EXHIBIT 4.1
CREDIT AGREEMENT
dated as of December 19, 1994
among
ROCHESTER TELEPHONE CORPORATION
the Banks signatory hereto
and
THE CHASE MANHATTAN BANK, N.A.
as Agent
Table of Contents
ARTICLE 1 DEFINITIONS; ACCOUNTING TERMS. . . . . . . . . . . . . . 5
Section 1.01 Definitions. . . . . . . . . . . . . . . . . . . . 5
Section 1.02 Accounting Terms . . . . . . . . . . . . . . . . .12
ARTICLE 2 THE CREDIT.. . . . . . . . . . . . . . . . . . . . . . .12
Section 2.01 The Loans. . . . . . . . . . . . . . . . . . . . .12
Section 2.02 The Notes. . . . . . . . . . . . . . . . . . . . .12
Section 2.03 Purpose. . . . . . . . . . . . . . . . . . . . . .12
Section 2.04 Borrowing Procedures . . . . . . . . . . . . . . .13
Section 2.05 Prepayments and Conversions. . . . . . . . . . . .13
Section 2.06 Interest Periods; Renewals . . . . . . . . . . . .13
Section 2.07 Changes of Commitments . . . . . . . . . . . . . .14
Section 2.08 Certain Notices. . . . . . . . . . . . . . . . . .14
Section 2.09 Minimum Amounts. . . . . . . . . . . . . . . . . .14
Section 2.10 Interest . . . . . . . . . . . . . . . . . . . . .15
Section 2.11 Fees . . . . . . . . . . . . . . . . . . . . . . .15
Section 2.12 Payments Generally . . . . . . . . . . . . . . . .16
Section 2.13 Quoted Rate Loans. . . . . . . . . . . . . . . . .16
ARTICLE 3 YIELD PROTECTION; ILLEGALITY; ETC. . . . . . . . . . . .17
Section 3.01 Additional Costs . . . . . . . . . . . . . . . . .17
Section 3.02 Limitation on Types of Loans . . . . . . . . . . .19
Section 3.03 Illegality . . . . . . . . . . . . . . . . . . . .19
Section 3.04 Certain Conversions. . . . . . . . . . . . . . . .19
Section 3.05 Certain Compensation . . . . . . . . . . . . . . .20
ARTICLE 4 CONDITIONS PRECEDENT.. . . . . . . . . . . . . . . . . .21
Section 4.01 Documentary Conditions Precedent . . . . . . . . .21
Section 4.02 Additional Conditions Precedent. . . . . . . . . .22
Section 4.03 Deemed Representations . . . . . . . . . . . . . .22
ARTICLE 5 REPRESENTATIONS AND WARRANTIES.. . . . . . . . . . . . .22
Section 5.01 Incorporation, Good Standing and Due . . . . . . . .
Qualification. . . . . . . . . . . . . . . . . . 22
Section 5.02 Corporate Power and Authority;\
No Conflicts . . . . . . . . . . . . . . . . . . .22
Section 5.03 Legally Enforceable Agreements. . . . . . . . . . .23
Section 5.04 Litigation. . . . . . . . . . . . . . . . . . . . .23
Section 5.05 Financial Statements. . . . . . . . . . . . . . . .23
Section 5.06 Ownership and Liens . . . . . . . . . . . . . . . .24
Section 5.07 Taxes . . . . . . . . . . . . . . . . . . . . . . .24
Section 5.08 ERISA . . . . . . . . . . . . . . . . . . . . . . .24
ARTICLE 6 AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . .24
Section 6.01 Maintenance of Existence. . . . . . . . . . . . . .25
Section 6.02 Conduct of Business . . . . . . . . . . . . . . . .25
Section 6.03 Maintenance of Insurance. . . . . . . . . . . . . .25
Section 6.04 Compliance with Laws. . . . . . . . . . . . . . . .25
Section 6.05 Reporting Requirements. . . . . . . . . . . . . . .25
ARTICLE 7 NEGATIVE COVENANTS.. . . . . . . . . . . . . . . . . . .28
Section 7.01 Mergers . . . . . . . . . . . . . . . . . . . . . .28
Section 7.02 Liens . . . . . . . . . . . . . . . . . . . . . . .28
ARTICLE 8 FINANCIAL COVENANTS. . . . . . . . . . . . . . . . . . .29
Section 8.01 Minimum Tangible Net Worth. . . . . . . . . . . . .29
Section 8.02 Leverage Ratio. . . . . . . . . . . . . . . . . . .30
ARTICLE 9 EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . .30
Section 9.01 Events of Default . . . . . . . . . . . . . . . . .30
Section 9.02 Remedies. . . . . . . . . . . . . . . . . . . . . .31
ARTICLE 10 THE AGENT; RELATIONS AMONG BANKS AND BORROWER. . . . . .32
Section 10.01 Appointment, Powers and Immunities
of Agent. . . . . . . . . . . . . . . . . . . . . .32
Section 10.02 Reliance by Agent . . . . . . . . . . . . . . . . .32
Section 10.03 Defaults. . . . . . . . . . . . . . . . . . . . . .33
Section 10.04 Rights of Agent as a Bank . . . . . . . . . . . . .33
Section 10.05 Indemnification of Agent. . . . . . . . . . . . . .33
Section 10.06 Documents . . . . . . . . . . . . . . . . . . . . .34
Section 10.07 Non-Reliance on Agent and Other Banks . . . . . . .34
Section 10.08 Failure of Agent to Act . . . . . . . . . . . . . .34
Section 10.09 Resignation or Removal of Agent . . . . . . . . . .35
Section 10.10 Amendments Concerning Agency Function . . . . . . .35
Section 10.11 Liability of Agent. . . . . . . . . . . . . . . . .35
Section 10.12 Transfer of Agency Function . . . . . . . . . . . .35
Section 10.13 Non-Receipt of Funds by the Agent . . . . . . . . .35
Section 10.14 Withholding Taxes . . . . . . . . . . . . . . . . .36
Section 10.15 Several Obligations and Rights of Banks . . . . . .36
Section 10.16 Pro Rata Treatment of Loans, Etc. . . . . . . . . .36
Section 10.17 Sharing of Payments Among Banks . . . . . . . . . .37
ARTICLE 11 MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . .37
Section 11.01 Amendments and Waivers. . . . . . . . . . . . . . .37
Section 11.02 Usury . . . . . . . . . . . . . . . . . . . . . . .38
Section 11.03 Expenses. . . . . . . . . . . . . . . . . . . . . .38
Section 11.04 Survival. . . . . . . . . . . . . . . . . . . . . .38
Section 11.05 Assignment; Participations. . . . . . . . . . . . .38
Section 11.06 Notices . . . . . . . . . . . . . . . . . . . . . .39
Section 11.07 Setoff. . . . . . . . . . . . . . . . . . . . . . .39
Section 11.08 Jurisdiction; Immunities. . . . . . . . . . . . . .40
Section 11.0 Table of Contents; Headings. . . . . . . . . . . . .40
Section 11.10 Severability. . . . . . . . . . . . . . . . . . . .40
Section 11.11 Counterparts. . . . . . . . . . . . . . . . . . . .41
Section 11.12 Integration . . . . . . . . . . . . . . . . . . . .41
Section 11.13 Governing Law . . . . . . . . . . . . . . . . . . .41
Section 11.14 Confidentiality . . . . . . . . . . . . . . . . . .41
Section 11.15 Treatment of Certain Information. . . . . . . . . .41
Section 11.16 Substitution of R-Net As Borrower . . . . . . . . .42
Section 11.17 Treatment of Certain Information. . . . . . . . . .44
EXHIBITS
Exhibit 2.02 Promissory Note . . . . . . . . . . . . . . . . . .54
Exhibit 4.01(b) Authorization Letter. . . . . . . . . . . . . . .57
Exhibit 4.01(e) Security Agreement. . . . . . . . . . . . . . . .59
Exhibit 4.01(f) Opinion of Borrower . . . . . . . . . . . . . . .72
Exhibit 11.16 Certificate of Adoption . . . . . . . . . . . . . .74
Exhibit 11.16(f) Rnet Financial Structure . . . . . . . . . . . .80
Exhibit 11.16(h) Opinion of R-Net . . . . . . . . . . . . . . . .81
CREDIT AGREEMENT dated as of December 19, 1994 among
ROCHESTER TELEPHONE CORPORATION, a corporation organized under
the laws of New York (the "Borrower" and "Rochester Tel"), each
of the banks which is a signatory hereto (individually a "Bank"
and collectively the "Banks") and THE CHASE MANHATTAN BANK ,
N.A., a national banking association organized under the laws of
the United States of America, as agent for the Banks (in such
capacity, together with its successors in such capacity, the
"Agent").
The Borrower desires that the Banks extend credit as
provided herein and the Banks are prepared to extend such credit.
Accordingly, the Borrower, the Banks and the Agent agree as
follows:
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS.
Section 1.01. Definitions. As used in this Agreement the
following terms have the following meanings (terms defined in the
singular to have a correlative meaning when used in the plural
and vice versa):
"Affiliate" means any Person: (a) which directly or
indirectly Controls, or is Controlled by, or is under common
Control with, the Borrower or any of its Subsidiaries; (b) which
directly or indirectly beneficially owns or holds 5% or more of
any class of voting stock of the Borrower or any such Subsidiary;
(c) 5% or more of the voting stock of which is directly or
indirectly beneficially owned or held by the Borrower or such
Subsidiary; or (d) which is a partnership in which the Borrower
or any of its Subsidiaries is a general partner.
"Agreement" means this Credit Agreement, as amended or
supplemented from time to time. References to Articles,
Sections, Exhibits, Schedules and the like refer to the Articles,
Sections, Exhibits, Schedules and the like of this Agreement
unless otherwise indicated.
"Authorization Letter" means the letter agreement executed
by the Borrower in the form of Exhibit 4.01(b) .
"Banking Day" means any day on which commercial banks are
not authorized or required to close in New York City and whenever
such day relates to a Eurodollar Loan or notice with respect to
any Eurodollar Loan, a day on which dealings in Dollar deposits
are also carried out in the London interbank market.
"Borrower" shall mean, initially, Rochester Tel, and it
shall mean R-Net at such time as R-Net may become the Borrower
pursuant to Section 11.16.
"Capital Lease" means any lease which has been or should be
capitalized on the books of the lessee in accordance with GAAP.
"Closing Date" means the date this Agreement has been
executed by the Borrower, the Banks and the Agent.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Commitment" means, with respect to each Bank, the
obligation of such Bank to make Variable Rate Loans and
Eurodollar Loans under this Agreement, in the following aggregate
principal amount, as such amount may be reduced or otherwise
modified from time to time:
The Chase Manhattan Bank, N.A.: $35,000,000;
Chemical Bank: $30,000,000;
Union Bank of Switzerland: $25,000,000;
Marine Midland Bank: $20,000,000;
NationsBank of Texas, N.A.: $20,000,000;
PNC Bank, N.A.: $20,000,000;
Manufacturers and Traders Trust
Company: $10,000,000.
-----------
Total: $160,000,000.
============
"Consolidated Funded Debt" means Funded Debt of the
Borrower and its Consolidated Subsidiaries, as determined on a
consolidated basis in accordance with GAAP.
"Consolidated Subsidiary" means any Subsidiary whose
accounts are or are required to be consolidated with the accounts
of the Borrower in accordance with GAAP.
"Consolidated Tangible Net Worth" means Tangible Net Worth
of the Borrower and its Consolidated Subsidiaries, as determined
on a consolidated basis in accordance with GAAP.
"Control" means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting
securities, by contract, or otherwise.
"Default" means any event which with the giving of notice
or lapse of time, or both, would become an Event of Default.
"Default Rate" means, with respect to the principal of any
Loan and, to the extent permitted by law, any other amount
payable by the Borrower under this Agreement or any Note that is
not paid when due (whether at stated maturity, by acceleration or
otherwise), a rate per annum during the period from and including
the due date, to, but excluding the date on which such amount is
paid in full equal to 1% above the Variable Rate as in effect
from time to time (provided that, if the amount so in default is
principal of a Fixed Rate Loan and the due date thereof is a day
other than the last day of the Interest Period therefor, the
"Default Rate" for such principal shall be, for the period from
and including the due date and to but excluding the last day of
the Interest Period therefor, 2% above the interest rate for such
Loan as provided in Section 2.10 hereof and, thereafter, the rate
provided for above in this definition).
"Dollars" and the sign "$" mean lawful money of the United
States of America.
"Environmental Laws" means any and all federal, state,
local and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or other governmental
restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants,
contaminants, chemicals, or industrial, toxic or hazardous
substances or wastes into the environment including, without
limitation, ambient air, surface water, ground water, or land, or
otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, or handling of
pollutants, contaminants, chemicals, or industrial, toxic or
hazardous substances or wastes.
"ERISA" means the Employee Retirement Income Security Act
of 1974, as amended from time to time, including any rules and
regulations promulgated thereunder.
"ERISA Affiliate" means any corporation or trade or
business which is a member of any group of organizations (i)
described in Section 414(b) or (c) of the Code of which the
Borrower is a member, or (ii) solely for purposes of potential
liability under Section 302(c)(11) of ERISA and Section
412(c)(11) of the Code and the lien created under Section 302(f)
of ERISA and Section 412(n) of the Code, described in Section
414(m) or (o) of the Code of which the Borrower is a member.
"Eurodollar Loan" means any Loan when and to the extent
the interest rate therefor is determined on the basis of the
definition of "Fixed Base Rate."
"Event of Default" has the meaning given such term in
Section 9.01.
"Facility Documents" means this Agreement, the Notes, the
Authorization Letter and the Security Agreement.
"Financing Statements" has the meaning given such term in
Section 4.01(e).
"Fixed Base Rate" means with respect to any Interest
Period for a Eurodollar Loan, the rate per annum (rounded
upwards, if necessary, to the nearest 1/16 of 1%) quoted at
approximately 11:00 a.m. London time by the principal London
branch of the Reference Bank two Banking Days prior to the first
day of such Interest Period for the offering to the Reference
Bank in the London interbank market of Dollar deposits in
immediately available funds, for a period, and in an amount,
comparable to the Interest Period and principal amount of the
Eurodollar Loan which shall be made by the Reference Bank and
outstanding during such Interest Period.
"Fixed Rate" means, for any Eurodollar Loan for any
Interest Period therefor, a rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) determined by the Agent to
be equal to the quotient of (i) the Fixed Base Rate for such Loan
for such Interest Period divided by (ii) one minus the Reserve
Requirement for such Loan for such Interest Period.
"Fixed Rate Loan" means any Eurodollar Loan and any Quoted
Rate Loan.
"Funded Debt" means, with respect to any Person, all
indebtedness of such Person (including current maturities), for
money borrowed which by its terms matures more than one year from
the date as of which such Funded Debt is incurred, and any
indebtedness of such Person for money borrowed maturing within
one year from such date which is renewable or extendable at the
option of the obligor to a date beyond one year from such date
(whether or not theretofore renewed or extended), including any
such indebtedness renewable or extendable at the option of the
obligor under, or payable from the proceeds of other indebtedness
which may be incurred pursuant to, the provisions of any
revolving credit agreement or other similar agreement.
"GAAP" means generally accepted accounting principles in
the United States of America as in effect from time to time,
applied on a basis consistent with those used in the preparation
of the financial statements referred to in Section 5.05 (except
for changes concurred in by the Borrower's independent public
accountants).
"Interest Period" means, with respect to any Fixed Rate
Loan, the period commencing on the date such Loan is made,
converted from another type of Loan or renewed, as the case may
be, and ending, as the Borrower may select pursuant to Section
2.06 or Section 2.13 as the case may be: (a) in the case of
Eurodollar Loans, on the numerically corresponding day in the
first, second, third, or sixth calendar month thereafter,
provided that each such Interest Period which commences on the
last Banking Day of a calendar month (or on any day for which
there is no numerically corresponding day in the appropriate
subsequent calendar month) shall end on the last Banking Day of
the appropriate calendar month; and (b) in the case of Quoted
Rate Loans, on the date established by the lending Bank.
"Lending Office" means, for each Bank and for each type of
Loan, the lending office of such Bank (or of an affiliate of such
Bank) designated as such for such type of Loan on its signature
page hereof or such other office of such Bank (or of an affiliate
of such Bank) as such Bank may from time to time specify to the
Agent and the Borrower as the office by which its Loans of such
type are to be made and maintained.
"Lien" means any lien (statutory or otherwise), security
interest, mortgage, deed of trust, priority, pledge, charge,
conditional sale, title retention agreement, financing lease or
other encumbrance or similar right of others, or any agreement to
give any of the foregoing.
"Loan" means any loan made by a Bank pursuant to Section
2.01 or Section 2.13.
"Margin" means for each Eurodollar Loan, a rate determined
pursuant to the grid set forth below, based on Borrower's senior
unsecured debt rating established from time to time by Standard &
Poor's Ratings Group ("S & P") and Xxxxx'x Investors Service,
Inc. ("Moody's"). For purposes of this grid, (i) if the S & P
and Moody's ratings are different, the higher one shall be used
to determine the Margin, (ii) the symbol ">/=" shall mean greater
than or equal to, and (iii) the symbol "<=/" shall mean less than
or equal to. If at any given time neither S & P nor Moody's has
established a debt rating for the Borrower, the Margin shall be
17 basis points.
S & P/Moody's Margin
------------- ------------
(In basis points)
>/= AA / Aa2 13
>/= A / A2 17
>/= BBB+ / Baa1 25
BBB / Xxx0 00
XXX- / Xxx0 40
/=" shall mean greater than or
equal to, and (iii) the symbol "/= AA / Aa2 7
>/= A / A2 8
>/= BBB+/ Baa1 12.5
BBB / Xxx0 00
XXX-/ Xxx0 20
