
(e) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation; provided
--------
that the Borrowers shall not be required to compensate a Lender or the Issuing
Bank pursuant to this Section for any increased costs or reductions incurred
more than 270 days prior to the date that such Lender or the Issuing Bank, as
the case may be, notifies the Company of the Change in Law giving rise to such
increased costs or reductions and of such Lender's or the Issuing Bank's
intention to claim compensation therefor; provided further that, if the Change
-------- -------
in Law giving rise to such increased costs or reductions is retroactive, then
the 270-day period referred to above shall be extended to include the period of
retroactive effect thereof.
SECTION 2.16. Break Funding Payments. In the event of (a) the
-----------------------
payment of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Eurodollar Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked
under Section 2.10(f) and is revoked in accordance therewith), or (d) the
assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Company or a Borrower
pursuant to Section 2.19, then, in any such event, the Borrowers shall
compensate each Lender for the loss, cost and expense attributable to such event
(but not for any loss of Applicable Spread). In the case of a Eurodollar 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 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 in reasonable detail any amount or
amounts that such Lender is entitled to receive pursuant to this Section and the
determination thereof shall be delivered to the Company and shall be conclusive
absent demonstrable error. The Borrowers shall pay such Lender the amount shown
as due on any such certificate within 10 days after receipt thereof.
SECTION 2.17. Taxes. (a) Any and all payments by or on account of
------
any obligation of the Borrowers, the Company or any Subsidiary 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 a Borrower,
--------
the Company or any Subsidiary shall be required by law or regulation 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 Agent, Lender or Issuing Bank (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) such Borrower, the Company or such Subsidiary shall make such deductions
and (iii) such
Borrower, the Company or any Subsidiary, as the case may be, shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) In addition, the Borrowers, the Company and any Subsidiary shall
pay any Other Taxes to the relevant Governmental Authority in accordance with
applicable law.
(c) The Borrowers shall, jointly and severally, indemnify the Agent,
each Lender and the Issuing Bank, within 15 days after written demand therefor,
for the full amount of any Indemnified Taxes or Other Taxes required to be paid
by the Agent, such Lender or the Issuing Bank, as the case may be, on or with
respect to any payment by or on account of any obligation of the Borrowers, the
Company or any Subsidiary 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. After the Agent, such Lender or the
Issuing Bank learns of the imposition of such Indemnified Taxes or Other Taxes,
such party will act in good faith to promptly notify the Borrowers of its
obligations thereunder. A certificate setting forth in reasonable detail the
amount of such payment or liability and the determination thereof delivered to
the Company by a Lender or the Issuing Bank, or by the Agent on its own behalf
or on behalf of a Lender or the Issuing Bank, shall be conclusive absent
demonstrable error.
(d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrowers, the Company or any Subsidiary to a Governmental
Authority, the Company shall deliver to the Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Agent.
(e) Each Foreign Lender listed on the signature pages hereof, before
it signs and delivers this Agreement (and before it becomes a Foreign Lender in
the case of each other Foreign Lender) and from time to time thereafter, before
the date any such form expires or becomes obsolete or invalid, shall provide the
Company and the Agent with Internal Revenue Service Form 1001, 4224 or W-8 in
duplicate, as appropriate, or any successor form prescribed by the Internal
Revenue Service, (i) certifying that such Foreign Lender is entitled to benefits
under an income tax treaty to which the United States is a party which exempts
the Foreign Lender from United States withholding tax or reduces the rate of
withholding tax on payments of interest for the account of such Foreign Lender,
(ii) certifying that
the income receivable pursuant to this Agreement is effectively connected with
the conduct of such Lender's trade or business in the United States and exempt
from United States withholding tax or (iii) claiming exemption from United
States withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of "portfolio interest". Notwithstanding any other provision of this
Section 2.17(e), each such Lender shall not be required to deliver any form
pursuant to this Section 2.17(e) that such Lender is not legally able to deliver
(i) at the time such Lender becomes a party to this Agreement or (ii) to the
extent that such failure is due to a change in treaty, law, regulation or any
action by the Borrower occurring subsequent to the date on which such form
originally was required to be provided pursuant to this Section 2.17(e).
(f) If any Foreign Lender or Participant receives a refund of any
Taxes or Other Taxes as to which it has been indemnified by the Borrower or with
respect to which the Borrower has paid additional amounts pursuant to this
Section 2.17, it shall pay over such refund to the Borrower (but only to the
extent of indemnity payments made, or additional amounts paid, by the Borrower
under this Section 2.17 with respect to the Taxes or Other Taxes giving rise to
such refund), net of all out-of-pocket expenses of the Foreign Lender 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 such Foreign Lender, agrees to repay the amount paid over to the
Borrower pursuant to this Section 2.17(f) (plus any penalties, interest or other
charges imposed by the relevant Governmental Authority) to the Foreign Lender in
the event such Foreign Lender is required to repay such refund to such
Governmental Authority. Nothing contained in this Section 2.17(f) shall require
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 2.18. Payments Generally; Pro Rata Treatment; Sharing of Set-
------------------------------------------------------
offs. (a) The Borrowers shall make each payment required to be made by them
-----
hereunder or under any other Loan Document (whether of principal, interest, fees
or reimbursement of LC Disbursements, or of amounts payable under Section 2.15,
2.16 or 2.17, or otherwise) prior to the time expressly required hereunder or
under such other Loan Document for such payment (or, if no such time is
expressly required, prior to 1:00 p.m., New York City time), on the date when
due, in immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
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 Agent at its offices at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, except payments
to be made directly to the Issuing Bank as
expressly provided herein and except that payments pursuant to Sections 2.15
(other than paragraph (a) thereof), 2.16, 2.17 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 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 Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, 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
and unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements 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 Revolving Loans, Term Loans or participations in LC
Disbursements resulting in such Lender receiving payment of a greater proportion
of the aggregate amount of its Revolving Loans, Term Loans and participations in
LC Disbursements 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 Revolving Loans, Term
Loans and participations in LC Disbursements 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 Revolving Loans, Term Loans and
participations in LC Disbursements; provided that (i) if any such participations
--------
are purchased and all or any portion of the payment giving rise thereto is
recovered, such participations shall be rescinded and the purchase price
restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by the Company or any 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 or participations in LC Disbursements to any
assignee or participant, other than to the Company or any Subsidiary or
Affiliate thereof (as to which the provisions of this paragraph shall apply).
The Company and the Borrowers consent to the foregoing and agree, to the extent
they may effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Company and the Borrowers rights of set-off and counterclaim with respect to
such participation as fully as if such Lender were a direct creditor of the
Company or the Borrowers in the amount of such participation.
(d) Unless the Agent shall have received notice from the Company
prior to the date on which any payment is due to the Agent for the account of
the Lenders or the Issuing Bank hereunder that a Borrower will not make such
payment, the Agent may assume that the relevant Borrower has made such payment
on such date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders or the Issuing Bank, as the case may be, the amount
due. In such event, if the relevant Borrower has not in fact made such payment,
then each of the Lenders or the Issuing Bank, as the case may be, severally
agrees to repay to the Agent forthwith on demand the amount so distributed to
such Lender or Issuing Bank 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 Agent, at the greater of the Federal Funds Effective Rate and a
rate determined by the Agent in accordance with banking industry rules on
interbank compensation.
(e) If any Lender shall fail to make any payment required to be made
by it pursuant to Section 2.04(d) or (e), 2.05(b), 2.18(d) or 9.03(c), then the
Agent may, in its discretion (notwithstanding any contrary provision hereof),
apply any amounts thereafter received by the Agent for the account of such
Lender to satisfy such Lender's obligations under such Sections until all such
unsatisfied obligations are fully paid.
SECTION 2.19. Mitigation Obligations; Replacement of Lenders. (a)
-----------------------------------------------
If any Lender requests compensation under Section 2.15, or if the Company or any
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.17,
then 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 2.15 or 2.17, 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 Company and the Borrowers hereby agree to pay all reasonable costs and
expenses incurred by any Lender in connection with any such designation or
assignment.
(b) If any Lender requests compensation under Section 2.15 (other
than under paragraph (a) thereof), or if the Company or any Borrower is required
to pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.17, or if any Lender defaults in its
obligation to fund Loans hereunder, then the Company may, at its sole expense
and effort, upon notice to such Lender and the 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 Company shall have received the prior written
--------
consent of the Agent (and, if a Revolving Commitment is being assigned, the
Issuing Bank), which consent shall not unreasonably be withheld or delayed and
(ii) such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in LC Disbursements,
accrued interest thereon, accrued fees and all other amounts payable to it
hereunder or pursuant to any other Loan Document, from the assignee (to the
extent of such outstanding principal and accrued interest and fees) or the
Company or any Borrower (in the case of all other amounts). 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
Company to require such assignment and delegation cease to apply.
ARTICLE III
Representations and Warranties
------------------------------
Each of the Company and the Borrowers represents and warrants to the
Lenders that:
SECTION 3.01. Organization; Powers. Each of the Company, the
---------------------
Borrowers and their Restricted Subsidiaries is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization, has
all requisite power and authority to carry on its business as now conducted and,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, is qualified to
do business in, and is in good standing in, every jurisdiction where such
qualification is required.
SECTION 3.02. Authorization; Enforceability. The Transactions to be
------------------------------
entered into by each Loan Party are within such Loan Party's corporate powers
and have been duly authorized by all necessary corporate and, if required,
stockholder action. This Agreement has been duly executed and delivered by each
of the Company and the Borrowers 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 valid and binding obligation of the Company, the
Borrowers or such Loan Party (as the case may be), enforceable in accordance
with its terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, 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 Financing
-------------------------------------
Transactions (a) do not require any consent or approval of, registration or
filing with, or any other action by, any Governmental Authority, except (i) such
as have been obtained or made and are in full force and effect and except
filings necessary to perfect Liens created under the Loan Documents and (ii)
filing with, and approval by, the New Jersey Board of Public Utilities of the
security interests in certain collateral and perfection thereof, (b) will not
violate any applicable law or regulation or the charter, by-laws or other
organizational documents of the Company, the Borrowers or any of their
Restricted Subsidiaries or any order of any Governmental Authority, (c) will
not violate or result in a default under any indenture or agreement governing
Indebtedness or any other agreement material to the Company and the Restricted
Subsidiaries taken as a whole that is binding upon the Company, the Borrowers or
any of their Restricted Subsidiaries or its assets, or give rise to a right
thereunder to require any payment to be made by the Company, the Borrowers or
any of their Restricted Subsidiaries, and (d) except for Liens created under the
Loan Documents, will not result in the creation or imposition of any Lien on any
asset of the Company, the Borrowers or any of the Restricted Subsidiaries (in
the case of the BecoCom Group and the Starpower Group, under any such indenture
or material agreement or otherwise to the knowledge of any Executive Officer of
the Company).
SECTION 3.04. Financial Condition; No Material Adverse Change. (a)
------------------------------------------------
The Company has heretofore furnished to the Lenders (i) its consolidated balance
sheet and statements of operations, shareholders' equity and cash flows, in each
case for the Company and its consolidated Subsidiaries other than the Starpower
Group, (A) as of and for the fiscal year ended December 31, 1998, reported on by
PriceWaterhouseCoopers LLP ("PWC"), independent accountants, and (B) as of and
for the fiscal quarter ended March 31, 1999, certified by its chief financial
officer, (ii)
Starpower's consolidated balance sheet and statements of operations,
shareholders' equity and cash flows (A) as and for the fiscal year ended
December 31, 1998, reported on by PWC, independent accountants, and (B) as of
and for the fiscal quarter ended March 31, 1999, and (iii) the unaudited
consolidating balance sheet and related consolidating statement of operations
for the Company and its consolidated Restricted Subsidiaries, including
Starpower,(A) as of and for the fiscal year ended December 31, 1998, and (B) as
of and for the fiscal quarter ended March 31, 1999, in each case certified by
the Company's chief financial officer. Such financial statements present fairly,
in all material respects, the financial position and results of operations and
cash flows of the Company and its consolidated Restricted Subsidiaries and of
the Starpower Group, as the case may be, as of such dates and for such periods
in accordance with GAAP, in the case of the financial statements referred to in
clauses (i) and (ii) and in accordance with Adjusted Accounting Principles in
the case of the financial statements referred to in clause (iii), subject to
year-end audit adjustments in the case of interim statements and to the absence
of footnotes and other disclosures in the case of the statements referred to in
(i)(B), (ii)(B) and (iii) above.
(b) Except as disclosed in the financial statements referred to above
or the notes thereto or in the Information Memorandum and except for the
Disclosed Matters, after giving effect to the Transactions, none of the Company,
the Borrowers or any of the Restricted Subsidiaries has, as of the Effective
Date, any material contingent liabilities, unusual material long-term
commitments or material unrealized losses.
(c) Since December 31, 1998, there has been no material adverse
change in the business, operations, or financial condition of the Company and
its Restricted Subsidiaries, taken as a whole.
SECTION 3.05. Properties. (a) Each of the Company, the Borrowers
-----------
and the Restricted Subsidiaries (to the knowledge of any Executive Officer in
the case of the RCN-BecoCom Group and the Starpower Group so long as they are
Restricted Subsidiaries) has good title to, or valid leasehold interests in, all
its real and personal property material to its business (including its Mortgaged
Properties), except for the exceptions listed in each title insurance policy
relating to such Mortgaged Property minor defects in title that do not interfere
with its ability to conduct its business as currently conducted or to utilize
such properties for their intended purposes.
(b) Each of the Company, the Borrowers and the Restricted
Subsidiaries (to the knowledge of any Executive
Officer in the case of the RCN-BecoCom Group and the Starpower Group so long as
they are Restricted Subsidiaries) owns, or is licensed to use, all trademarks,
tradenames, copyrights, patents and other intellectual property material to its
business, and the use thereof by the Company, the Borrowers and the Restricted
Subsidiaries (to the knowledge of any Executive Officer in the case of the RCN-
BecoCom Group and the Starpower Group so long as they are Restricted
Subsidiaries) does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
(c) Schedule 3.05 sets forth the address of each real property having
a book value on the Effective Date in excess of $100,000 that is owned by the
Company, the Borrowers or any of the Company Group Subsidiaries as of the
Effective Date after giving effect to the Financing Transactions.
(d) As of the Effective Date, neither the Company, the Borrowers nor
any of the Company Group Subsidiaries has received notice of, or has knowledge
of, any pending or contemplated condemnation proceeding affecting any Mortgaged
Property or any sale or disposition thereof in lieu of condemnation. As of the
Effective Date, neither any Mortgaged Property nor any interest therein is
subject to any right of first refusal, option or other contractual right to
purchase such Mortgaged Property or interest therein.
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 Company or the Borrowers,
threatened against or affecting the Company, the Borrowers or any of the
Restricted Subsidiaries (i) as to which there is a reasonable possibility of an
adverse determination and that, if adversely determined, could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse
Effect (other than the Disclosed Matters) or (ii) that involve any of the Loan
Documents.
(b) Except for the Disclosed Matters and except with respect to any
other matters that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, none of the Company, the
Borrowers, any of their Subsidiaries (in the case of the RCN-BecoCom Group and
the Starpower Group so long as they are Restricted Subsidiaries, to the
knowledge of any Executive Officer) (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
------------------------------------
Company, the Borrowers and their Subsidiaries (to the knowledge of any Executive
Officer in the case of the RCN-BecoCom Group and the Starpower Group so long as
they are Restricted Subsidiaries), is in compliance with all laws, regulation
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.
SECTION 3.08. Investment and Holding Company Status. Neither the
--------------------------------------
Company, the Borrowers nor any of the Restricted Subsidiaries is (a) an
"investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940 or (b) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.
SECTION 3.09. Taxes. Each of the Company, the Borrowers and their
------
Subsidiaries 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) any Taxes that are being contested in good
faith by appropriate proceedings and for which the Company, a Borrower or such
Subsidiary, as applicable, has set aside on its books adequate reserves or (b)
to the extent that the failure to do so could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably
------
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $10,000,000 the fair market value of the assets of such Plan, and the
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $10,000,000 the fair
market value of the assets of all such underfunded Plans.
SECTION 3.11. Disclosure. The Company has disclosed to the Lenders
-----------
all agreements, instruments and corporate or other restrictions to which the
Company, the Borrowers or any of the Restricted Subsidiaries is subject, and all
other matters known to any of them, 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 delivered
by or on behalf of any Loan Party to the Agent or any Lender pursuant to this
Agreement or any other Loan Document (as modified or supplemented by other
information so furnished), taken as a whole, 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
--------
Company represents only that such information was prepared in good faith based
upon assumptions believed to be reasonable at the time.
SECTION 3.12. Subsidiaries. As of the date hereof, the Company does
-------------
not have any subsidiaries other than the Borrowers and the Borrowers'
Subsidiaries. Schedule 3.12 sets forth the name of, and the ownership interest
of the Company in, each Subsidiary of the Company (including each Joint Venture
Subsidiary) and identifies each Subsidiary that is a Subsidiary Loan Party, in
each case as of the Effective Date.
SECTION 3.13. Insurance. The Company believes that the insurance
----------
maintained by or on behalf of the Company, the Borrowers and the Restricted
Subsidiaries is adequate.
SECTION 3.14. Labor Matters. As of the Effective Date, there are no
--------------
strikes, lockouts or slowdowns against the Company, the Borrowers or any
Restricted Subsidiary (to the knowledge of any Executive Officer in the case of
the RCN-BecoCom Group and the Starpower Group so long as they are Restricted
Subsidiaries), pending or, to the knowledge of the Company or the Borrowers,
threatened. All significant payments due from the Company, the Borrowers or any
Restricted Subsidiary, or for which any significant claim may be made against
the Company, the Borrowers or any Restricted Subsidiary, 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 Company, the Borrowers or a
Restricted Subsidiary so long as they are Restricted Subsidiaries (to the
knowledge of any Executive Officer in the case of the RCN-BecoCom Group and the
Starpower Group). 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 binding upon the Company, the
Borrowers or any Restricted Subsidiary (to the knowledge of any Executive
Officer in the case of the RCN-BecoCom Group and the
Starpower Group so long as they are Restricted Subsidiaries).
SECTION 3.15. Intellectual Property. Each of the Company and its
---------------------
Restricted Subsidiaries owns, or is licensed to use, all intellectual property
necessary for the conduct of its business as currently conducted except for any
failure to so own or license intellectual property which, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
No claim has been asserted and is pending against the Company or any Restricted
Subsidiary challenging or questioning the use of any intellectual property by it
or the validity or effectiveness of any intellectual property used by it, except
for any claims, which, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. The use of intellectual property by
the Company or any Restricted Subsidiary does not infringe on the rights of any
person in any material respect and in any manner which could reasonably be
expected to have a Material Adverse Effect.
SECTION 3.16. Year 2000. The Company has reviewed the areas within
----------
its consolidated business and operations that could be adversely affected by,
and has developed or is developing a plan to address on a timely basis, the
"Year 2000 Problem" (that is, the risk that computer applications used by the
Company and its Restricted Subsidiaries may be unable to recognize and perform
properly date-sensitive functions involving certain dates prior to and any date
after December 31, 1999). Based on the Company's review and plan and any
Executive Officer's knowledge of Starpower's review and plan, the Company
reasonably believes that the "Year 2000 Problem" and the costs associated
therewith will not have a Material Adverse Effect.
SECTION 3.17. Security Interests. (a) When executed and delivered,
------------------
the Pledge Agreement will be effective to create in favor of the Agent for the
ratable benefit of the Secured Parties a valid and enforceable security interest
in the Collateral (as defined in the Pledge Agreement) and, when the portion of
the Collateral constituting certificated securities (as defined in the Uniform
Commercial Code) is delivered to the Agent thereunder together with instruments
of transfer duly endorsed in blank, the Pledge Agreement shall constitute a
fully perfected first priority Lien on, and security interest in, all right,
title and interest of the pledgors thereunder in such Collateral, prior and
superior in right to any other Person.
(b) The Security Agreement is effective to create in favor of the
Agent for the ratable benefit of the Secured
Parties a valid and enforceable security interest in the Collateral (as defined
in the Security Agreement) and, when financing statements in appropriate form
are filed in the offices specified in the Perfection Certificate, the Security
Agreement shall constitute a fully perfected Lien on, and security interest in,
all right, title and interest of the grantors thereunder in such Collateral, to
the extent perfection can be obtained by filing Uniform Commercial Code
financing statements, other than the Intellectual Property (as defined in the
Security Agreement), in which a security interest may be perfected by filing,
recording or registering a security agreement, financing statement or analogous
document in the United States Patent and Trademark Office or the United States
Copyright Office, as applicable, in each case prior and superior in right to any
other Person to the extent perfection can be obtained by filing Uniform
Commercial Code financing statements, other than with respect to the rights of
Persons pursuant to Liens expressly permitted by Section 6.02.
(c) When the Security Agreement is filed in the United States Patent
and Trademark Office and the United States Copyright Office, the security
interest created thereunder shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the Loan Parties in the
Intellectual Property (as defined in the Security Agreement) in which a security
interest may be perfected by filing, recording or registering a security
agreement, financing statement or analogous document in the United States Patent
and Trademark Office or the United States Copyright Office, as applicable, in
each case prior and superior in right to any other Person, other than with
respect to the rights of Persons pursuant to Liens expressly permitted by
Section 6.02 (it being understood that subsequent recordings in the United
States Patent and Trademark Office and the United States Copyright Office may be
necessary to perfect a lien on registered trademarks, trademark applications and
copyrights acquired by the Loan Parties after the date hereof).
(d) The Mortgages are effective to create, subject to the exceptions
listed in each title insurance policy covering such Mortgage, in favor of the
Agent for the ratable benefit of the Secured Parties, a legal, valid and
enforceable Lien on all of the Loan Parties' right, title and interest in and to
the Mortgaged Properties thereunder and the proceeds thereof, and when the
Mortgages are filed in the offices specified on Schedule 3.17, the Mortgages
shall constitute a Lien on, and security interest in, all right, title and
interest of the Loan Parties in such Mortgaged Properties and the proceeds
thereof, in each case prior and superior in right to any other Person, other
than with respect to the rights of Persons pursuant to Liens expressly permitted
by Section 6.02.
ARTICLE IV
Conditions
----------
SECTION 4.01. Effective Date. The obligations of the Lenders to make
---------------
Loans and of the Issuing Bank to issue Letters of Credit 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 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 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 Agent shall have received a favorable written opinion
(addressed to the Agent and the Lenders and dated the Effective Date) of
each of (i) Xxxxx Xxxx & Xxxxxxxx, counsel for the Company and the
Borrowers, substantially in the form of Exhibit D-2, (ii) the general
counsel of the Company substantially in the form of Exhibit D-1 and (iii)
local counsel in each jurisdiction where a Mortgaged Property or Credit
Party not covered by the foregoing opinions is located, in form and
substance reasonably satisfactory to the Agent, and, in the case of each
such opinion required by this paragraph, covering such other matters
relating to the Loan Parties or the Loan Documents as the Required Lenders
shall reasonably request. The Company and the Borrowers hereby request
such counsel to deliver such opinions.
(c) The Agent shall have received such documents and certificates as
the Agent or its counsel may reasonably request relating to the
organization, existence and good standing of each Loan Party, the
authorization of the Financing Transactions and any other legal matters
relating to the Loan Parties, the Loan Documents or the Financing
Transactions, all in form and substance satisfactory to the Agent and its
counsel.
(d) The Agent shall have received a certificate, dated the Effective
Date and signed by the President, a Vice President or a Financial Officer
of the Company, confirming compliance with the conditions set forth in
paragraphs (a) and (b) of Section 4.02.
(e) The Agent shall have received all fees and other amounts due and
payable on or prior to the Effective Date, including, to the extent
invoiced,
reimbursement or payment of all out-of-pocket expenses (including
reasonable fees, charges and disbursements of counsel) required to be
reimbursed or paid by any Loan Party hereunder or under any other Loan
Document.
(f) The Agent shall have received counterparts of the Security
Documents signed on behalf of the Company, the Borrowers and each
Subsidiary Loan Party, together with the following:
(i) certificates representing all the outstanding shares of
capital stock or other Equity Interests owned as of the Effective Date
by the Company or by any Significant Subsidiary of the Company,
including each Borrower, in each Significant Subsidiary, including
each Borrower, and each Joint Venture Subsidiary other than Starpower
and its subsidiaries, JuniorNet, Megacable, HomeLink and Intertainer
(except that stock certificates representing shares of common stock of
a Foreign Subsidiary may be limited to 65% of the outstanding shares
of common stock of such Foreign Subsidiary), and stock powers and
instruments of transfer, endorsed in blank, with respect to such
certificates;
(ii) all documents and instruments, including Uniform Commercial
Code financing statements, required by law or reasonably requested by
the Agent to be filed, registered or recorded to create or perfect the
Liens intended to be created under the Security Agreement or Pledge
Agreement; and
(iii) a completed Perfection Certificate relating to the Loan
Parties dated the Effective Date and signed by an executive officer or
Financial Officer of the Company, together with all attachments
contemplated thereby, including the results of a search of the Uniform
Commercial Code (or equivalent) filings made with respect to the Loan
Parties in the jurisdictions contemplated by the Perfection
Certificate and copies of the financing statements (or similar
documents) disclosed by such search and evidence reasonably
satisfactory to the Agent that the Liens indicated by such financing
statements (or similar documents) are permitted by Section 6.02 or
have been released or will be released on the Effective Date;
(g) The Agent shall have received (i) counterparts of a Mortgage with
respect to each Mortgaged Property signed on behalf of the record owner of
such Mortgaged Property (ii) a policy or policies of title insurance issued
by a nationally recognized title
insurance company, or a binding commitment to provide the same, insuring
the Lien of each such Mortgage as a valid first Lien on the Mortgaged
Property described therein, free of any other Liens except as permitted by
Section 6.02, together with such endorsements, coinsurance and reinsurance
as is available at commercially reasonable rates and the Agent or the
Required Lenders may reasonably request, and (iii) such surveys, abstracts
and appraisals as currently exist and as the Agent or the Required Lenders
may reasonably request.
(h) The Agent shall have received evidence that the insurance
required by Section 5.07 and the Security Documents is in effect.
(i) The Agent shall have received evidence satisfactory to it that
the existing bank credit facilities of Subsidiaries of the Company have
been terminated, that all outstanding payment obligations thereunder have
been paid in full and that any Liens securing such bank credit facilities
have been released.
The Agent shall notify the Company and the Lenders of the Effective Date, and
such notice shall be conclusive and binding. Notwithstanding the foregoing, the
obligations of the Lenders to make Loans and of the Issuing Bank to issue
Letters of Credit hereunder shall not become effective unless each of the
foregoing conditions is satisfied (or waived pursuant to Section 9.02) at or
prior to 5:00 p.m., New York City time, on June 15, 1999 (and, in the event such
conditions are not so satisfied or waived, the Commitments shall terminate at
such time).
SECTION 4.02. Each Credit Event. The obligation of each Lender to
------------------
make a Loan on the occasion of any Borrowing, and of the Issuing Bank to issue,
amend, renew or extend any Letter of Credit, is subject to receipt of the
request therefor in accordance herewith and to the satisfaction of the following
conditions:
(a) The representations and warranties of each Loan Party set forth
in the Loan Documents shall be true and correct in all material respects on
and as of the date of such Borrowing or the date of issuance, amendment,
renewal or extension of such Letter of Credit, as applicable.
(b) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter
of Credit, as applicable, no Default shall have occurred and be continuing.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Company and the Borrowers on the date thereof as to the matters specified in
paragraphs (a) and (b) of this Section.
ARTICLE V
Affirmative Covenants
---------------------
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated and
all LC Disbursements shall have been reimbursed, each of the Company and the
Borrowers covenants and agrees with the Lenders that:
SECTION 5.01. Financial Statements and Other Information. The
-------------------------------------------
Company will furnish to the Agent, with sufficient copies for each Lender:
(a) within 105 days after the end of each fiscal year of the Company,
(i) its audited consolidated balance sheet and related statements of
operations, shareholders' equity and cash flows as of the end of and for
such year, and (ii) as long as Starpower is an unconsolidated (for GAAP
purposes) Restricted Subsidiary the audited consolidated balance sheet and
related statements of operations, shareholders' equity and cash flows of
Starpower as of the end of and for such fiscal year, setting forth in each
case in comparative form the figures for the previous fiscal year, all
reported on by PWC 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 other than qualifications relating to pre-acquisition financial
statements of acquired entities and statements of reliance on another
accounting firm) to the effect that such consolidated financial statements
present fairly in all material respects the financial condition and results
of operations of the Company and its consolidated Subsidiaries or of
Starpower and its consolidated subsidiaries, as the case may be, on a
consolidated basis in accordance with GAAP consistently applied and (iii)
an unaudited consolidating balance sheet and related unaudited
consolidating statement of operations of the Company and its Subsidiaries,
including Starpower (so long as it is a Restricted Subsidiary) and each
Unrestricted Subsidiary, as of the end of and for such fiscal year, setting
forth in each case in comparative form the figures for the previous fiscal
year, certified by a Financial Officer as having been prepared in
accordance with Adjusted Accounting Principles.
(b) within 60 days after the end of each of the first three fiscal
quarters of each fiscal year of the Company, (i) its consolidated balance
sheet and related statements of operations, shareholders' equity and cash
flows as of the end of and for such fiscal quarter and the then elapsed
portion of the fiscal year, (ii) the consolidated balance sheet and related
statements of operations, shareholders' equity and cash flows of Starpower
as of the end of and for such fiscal quarter and the then elapsed portion
of the fiscal year and (iii) the consolidating balance sheet and related
consolidating statement of operations of the Company and each of its
Subsidiaries, including Starpower (so long as it is a Restricted
Subsidiary) and each
Unrestricted Subsidiary, as of the end of and for such fiscal 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, certified, in the case of the statements referred to in clause
(i) and (iii), by a Financial Officer as presenting fairly in all material
respects the financial condition and results of operations of the Company
and its consolidated Subsidiaries on a consolidated basis in accordance
with GAAP, in the case of the financial statements referred to in clauses
(i) and (ii), and Adjusted Accounting Principles, in the case of the
financial statements referred to in clause (iii), consistently applied,
subject to normal year-end audit adjustments and the absence of footnotes
and other disclosures;
(c) concurrently with any delivery of financial statements under
clause (a) or (b) above, a certificate of a Financial Officer of the
Company (i) certifying as to whether a Default has occurred and is
continuing and, if a Default has occurred, and is continuing 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 Section 6.12 as of the last day of the relevant fiscal
quarter or fiscal year, as applicable, in respect of which the Company is
delivering such reports and (iii) stating whether any change in Adjusted
Accounting Principles or GAAP, as the case may be, or in the application
thereof has occurred since the date of the Company's audited financial
statements referred to in Section 3.04 and, if any such change has
occurred, specifying the effect of such change on the financial statements
accompanying such certificate;
(d) concurrently with any delivery of financial statements under
clause (a)(i) 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
that has occurred and is continuing (which certificate may be limited to
the extent required by accounting rules or guidelines);
(e) prior to the commencement of each fiscal year of the Company, a
detailed consolidated budget for such fiscal year covering the Company and
the Restricted Subsidiaries (including a projected consolidated balance
sheet for the Company and the Restricted Subsidiaries and related
statements of projected operations and cash flow as of the end of and for
such fiscal year and setting forth the assumptions used for
purposes of preparing such budget) and, promptly when available, any
significant revisions of such budget;
(f) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials other than
those relating to employee benefit plans filed by the Company, the
Borrowers or any Restricted Subsidiary with the Securities and Exchange
Commission, or any Governmental Authority succeeding to any or all of the
functions of said Commission, or with any national securities exchange, or
distributed by the Company to its shareholders generally, as the case may
be; and
(g) promptly following any request therefor, using reasonable best
efforts to obtain information with respect to Starpower, such other
information regarding the operations, business affairs and financial
condition of the Company, the Borrowers or any Restricted Subsidiary, or
compliance with the terms of any Loan Document, as the Agent or any Lender
may reasonably request.
SECTION 5.02. Notices of Material Events. The Company will furnish
---------------------------
to the Agent and the Agent will furnish to each Lender prompt written notice of
the following after any Executive Officer of the Company obtains knowledge
thereof:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against the Company, the
Borrowers or any Affiliate thereof that, in the reasonable judgment of the
Company, if adversely determined, could reasonably be expected to result in
a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to
result in a Material Adverse Effect; and
(d) any other development that has resulted in a Material Adverse
Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Company 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 Company
---------------------------------
will furnish to the Agent prompt written
notice of any change (i) in any Loan Party's corporate name or in any trade name
used to identify it in the conduct of a significant portion of its business or
in the ownership of significant properties, (ii) in the location of any Loan
Party's chief executive office, its principal place of business, any office in
which it maintains books or records relating to Collateral owned by it or any
office or facility at which Collateral owned by it is located (including the
establishment of any such new office or facility), (iii) in any Loan Party's
identity or corporate structure or (iv) in any Loan Party's Federal Taxpayer
Identification Number. The Company agrees not to effect or permit any change
referred to in the preceding sentence unless it shall have given the Collateral
Agent 10 days notice of such change and shall promptly make all filings under
the Uniform Commercial Code or otherwise that are required in order for the
Agent to continue at all times following such change to have a valid and
perfected security interest in all the Collateral. The Company also agrees
promptly to notify the Agent if any material portion of the Collateral is
damaged or destroyed.
(b) Each year, at the time of delivery of annual financial statements
with respect to the preceding fiscal year pursuant to clause (a) of Section
5.01, the Company shall deliver to the Agent a certificate of a legal officer of
the Company (i) setting forth the information required pursuant to Section 2 of
the Perfection Certificate or confirming that there has been no change in such
information since the date of the Perfection Certificate delivered on the
Effective Date or the date of the most recent certificate delivered pursuant to
this Section and (ii) certifying that all Uniform Commercial Code financing
statements (including fixture filings, (other than in real estate records
(except in the case of Mortgaged Properties) and other than fixture filings
requiring metes and bounds descriptions) or other appropriate filings,
recordings or registrations, including all refilings, rerecordings and
reregistrations, containing a description of the Collateral have been filed of
record in each governmental, municipal or other appropriate office in each
jurisdiction identified pursuant to clause (i) above to the extent necessary to
protect and perfect the security interests under the Security Agreement 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. Each of the Company
-------------------------------
and the Borrowers will, and will cause (or in the case of Starpower so long as
it is a Restricted Subsidiary, use its reasonable best efforts to cause) each of
its Restricted Subsidiaries to, do or cause to be done all things necessary to
preserve, renew and keep in full force and effect its legal existence and the
rights, licenses, permits, privileges, franchises, patents, copyrights,
trademarks and trade names which, in the
Company's judgment, are material to the conduct of the business of the Company
and its Restricted Subsidiaries, taken as a whole; provided that the foregoing
--------
shall not prohibit any merger, consolidation, liquidation or dissolution
permitted under Section 6.03.
SECTION 5.05. Payment of Obligations. Each of the Company and the
-----------------------
Borrowers will, and will cause (or in the case of Starpower so long as it is a
Restricted Subsidiary, use its reasonable best efforts to cause) each of its
Restricted Subsidiaries to, pay its Indebtedness and other obligations,
including Tax liabilities, before the same shall become delinquent or in
default, except (i) where (a) the validity or amount thereof is being contested
in good faith by appropriate proceedings, (b) the Company, the Borrowers or such
Restricted Subsidiary has set aside on its books adequate reserves with respect
thereto in accordance with GAAP, (c) such contest effectively suspends
collection of the contested obligation and the enforcement of any Lien securing
such obligation or (ii) the failure to make any such payments would not result
in aggregate liability in excess of $10,000,000.
SECTION 5.06. Maintenance of Properties. Each of the Company and the
--------------------------
Borrowers will, and will cause (or in the case of Starpower so long as it is a
Restricted Subsidiary, use its reasonable best efforts to cause) each of its
Restricted Subsidiaries to keep and maintain all property material to the
conduct of its business in good working order and condition, ordinary wear and
tear excepted.
SECTION 5.07. Insurance. Each of the Company and the Borrowers will,
----------
and will cause (or in the case of Starpower so long as it is a Restricted
Subsidiary, use its reasonable best efforts to cause) each of its Restricted
Subsidiaries to maintain, with financially sound and reputable insurance
companies (a) insurance in such amounts and against such risks as are
customarily maintained by companies engaged in the same or similar businesses
and (b) all insurance required to be maintained pursuant to the Security
Documents. The Company will furnish to the Lenders, upon request of the Agent,
information in reasonable detail as to the insurance so maintained.
SECTION 5.08. Casualty and Condemnation. The Company (a) will
--------------------------
furnish to the Agent prompt written notice of any casualty or other insured
damage to any material portion of any Collateral or the commencement of any
action or proceeding for the taking of any Collateral or any part thereof or
interest therein under power of eminent domain or by condemnation or similar
proceeding and (b) will ensure that the Net Proceeds of any such event (whether
in the form of insurance proceeds, condemnation awards or otherwise) are
collected and applied in accordance with the applicable provisions of this
Agreement and the Security Documents.
SECTION 5.09. Books and Records; Inspection and Audit Rights. Each
-----------------------------------------------
of the Company and the Borrowers will, and will cause (or in the case of
Starpower so long as it is a Restricted Subsidiary, use its reasonable best
efforts to cause) each of their Subsidiaries to keep proper books of record and
account in which in all material respects full, true and correct entries are
made of all dealings and transactions in relation to its business and
activities. Each of the Company and the Borrowers will, and will cause (or in
the case of Starpower so long as it is a Restricted Subsidiary, use its
reasonable best efforts to cause) each of their Subsidiaries to permit any
representatives designated by the Agent or any Lender, upon reasonable prior
notice, to visit and inspect its properties, to examine and make extracts from
its books and records, and to discuss its affairs, finances and condition with
its officers and independent accountants (with representatives of the Company
present), all at such reasonable times and as often as reasonably requested.
SECTION 5.10. Compliance with Laws. Each of the Company and the
---------------------
Borrowers will, and will cause (or in the case of Starpower so long as it is a
Restricted Subsidiary, use its reasonable best efforts to cause) each of the
Restricted Subsidiaries to comply with all laws, rules, regulations and orders
of any Governmental Authority applicable to 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 5.11. Use of Proceeds and Letters of Credit. (a) The
--------------------------------------
proceeds of GC Revolving Borrowings and the issuance of letters of credit shall
be used to refinance the existing secured bank credit facilities of the
Company's Subsidiaries, to fund working capital needs and for general corporate
purposes of the Borrowers and their Subsidiaries. The proceeds of TA Revolving
Borrowings shall be used by the Borrowers and their Subsidiaries solely to
finance the construction, expansion, development or acquisition of
Telecommunications Assets.
(b) The proceeds of Term Borrowings will be used by the Borrowers and
their Subsidiaries solely to fund the construction, expansion, development or
acquisition of Telecommunications Assets.
(c) The Borrowers will not effect any TA Revolving Borrowing on any
date on or after October 15, 2002, unless the Revolving Loans comprising such
Borrowing are permitted to be incurred on such date as fully secured
Indebtedness (in accordance with the provisions of this Agreement and the
Security Documents) under the provisions
of each indenture or other agreement governing then-outstanding Indebtedness of
the Company and its Subsidiaries. The Borrowers will not use the proceeds of any
Loans hereunder in a manner inconsistent with the status of such Loans as
permitted Indebtedness, secured in the manner contemplated hereby and by the
Security Documents, under each indenture or other agreement governing
outstanding Indebtedness of the Company and its Restricted Subsidiaries.
SECTION 5.12. Additional Subsidiaries. If any additional Significant
------------------------
Subsidiary is formed or acquired after the Effective Date, the Company will
notify the Agent and the Lenders thereof and (a) if such Subsidiary is a
Subsidiary Loan Party, the Company will cause such Subsidiary to become a party
to the Security Documents within ten Business Days after such Restricted
Subsidiary is formed or acquired and promptly take such actions to create and
perfect Liens on such Subsidiary's assets to secure the Obligations as the Agent
or the Required Lenders shall reasonably request and (b) if any Equity Interest
in or Indebtedness of such Subsidiary is owned by or on behalf of any Loan
Party, the Company will cause such Equity Interests and promissory notes
evidencing such Indebtedness to be pledged pursuant to the Security Documents
within 10 Business Days after such Subsidiary is formed or acquired (except
that, if such Subsidiary is a Foreign Subsidiary, shares of common stock of such
Subsidiary to be pledged pursuant to the Pledge Agreement may be limited to 65%
of the outstanding shares of common stock of such Subsidiary).
SECTION 5.13. Further Assurances. (a) Each of the Company and the
-------------------
Borrowers will, and will cause each Subsidiary 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 (which, except in the case of Mortgaged Properties,
do not require metes and bounds descriptions or filing in real estate records),
mortgages, deeds of trust and other documents), which may be required under any
applicable law, or which the Agent or the Required Lenders may reasonably
request consistent with the terms hereof and of the other Loan Documents, 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 Loan Parties. The Company and the Borrowers also agree to
provide to the Agent, from time to time upon request, evidence reasonably
satisfactory to the Agent as to the perfection and priority of the Liens created
or intended to be created by the Security Documents.
(b) If any material assets (including any real property or
improvements thereto or any interest therein)
constituting Collateral are acquired by the Company or any Subsidiary Loan
Party, including the Borrowers, after the Effective Date (other than (i) assets
constituting Collateral under the Security Documents that become subject to the
Lien of the Security Documents upon acquisition thereof, (ii) real estate other
than Mortgaged Properties and (iii) Excluded Collateral (as defined in the
Security Agreement)), the Company will notify the Agent thereof, and, unless the
Agent otherwise agrees, the Company will, subject to legal and contractual
restrictions, cause such assets to be subjected to a Lien securing the
Obligations and will take, and cause the Subsidiary Loan Parties to take, such
actions as shall be necessary or reasonably requested by the Agent to grant and
perfect such Liens, including actions described in paragraph (a) of this
Section, all at the expense of the Loan Parties.
(c) In the event (i) the Company or any Subsidiary Loan Party forms
or acquires any Joint Venture Subsidiary or acquires any other Equity Interests,
(ii) such investment exceeds $2,500,000 in the aggregate, and (iii) the consent
of any other Person (other than any Governmental Authority) is required in order
to permit the Equity Interests in such Joint Venture Subsidiary or such other
Equity Interests to be pledged to the Agent, for the benefit of the Secured
Parties, pursuant to the Security Documents, the Company and any such Subsidiary
Loan Party will use their commercially reasonable best efforts to obtain all
such required consents and effect such pledge as soon as practicable. At all
times prior to the time (if any) when such consents are obtained and such pledge
effected, the Company will cause the Equity Interests in such Joint Venture
Subsidiary or such other Equity Interests held by a Loan Party to be held and
owned by an Investment Subsidiary in accordance with the provisions of Section
6.02(b). Notwithstanding the foregoing or any other provision in any Loan
Document, the Equity Interests of JuniorNet, HomeLink and Intertainer owned by
the Loan Parties need not be held in or owned by an Investment Subsidiary.
(d) In the event the consent of any Governmental Authority is
required in order to permit any Equity Interests to be pledged to the Agent, for
the benefit of the Secured Parties, pursuant to the Security Documents, the
Company will use its commercially reasonable best efforts to obtain such
required consent and effect such pledge as soon as practicable, provided that if
such consent cannot be obtained following use of commercially reasonable best
efforts, there shall be no Security Interest or Pledged Interest created in such
Equity Interests under the Security Documents.
(e) The Company will, within 30 days of the date hereof, deliver to
the Agent a favorable written opinion of special regulatory counsel to the
Company setting forth each
jurisdiction where the consent of any Governmental Authority is required to
permit any Equity Interests to be pledged pursuant to the Security Documents, in
form and substance reasonably satisfactory to the Agent.
SECTION 5.14. Interest Rate Protection. As promptly as practicable,
-------------------------
and in any event within 90 days after the Effective Date, the Company or any
Loan Party or (in respect of its own Indebtedness) any other Restricted
Subsidiary will enter into, and thereafter until the final maturity of all the
Loans will maintain in effect, one or more interest rate protection agreements
on such terms and with such parties as shall be reasonably satisfactory to the
Agent in order to effectively maintain at least 50% of the aggregate Total Debt
and preferred capital instruments of the Company and the Restricted Subsidiaries
as fixed rate obligations.
ARTICLE VI
Negative Covenants
------------------
Until the Commitments have expired or terminated and the principal of
and interest on each Loan and all fees payable hereunder have been paid in full
and all Letters of Credit have expired or terminated and all LC Disbursements
shall have been reimbursed, each of the Company and the Borrowers covenants and
agrees with the Lenders that:
SECTION 6.01. Limitations on Indebtedness. (a) The Company will not,
---------------------------
and will not permit any Restricted Subsidiary to, create, incur, assume or
permit to exist any Indebtedness, except:
(i) Indebtedness created under the Loan Documents;
(ii) Indebtedness existing on the date hereof and set forth on Schedule
6.01 attached hereto, and extensions, renewals or replacements of any
such Indebtedness that do not increase the outstanding principal
amount thereof;
(iii) Indebtedness of the Company to any Subsidiary and of any Subsidiary
to the Company or any other Subsidiary; provided that Indebtedness of
--------
any Subsidiary that is not a Loan Party to the Company or any
Subsidiary Loan Party shall be subject to Section 6.04;
(iv) Guarantees by the Company of Indebtedness or operating lease payment
obligations of any Subsidiary and by any Subsidiary of Indebtedness of
any other Subsidiary; provided that Guarantees by the Company or any
--------
Subsidiary Loan Party of
Indebtedness or operating lease payment obligations of any Subsidiary
that is not a Loan Party shall be subject to Section 6.04;
(v) Purchase Money Indebtedness of the Company or any Restricted
Subsidiary (other than Subsidiaries in the RCN-BecoCom Group or
Starpower Group); provided that the sum of the aggregate principal
--------
amount of Indebtedness permitted by this clause (v) and the aggregate
amount of Attributable Debt in respect of sale and leaseback
transactions of the Company and its Restricted Subsidiaries (other
than the RCN-BecoCom Group and the Starpower Group) permitted by
Section 6.06 shall not exceed $180,000,000 at any time outstanding;
(vi) Indebtedness of any Person that becomes a Restricted Subsidiary after
the date hereof; provided that such Indebtedness exists at the time
--------
such Person becomes a Restricted Subsidiary and is not created in
contemplation of or in connection with such Person becoming a
Restricted Subsidiary; and extensions, renewals or replacements of any
such Indebtedness that do not increase the principal amount thereof;
(vii) Permitted Debt of the Company; provided that such Indebtedness is
--------
permitted by Section 6.12(c) and (j) when incurred;
(viii) other secured or unsecured Indebtedness of the Company or any
Restricted Subsidiary not in excess of $25,000,000 at any time
outstanding;
(ix) Purchase Money Indebtedness of the RCN-BecoCom Group; provided that
--------
the sum of the aggregate principal amount of the Indebtedness
permitted by this clause (ix) and the aggregate amount of Attributable
Debt in respect of sale and leaseback transactions of the RCN-BecoCom
Group permitted by Section 6.06 shall not exceed $100,000,000 at any
time outstanding;
(x) Purchase Money Indebtedness of the Starpower Group; provided that the
--------
sum of the aggregate principal amount of Indebtedness permitted by
this clause (x) and the aggregate amount of Attributable Debt in
respect of sale and leaseback transactions of the Starpower Group
permitted by Section 6.06 shall not exceed $100,000,000 at any time
outstanding;
(xi) Indebtedness of the Company and the Restricted Subsidiaries pursuant
to Hedging Agreements entered into to fix the effective rate of
interest on the Loans or other Indebtedness, provided such
transactions are entered into to hedge actual
interest rate exposures and not for the purpose of speculation.
(b) The Company will not issue any shares of its preferred stock or
other preferred Equity Interests, which are (i) mandatorily redeemable or
required to be repurchased or reacquired by the Company or any Restricted
Subsidiary, or which require a payment of cash dividends, in each case, prior to
the date that is six months after the Tranche B Maturity Date, (ii) secured by
any assets of the Company or any Restricted Subsidiary, (iii) Guaranteed by any
Restricted Subsidiary or (iv) exchangeable or convertible into any Indebtedness
other than Permitted Debt.
SECTION 6.02. Limitation on Liens. (a) The Company will not, and
-------------------
will not permit any Restricted Subsidiary to, create, incur, assume or permit to
exist any Lien on any property or asset now owned or hereafter acquired by it,
or assign or sell any income or revenues (including accounts receivable, other
than doubtful accounts sold in lieu of collection in the ordinary course of
business) or rights in respect of any thereof, except:
(i) Liens created under the Loan Documents;
(ii) any Lien on any property or asset of the Company or any Restricted
Subsidiary existing on the date hereof and set forth on Schedule 6.02
attached hereto; provided that (i) such Lien shall not apply to any
--------
other property or asset of the Company or any Restricted Subsidiary
and (ii) such Lien shall secure only those obligations which it
secures on the date hereof and extensions, renewals and replacements
thereof that do not increase the outstanding principal amount thereof;
(iii) Permitted Encumbrances;
(iv) any Lien existing on any property or asset prior to the acquisition
thereof by the Company or any Restricted Subsidiary or existing on any
property or asset of any Person that becomes a Restricted Subsidiary
after the date hereof prior to the time such Person becomes a
Restricted Subsidiary; provided that (A) such Lien is not created in
--------
contemplation of or in connection with such acquisition or such Person
becoming a Restricted Subsidiary, as the case may be, (B) such Lien
shall not apply to any other property or assets of the Company or any
Restricted Subsidiary and (C) such Lien shall secure only those
obligations which it secures on the date of such acquisition or the
date such Person becomes a Restricted Subsidiary, as the case may be,
and extensions,
renewals and replacements thereof that do not increase the outstanding
principal amount thereof;
(v) Liens, including pursuant to any Capital Lease Obligation, on fixed or
capital assets acquired, constructed or improved by the Company or any
Restricted Subsidiary; provided that (A) such security interests
--------
secure Indebtedness permitted by clause (v) of Section 6.01 or, in the
case of the RCN-BecoCom Group or the Starpower Group, clause (ix) or
(x), respectively, of Section 6.01, (B) such security interests and
the Indebtedness secured thereby are incurred prior to or within 270
days after such acquisition or the completion of such construction or
improvement, (C) the Indebtedness secured thereby does not exceed the
cost of acquiring, constructing or improving such fixed or capital
assets and (D) such security interests shall not apply to any other
property or assets of the Company or any Restricted Subsidiary; and
(vi) Liens consisting of customary options, calls, puts or restrictions on
transfer relating to Equity Interests of Joint Venture Subsidiaries
and arising under joint venture arrangements with other holders (other
than the Company and its Affiliates) of such Equity Interests;
(vii) other Liens (not relating to Equity Interests of Subsidiaries or
investments in Megacable, JuniorNet, HomeLink or Intertainer) securing
Indebtedness otherwise permitted by Section 6.01(viii).
(b) The Company and the Borrowers will not permit RCN International
Holdings, Inc., RCN Telecom Services of Washington D.C., Inc. or any other
Investment Subsidiary holding any Equity Interest not subject to a Lien under
the Security Documents to incur, assume or permit to exist any Indebtedness or
operating lease obligations (other than under the Subsidiary Guarantee Agreement
and the other Loan Documents to which it is party and, in the case of RCN
International Holdings, Inc., other than intercompany Indebtedness outstanding
on the date of this Agreement) or to engage in any business or activities other
than acting as a holding company for its Subsidiaries and holding other Equity
Interests and investments. The Company and the Borrowers will not permit any
Equity Interest of Megacable or Starpower owned by the Company or any Restricted
Subsidiary to be held by any Subsidiary other than RCN International Holdings,
Inc., or RCN Telecom Services of Washington D.C., Inc., respectively, each of
which shall remain a Restricted Subsidiary and an Investment Subsidiary
hereunder.
SECTION 6.03. Fundamental Changes. (a) The Company will not, and will
--------------------
not permit any Restricted Subsidiary (other than RCN-BecoCom, Starpower and
their subsidiaries) to, merge into or consolidate with any other Person, or
permit any other Person to merge into or consolidate with it, or liquidate or
dissolve, except that, if at the time thereof and immediately after giving
effect thereto no Event of Default or Default attributable to such action shall
have occurred and be continuing, (i) any Person other than a Loan Party or an
Unrestricted Subsidiary may merge into or consolidate with the Company in a
transaction in which the Company is the surviving corporation, (ii) any
Subsidiary (including a Borrower) other than an Unrestricted Subsidiary may
merge with or into or consolidate with a Borrower in a transaction in which such
Borrower is the surviving corporation (or the surviving corporation concurrently
becomes a Borrower hereunder and assumes all outstanding obligations of the
predecessor Borrower pursuant to a written agreement reasonably satisfactory to
the Agent and its counsel), (iii) any Person other than an Unrestricted
Subsidiary may merge with or into any Restricted Subsidiary in a transaction in
which the surviving entity is a Wholly Owned Subsidiary and (except in the case
of a Foreign Subsidiary) a Subsidiary Loan Party, (iv) a Borrower or any
Subsidiary may merge with or into or consolidate with any other Person in a
transaction effecting a sale, transfer or other disposition of such Borrower or
Subsidiary in accordance with and permitted by Section 6.05(c), and (v) any
Subsidiary (other than a Borrower) may liquidate or dissolve if the Company
determines in good faith that such liquidation or dissolution is in the best
interests of the Company and is not materially disadvantageous to the Lenders;
provided that, in each case above, any such merger involving a Person that is
--------
not a Wholly Owned Subsidiary immediately prior to such merger shall not be
permitted unless also permitted by Section 6.04 and Section 6.12(m).
(b) The Company will not permit RCN-BecoCom or Starpower to merge
with or into or consolidate with any other Person if as a result thereof RCN-
BecoCom or Starpower would cease to be a Restricted Subsidiary hereunder unless:
(i) no Event of Default shall have occurred and be continuing at the time
of or after giving effect to such transaction;
(ii) after giving effect to such transaction, the Company would be in
compliance with each of the covenants set forth in Section 6.12
calculated on a pro forma basis as if such transaction had occurred
immediately prior to the first day of the period of four consecutive
fiscal quarters most recently ended in respect of which financial
statements have been delivered by the Company pursuant to Section
5.01(a) or (b); and
(iii) the Company has delivered to the Agent (x) written notice of such
transaction and (y) a certificate, dated the effective date of such
transaction, of an Executive Officer stating that no Event of Default
has occurred and is continuing and setting forth reasonably detailed
calculations demonstrating pro forma compliance with Section 6.12 in
accordance with paragraph (ii) above.
(c) The Company will not, and will not permit any of its Restricted
Subsidiaries to, engage to any material extent in any business other than
businesses of the type conducted by the Company and its Subsidiaries on the date
of execution of this Agreement and businesses reasonably related thereto.
(d) The Company will not engage in any business or activity other
than the ownership of shares of capital stock or other Equity Interests in its
Subsidiaries and other securities permitted as investments hereunder and
activities (including financing activities but excluding the conduct of an
operating business) incidental thereto.
SECTION 6.04. Investments, Loans, Advances, Guarantees and
--------------------------------------------
Acquisitions. The Company will not, and will not permit any of its Restricted
------------
Subsidiaries to, purchase, hold or acquire (including pursuant to any merger
with any Person that was not a Wholly Owned Subsidiary prior to such merger) any
Equity Interests in or 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:
(a) Permitted Investments;
(b) investments existing on the date hereof and set forth on Schedule 6.04
attached hereto;
(c) investments by the Company and its Restricted Subsidiaries in Equity
Interests in Subsidiaries that are Wholly Owned Subsidiaries and Loan
Parties both before and after such investments; provided that any such
--------
Equity Interests held by a Loan Party shall be pledged pursuant to the
Pledge Agreement;
(d) investments by the Company and its Restricted Subsidiaries in Equity
Interests of then-existing Subsidiaries (including Foreign-
Subsidiaries) or Joint Venture Subsidiaries that are not Loan Parties;
provided that (i) any such Equity Interests held by a Loan Party shall
--------
be pledged pursuant to the Pledge Agreement (subject to the
limitations applicable to common stock of a Foreign Subsidiary) and
(ii) the aggregate amount of investments by Loan Parties in, and loans
and advances by Loan Parties to, and Guarantees by Loan Parties of
Indebtedness of, Subsidiaries that are not Loan Parties (other than
such investments permitted by clauses (a), (e), (l) and (n) of this
Section) shall not exceed $100,000,000 at any time outstanding;
(e) additional investments made after the date hereof by the Company or
its Restricted Subsidiaries in RCN-BecoCom and Starpower (i) pursuant
to binding commitments in effect on the date hereof not in excess of
$150,000,000 in the aggregate and (ii) other than pursuant to such
existing commitments in an aggregate amount not in excess of
$100,000,000;
(f) loans or advances made by the Company to any Subsidiary and made by
any Subsidiary to the Company or any other Subsidiary; provided that
--------
(i) any such loans and advances made by a Loan Party shall be
evidenced by a promissory note pledged to the extent required by the
Pledge Agreement and (ii) the amount of such loans and advances made
by Loan Parties to Subsidiaries that are not Loan Parties shall be
subject to the limitation set forth in clause (d) above;
(g) Guarantees constituting Indebtedness permitted by Section 6.01;
provided that the aggregate principal amount of Indebtedness of
--------
Subsidiaries that are not Loan Parties that is Guaranteed by any Loan
Party shall be subject to the limitation set forth in clause (d)
above;
(h) Capital Expenditures made in accordance with Section 6.12(m);
(i) loans by the Company to the Employee Stock Ownership Plan of the
Company, the proceeds of which are utilized to purchase not more than
2,000,000 shares of the Company's common stock (such number of shares
to be adjusted to reflect stock splits, stock dividends, stock
combinations and similar events);
(j) investments, including acquisitions, to the extent the consideration
paid therefor consists of capital stock of the Company or which are
made with proceeds from the issuance of capital stock of the Company
(to the extent not previously used for other purposes (other than
temporary repayment of Revolving Loans or investments in Permitted
Investments));
(k) Hedging Agreements;
(l) purchases or acquisitions of Equity Interests in Joint Venture
Subsidiaries pursuant to Permitted Business Acquisitions as a result
of which such Joint Venture Subsidiaries become Wholly Owned
Restricted Subsidiaries of the Company; provided that each such
--------
Subsidiary (and each Wholly Owned Subsidiary thereof) becomes a
Subsidiary Loan Party and enters into the Subsidiary Guarantee
Agreement, the Security Agreement, and other applicable Security
Documents (including, if applicable, the Pledge Agreement);
(m) investments by Joint Venture Subsidiaries in Persons other than
Company Group Subsidiaries;
(n) other investments in an aggregate amount not to exceed $50,000,000
(net of any return of capital or sales proceeds in respect of any such
investment and valued at the time of the making thereof); and
(o) investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes
with, customers, suppliers and other third parties; provided that any
--------
transfer of assets or Equity Interests of the Company or any
Restricted Subsidiary in connection therewith shall be subject to
Section 6.05.
SECTION 6.05. Asset Sales. The Company will not, and will not permit
------------
any of its Restricted Subsidiaries to, sell, transfer, lease or otherwise
dispose of any asset, including any Equity Interest owned by it, nor will the
Company permit any of the Restricted Subsidiaries to issue any additional Equity
Interest in such Restricted Subsidiary, except:
(a) sales of inventory, used or surplus equipment and Permitted
Investments in the ordinary course of business;
(b) sales, transfers and dispositions to the Company or a Subsidiary;
provided that any such sales, transfers or dispositions involving a
--------
Subsidiary
that is not a Loan Party shall be made in compliance with Section
6.09;
(c) sales, transfers and other dispositions of assets (including Equity
Interests in Joint Venture Subsidiaries and including all, but not
less than all, the Equity Interests of a Wholly Owned Subsidiary or of
a Borrower owned by the Company or a Restricted Subsidiary) that are
not permitted by any other clause of this Section; provided that (i)
--------
the Net Proceeds of such sale, transfer or disposition are used, to
the extent required hereunder, to prepay Loans or to purchase
Telecommunications Assets (including pursuant to a Permitted Business
Acquisition) in accordance with the provisions of Section 2.10 (c),
(ii) the aggregate fair market value of all consideration payable for
all assets sold, transferred or otherwise disposed of in reliance upon
this clause (c) (including, without limitation, the amount of any
Indebtedness assumed by the transferee or its Affiliates in connection
with a sale of assets or Equity Interests) shall not exceed
$100,000,000 during any fiscal year of the Company and (iii) the
Company may not sell, transfer or dispose of the Equity Interests or
substantially all the assets of entities representing (after giving
effect to any mergers or other combinations of Borrowers) more than
three initial Borrowers hereunder pursuant to this clause (c);
(d) sales by the Company or Restricted Subsidiaries of Equity Interests of
a Joint Venture Subsidiary to the extent that the fair market value of
the consideration payable therefor exceeds the aggregate amount
permitted under clause (c) above (such excess amount being called the
"excess consideration"); provided that (i) such sales (together with
--------
any concurrent sale pursuant to clause (c) above) (x) constitute a
sale of all, but not less than all, the Equity Interests of such Joint
Venture Subsidiary owned by the Company and the Restricted
Subsidiaries and (y) are made to other holders (other than the Company
and its Affiliates) of Equity Interests of such Joint Venture
Subsidiary pursuant to binding requirements of the joint venture
agreements governing such Joint Venture Subsidiary and (ii) the
Company makes a prepayment of Loans pursuant to Section 2.10(c) in an
aggregate amount equal to the Net Proceeds attributable to such excess
consideration (it being understood that such Net Proceeds shall not be
eligible for
reinvestment in Telecommunications Assets in lieu of prepaying Loans);
(e) sales, transfers and other dispositions of Equity Interests of
JuniorNet, Megacable HomeLink or Intertainer; provided that the Net
--------
Proceeds thereof are used, to the extent required hereunder to prepay
Loans or to purchase Telecommunications Assets (including pursuant to
a Permitted Business Acquisition) in accordance with the provisions of
Section 2.10(c); and
(f) any issuance by Joint Venture Subsidiaries of additional Equity
Interests (i) to Persons other than the Company and its Restricted
Subsidiaries or (ii) to the Company and its Restricted Subsidiaries,
provided such investment by the Company or its Restricted Subsidiaries
is permitted by Section 6.04;
provided that all sales, transfers, leases and other dispositions permitted
--------
hereby (other than those among Loan Parties permitted by clause (b) above) shall
be made for fair value.
SECTION 6.06. Sale and Leaseback Transactions. The Company will not,
-------------------------------
and will not permit any of its Restricted Subsidiaries 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
hereinafter 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 assets that is made for cash consideration in an amount not less than
the cost of such fixed or capital asset and is consummated within 270 days after
the Company or such Restricted Subsidiary acquires or completes the construction
of such fixed or capital asset; provided that (i) the sum of the aggregate
--------
amount of Attributable Debt in respect of all such sale and leaseback
transactions of the Company and its Restricted Subsidiaries other than the
Starpower Group and the RCN-BecoCom Group and the aggregate amount of
Indebtedness permitted by paragraph (a)(v) of Section 6.01 shall not exceed
$180,000,000 at any time outstanding, (ii) the sum of the aggregate amount of
Attributable Debt in respect of all such sale and leaseback transactions of the
Starpower Group and the aggregate amount of Indebtedness permitted by paragraph
(a)(x) of Section 6.01 shall not exceed $100,000,000 at any time outstanding,
and (iii) the sum of the aggregate amount of Attributable Debt in respect of all
such sale and leaseback transactions of the RCN-BecoCom Group and the aggregate
amount of Indebtedness permitted by paragraph (a)(ix) of Section 6.01 shall not
exceed $100,000,000 at any time outstanding.
SECTION 6.07. Hedging Agreements. The Company will not, and will not
-------------------
permit any of its Restricted Subsidiaries to, enter into any Hedging Agreement,
other than (a) Hedging Agreements required by Section 5.14 and (b) Hedging
Agreements entered into in the ordinary course of business to hedge or mitigate
risks to which the Company or any Subsidiary is exposed in the conduct of its
business or the management of its liabilities.
SECTION 6.08. Restricted Payments; Payments of Indebtedness. The
---------------------------------------------
Company will not, and will not permit any Restricted Subsidiary to, declare or
make, or agree to pay or make, directly or indirectly, any Restricted Payment,
or incur any obligation (contingent or otherwise) to do so, except (i) the
Company may declare and pay dividends with respect to its capital stock payable
solely in additional shares of its capital stock or rights to acquire shares of
its capital stock, (ii) Subsidiaries may declare and pay dividends ratably with
respect to their capital stock, (iii) the Company may make Restricted Payments
(including open-market or other repurchases of stock of the Company), not
exceeding $25,000,000 during any fiscal year, pursuant to and in accordance with
stock option plans or other benefit plans for directors, management or employees
of the Company and its Subsidiaries; (iv) the Company may make Restricted
Payments for the purchase or acquisition of Equity Interests in any Subsidiary
(including any Joint Venture Subsidiary); provided that such Restricted Payment
--------
is made in compliance with Section 6.04(c), (d), (e), (j), (l) or (n) hereof;
(v) purchases or acquisitions of Equity Interests of Joint Venture Subsidiaries
resulting in such Subsidiaries becoming Wholly Owned Subsidiaries and Subsidiary
Loan Parties in accordance with Section 6.04(l), and (vi) other Restricted
Payments in an aggregate amount not exceeding $2,000,000 in any fiscal year.
The Company will not, and will not permit any Restricted Subsidiary
to, make or agree to pay or make, directly or indirectly, any payment or other
distribution (whether in cash, securities or other property) of or in respect of
principal of or interest on any Indebtedness, or any payment or other
distribution (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancelation or termination of any Indebtedness, except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of intercompany Indebtedness among the Company and its
Subsidiaries;
(iii) payment of regularly scheduled interest and principal payments as
and when due in respect of any Indebtedness;
(iv) refinancings of Indebtedness to the extent permitted by Section
6.01;
(v) payment of secured Indebtedness that becomes due as a result of the
casualty, condemnation, voluntary sale or transfer of the property
or assets securing such Indebtedness;
(vi) refinancings or repayments of acquired Indebtedness permitted
pursuant to paragraph (a)(vi) of Section 6.01 which are (x)
effected solely pursuant to the issuance of Permitted Debt or
capital stock of the Company and (y) consummated or made within 180
days of the acquisition of the Restricted Subsidiary giving rise to
such acquired Indebtedness;
(vii) payment of Indebtedness under Hedging Agreements in connection with
the termination (including early termination) of such Hedging
Agreements by the Company or a Restricted Subsidiary in the
ordinary course of business; and
(viii) mandatory prepayments by Joint Venture Subsidiaries of Indebtedness
incurred in compliance with the provisions of Sections 6.01 and
6.02 if applicable and any applicable provisions of the Company
Indentures.
SECTION 6.09. Transactions with Affiliates. The Company will not,
----------------------------
and will not permit any Restricted Subsidiary to, sell, lease or otherwise
transfer any property or assets to, or purchase, lease or otherwise acquire any
property or assets from, or otherwise engage in any other transactions with, any
of its Affiliates, except (a) transactions that are at prices and on terms and
conditions not less favorable to the Company or such Restricted Subsidiary than
could be obtained on an arm's-length basis from unrelated third parties, (b)
transactions between or among the Company, the Borrowers and the Subsidiary Loan
Parties not involving any other Affiliate, (c) any Restricted Payment permitted
by Section 6.08 and (d) transactions required to be effected pursuant to, and on
terms provided for in, existing agreements (as in effect on the date hereof)
listed in Schedule 6.09 attached hereto.
SECTION 6.10. Restrictive Agreements. Neither the Company nor the
-----------------------
Borrowers will, nor will they permit any Restricted Subsidiary to, directly or
indirectly, enter into, incur or permit to exist any agreement or other
arrangement that prohibits, restricts or imposes any condition upon (a) the
ability of the Company, the Borrowers
or any Restricted Subsidiary to create, incur or permit to exist any Lien upon
any of its property or assets, or (b) the ability of any Restricted Subsidiary
to pay dividends or other distributions with respect to any shares of its
capital stock or to make or repay loans or advances to the Borrowers or any
other Restricted Subsidiary or to Guarantee Indebtedness of the Borrowers or any
other Restricted Subsidiary; provided that (i) the foregoing shall not apply to
--------
restrictions and conditions imposed by law or by any Loan Document, (ii) the
foregoing shall not apply to restrictions and conditions under agreements
existing on the date hereof identified on Schedule 6.10 attached hereto (but
shall apply to any amendment or modification expanding the scope of any such
restriction or condition) or to restrictions or conditions under any agreement
that refinances or replaces such an agreement, provided that such restrictions
--------
or conditions are not more restrictive than those included in the agreement
being refinanced or replaced, (iii) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
Subsidiary pending such sale, provided such restrictions and conditions apply
only to the Subsidiary that is to be sold and such sale is permitted hereunder,
(iv) clause (a) of the foregoing shall not apply to restrictions or conditions
imposed by any agreement relating to secured Indebtedness permitted by this
Agreement if such restrictions or conditions apply only to the property or
assets securing such Indebtedness, (v) clause (a) of the foregoing shall not
apply to customary provisions in leases and other contracts restricting the
assignment thereof, (vi) the foregoing shall not apply to customary encumbrances
or restrictions applicable to a Joint Venture Subsidiary that is contained in a
"Permitted Credit Facility" (as such term is defined in the Company Indentures)
to which such Joint Venture Subsidiary is party and which encumbrances or
restrictions otherwise comply with the provisions of the Company Indentures
applicable to encumbrances or other restrictions entered into by "Restricted
Affiliates" (as such term is defined in the Company Indentures) and (vii) the
foregoing shall not apply to restrictions and conditions applicable to any Joint
Venture Subsidiary contained in any joint venture agreement relating to the
ability of such Joint Venture Subsidiary to create or permit to exist any
security interest in any Equity Interests of such Joint Venture Subsidiary.
SECTION 6.11. Designation of Unrestricted Subsidiaries. The Company
-----------------------------------------
will not designate any Subsidiary (other than a newly created Subsidiary in
which no investment has previously been made) as an "Unrestricted Subsidiary")
under this agreement (a "Designation") unless:
(i) no Event of Default shall have occurred and be continuing at the
time of or after giving effect to such Designation;
(ii) after giving effect to such Designation, the Company would be in
compliance with each of the covenants set forth in Section 6.12
calculated on a pro forma basis as if such Designation had occurred
immediately prior to the first day of the period of four consecutive
fiscal quarters most recently ended in respect of which financial
statements have been delivered by the Company pursuant to Section
5.01(a) or (b); and
(iii) the Company has delivered to the Agent (x) written notice of such
Designation and (y) a certificate, dated the effective date of such
Designation, of an Executive Officer stating that no Event of
Default has occurred and is continuing and setting forth reasonably
detailed calculations demonstrating pro forma compliance with
Section 6.12 in accordance with paragraph (ii) above.
Neither the Company nor any Restricted Subsidiary shall at any time (x) provide
a Guarantee of any Indebtedness of any Unrestricted Subsidiary, (y) be directly
or indirectly liable for any Indebtedness of any Unrestricted Subsidiary or (z)
be directly or indirectly liable for any other Indebtedness which provides that
the holder thereof may (upon notice, lapse of time or both) declare a default
thereon (or cause such Indebtedness or the payment thereof to be accelerated,
payable or subject to repurchase prior to its final scheduled maturity) upon the
occurrence of a default with respect to any other Indebtedness that is
Indebtedness of an Unrestricted Subsidiary, except in the case of clause (x) or
(y) to the extent permitted under Section 6.01 and Section 6.04 hereof. Each
Designation shall be irrevocable, and no Unrestricted Subsidiary may become a
Restricted Subsidiary, be merged with or into the Company or a Restricted
Subsidiary or liquidate into or transfer substantially all its assets to the
Company or a Restricted Subsidiary.
SECTION 6.12. Financial Covenants. The Company and the Borrowers
--------------------
will not:
(a) Minimum Cash Balances. Permit cash and cash equivalents on hand
----------------------
plus actual availability under the Revolving Facility to be less than
[Redacted] on the last day of any fiscal quarter ending at any time before
January 1, 2003.
(b) Maximum Senior Secured Debt to Adjusted Total Capitalization.
------------------------------------------------------------
Permit the ratio of Senior Secured Debt to Adjusted Total Capitalization to
exceed (i)35% on the last day of any fiscal quarter ending on or
prior to June 30, 2000 and (ii) 30% on the last day of any fiscal quarter
ending on or after July 1, 2000 and prior to April 1, 2002.
(c) Maximum Total Debt to Adjusted Total Capitalization. Permit Total
---------------------------------------------------
Debt minus the Cash Adjustment to exceed 75% of Adjusted Total
Capitalization on the last day of any fiscal quarter ending prior to
October 1, 2002.
(d) Homes Passed. Permit the number of Homes Passed at the end of any
------------
fiscal quarter ending on the date set forth below to be less than the
number set forth opposite such date:
Fiscal Quarter Ending Minimum Homes Passed
--------------------- --------------------
June 30, 1999 [Redacted]
September 30, 1999 [Redacted]
December 31, 1999 [Redacted]
March 31, 2000 [Redacted]
June 30, 2000 [Redacted]
September 30, 2000 [Redacted]
December 31, 2000 [Redacted]
March 31, 2001 [Redacted]
June 30, 2001 [Redacted]
September 30, 2001 [Redacted]
December 31, 2001 [Redacted]
(e) Minimum Consolidated Revenue. Permit Consolidated Revenue for any
----------------------------
period of four consecutive fiscal quarters ending on a date set forth below
to be less than the amount set forth opposite such date:
Fiscal Quarter Ending Minimum
--------------------- -------
Consolidated Revenue
--------------------
June 30, 1999 $[Redacted]
September 30, 1999 [Redacted]
December 31, 1999 [Redacted]
March 31, 2000 [Redacted]
June 30, 2000 [Redacted]
September 30, 2000 [Redacted]
December 31, 2000 [Redacted]
March 31, 2001 [Redacted]
June 30, 2001 [Redacted]
September 30, 2001 [Redacted]
December 31, 2001 [Redacted]
(f) Minimum On-Net Connections. Permit On-Net Connections at the end
---------------------------
of any fiscal quarter ending on a date set forth below to be less than the
number set forth opposite such date:
Fiscal Quarter Ending Minimum On-Net
--------------------- Connections
--------------
June 30, 1999 [Redacted]
September 30, 1999 [Redacted]
December 31, 1999 [Redacted]
March 31, 2000 [Redacted]
June 30, 2000 [Redacted]
September 30, 2000 [Redacted]
December 31, 2000 [Redacted]
March 31, 2001 [Redacted]
June 30, 2001 [Redacted]
September 30, 2001 [Redacted]
December 31, 2001 [Redacted]
(g) Maximum Cumulative Negative EBITDA. Permit cumulative negative
-----------------------------------
EBITDA from the period commencing with the first day of the first fiscal
quarter ending on or after the date of this Agreement to the last day of
each fiscal quarter ending during a period set forth below to exceed (i.e.,
---
be a greater negative number than) the amount set forth below for such
period:
Period Maximum
------ -------
Cumulative
----------
Negative
--------
EBITDA
------
June 30, 1999 through December 31, 1999 [Redacted]
January 1, 2000 through December 31, 2001 [Redacted]
(h) Minimum Annualized EBITDA. Permit Annualized EBITDA determined as
-------------------------
of any date set forth below to be less than the amount set forth opposite
such date below:
Date Minimum
---- -------
Annualized
----------
EBITDA
------
September 30, 2001 [Redacted]
December 31, 2001 [Redacted]
March 31, 2002 [Redacted]
(i) Maximum Senior Secured Debt to Annualized EBITDA. Permit the
------------------------------------------------
ratio of (i) Senior Secured Debt outstanding on any day from and including
(A) the last day of any fiscal quarter ending on the dates or during the
periods set forth below through (B) the day immediately preceding the last
day of the immediately following fiscal quarter to (ii) Annualized EBITDA
determined as of the date referred to in clause (i)(A) above to exceed the
ratio set forth below opposite such date:
Fiscal Quarter Ending Maximum Ratio
--------------------- -------------
June 30, 2002 5.00 to 1
September 30, 2002 5.00 to 1
December 31, 2002 [Redacted]
January 1, 2003 and thereafter [Redacted]
(j) Maximum Total Debt to Annualized EBITDA. Permit the ratio of (i)
----------------------------------------
Total Debt, minus the Cash Adjustment, outstanding on any day from and
including (A) the last day of any fiscal quarter ending on December 31,
2002 or thereafter in the years set forth below through (B) the day
immediately preceding the last day of the immediately following fiscal
quarter to (ii) Annualized EBITDA determined as of the date referred to in
clause (i)(A) above to exceed the ratio set forth below opposite such date
or period:
Fiscal Quarter Ending on
------------------------
or During Maximum Ratio
--------- -------------
December 31, 2002 10.00 to 1
Fiscal Year ending December 31, 2003 10.00 to 1
Fiscal Year ending December 31, 2004 8.00 to 1
Fiscal Year ending December 31, 2005 6.00 to 1
Fiscal Year ending December 31, 2006 5.50 to 1
Fiscal Year ending December 31, 2007 5.00 to 1
(k) Interest Coverage Ratio. Permit the ratio of (i) Annualized
------------------------
EBITDA determined as of the last day of any fiscal quarter ending on the
date or in the years set forth below to (ii) Annualized Cash Interest
Expense determined as of the last day of such fiscal quarter to be less
than the ratio set forth below opposite such date or period:
Fiscal Quarter Ending on
------------------------
or During Maximum Ratio
--------- -------------
December 31, 2001 1.25 to 1
March 31, 2002 1.25 to 1
June 30, 2002 1.25 to 1
September 30, 2002 1.50 to 1
December 31, 2002 1.50 to 1
Fiscal Year ending December 31, 2003 1.50 to 1
Fiscal Year ending December 31, 2004 1.75 to 1
Fiscal Year ending December 31, 2005 2.00 to 1
Fiscal Year ending December 31, 2006 2.00 to 1
Fiscal Year ending December 31, 2007 2.00 to 1
(l) Minimum Fixed Charge Coverage Ratio. Permit the ratio of (i)
------------------------------------
Annualized EBITDA determined as of the last day of any fiscal quarter
ending on or after
December 31, 2001 to (ii) Annualized Fixed Charges determined as of such
date to be less than 1.00 to 1 in respect of any such fiscal quarter ending
at any time from December 31, 2001 to and including June 30, 2002 and 1.20
to 1 in respect of any such fiscal quarter ending thereafter.
(m) Maximum Capital Expenditures. Permit Capital Expenditures of the
-----------------------------
Company and its Restricted Subsidiaries for any fiscal year to exceed the
amount set forth below opposite such year:
Fiscal Year Ending Maximum Capital
------------------ Expenditures
---------------
December 31, 1999 [Redacted]
December 31, 2000 [Redacted]
December 31, 2001 [Redacted]
December 31, 2002 [Redacted]
December 31, 2003 [Redacted]
December 31, 2004 [Redacted]
December 31, 2005 [Redacted]
December 31, 2006 [Redacted]
December 31, 2007 [Redacted]
Amounts not expended in any fiscal year may be carried over to subsequent
fiscal years. Notwithstanding the foregoing, in the event and whenever the
Company and the Restricted Subsidiaries, at any time prior to the second
anniversary of the date of this Agreement, have made Capital Expenditures
in the maximum amounts permitted by the table set forth above (after giving
effect to any carryover from a previous fiscal year), the Company and the
Restricted Subsidiaries may make additional Capital Expenditures prior to
such second anniversary in an aggregate amount not in excess of
$500,000,000. Any portion of such $500,000,000 basket not utilized by the
second anniversary of the date of this Agreement shall expire and not be
carried forward to any subsequent period.
ARTICLE VII
Events of Default
-----------------
If any of the following events ("Events of Default") shall occur:
-----------------
(a) any Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the
same shall become due and payable, whether at the due date thereof or at a
date fixed for prepayment thereof or otherwise;
(b) any Borrower or other Loan Party 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 this Agreement or any other
Loan Document, when and as the same shall become due and payable, and such
failure shall continue unremedied for a period of five days, in the case of
interest or fees, and 10 days after notice of nonpayment has been given to
the Company by the Agent or any Lender, in the case of other amounts;
(c) any representation or warranty made or deemed made by or on behalf
of the Company, the Borrowers or any Restricted Subsidiary 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 material respect when made or
deemed made;
(d) the Company or any Borrower shall fail to observe or perform any
covenant, condition or agreement contained in Section 5.02(a), 5.04 (with
respect to the existence of the Company or any Borrower) or in Article VI
(except with respect to Sections 6.03(b), 6.09 and 6.10 of such Article);
(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 Agent to the Company (which notice will be given at the request of any
Lender);
(f) the Company, the Borrowers or any Restricted Subsidiary 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 applicable grace
period);
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables
or permits (with or without the giving of notice, the lapse of time or
both) the holder or holders of any Material Indebtedness or any trustee or
agent on its or their behalf to cause any 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 (i) secured Indebtedness that becomes due as a result of
the casualty, condemnation, voluntary sale or transfer of the property or
assets securing such Indebtedness or (ii) Indebtedness of a Joint Venture
Subsidiary that becomes due as a result of mandatory prepayments from
excess cash flow, equity issuances or assets sales of such Joint Venture
Subsidiary required pursuant to a "Permitted Credit Facility" (as such term
is defined in the Company Indentures) under which such Indebtedness was
incurred;
(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 Company, a Borrower or any Significant 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 Company, a
Borrower or any Significant 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 Company, a Borrower or any Significant 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 itself 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 Company, a Borrower or any Significant 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 $10,000,000 shall be rendered against the Company, any
Borrower, any Restricted 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 Company, a Borrower or any Restricted Subsidiary to enforce any such
judgment;
(l) 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;
(m) any Lien purported to be created under any Security Document shall
cease to be, or shall be asserted by any Loan Party not to be, a valid and
perfected Lien on any Collateral, with the priority required by the
applicable Security Document, except (i) as a result of the sale or other
disposition of the applicable Collateral in a transaction permitted under
the Loan Documents or (ii) as a result of the Agent's failure to maintain
possession of any stock certificates, promissory notes or other instruments
delivered to it under the Pledge Agreement; or
(n) a Change in Control shall occur;
then, and in every such event (other than an event with respect to the Company
or a Borrower described in clause (h) or (i) of this Article), and at any time
thereafter during the continuance of such event, the Agent may, and at the
request of the Required Lenders shall, by notice to the Company, take either or
both of the following actions, at the same or different times: (i) terminate
the Commitments, and thereupon the Commitments shall terminate immediately, and
(ii) declare the Loans then outstanding to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with accrued interest
thereon and all fees and other obligations of the Borrowers accrued hereunder,
shall become due and payable immediately, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrowers;
and in case of any event with
respect to the Company or any 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 Borrowers accrued hereunder, shall automatically become
due and payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrowers.
ARTICLE VIII
The Agent
---------
Each of the Lenders and the Issuing Bank hereby irrevocably appoints
the Agent as its agent and authorizes the Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Agent by the terms of
the Loan Documents, together with such actions and powers as are reasonably
incidental thereto.
The bank serving as the 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 the Agent, and such bank and its Affiliates may accept
deposits from, lend money to and generally engage in any kind of business with
the Company, the Borrowers or any Subsidiary or other Affiliate thereof as if it
were not the Agent hereunder.
The Agent shall not have any duties or obligations except those
expressly set forth in the Loan Documents. Without limiting the generality of
the foregoing, (a) the Agent shall not be subject to any fiduciary or other
implied duties, regardless of whether a Default has occurred and is continuing,
(b) the Agent shall not 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 the 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, the
Agent shall not have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to the Company, the Borrowers or
any of the Subsidiaries that is communicated to or obtained by the bank serving
as Agent or any of its Affiliates in any capacity. The Agent shall not be
liable for any action taken or not taken by it with the consent or at the
request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section
9.02) or in the absence of its own gross negligence or wilful misconduct. The
Agent
shall not be deemed to have knowledge of any Default unless and until written
notice thereof is given to the Agent by the Company, the Borrowers or a Lender,
and the Agent shall not 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 the Agent.
The 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 Agent also may rely
upon any statement made to it orally or by telephone and believed by it to be
made by the proper Person, and shall not incur any liability for relying
thereon. The Agent may consult with legal counsel (who may be counsel for the
Company or a 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 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 the Agent. The
Agent and any such sub-agent may perform any and all its duties and exercise its
rights and powers through their respective Related Parties. The exculpatory
provisions of the preceding paragraphs shall apply to any such sub-agent and to
the Related Parties of each Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Agent.
Subject to the appointment and acceptance of a successor the Agent as
provided in this paragraph, the Agent may resign at any time by notifying the
Lenders, the Issuing Banks and the Company in writing. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Company, to appoint a successor. 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 and the Issuing Bank, 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 Borrowers to a successor Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrowers and such
successor. After the 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 the 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 the 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.
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 Company or any Borrower, to it in care of the Company at RCN
Corporation, 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000, telecopy:
(000) 000-0000, Attention of Xx. Xxxxx Xxxxxxx, Chief Financial Officer,
(Telecopy No. 609-951-8637);
(b) if to the Agent, or the Issuing Banks, to The Chase Manhattan
Bank, Loan and Agency Services Group, One Chase Xxxxxxxxx Xxxxx, 0xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention of Xxxxxxxxxxx Xxxxxx (Telecopy No.
(000) 000-0000), with a copy to The Chase Manhattan
Bank, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of Xxxx Xxxxx
(Telecopy No. (000) 000-0000);
(c) if to any other Lender, to it at its address (or telecopy number)
set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of delivery.
Each Borrower hereby irrevocably authorizes and appoints the Company as its
agent to give and receive any notices on its behalf under this Agreement and
each other Loan Document, and any such notice given or received by the Company
on behalf of any Borrower shall be fully effective as if given or received by
such Borrower at such time, regardless of such Borrower's actual knowledge
thereof.
SECTION 9.02. Waivers; Amendments. (a) No failure or delay by the
--------------------
Agent, the Issuing Bank 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 Agent, the Issuing Bank 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 or issuance of a Letter of
Credit shall not be construed as a waiver of any Default, regardless of whether
the Agent, any Lender or the Issuing Bank may have had notice or knowledge of
such Default at the time.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Company, the Borrowers 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 Agent and the Loan Party or Loan Parties that are
parties thereto, in each case 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 LC Disbursement or
reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (iii) postpone the
maturity of any Loan, or any scheduled date of payment of the principal amount
of any Term Loan under Section 2.09, or the required date of reimbursement of
any LC Disbursement, or any date for the payment of any interest or fees payable
hereunder, or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date of expiration of any Commitment, without the written
consent of each Lender affected thereby, (iv) change Section 2.18(b) or (c) in a
manner that would alter the pro rata sharing of payments required thereby,
without the written consent of each Lender, (v) change any of the provisions of
this Section or the percentage set forth in the definition of "Required Lenders"
or any other provision of any Loan Document specifying the number or percentage
of Lenders (or Lenders of any Class) 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 (or each Lender of such Class, as the
case may be), (vi) release the Company or any Subsidiary Loan Party from its
Guarantee under a Guarantee Agreement (except as expressly provided in such
Guarantee Agreement or by Section 9.15 hereof), or limit its liability in
respect of such Guarantee, without the written consent of each Lender, (vii)
release all or substantially all of the Collateral from the Liens of the
Security Documents, 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 (including without limitation
prepayment fees) due to Lenders holding Loans of any Class differently than
those holding Loans of any other Class, without the written consent of Lenders
holding a majority in interest of the outstanding Loans and unused Commitments
of each affected Class; provided further that (A) no such agreement shall amend,
----------------
modify or otherwise affect the rights or duties of the Agent, or the Issuing
Bank without the prior written consent of the Agent, or an Issuing Bank, as the
case may be, and (B) any waiver, amendment or modification of this Agreement
that by its terms affects the rights or duties under this Agreement of the
Revolving Lenders (but not the Tranche A Lenders and Tranche B Lenders), the
Tranche A Lenders (but not the Revolving Lenders and Tranche B Lenders) or the
Tranche B Lenders (but not the Revolving Lenders and Tranche A Lenders) may be
effected by an agreement or agreements in writing entered into by the Company,
the Borrowers and a majority in interest of the affected Class of Lenders.
Notwithstanding the foregoing, any provision of this Agreement may be amended by
an agreement in writing entered into by the Company, the Borrowers, the Required
Lenders and the Agent (and, if its rights or obligations are affected thereby,
an
Issuing Bank) if (i) by the terms of such agreement the Commitment of each
Lender not consenting to the amendment provided for therein shall terminate upon
the effectiveness of such amendment and (ii) at the time such amendment becomes
effective, each Lender not consenting thereto receives payment in full of the
principal of and interest accrued on each Loan made by it and all other amounts
owing to it or accrued for its account under this Agreement.
SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) The Borrowers
-----------------------------------
shall pay (i) all reasonable out-of-pocket expenses incurred by the Agent and
its Affiliates, including the reasonable fees, charges and disbursements of
counsel for the Agent, in connection with the syndication of the credit
facilities provided for herein, the preparation of the Loan Documents or any
amendments, modifications or waivers of the provisions thereof (whether or not
the transactions contemplated hereby or thereby shall be consummated), (ii) all
reasonable out-of-pocket expenses incurred by the Issuing Bank in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder and (iii) upon the occurrence and during the
continuation of an Event of Default, all out-of-pocket expenses incurred by the
Agent, the Issuing Bank or any Lender, including the fees, charges and
disbursements of any counsel for the Agent, the Issuing Bank or any Lender, in
connection with 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 or Letters of Credit issued hereunder, including all such
out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.
(b) The Borrowers shall, without duplication on a joint and several
basis, indemnify the Agent, the Issuing Bank and each Lender, and each Related
Party of any of the foregoing Persons (each such Person being called an
"Indemnitee") against, and hold each Indemnitee harmless from, any and all
----------
losses, claims, damages, liabilities and related expenses, including the fees,
charges and disbursements of any counsel for any Indemnitee, incurred by or
asserted against any Indemnitee arising out of, in connection with, or as a
result of any actual or prospective claim, litigation, investigation or
proceeding relating to (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 Letter of Credit or the use of the proceeds therefrom
(including any refusal by the Issuing Bank to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms of such Letter of Credit),
(iii) any actual or alleged presence or release of Hazardous Materials on or
from any Mortgaged Property or any other property currently or formerly owned or
operated by the Company or any of its Subsidiaries, or any Environmental
Liability related in any way to the Company or any of its Subsidiaries, whether
such claim, litigation, investigation or proceeding is based on contract, tort
or any other theory and regardless of whether any Indemnitee is a party thereto;
provided that such indemnity shall not, as to any Indemnitee, be available to
--------
the extent that such losses, claims, damages, liabilities or related expenses
are determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or wilful misconduct of such
Indemnitee.
(c) To the extent that the Borrowers fail to pay any amount required
to be paid by them to the Agent or the Issuing Bank under paragraph (a) or (b)
of this Section each Lender severally agrees to pay to the Agent or the Issuing
Bank, as the case may be, 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 the Agent or the Issuing Bank 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 Revolving Exposures, outstanding Term Loans and
unused Commitments at the time.
(d) To the extent permitted by applicable law, neither the Company
nor any of the Borrowers shall assert, and each 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, any Loan or Letter of Credit or the use of the
proceeds thereof.
(e) All amounts due under this Section shall be payable promptly
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 (including any
Affiliate of an Issuing Bank that issues any Letter of Credit), except that
neither the Company nor any Borrower may 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 Company or any 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 (including any Affiliate of the Issuing
Bank that issues any Letter of Credit) and, to the extent expressly contemplated
hereby, the Related Parties of each of the Agent, the Issuing Bank and 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 assignees 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 or a
Related Fund of a Lender, each of the Company and the Agent (and, in the case of
an assignment of all or a portion of a Revolving Commitment or any Lender's
obligations in respect of its LC, the Issuing Bank) must give its prior written
consent to such assignment (which consent shall not be unreasonably withheld or
delayed); provided that the consent of the Company shall not be required for any
--------
assignment that occurs at any time when an Event of Default pursuant to
paragraphs (h) and (i) of Article VII hereof shall have occurred and be
continuing, (ii) except in the case of an assignment to a Lender or an Affiliate
of a Lender or a Related Fund of a Lender or an assignment of the entire
remaining amount of the assigning Lender's Commitment or Loans, the amount of
the Commitment or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Agent) shall not be less than $5,000,000 unless
each of the Company and the Agent 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 the assigning Lender's rights and obligations in
respect of one Class of Commitments or Loans, (iv) the parties to each
assignment shall execute and deliver to the Agent an Assignment and Acceptance,
together with a processing and recordation fee of $3,500, and (v) the assignee,
if it shall not be a Lender, shall deliver to the Agent an Administrative
Questionnaire. Subject to acceptance and recording thereof pursuant to
paragraph (d) of this Section, from and after the effective date specified in
each Assignment and Acceptance the assignee thereunder shall be a party hereto
and, to the extent of the interest assigned by such Assignment and Acceptance,
have the rights and obligations of a Lender under this Agreement, and the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all of the
assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto but shall continue to be
entitled to the benefits of Sections 2.15, 2.16, 2.17 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 Agent, acting for this purpose as an agent of the Borrowers,
shall maintain at one of its offices in The City of New York 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 Commitment of, and principal
amount of the Loans and LC Disbursements owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the Register
--------
shall be conclusive, and Company, the Borrowers, the Agent, the Issuing Bank 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 Borrowers, the Issuing Bank 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), the processing and recordation fee referred to in paragraph (b) of
this Section and any written consent to such assignment required by paragraph
(b) of this Section, the Agent shall accept such Assignment and Acceptance and
record the information contained therein in the Register. No assignment shall
be effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Company, the
Borrowers, the Agent or the Issuing Bank, sell participations to one or more
banks or other entities (a "Participant") in all or a portion of such Lender's
-----------
rights and obligations under this Agreement (including all or a portion of its
Commitment 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 Company, the Borrowers, the Agent, the Issuing
Bank 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 Company
and the Borrowers agree that each Participant shall be entitled to the benefits
of Sections 2.15, 2.16 and 2.17 to the same extent as if it were a Lender and
had acquired its interest by assignment pursuant to paragraph (b) of this
Section. To the extent permitted by law, each Participant also shall be entitled
to the benefits of Section 9.08 as though it were a Lender, provided such
Participant agrees to be subject to Section 2.18(c) as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.15 or 2.17 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Company's prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 2.17 unless
the Company is notified of the participation sold to such Participant and such
Participant complies, for the benefit of the Company, with Section 2.17(e) as
though it were a Lender.
(g) Without notice to or consent from the Agent or the Company, 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, without limitation, any pledge or assignment to secure obligations to
a Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
--------
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.
SECTION 9.05. Survival. All covenants, agreements, representations
---------
and warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that the Agent, the Issuing Bank 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 or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated. The provisions of
Sections 2.15, 2.16, 2.17 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 Letters of Credit and the Commitments or the termination of this
Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. This
-----------------------------------------
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement,
the other Loan Documents and any separate letter agreements with respect to fees
payable to the Agent constitute the entire contract among the parties relating
to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.01, this Agreement shall become effective when it shall
have been executed by the Agent and when the 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 Company or any Borrower
against any of and all the obligations of the Borrowers 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 deposits 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) Each of the Company and the Borrowers 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 the Agent, the Issuing Bank or any Lender may otherwise
have to bring any action or proceeding relating to this Agreement or any other
Loan Document against the Company, the Borrowers or its properties in the courts
of any jurisdiction.
(c) Each of the Company and the Borrowers hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any other Loan Document in any court referred to in paragraph (b) of this
Section. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of
process by registered or certified mail, return receipt requested. Nothing in
this Agreement or any other Loan Document will affect the right of any party to
this Agreement to serve process in any other manner permitted by law.
SECTION 9.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
---------------------
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION.
SECTION 9.11. Headings. Article and Section headings and the Table
---------
of Contents used herein are for convenience of reference only, are not part of
this Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12. Confidentiality. Each of the Agent, the Issuing Bank
----------------
and the Lenders agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its and its
Affiliates' and its Related Funds' directors, officers, employees and agents,
including accountants, legal counsel and other advisors (other than securities
analysts) or to any direct or indirect contractual counterparty in swap
agreements or such contractual counterparty's professional advisor (so long as
such contractual counterparty or professional advisor to such contractual
counterparty agrees in writing to be bound by the provisions of this Section
9.12) (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) provided that
such assignee or Participant, or such prospective assignee or Participant agrees
in writing to be bound by the confidentiality provisions of this Section 9.12,
to any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement, (g) with
the consent of the Company 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 the Agent, the Issuing Bank or any Lender on a
nonconfidential basis from a source other than the Company or the Borrowers. For
the purposes of this Section, "Information" means all information received from
-----------
the Company or the Borrowers relating to the Company or the Borrowers or their
business, other than any such information that is available to the Agent, the
Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by the
Company or the Borrowers; provided that, in the case of information received
--------
from the Company or the Borrowers after the date hereof, such information is
clearly 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. Liability of Borrowers. The Borrowers are engaged as
-----------------------
an integrated group in the telecommunications businesses conducted by them, and
each Borrower expects to derive benefit, directly or indirectly, from the credit
extended by the Lenders hereunder, both in its individual capacity and as a
member of such integrated group. Each Borrower will be jointly and severally
liable for the payment of all Obligations incurred under this Agreement and the
other Loan Documents, including all obligations in respect of principal,
interest, reimbursement of LC Disbursements, the posting of cash Collateral,
fees, expense reimbursements and indemnities. If, in any action or proceeding
before any court of competent jurisdiction under any state or Federal
bankruptcy, insolvency, reorganization or similar law affecting the rights of
creditors generally, the joint and several obligations of any Borrower in
respect of the Obligations would otherwise, taking into account the provisions
of the Indemnity, Subrogation and Contribution Agreement and other rights of
such Borrower under applicable law, be held or determined to be void, invalid or
unenforceable, or subordinated to the claims of other senior creditors of such
Borrower, on account of the amount of such Borrower's liability in respect of
the Obligations, then, notwithstanding any provision hereof to the contrary, the
amount of such liability shall be automatically limited and reduced to the
highest amount that is valid and enforceable and not subordinated to the claims
of other senior creditors, as determined by such court in such action or
proceeding.
SECTION 9.14. Interest Rate Limitation. Notwithstanding anything
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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
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maximum lawful rate (the "Maximum Rate") which may be contracted for, charged,
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taken, received or reserved by the Lender holding such Loan in
accordance with applicable law, the rate of interest payable in respect of such
Loan hereunder, together with all Charges payable in respect thereof, shall be
limited to the Maximum Rate and, to the extent lawful, the interest and Charges
that would have been payable in respect of such Loan but were not payable as a
result of the operation of this Section shall be cumulated and the interest and
Charges payable to such Lender in respect of other Loans or periods shall be
increased (but not above the Maximum Rate therefor) until such cumulated amount,
together with interest thereon at the Federal Funds Effective Rate to the date
of repayment, shall have been received by such Lender.
SECTION 9.15. Release of Subsidiaries and Borrowers. (a) If (i) the
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Agent receives a certificate from the chief executive officer, the chief
financial officer or treasurer of the Company certifying as of the date of that
certificate that, after the consummation of the transaction or series of
transactions described in reasonable detail satisfactory to the Agent in such
certificate on such date, the Subsidiary Loan Party or Borrower, as the case may
be, identified in such certificate will no longer be a Subsidiary of the
Company, (ii) such transactions are consummated on such date in accordance with
and without
violating the provisions of this Agreement or any other Loan Document, and (iii)
in the case of a Borrower, any outstanding Letters of Credit issued for the
account of such Borrower have been, or arrangements are in place for them to be,
terminated, then (x) such Subsidiary's Guarantee shall automatically terminate
and such Subsidiary shall cease to be a party to any Loan Document or (y) such
Borrower shall automatically cease to be a party to this Agreement and the other
Loan Documents.
(b) No such termination or cessation shall release, reduce, or
otherwise adversely affect the obligations of any other Loan Party under this
Agreement, any other Guarantee, or any other Loan Document, all of which
obligations continue to remain in full force and effect.
(c) The Lenders shall, at the Company's expense execute such
documents as the Company may reasonably request to evidence such termination or
cessation, as the case may be.
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.
RCN CORPORATION,
by
_________________________
Name:
Title:
RCN TELECOM SERVICES OF
PENNSYLVANIA, INC.
by
_________________________
Name:
Title:
RCN CABLE SYSTEMS, INC.,
by
________________________________
Name:
Title:
JAVA NET, INC.,
by
________________________________
Name:
Title:
RCN FINANCIAL MANAGEMENT, INC.,
by
________________________________
Name:
Title:
UNET HOLDING, INC.,
by
________________________________
Name:
Title:
INTERPORT COMMUNICATIONS CORP.,
by
________________________________
Name:
Title:
ENET HOLDING, INC.,
by
________________________________
Name:
Title:
