LOAN AGREEMENT
Dated as of October 30, 2000
between
ELECTRIC LIGHTWAVE, INC.
as Borrower
CITIZENS COMMUNICATIONS COMPANY
as
Lender
LOAN AGREEMENT, dated as of October 30, 2000 (this
"Agreement"), among ELECTRIC LIGHTWAVE, INC., a Delaware corporation (the
"Borrower") and CITIZENS COMMUNICATIONS COMPANY, a Delaware corporation (the
"Lender").
The Borrower has requested the Lender to extend credit by
effectuating Advances (as herein defined) to the Borrower to enable the Borrower
to borrow and re-borrow on a revolving credit basis, on and after the date
hereof and at any time and from time to time prior to the Maturity Date (as
herein defined) a principal amount not in excess of $450,000,000 at any time
outstanding. The proceeds of such borrowings are to be used to provide working
capital and for other general corporate purposes of the Borrower. The Lender is
willing to make Advances and effectuate loans to the Borrower on the terms and
subject to the conditions herein set forth.
Accordingly, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
ARTICLE 1.01 . CERTAIN DEFINED TERMS. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"Advance" means a "Working Capital Advance" or an "Interest Advance" as
hereafter defined, by the Lender to the Borrower.
"Affiliate" means, when used with respect to a specified Person,
another Person that directly, or indirectly through one or more
intermediaries, controls or is controlled by or is under common control
with the Person specified or any Subsidiary of that person. For
purposes of this definition, "Control" shall mean the possessor
directly or indirectly of the power to (i) vote 25% or more of the
securities having ordinary voting power for the election of directors
of such Person, or (ii) direct or cause the direction of management and
policies of a business, whether through the ownership of voting
securities, by contract or otherwise, and either alone or in
conjunction with others or any group.
"A Change in Control" shall be deemed to have occurred if:
(a) any Person or group (within the meaning of Rule 13d-5 of the
Securities and Exchange Commission as in effect on the date hereof)
other than a group in which the chief executive officer of the Borrower
or an entity controlled by such chief executive officer is a par-
ticipant shall own directly or indirectly, beneficially or of record,
shares representing more than 49% of the aggregate ordinary voting
power of the Borrower represented by the issued and outstanding capital
stock or has the power to Control the Borrower, or
(b) a majority of the seats (other than vacant seats) on the board of
directors of the Borrower shall at any time have been occupied by
Persons who were neither (i) nominated by the management, nor (ii)
appointed by directors so nominated.
"Borrowing" means the making of an Advance by the Lender to the
Borrower.
"Business Day" means a day of the year on which banks are not required
or authorized to close in New York City.
"Closing Date" means October 30, 2000.
"Code" means the Internal Revenue Code of 1986, as the same may be
amended from time to time.
"Commission" means the Securities and Exchange Commission.
"Commitment" means the obligation of the Lender to make the Advances
and Borrowings provided for in this Agreement.
"Consolidated Tangible Assets" means total assets of a Person
(including such Person's Subsidiaries) determined on a consolidated
basis, less goodwill, patents, trademarks and other assets classified
as intangible assets in accordance with GAAP.
"Default" means an event, condition or default which with the giving of
notice, the passage of time or both would be an Event of Default.
"Default Interest" shall be the rate of interest specified in Section
2.04(b).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time-to-time, and any successor statute.
"Event of Default" has the meaning assigned to such term in Article
VII.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
"Excluded Taxes" has the meaning assigned to such term in Section 2.08.
"Financial Officer" of any corporation or other entity shall mean the
President, Executive Vice-President, Chief Financial Officer, Chief
Executive Officer, Vice-President of Finance, Chief Accounting Officer
or Treasurer of such corporation or other entity.
"Financials" have the meaning assigned in Section 4.02.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as set forth in Section 1.03 applied on
a consistent basis with the Financials.
"Governmental Approval" means any authorization, consent, approval,
license, franchise, lease, ruling, tariff, rate, permit, certificate,
exemption of, or filing or registration with, any Governmental
Authority required in connection with the execution, delivery or
performance by the Borrower of this Agreement.
"Governmental Authority" means any Federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory
body.
"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 or assets
purchased by such Person, (e) all obligations of such Person issued or
assumed as the deferred purchase price of property or services (other
than customary reservations or retentions of title under agreements
with suppliers entered into in the ordinary course of business), (f)
all Indebtedness of others secured by (or for which the holder of such
indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on or payable out of the proceeds of production
from, property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (g) all capital lease
obligations of such Person, (h) all obligations of such person in
respect of interest rate protection agreements, foreign currency
exchange agreements or other interest or exchange rate hedging
arrangements, (i) all obligations of such Person as an account party in
respect of letters of credit and bankers' acceptances and, without
duplication, all drafts drawn thereunder (to the extent unreimbursed),
(j) all obligations of such person with respect to all preferred
capital stock issued by such Person and required by the terms thereof
to be redeemed or for which mandatory sinking fund payments are due, by
a fixed date, (k) the principal portion of all obligations of such
person under off-balance sheet financing arrangements, (l) the
indebtedness of any partnership or unincorporated joint venture in
which such Person is a general partner or a joint venturer and is
legally obligated or has a reasonable expectation of being liable with
respect thereto, and (m) any obligation, contingent or otherwise.
"Interest Advance" means an Advance made or deemed to be made
subsequent to December 31, 2001 for the purpose of paying interest on
Working Capital Advances and any prior Interest Advances made.
"Interest Payment Date" means the last business day of each calendar
month commencing with the calendar month in which an Advance is made.
"Interest Rate" has the meaning assigned to it in Section 2.04.
"Lien(s)" means any lien, claim, charge, pledge, security interest,
deed of trust, mortgage or other encumbrance.
"Loan Agreement" means this Agreement.
"Loan Documents" means this Agreement and the Note.
"Moody's" means Xxxxx'x Investors Service, Inc, or any successor
thereto.
"Material Adverse Change" means a material adverse change in (a) the
business, prospects, operations, results of operations, assets,
liabilities or condition (financial or otherwise) of the Borrower and
its Subsidiaries, taken or as a whole, (b) the Borrower's ability to
perform its obligations under the Loan Documents or under the Third
Party Loan Agreements or either of them or (c) the rights and remedies
of the Lender as determined by the Lender in its reasonable discretion.
"Material Adverse Effect" means a material adverse effect on (a) the
business, prospects, operations, results of operations, assets,
liabilities or condition (financial or otherwise) of the Borrower and
its Subsidiaries, taken or as a whole, (b) the Borrower's ability to
perform its obligations under the Loan Documents or under the Third
Party Loan Agreements or any of them, or (c) the rights and remedies of
the Lender hereunder as determined by the Lender in its reasonable
discretion.
"Maturity Date" means October 31, 2005.
"Note" means the promissory note of the Borrower payable to the order
of the Lender, in substantially the form of Exhibit A hereto,
evidencing the aggregate indebtedness of the Borrower to the Lender
resulting from Advances made by the Lender.
"Notice of a Borrowing" means either a Notice of Interest Advance or a
Notice of Working Capital Advance.
"Notice of Interest Advance" has the meaning assigned to it in Section
2.02(b).
"Notice of Working Capital Advance" has the meaning assigned to it in
Section 2.02(a).
"Obligations" has the meaning assigned to it in Section 8.04.
"Other Taxes" has the meaning assigned to it in Section
2.08(b).
"PBGC" has the meaning assigned to it in Section 5.02(d).
"Person" means any natural person, corporation, business trust, joint
venture, limited liability company, association, company, partnership,
or government, or any agency or political subdivision thereof.
"Plan" means any pension plan (including a multi-employer plan) subject
to the provisions of Title IV of ERISA or Section 412 of the Code which
is maintained for or to which contributions are made for employees of
the or any ERISA Affiliate.
"Refund" has the meaning assigned to it in Section 2.08(e).
"Subordinate Debt" means unsecured Indebtedness incurred by the
Borrower which is expressly subordinated and made junior to the payment
and performance in full of the Advances and any other loans and
advances or extensions of credit made or to be made by Lender to the
Borrower, or to others for the account of Borrower, pursuant to the
terms of this Agreement, together with interest thereon and including
all indebtedness, fees, liabilities and obligations which may at any
time be owing by Borrower to Lender pursuant to this Agreement, and
contains terms and conditions satisfactory to Lender.
"Subsidiary" means, to any Person, (a) any corporation more than 50% of
whose capital stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time, any class or
classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time owned by
such Person directly or indirectly through Subsidiaries, (b) any
partnership, association, joint venture or other entity in which such
Person directly or indirectly through Subsidiaries has more than a
fifty percent (50%) interest in the total capital, total income and/or
total ownership interests of such entity at any time and (c) any
partnership in which such Person is a general partner.
"Taxes" means any federal, state, local or foreign income, sales use,
transfer, payroll, personal property, occupancy, franchise or other
tax, levy, impost, fee, imposition, assessment or similar charge,
together with any interest or penalties thereof.
"Third Party Loan Agreements" mean the following:
(a) Credit Agreement dated as of November 21, 1997 among the
Borrower and the Lender (as Parent Guarantor) and a consortium
of banks of which Citibank, N. A., is the Administrative Agent
and providing for extension of credit in the sum of four hund-
red million dollars ($400,000,000),
(b) Notes of the Borrower aggregating the principal amount of
three hundred twenty-five million dollars ($325,000,000) dated
as of April 15, 1999 and due May 15, 2004 and carrying
interest at the rate of 6.05% per annum, issued pursuant to
the Indenture of said date between the Borrower and Citibank,
N.A., as Trustee and
(c) various capitalized leases in existence on the date of
this Agreement and noted in the books and records of the
Borrower and including without limitation those capital leases
reported on in the balance sheet of the Borrower dated as of
September 30, 2000.
"Working Capital Advances" means an Advance made during the Working
Capital Period to be utilized either to (i) fund working capital or
other general corporate purpose of the Borrower or (ii) fund interest
payments due on Working Capital Advances then outstanding, including
Working Capital Advances consisting of payments of interest. In no
event may Working Capital Advances exceed two hundred sixty million
dollars ($260,000,000).
"Working Capital Period" means the period commencing on October 30,
2000 and expiring on December 31, 2001 or such later date (but in no
event later than December 31, 2002) that Lender may designate.
SECTION 1.02. COMPUTATION OF TIME PERIODS. In this Agreement in the computa-
tion of periods of time from a specified date to a later specified date, the
word "from" means "from and including" and the words "to" and "until" each
means "to but excluding."
SECTION 1.03. ACCOUNTING TERMS. Except as otherwise expressly provided herein,
all terms of an accounting or financial nature shall be construed in accordance
with GAAP, as in effect from time to time; provided, however, that, for purposes
of determining compliance with any covenant set forth in Articles V and VI, such
terms shall be construed in accordance with GAAP as in effect on the date of
this Agreement applied on a basis consistent with the application used in
preparing the audited financial statements referred to in Section 4.02.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
SECTION 2.01. THE ADVANCES.
(a) The Lender agrees, on the terms and conditions hereinafter set forth,
to make Working Capital Advances and Interest Advances to the Borrower
from time to time on any Business Day during the period from the date
hereof until the Maturity Date, on a revolving basis, provided that (i)
the aggregate (of Advances) at any time may not at any time exceed
$450,000,000 and the aggregate of Working Capital Advances may not
exceed $260,000,000, and (ii) no Working Capital Advance shall be made
subsequent to the Working Capital Period.
(b) The initial Working Capital Advance shall be in integral multiples of
$500,000, but in no event less than $1,000,000. Each additional Working
Capital Advance shall be in integral multiples of $500,000, except that
a Working Capital Advance made to pay interest on the then outstanding
Working Capital Advances shall be in the amount of said interest. Each
Interest Advance shall be in an amount of the interest then due on the
aggregate of Working Capital Advances and Interest Advances then
outstanding.
(c) All Advances shall be evidenced by the Note to be executed and deliver-
ed by Borrower, with appropriate insertions.
SECTION 2.02. MAKING THE ADVANCES.
(a) Working Capital Advance: Each Working Capital Advance shall be made
during the Working Capital Period on notice to the Lender in the form
of the Notice of Working Capital Advance attached as Exhibit B, given
not later than 11:00 A.M. (New York City time) on the fifth Business
Day prior to the date of the proposed Advance. Provided however that in
the event that on a date which is five (5) days immediately preceding
an Interest Payment Date during the Working Capital Period, no Notice
of Working Capital Advance or no notice that the Borrower will pay such
interest from other sources has been received by Lender, then subject
to the provisions of subsection (d), Borrower shall be deemed to have
given a Notice of Working Capital Advance in the amount of such
interest on such date.
(b) Interest Advance: Each Interest Advance shall be made in the following
manner: Interest Advances shall only be made commencing with January
1, 2002. Each Interest Advance shall be made on Notice in the form
of the Notice of Interest Advance, attached as Exhibit "C" given not
later than 11:00 A.M. (New York City time) on the fifth Business Day
prior to each Interest Payment Date when interest is due and shall re-
quest an Interest Advance in the amount of interest to be due on each
such Interest Payment Date. Provided however that in the event the
Lender shall not have received a Notice of Interest Advance or a notice
from the Borrower that such interest will be paid from other sources
on a date no later than five days immediately preceding such Interest
Payment Date, then subject to the provisions of sub-section (d), the
Borrower shall be deemed to have given the Lender a Notice of Interest
Advance requesting an Interest Advance in the amount of said interest,
and said Interest Advance shall be made by the Lender to the Borrower.
(c) Within the limits and provision of this Agreement, the Borrower may,
from time to time, borrow, prepay pursuant to Section 2.05 and reborrow
pursuant to Section 2.01 and 2.02.
(d) In the event the Working Capital Period is extended beyond December 31,
2001 then the Borrower shall have the option, in its discretion during
the period commencing with January 1, 2002 and expiring on the date of
the Working Capital Period to request either an Interest Advance or a
Working Capital Advance and in the event interest is to be paid on an
Interest Payment Date and the Borrower has not requested an advance
pursuant to sub-section (a) or (b) and has not sent the notice
referenced in sub-section (a) or (b), the Borrower shall be deemed to
have given a Notice of Interest Advance in the amount of such interest.
(e) Each Notice of a Borrowing shall be irrevocable and binding on the
Borrower. In the case of any Borrowing, the Borrower shall indemnify
the Lender against any loss, cost or expense incurred by the Lender
as a result of any failure to fulfill, on or before the date specified
in such Notice of a Borrowing, the applicable conditions set forth
in Article III, including, without limitation, any loss (excluding
loss of anticipated profits), cost or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by
Lender to fund the Advance to be made by the Lender as part of such
Borrowing. The Borrower shall pay amounts owing to the Lender pursuant
to this Section 2.02(b) within 30 days after receipt from the Lender of
a certificate setting forth in reasonable detail the calculation of the
amount the Lender is entitled to claim under this Section 2.02(b)
(which certificate shall be conclusive and binding for all purposes,
absent manifest error).
SECTION 2.03. REPAYMENT OF AN ADVANCE. The Borrower hereby promises to and
shall pay to the Lender the entire outstanding principal amount to-
gether with any interest then outstanding upon the Maturity Date.
SECTION 2.04. INTEREST.
(a) Ordinary Interest. The Borrower shall pay interest on each Interest
Payment Date compounded monthly on the unpaid principal amount of each
Advance made by the Lender, from the date of such Advance until repaid,
or if not repaid by the Maturity Date, until the Maturity Date, at
fifteen percent (15%) per annum computed as provided in Section
2.07(b).
(b) Default Interest. Additionally the Borrower shall pay interest on the
unpaid amount of any interest or an Advance hereunder that is not paid
when due, at a rate per annum during the period from the due date
thereof to the date on which such amount is paid in full equal to
seventeen percent (17%) per annum, compounded monthly and computed as
provided in Section 2.07(b).
SECTION 2.05. PREPAYMENTS OF ADVANCES.
(a) The Borrower shall have no right to prepay any principal amount of any
Advance on any Interest Payment Date other than as provided in
subsection (b) below.
(b) The Borrower, upon at least one Business Day's notice to Lender stating
the proposed date and aggregate principal amount of the prepayment, may
prepay any principal amount of Advances then outstanding, in whole or
in part. If such notice is given, the Borrower shall prepay said stated
principal amount of the Advances, together with accrued interest to the
date of such repayment on the principal amount prepaid without premium
or penalty; provided, however, that each partial prepayment shall be in
an aggregate principal amount not less than $1,000,000 or integral
multiples of $500,000 in excess thereof.
SECTION 2.06. INCREASED COSTS. If, due to either the introduction of or any
change in (to the extent any such introduction or change occurs after the date
hereof) or in the interpretation of any law or regulation there shall be any
increase in the cost to The Lender of agreeing to make or making, funding or
maintaining the Advances, the Borrower shall from time to time, within thirty
(30) days after delivery by the Lender to the Borrower of a certificate as to
the amount of (and specifying in reasonable detail the basis for) such increased
cost, pay to the Lender the amount of the increased costs set forth in such
certificate (which certificate shall be conclusive and binding for all purposes,
absent manifest error); provided that, before making any such demand, the Lender
agrees to use reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions) to avoid the need for, or reduce the amount of,
such increased cost which would not, in the reasonable judgment of the Lender,
be otherwise disadvantageous to the Lender.
SECTION 2.07. PAYMENTS AND COMPUTATIONS.
(a) The Borrower shall make each payment hereunder and under the Note
without set-off or counterclaim not later than 11:00 A.M. (New York
City time) on the day when due in U.S. dollars to the Lender at its
address referred to in Section 8.02 in same day funds.
(b) All computations of interest shall be made by Lender pursuant to
Sections 2.04 and 2.05 on the basis of a 360 day year (12 thirty day
months), in each case for the actual number of days (including the
first day but excluding the last day) occurring in the period for which
such interest is payable. Each determination by Lender of an interest
payment due hereunder shall be conclusive and binding for all purposes,
absent manifest error.
SECTION 2.08. TAXES.
(a) Any and all payments by the Borrower hereunder or under the Note shall
be made, in accordance with Section 2.07, free and clear of and
without deduction for any and all present or future Taxes, deductions,
charges or withholdings and all liabilities with respect thereto,
excluding, in the case of the Lender, of the Lender's taxes imposed on
its income and franchise taxes imposed on it by the jurisdiction under
the laws of which the Lender is organized or any political subdivision
thereof ("Excluded Taxes"). If the Borrower shall be required by law
to deduct any Taxes (other than Excluded Taxes) from or in respect of
any sum payable hereunder or under the Note to the Lender, (i) the sum
payable shall be increased as may be necessary so that after making
all required deductions (including deductions applicable to additional
sums payable under this Section 2.08) the Lender receives an amount
equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.
(b) In addition, the Borrower agrees to pay any present or future stamp,
documentary, privilege, intangible or similar Taxes or any other excise
or property taxes, charges or similar levies which arise at any time or
from time to time (other than Excluded Taxes) from any payment made
hereunder or under the Note or from the execution, delivery or
registration of, or otherwise with respect to, the Loan Documents or
any of them hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify the Lender for the full amount of Taxes or
Other Taxes (including, without limitation, any Taxes and Other Taxes
imposed by any jurisdiction on amounts payable under this Section 2.08)
paid by Lender and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not
such Taxes or Other Taxes were correctly or legally asserted. The
Lender will use reasonable efforts to contest such a Tax or Other Tax
that, in its opinion, is incorrectly asserted. Payment of this
indemnification shall be made within 30 days from the date Lender makes
written demand therefor.
(d) Within 30 days after the date of any payment of Taxes or Other Taxes,
the Borrower will furnish to the Lender, at its address referred to in
Section 8.02, the original or a certified copy of a receipt evidencing
payment thereof.
(e) If the Lender shall become aware that it is entitled to claim a Refund
(as hereinafter defined) from a taxing authority, the Lender shall
promptly notify the Borrower of the availability of such Refund and
shall, within 30 days after receipt of a written request by the
Borrower, make a claim to such taxing authority for such Refund at the
Borrower's expense if, in the judgement of the Lender, the making of
such claim will not be otherwise disadvantageous to the Lender. If the
Lender receives a Refund from a taxing authority, it shall promptly
pay to the Borrower the amount so received (but only to the extent of
indemnity payments made, or additional amounts paid, by the Borrower
under this Section 2.08 with respect to the taxes or Other Taxes
giving rise to such Refund) , net of all reasonable out-of-pocket
expenses (including the net amount of taxes, if any, imposed on the
Lender). The Borrower, upon the request of the Lender, shall repay the
amount paid over to the Borrower (plus penalties, interest and other
charges) to Lender in the event the Lender is required to repay such
Refund to such taxing authority. Nothing contained in this Section
2.08 shall require the Lender to make available any of its tax returns
(or any other information that it deems to be confidential or
proprietary). For purposes of this Section 2.08(e) a "Refund" means a
refund of Taxes or Other Taxes (other than any such refund in the form
of a tax credit) for which the Lender has been indemnified by Borrower
(or with respect to which Borrower has paid additional amounts)
pursuant to this Section 2.8, provided that the entitlement to such
refund arises solely from a manifest error in the amount of such taxes
or Other Taxes so paid.
(f) Without prejudice to the survival of any other agreement of Borrower,
the agreements and obligations of the Borrower contained in this
Section 2.08 shall survive the payment in full of all obligations
hereunder and under the Note.
ARTICLE III
CONDITIONS OF LENDING
The obligations of the Lenders to make Advances hereunder are subject
to the satisfaction, or waiver of, immediately prior to or concurrently with the
making of any Advance the following conditions:
SECTION 3.01. FIRST BORROWING. On the Closing Date:
(a) The Lender shall have received the duly executed Note and this
Agreement;
(b) The Lender shall have received a favorable written opinion of either
the general counsel or the corporate secretary of the Borrower
(provided that such corporate secretary is an attorney admitted to
practice law, and is in good standing, in a jurisdiction within the
United States of America) dated the Closing Date and addressed to the
Lender, to the effect set forth in Exhibit D hereto.
(c) All legal matters incident to this Loan Agreement and the Borrowings
hereunder shall be satisfactory to the Lender;
(d) The Lender shall have received:
1. a copy of the certificate or articles of incorporation, including
all amendments thereto, of the Borrower, certified as of a recent date
by the Secretary of State of the state of Delaware, and a certificate
as to the good standing of the Borrower as of a recent date, from such
Secretary of State;
2. a certificate of the Secretary or Assistant Secretary of Borrower
dated the Closing Date and certifying (A) that attached thereto is a
true and complete copy of the by-laws of the Borrower as in effect on
the Closing Date and at all times since a date prior to the date of
the resolutions described in clause (B) below, (B) that attached
thereto is a true and complete copy of resolutions duly adopted by the
Board of Directors of the Borrower authorizing the execution, delivery
and performance of the Loan Documents to which it is a party and the
Borrowings hereunder, and that such resolutions have not been
modified, rescinded, or amended and are in full force and effect, (C)
that neither the certificate or articles of incorporation of the
Borrower has been amended since the date of the last amendment thereto
shown on the certificate of good standing furnished pursuant to clause
1. above, and (D) as to the incumbency and specimen signature of each
officer executing any Loan Document or any other document delivered in
connection herewith on behalf of the Borrower;
3. such other documents as Lender may reasonably request.
(e) The Lender shall have received a certificate, dated the Closing Date
and signed by a Financial Officer of the Borrower, confirming
compliance with the conditions precedent set forth in paragraphs (a),
(b) and (d) of this Section 3.01.
(f) The Lender shall have received evidence that all governmental,
shareholder and third party consents and approvals required in
connection with the transactions and the related financings
contemplated hereby and of the expiration of all applicable waiting
periods without any action being taken by any authority that could
restrain, prevent or impose any material adverse conditions on such
transactions or that could seek or threaten any of the foregoing, and
no law or regulation shall be applicable which in the judgment of the
Lender could have such effect.
(g) The Lender shall be satisfied that there does not exist any pending or
threatened action, suit, investigation or proceeding against Borrower
or its assets that could reasonably be expected to have a Material
Adverse Effect.
(h) The Lender is satisfied that, after giving effect to the making of the
Advances made on the Closing Date, the Borrower shall have no
agreements or commitments providing for the advancement or lending of
monies other than the Loan Documents, the Third Party Loan Agreements
and purchase money obligations incurred in the ordinary course of
business.
(i) The Lender shall have received a certificate or certificates executed
by a Financial Officer of the Borrower as of the Closing Date stating
that (i) after giving effect to the making of the Advances and
Borrowings under this Loan Agreement and application of the proceeds
thereof, the Borrower is in compliance with all existing financial
obligations, (ii) all governmental, shareholder and third party
consents and approvals, if any, with respect to the Loan Documents and
the transactions contemplated thereby have been obtained, (iii) no
action, suit, investigation or proceeding is pending or threatened in
any court or before any arbitrator or governmental instrumentality
that purports to affect the Borrower or any transaction contemplated
by the Loan Documents, if such action, suit, investigation or
proceeding could reasonably be expected to have a Material Adverse
Effect, and (iv) immediately after giving effect to this Loan
Agreement, the Third Party Loan Agreements and all the transactions
contemplated therein to occur on such date, (A) no Default or Event of
Default exists, (B) and all representations and warranties contained
herein and in the other Loan Documents are true and correct in all
material respects.
(j) The Lender shall have received instruments, agreements or information
as reasonably requested by Lender.
(k) The Lender is satisfied that no Material Adverse Change or development
reasonably likely to have a Material Adverse Effect, shall have
occurred, no occurrence or event which is reasonably likely to have a
Material Adverse Effect shall have occurred and be continued, and on or
prior to the Closing Date there shall not have occurred a substantial
impairment of the financial markets generally which, in the reasonable
judgment of the Lender, has materially and adversely affected the
transactions contemplated hereby.
SECTION 3.02. ALL ADVANCES. On the date of each Advance:
(a) The representations and warranties set forth in Article IV shall be
true and correct in all material respects on and as of the date of such
Advance with the same effect as though made on and as of such date,
except to the extent such representations and warranties expressly
relate to an earlier date in which event such representations and
warranties shall have been true and complete on and as of such earlier
time.
(b) The Borrower shall be in compliance with all of the terms and
provisions set forth herein and in each other Loan Document on its part
to be observed or performed, and at the time of, and immediately after
such Borrowing, no Event of Default or Default shall have occurred and
be continuing;
(c) Each Advance shall be deemed to constitute a representation and
warranty by the Borrower on the date of such Borrowing as to the
matters specified in paragraphs (a) and (b) of this Section 3.02.
(d) The Note shall be modified to reflect any additional Borrowings and re-
payments of any Borrowings.
ARTICLE IV A
REPRESENTATIONS AND WARRANTIES OF BORROWER
To induce the Lender to enter into this Loan Agreement and make the
Advances referenced herein, the Borrower represents and warrants to the Lender
that:
SECTION 4.01. ORGANIZATION; POWERS; GOVERNMENTAL APPROVALS.
(a) The Borrower (i) is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, (ii) has
all requisite power and authority to own its property and assets
and to carry on its business as now conducted, (iii) is qualified to
do business in every jurisdiction where such qualification is required,
except where the failure so to qualify would not have a Adverse Effect
and (iv) the Borrower's execution, delivery and performance of this
Agreement and the Loan Documents are within its corporate powers, have
been duly authorized by all necessary actions and do not violate or
create a default under law, its organizational documents, or any con-
tractual provision binding upon it. This Agreement and the Notes con-
stitute legal, valid and binding obligations of the Borrower.
(b) All Governmental Approvals have been duly obtained, are in full force
and are in effect without having been amended or modified in any manner
that may impair the ability of the Borrower to perform its obligations
under this Agreement or the Note, and are not the subject of any
pending or overtly threatened appeal, stay or other challenge.
SECTION 4.02. FINANCIAL STATEMENTS AND SECURITIES LAW FILINGS.
The Borrower has furnished to Lender its most recent filings with the Commission
on Forms 10-K and 10-Q. Each of the financial statements in such Forms 10-K and
10-Q, and each such subsequent filing, has been, and each of the financial
statements to be furnished pursuant to Section 5.02 (the "Financials") will be,
prepared in accordance with GAAP applied consistently with prior periods
except as therein noted, and presents fairly or will present fairly in all
material respects the consolidated financial position of the Borrower, as
the case may be, as of the date thereof and the results of the operations of the
Borrower for the period then ended (subject in the case of unaudited financial
statements to normal year-end adjustments and the absence of footnotes). The
financial statements contained in Form 10K have been and will be audited by KPMG
Peat Marwick independent certified public accountants and the financial
statements contained in Form 10Q have been and will be prepared by a Financial
Officer of the Borrower (subject in the instance of Financials to the provisions
of Section 5.02).
SECTION 4.03. NO MATERIAL ADVERSE CHANGE. From the date of the Borrower's most
recent financial statements contained in its Annual Report on Form 10-K for the
fiscal year ended December 31, 1999 furnished to Lender pursuant to Section 4.02
through the date of the initial Borrowing, and except as described in the
Borrower's Quarterly Reports on Form l0-Q for the quarterly periods ended March
31, 2000, and June 30, 2000 furnished to Lender pursuant to Section 4.02 prior
to the date hereof, there has been no material adverse change in the condition,
financial or otherwise of the Borrower and its Subsidiaries taken as a whole,
and there has occurred no event or condition which is likely to result in a
Material Adverse Change in the Borrower and its Subsidiaries taken as a whole.
SECTION 4.04. TITLE TO PROPERTIES: POSSESSION UNDER LEASES.
(a) The Borrower and each of its Subsidiaries has good and marketable title
to, or valid leasehold interests in, all its material respective
properties and assets and licenses, easements, rights of way and other
rights to use, except for minor defects in title that do not interfere
with its respective ability to conduct its business as currently
conducted or to utilize such properties and assets for their intended
purposes. All such material properties and assets are free and clear of
Liens, other than Liens expressly permitted by Section 6.01.
(b) The Borrower and each of its Subsidiaries has complied with all
obligations under all material leases to which it is a party and all
such leases are in full force and effect, except where such failure to
comply or maintain such leases in full force and effect would not have
a Material Adverse Effect. The Borrower enjoys peaceful and undisturbed
possession under all such material leases except where such failure
would not have a Material Adverse Effect.
SECTION 4.05. LITIGATION: COMPLIANCE WITH LAWS.
(a) There is no action, suit, or proceeding, or any governmental
investigation or any arbitration, in each case pending or, to the
knowledge of the Borrower, threatened, against the Borrower, except as
disclosed in the Borrower's Annual Report on Form 10-K for the fiscal
year ended December 31, 1999 or its Quarterly Reports on Form 10-Q for
the quarterly periods ended March 31, 2000, and June 30, 2000 furnished
to Lender pursuant to Section 4.02 prior to the date hereof that could
reasonably be expected to have a Material Adverse Effect or result in a
Material Adverse Change.
(b) The Borrower is not in violation of any law, rule, or regulation, or in
default with respect to any judgment, writ, injunction or decree of any
Governmental Authority, where such violation or default could
reasonably be anticipated to result in a Material Adverse Effect. The
Borrower has no knowledge of any order or notice of any governmental
investigation or of any violation or claim of violation of any law,
regulation, notice judgment, rule, order or other governmental
pronouncement.
SECTION 4.06. AGREEMENTS.
(a) The Borrower is not a party to any agreement or instrument or subject
to any corporate restriction that has resulted, or could reasonably be
anticipated to result in a Material Adverse Effect.
(b) The Borrower is not in default in any manner under any provision of any
indenture or other agreement or instrument evidencing indebtedness, or
any other material agreement or instrument to which it is a party or by
which it or any of its properties or assets are or may be bound,
including without limitation the Third Party Loan Agreements, where
such default could reasonably be anticipated to result in a Material
Adverse Effect Change or have a Material Adverse Effect. Borrower knows
of no dispute with respect to the Borrower or any of its Subsidiaries
regarding any agreement, instrument or commitment which could
reasonably be expected to have a Material Adverse Effect.
SECTION 4.07. TAX RETURNS. The Borrower has filed or caused to be filed all
federal, state and local tax returns required to have been filed by it and has
paid or caused to be paid all taxes shown to be due and payable on such returns
or on any assessments received by it, except taxes that are being contested in
good faith by appropriate proceedings and for which the Borrower shall have set
aside on its books adequate reserves.
SECTION 4.08. OTHER INDEBTEDNESS. Except for Indebtedness incurred in the
ordinary course of its business and except for the Indebtedness incurred under
the Third Party Loan Agreements, the Borrower has no Indebtedness.
SECTION 4.09. GOVERNMENTAL APPROVALS. All Governmental Approvals required for
the transaction contemplated by this Agreement have been given.
SECTION 4.10. NO MATERIAL MISSTATEMENTS. No statement, information, report,
financial statement, exhibit, or schedule furnished by or on behalf of Borrower
to Lender in connection with negotiation of this Agreement or included herein or
delivered pursuant hereto contained, contains, or will contain any material
misstatement of fact or intentionally omitted, omits, or will omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were, are, or will be made, not misleading. There
is no fact now known to any officer of the Borrower or any of its Subsidiaries
which has, or could reasonably be expected to have a Material Adverse Effect,
which fact has not been set forth in the Financials, the financial statements
referenced in Section 4.02, or any certificate, opinion or other written
statement made or furnished by the Borrower to the Lender.
SECTION 4.11. EMPLOYEE BENEFIT PLANS.
(a) Each Plan is in compliance with ERISA, except for such noncompliance
that has not resulted, and could not reasonably be anticipated to
result, in a Material Adverse Effect.
(b) No Plan has an accumulated or waived funding deficiency within the
meaning of Section 412 or Section 415 of the Code, except for any such
deficiency that has not resulted, and could not reasonably be
anticipated to result, in a Material Adverse Effect.
(c) No proceedings have been instituted to terminate any Plan, except for
such proceedings where the termination of a Plan has not resulted, and
could not reasonably be anticipated to result, in a Material Adverse
Effect.
ARTICLE IV B
REPRESENTATIONS AND WARRANTIES OF LENDER
SECTION 4.12. The Lender represents and warrants that no Taxes or Other Taxes
will be incurred on the date hereof in connection with the execution and
delivery of the Loan Documents.
ARTICLE V
AFFIRMATIVE COVENANTS
Borrower covenants and agrees with the Lender that, so long as this
Agreement remains in effect or the principal of or interest on any Advance (or
any portion thereof), or any other expenses or amounts payable hereunder, shall
be unpaid, the Borrower will:
SECTION 5.01. EXISTENCE, BUSINESSES AND PROPERTIES.
(a) Preserve and maintain, and cause each Subsidiary to preserve and main-
tain its corporate existence, rights and franchises.
(b) pay, and cause each Subsidiary to pay, prior to same becoming
delinquent, (i) all Taxes, including without limitation, taxes,
assessments and governmental charges imposed upon it or upon its
property, and (ii) all claims (including, without limitation, claims
for labor, materials, supplies, or services) which might, if unpaid,
become a Lien upon its property, unless, in each case, the validity or
amount thereof is being disputed in good faith, and the Borrower and
each Subsidiary has maintained adequate reserves with respect thereto;
(c) maintain and cause each Subsidiary to maintain or cause to be
maintained insurance with financially sound and reputable insurers, or
self-insurance, with respect to its properties and against loss or
damage of the kinds customarily insured against by reputable companies
in the same or similar businesses, such insurance to be of such types
and in such amounts (with such deductible amounts) as is customary for
such companies under similar circumstances, and
(d) comply with and cause each Subsidiary to comply with all acts, rules,
regulations, directions and ordinances of any legislative,
administrative or judicial body or official applicable to the
operations of its business.
SECTION 5.02. FINANCIAL STATEMENTS, REPORTS, ETC. Furnish to the Lender:
(a) as soon as available and in any event within 120 days after the end of
each fiscal year, (i) consolidated balance sheets and the related
statements of income and cash flows of Borrower as of the close of such
fiscal year (which requirement shall be deemed satisfied by the
delivery of the Annual Report on Form 10-K (or any successor form) for
such year) all which have been audited by KPMG Peat Marwick or other
independent public accountants of recognized national standing and
accompanied by an opinion of such accountants to the effect that such
consolidated financial statements present fairly in all material
respects the financial condition and results of operations of Borrower
in accordance with GAAP consistently applied.
(b) within 65 days after the end of each of the first three fiscal quarters
of each fiscal year, (i) consolidated balance sheets and related
statements of income and cash flows of Borrower as of the close of such
fiscal quarter and the then elapsed portion of the fiscal year (which
requirement shall be deemed satisfied by the delivery of the Borrower's
Quarterly Report on Form 10-Q (or any successor form) for such
quarter), each certified by a Financial Officer as fairly presenting
the financial condition and results of operations of Borrower in
accordance with GAAP consistently applied, subject to normal year-end
audit adjustments.
(c) promptly upon the mailing or filing thereof copies of all financial
statements, reports and proxy statements mailed to the Borrower's
public shareholders, and copies of all registration statements (other
than those on Form S-8) and Form 8-K's (to the extent that such Form
8-K's disclose actual or potential adverse developments with respect to
the Borrower or could reasonably be anticipated to constitute a
Material Adverse Effect) filed with the Commission (or any successor
thereto) or any national securities exchange;
(d) promptly after (i) the occurrence thereof, notice of any ERISA
Termination Event or "prohibited transaction", as such terms are de-
fined in Section 4975 of the Code, with respect to any Plan that
results, or could reasonably be anticipated to result, in a Material
Adverse Effect, which notice shall specify the nature thereof and the
Borrower's proposed response thereto, and (ii) actual copies of any
notice of Pension Benefit Guaranty Corporation's (PBGC) intention
to terminate or to have a trustee appointed to administer any Plan; and
(e) promptly, from time to time, such other information, regarding its
operations, business affairs and financial condition, or compliance
with the terms of this Loan Agreement, as the Lender may reasonably
request.
SECTION 5.03. LITIGATION AND OTHER NOTICES. Furnish to the Lender prompt
written notice of the following:
(a) any Event of Default or Default, specifying the nature and extent
thereof and the corrective action (if any) proposed to be taken with
respect thereto;
(b) the filing or commencement of, or notice of intention of any person to
file or commence, any action, suit or proceeding, whether at law or in
equity or by or before any Governmental Authority, against the Borrower
which is reasonably likely to be adversely determined and which, if
adversely determined, could reasonably be anticipated to result in a
Material Adverse Effect; and
(c) any development with respect to the Borrower that has resulted in, or
could reasonably be anticipated to result in, a Material Adverse
Effect.
SECTION 5.04. MAINTAINING RECORDS. Maintain all financial records in accor-
dance with GAAP and, upon reasonable notice, permit the Lender to visit and in-
spect the financial records of the Borrower at reasonable times and as often as
requested and to make extracts from and copies of such financial records, and
permit any representatives designated by the Lender to discuss the affairs,
finances and condition of the Borrower with the appropriate officers thereof
and, with Borrower's consent, the Borrower's independent accountants.
SECTION 5.05. USE OF PROCEEDS. Cause the proceeds of any Working Capital
Advance (other than a Working Capital Advance which is utilized to pay interest
obligations) to be used to provide working capital and for other general
corporate purposes of the Borrower and cause the proceeds of any Interest
Advance to be used for the payment of interest on Advances as same becomes due.
Without limitation of the foregoing, in no event shall any portion of such
proceeds be used by the Borrower for the purpose of purchasing or carrying any
"Margin Stock" (as defined in Regulation U of the Board of Governors of the
Federal Reserve System) or for any other purpose which violates the provisions
of Regulation or X of said Board of Governors or for any other purpose in
violation of any applicable statute or regulation or the terms and conditions of
this Loan Agreement.
ARTICLE VI
NEGATIVE COVENANTS
Borrower covenants and agrees with the Lender that, so long as this
Loan Agreement shall remain in effect or the principal of or interest on any
Advance (or any portion thereof), or any other expenses or amounts payable
hereunder, shall be unpaid, it will not permit any of its Subsidiaries to:
SECTION 6.01. ASSET SALES. Sell, assign, or otherwise dispose of assets
(whether in one transaction or a series of transactions), if after giving effect
to such transaction, Borrower or one or more of its Subsidiaries will have
disposed of, in the aggregate, assets representing more than 25% of Borrower's
Consolidated Tangible Assets.
SECTION 6.02. LIENS. Mortgage, assign, pledge, transfer or otherwise permit
any Lien or judgment (whether as a result of a purchase money or title retention
transaction, or other security interest, or otherwise) to exist on any of its
assets or properties, whether real, personal or mixed, whether now or hereafter
acquired, except for Liens on fixed assets securing purchase money Indebtedness
provided the total of all such Indebtedness to all such Persons taken together
shall not exceed an aggregate principal amount of $150,000 at any one time
outstanding, and provided that any such Lien attaches to such assets
concurrently either or within thirty (30) days after the acquisition thereof and
only to the assets to be or being acquired.
SECTION 6.03. MERGERS. Merge or consolidate with any Person, or enter into or
effect any recapitalization, reorganization or other transaction of like effect
or dissolve, or except as permitted by Section 6.01 of this Agreement, sell,
assign, lease, or otherwise dispose of (whether in one transaction or a series
of transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to any Person without Lender's consent.
ARTICLE 6.04. ADDITIONAL INDEBTEDNESS. Incur or create any liability or
Indebtedness other than (i) trade payables incurred in the ordinary course of
the Borrower's or the particular Subsidiary's business, (ii) purchase money
indebtedness of the type and in the aggregate amount as referenced in Section
6.02 or Subordinated Debt on terms and conditions acceptable to Lender, or (iii)
pursuant to any of the Third Party Loan Agreements.
ARTICLE 6.05. TRANSACTIONS WITH AFFILIATES. Sell or transfer any property or
assets to, or purchase or acquire any property or assets from, or otherwise
engage in any other transactions with, any of its Affiliates, except that, so
long as no Default or Event of Default shall have occurred and be continuing,
the Borrower may engage in any of the foregoing transactions in the ordinary
course of business at prices and on terms and conditions not less favorable to
the Borrower than terms and conditions that could be obtained on an arm's length
basis from unrelated third parties or as otherwise may be required by any
Federal or state Governmental Authority.
SECTION 6.06. NO GUARANTIES. Assume, guarantee, endorse, or otherwise become
liable upon the obligations of any other Person, including without limitation
any affiliate or subsidiary of Borrower, except (i) by the endorsement of
negotiable instruments in the ordinary course of business and (ii) in connection
with the incurrence of Indebtedness permitted pursuant to Section 6.04.
SECTION 6.07. DIVIDENDS OF DISTRIBUTIONS. Make any dividend or other
distribution except that a Subsidiary may make dividend or other distributions
to the Borrower.
SECTION 6.08. NO INVESTMENTS. Make other investments other than (i) interest-
bearing demand or time deposit (including certificates of deposit) which are
insured by the Federal Deposit Insurance Corporation or a similar federal in-
surance program or as the Lender may approve, or (ii) money market funds approv-
ed by Lender. Such approvals shall not be unreasonably withheld.
ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.01. DEFAULTS. An Event of default ("Event of Default") under this
Agreement shall be deemed to exist if any one or more of the following events
occurs and is continuing, whatever the reason, therefore:
(a) any representation or warranty made or deemed made in or in connection
with this Loan Agreement or Advances hereunder, or any representation,
warranty, statement, or information contained in any written report,
certificate, financial statement, or other instrument furnished in
connection with or pursuant to this Loan Agreement, shall prove to have
been false or misleading in any material respect when so made, deemed
made, or furnished;
(b) failure to pay or default shall be made in the payment of any principal
of any Advance (or any portion thereof) when and as the same shall
become due and payable, whether at the due date thereof or at a date
fixed or for prepayment thereof or by acceleration thereof or
otherwise;
(c) failure to pay or default shall be made in the payment of any interest
on any Advance (or any portion thereof) or any fee or any other amount
(other than an amount referred to in (b) above) due under any Loan
Document, when and as the same shall become due and payable, and such
default shall continue unremedied for a period of five Business Days
following the Lender's notification;
(d) failure to pay or default shall be made in the due observance or per-
formance of any covenant, condition, or agreement contained in Article
V or Article VI;
(e) default shall be made in the due observance or performance of any
covenant, condition, or agreement contained herein (other than those
specified in (b), (c), or (d) above) and such default shall, continue
unremedied for a period of 30 days after the earlier to occur of (i)
the Borrower obtaining knowledge thereof and (ii) the date that written
notice thereof shall have been given to Borrower;
(f) an involuntary proceeding shall be commenced or an involuntary petition
shall be filed in a court of competent jurisdiction seeking (i) relief
in respect of the Borrower of a substantial part of the property or
assets of the Borrower under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other Federal or state
bankruptcy, insolvency, receivership, or similar law, (ii) the
appointment of a receiver, trustee, custodian, sequestrator,
conservator, or similar official for the Borrower for a substantial
part of the property or assets of the Borrower, or (iii) the winding-up
or liquidation of the Borrower; and such particular proceeding or
petition or appointment shall continue undismissed for sixty (60) days,
or an order or decree approving or ordering any of the foregoing shall
be entered;
g) The Borrower shall (i) voluntarily commence any proceeding or file any
petition seeking relief under Title 11 of the United States Code, as
now constituted or hereafter amended, or any other Federal or state
bankruptcy, insolvency, receivership, or similar law, (ii) consent to
the institution of, or fail to contest in a timely and appropriate
manner, any proceeding or the filing of any petition described in (f)
above, (iii) apply for or consent to the appointment of a receiver,
trustee, custodian, sequestrator, conservator, or similar official for
the Borrower or for a substantial part of the property or assets of
the Borrower, (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, (vi) become unable,
admit in writing its inability, or fail generally to pay its debts as
they become due, or (vii) take any action for the purpose of effecting
any of the foregoing;
(h) The Borrower fails to pay when due, or within any grace period
applicable thereto by the terms thereof any indebtedness under either
of the Third Party Loan Agreements or other Indebtedness of the
Borrower aggregating $5,000,000 or more;
(i) The Borrower shall fail to observe or perform any covenant or agreement
contained in any single agreement or instrument relating to any
Indebtedness in excess of $5,000,000, singly or in the aggregate, with
respect to all other Indebtedness, in each case within any applicable
grace period, or any other event shall occur if the effect of such
failure or other event is to accelerate, or to permit the holder of
such Indebtedness or any other person to accelerate, the maturity of
such Indebtedness; or any such Indebtedness shall be required to be
prepaid (other than by a regularly scheduled required prepayment or the
exercise by the Borrower of its right to make a voluntary prepayment)
in whole or in part prior to the stated maturity;
(j) a judgment or order for the payment of money in excess of $5,000,000
and having a Material Adverse Effect shall be rendered against Borrower
and such judgment or order shall continue unsatisfied (in the case of a
money judgment) and in effect for a period of 30 days during which
execution shall not be effectively stayed or deferred (whether by
action of a court, by agreement, or otherwise); and
(k) there shall have occurred A Change in Control. or
In the event of any Event of Default, then, and in every such event
(other than an event with respect to the Borrower described in paragraph (f) or
(g) above), and at any time thereafter during the continuance of such event,
Lender, shall by notice to Borrower, shall take either or both of the following
actions, at the same or different times: (i) terminate forthwith the Commitment
and (ii) declare the Advances then outstanding to be forthwith due and payable
in whole or in part, whereupon the principal of the Advances so declared to be
due and payable, together with accrued interest thereon and any unpaid accrued
fees and all other liabilities of the Borrower accrued hereunder and under any
other Loan Document, shall become forthwith due and payable, without
presentment, demand, protest, or any other notice of any kind, all of which are
hereby expressly waived by the Borrower, anything contained herein or in any
other Loan Document to the contrary notwithstanding; and in any event with
respect to the Borrower described in paragraph (f) or (g) above, the Commitment
shall automatically terminate and the principal of the Advances then
outstanding, together with accrued interest thereon and any unpaid accrued fees
and all other liabilities of the Borrower accrued hereunder and under any other
Loan Document, shall automatically become due and payable, without presentment,
demand, protest, or any other notice of any kind, all of which are hereby
expressly waived by the Borrower, anything contained herein or in any other Loan
Document to the contrary notwithstanding.
SECTION 7.02. FURTHER REMEDIES. Upon the occurrence of any one or more Events
of Default, the Lender may proceed to protect and enforce its rights under this
Agreement and the other Loan Documents by exercising such remedies as are
available to the Lender in respect thereof under applicable law, either by suit
in equity or by action at law, or both, whether for specific performance of any
provision contained in this Agreement or any of the other Loan Documents or in
aid of the exercise of any power granted in this Agreement or any of the other
Loan Documents.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01 . AMENDMENTS, ETC. No amendment or waiver of any provision of this
Agreement, nor consent to any departure by the Borrower therefrom, shall in any
event be effective unless the same shall be in writing and signed by Borrower
and the Lender, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
SECTION 8.02. NOTICES, ETC. All notices and other communications provided for
hereunder shall be in writing (including telecopier, telegraphic, telex or cable
communication) and personally delivered, mailed, (registered or certified mail)
return receipt requested), facsimiled or delivered by carrier (such as Federal
Express), if to the Borrower at Three High Ridge Park, Stamford, Connecticut
06905, Attention: Xxx Xxxxxx, Vice President of Finance, (Facsimile number (203)
614-4625); and if to the Lender, at Three Xxxx Xxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx
00000, Attention: Xxxxx X. Xxxxxxxxx, Executive Vice President (Facsimile number
(000) 000-0000). Such notices and communications shall be deemed delivered at
the following times:
(a) If mailed, on the third business day immediately succeeding posting,
with postage pre-paid.
(b) If by facsimile, on the day transmitted, if confirmed, provided such
day is a business day of the recipient, and if not, on the immediately
succeeding business day.
(c) If personally delivered, on such day.
(d) If transmitted by carrier, on the second business day following
delivery to the carrier for delivery on the immediately succeeding
business day.
SECTION 8.03. NO WAIVER; REMEDIES. No failure on the part of the Lender to
exercise, and no delay in exercising, any right hereunder or under the Note
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and not exclusive
of any remedies provided by law.
SECTION 8.04. RIGHT OF SET-OFF. Upon (i) the occurrence and during the
continuance of any Event of Default under Article VII or (ii) the making of the
request or the granting of the consent specified by Article VII to authorize the
Lender to declare the Note due and payable pursuant to the provisions of Article
VII, Lender 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 Indebtedness at any time owing by the Lender or such Affiliate to or for
the credit or the account of Borrower (all such deposits and other indebtedness
being herein called "Obligations") against any and all of the obligations of
Borrower now or hereafter existing under this Loan Agreement and the Note held
by the Lender, whether or not the Lender shall have made any demand under this
Loan Agreement or such Note and although the Obligations may be unmatured. The
Lender agrees promptly to notify the Borrower after any such set-off and
application made by the Lender, provided that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of the
Lender under this Section are in addition to other rights and remedies which the
Lender may have.
SECTION 8.05. BINDING EFFECT. This Agreement shall become effective when it
shall have been executed by Borrower and Lender, except that the Borrower shall
not have the right to assign its rights hereunder or any interest herein or
delegate any of its obligations hereunder without the prior written consent of
Lender.
SECTION 8.06 GOVERNING LAW; SUBMISSION TO JURISDICTION. This Agreement and
the Note shall be governed by, and construed in accordance with, the law
of the State of New York, applicable to agreements made and fully to be
performed therein and without any reference to any rules of conflicts of laws.
The Borrower hereby submits to the nonexclusive jurisdiction of the United
States District Court for the Southern District of New York and of any New York
state court sitting in New York City for the purposes of all legal proceedings
arising out of or relating to this Agreement or the transactions contemplated
hereby. The Borrower irrevocably waives, to the fullest extent permitted by
applicable law, any objection that it may now or hereafter have to the laying of
the venue of any such proceeding brought in such a court and any claim that any
such proceeding brought in such a court has been brought in an inconvenient
forum.
SECTION 8.07. SEVERABILITY. In case any provision in this Agreement or in any
Note shall be held to be invalid, illegal or unenforceable, such provision shall
be severable from the rest of this Agreement or the Note, as the case may be,
and the validity, legality and enforceability of the remaining provisions shall
not in any way be affected or impaired thereby. In such instance Borrower and
Lender shall exert their best efforts to negotiate and agree upon a substitute
provision providing the same rights and obligations as the unenforceable
provision, which will not be invalid, illegal or unenforceable.
SECTION 8.08. EXECUTION IN COUNTERPARTS. This Loan Agreement may be executed
in the number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
SECTION 8.09. SURVIVAL. The obligations of the Borrower under Sections 2.08,
shall survive the repayment of the Advances. In addition, each representation
and warranty made, or deemed to be made by any Notice of a Working Capital
Advance or a Notice of an Interest Advance herein or pursuant hereto shall
survive the making of such representation and warranty, and the Lender shall not
be deemed to have waived, by reason of making any Advance, any Default or Event
of Default that may arise by reason of such representation or warranty provision
have been false or misleading, notwithstanding that the Lender may have had
notice or knowledge or reason to believe that such representation or warranty
was false or misleading at the time the Advance was made.
SECTION 8.10. SENIOR DEBT. The Advances pursuant to this Agreement shall be
deemed to be senior debt of the Borrower, and accordingly shall be senior to and
have priority over all Indebtedness of the Borrower other than trade accounts
payable incurred in the Borrower's ordinary course of business and other than to
the extent any of the Third Party Loan Agreements requires the Advances under
this Agreement to be subordinated to such Third Party Loan Agreement and all
indebtedness and obligations thereunder, in which event this Agreement and the
Advances under this Agreement are and shall be deemed to be subordinate to such
Third Party Loan Agreement and the obligations and indebtedness of the Borrower
thereunder.
SECTION 8.11. WAIVER OF JURY TRIAL. EACH OF BORROWER, AND LENDER HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT, THE NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 8.12. CONFIDENTIALITY. The Lender agrees to hold all non-public
information obtained pursuant to the provisions of this Agreement in accordance
with its customary procedure for handling confidential information of this
nature, provided that nothing herein shall prevent the Lender from disclosing
such information, (i) upon the order of any court or administrative agency or
otherwise to the extent required by statute, rule, regulation or judicial
process, (ii) upon the request or demand of any other regulatory agency or
authority, (iii) which had been publicly disclosed other than as a result of a
disclosure by the Lender prohibited by this Agreement, (iv) in connection with
any litigation to which the Lender is a party, or in connection with the
exercise of any remedy hereunder or under any Note, (v) to the Lender's legal
counsel and independent auditors and accountants and (vi) subject to provisions
substantially similar to those contained in this Section, to any actual or
proposed participant or assignee.
SECTION 8.13. PAYMENT OF EXPENSES, INDEMNIFICATION. The borrower agrees to
pay all the reasonable out-of-pocket costsand expenses of:
(a) the Lender in connection with the (i) the negotiation, preparation,
execution and delivery and administration of this agreement and the
other loan documents and the documents and instruments referred to
therein (including without limitation, the reasonable fees and expenses
of counsel to the Lender), and (ii) any amendment, waiver or consent
relating hereto and thereto and
(b) the Lender in connection with the enforcement of the Loan Documents and
the documents and instruments referred to therein, including, without
limitation, in connection with any such enforcement, the reasonable
fees and disbursements of counsel for the Lender. The Borrower shall
indemnify, defend and hold harmless the Lender and its directors,
officers, agents, employees and counsel from and against (x) and all
losses, claims, damages, liabilities, deficiencies, judgments or
expenses incurred by any of them (except to the extent that it is
finally judicially determined to have resulted from their own gross
negligence or willful misconduct) arising out of or by reason of any
litigation, investigation, claim or proceeding which arises out of or
in any way related to
1. this Agreement,
2. any actual or proposed use by the Borrower of the proceeds of the
Advances and
3. the Lender's entering into this Agreement, the other Loan Documents
or any other agreements and documents relating hereto, including, with-
out limitation, amounts paid in settlement, court costs and the fees
and disbursements of counsel incurred in connection with any such
litigation, investigation, claim or proceeding or any advice rendered
in connection with any such litigation, investigation, claim or
proceeding or any advice rendered in connection with compliance of the
foregoing,
and (y) any such losses, claims, damages, liabilities, deficiencies,
judgments or expenses incurred in connection with any remedial or other
action taken by the Borrower or the Lender in connection with
compliance by the Borrower or any of its Subsidiaries, or any of their
respective properties, with any federal, state or local environmental
laws, acts, rules, regulations, orders, directions, ordinances,
criteria or guidelines. If and to the extent that the obligations of
the Borrower hereunder are unenforceable for any reason, the Borrower
hereby agrees to make the maximum contribution to the payment and
satisfaction of such obligations which is permissible under applicable
law. The Borrower's obligations under this Section 8.13 shall survive
any termination of this Agreement and the other Loan Documents and the
payment in full of the Advances, and are in addition, and not in
substitution of, any other of their obligations set forth in this
Agreement. In addition, Borrower shall, upon demand, pay to the Lender
all reasonable costs and expenses (including the reasonable fees and
disbursements of counsel and other professionals) paid or incurred by
the Lender in (A) enforcing or defending its rights under or in respect
of this Agreement, the other Loan Documents or any other document or
instrument now or hereafter executed and delivered in connection
herewith, and (B) in collecting the Advances.
SECTION 8.14.. ENTIRE AGREEMENT, SUCCESSORS AND ASSIGNS. This Agreement along
with the other Loan Documents constitute the entire agreement among the Borrower
and the Lender, supersedes any prior agreements among them, and shall bind and
benefit the Borrower and the Lender and their respective successors and
permitted assigns. The Borrower shall not assign this Agreement or any of its
rights hereunder or delegate its obligations hereunder.
IN WITNESS WHEREOF
The Borrower and the Lender have caused this Loan Agreement to be
executed and delivered by their proper and duly authorized officers as of the
date first above written:
ELECTRIC LIGHTWAVE, INC.
By
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Its
ATTEST
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Secretary
CITIZENS COMMUNICATIONS COMPANY
By
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Its
ATTEST
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Secretary
EXHIBIT A
FORM OF NOTE
Dated: As of October 30, 2000
FOR VALUE RECEIVED, the undersigned, ELECTRIC LIGHTWAVE, INC., a
Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
Citizens Communications Company (the "Lender") on the Maturity Date (as so
defined in the Loan Agreement) the principal sum of U.S. $450,000,000 or, if
less, the aggregate principal amount of Advances made by the Lender to the
Borrower pursuant to the certain Loan Agreement dated the date hereof by and
between the Borrower and the Lender (the "Loan Agreement"). Terms capitalized
but not defined herein shall have the meanings given to them in the Loan
Agreement. Payment shall be made at the principal offices of the Lender, Three
Xxxx Xxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx 00000. The Loan Agreement, among other
things, (i) provides for the making of Advances by the Lender to the Borrower
from time to time in an aggregate amount not to exceed at any time outstanding
the U.S. dollar amount first above mentioned, the indebtedness of the Borrower
resulting from each such Advance being evidenced by this Note, and (ii) contains
provisions for prepayments on account of principal hereof prior to the maturity
hereof upon the terms and conditions therein specified.
The Borrower promises to pay interest on the unpaid principal amount of
each Working Capital Advance and each Interest Advance on each Interest Payment
Date, and on the Maturity Date to pay any interest then remaining unpaid, at the
interest rate specified in the Loan Agreement computed from the date of such
Advance, and additionally agrees to pay Default Interest as provided in the Loan
Agreement.
Both principal and interest are payable in lawful money of the United
States of America to Lender, in same day funds. Each Advance made by the Lender
to the Borrower pursuant to the Loan Agreement, and all payments made on account
of principal thereof, shall be recorded by the Lender and, prior to any transfer
hereof, endorsed on the grid attached hereto which is part of this Note;
provided that the failure of the Lender to make any such recordation or
endorsement shall not affect the obligations of the Borrower hereunder or under
the Loan Agreement.
This note is the Note referred to in, and is entitled to the benefits
of, the certain Loan Agreement.
The Borrower hereby waives presentment, demand, protest and notice of
any kind. No failure to exercise, and no delay in exercising, any rights
hereunder on the part of the holder hereof shall operate as a waiver of such
rights.
This Note shall be governed by, and construed in accordance with, the
law of the State of New York, United States of America, applicable to agreements
made and fully to be performed therein and without any reference to any rules of
conflicts of laws.
ELECTRIC LIGHTWAVE, INC.
By______________________________
Its
ADVANCES AND PAYMENTS OF PRINCIPAL
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Amount of Advance Amount of Principal Unpaid Principal Notation Made By
Date Paid or Prepaid Balance
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Form of Note
EXHIBIT B
NOTICE OF WORKING CAPITAL ADVANCE
[Date]
Citizens Communications Company
Three Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Ladies and Gentlemen:
The undersigned, Electric Lightwave, Inc., refers to the Loan Agreement, dated
October 30, 2000 (the "Loan Agreement", the terms defined therein, being used
herein as therein defined), between the undersigned as Borrower and Citizens
Communications Company, as Lender. Borrower hereby gives you notice,
irrevocably, pursuant to Section 2.02 of the Loan Agreement that the undersigned
hereby requests a Working Capital Advance under the Loan Agreement, and in that
connection sets forth below the information relating to such Advance as required
by Section 2.02(a) of the Loan Agreement:
(i) The Business Day of the proposed Advance is ;
-----------------------
(ii) The aggregate amount of the proposed Advance is $ .
------------------
The undersigned hereby certifies that the following statements are true on the
date hereof, and will be true on the date of the proposed Advance:
(A) the representations and warranties contained in Article IV are correct,
before and after giving effect to the proposed Advance and to the applica-
tion of the proceeds therefrom, as though made on and as of such date; and
(B) no event has occurred and is continuing, or would result from such pro-
posed Advance or from the application of the proceeds therefrom, which
constitutes a Default or an Event of Default.
Very truly yours,
ELECTRIC LIGHTWAVE, INC.
By ___________________________
Title: ___________________________
EXHIBIT C
NOTICE OF INTEREST ADVANCE
[Date]
Citizens Communications Company
Three Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Ladies and Gentlemen:
The undersigned, Electric Lightwave, Inc., refers to the Loan Agreement, dated
October 30, 2000 (the "Loan Agreement", the terms defined therein, being used
herein as therein defined), between the undersigned as Borrower and Citizens
Communications Company, as Lender. The Borrower hereby gives you notice,
irrevocably, pursuant to Section 2.02 of the Loan Agreement that the undersigned
hereby requests an Interest Advance under the Loan Agreement, and in that
connection sets forth below the information relating to such Advance as required
by Section 2.02(a) of the Loan Agreement:
(i) The Business Day of the proposed Advance is ----------------------;
(ii) The aggregate amount of the proposed Advance is $----------.
The undersigned hereby certifies that the following statements are true on the
date hereof, and will be true on the date of the proposed Advance:
(A) the representations and warranties contained in Article IV are correct,
before and after giving effect to the proposed Advance and to the application
of the proceeds therefrom, as though made on and as of such date; and
(B) no event has occurred and is continuing, or would result from such pro-
posed Advance or from the application of the proceeds therefrom, which
constitutes a Default or an Event of Default.
Very truly yours,
ELECTRIC LIGHTWAVE, INC.
By ___________________________
Title:
___________________________
EXHIBIT D
[Form of Opinion of Counsel of the Borrower]
____________, 2000
Citizens Communications Company
Three Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Ladies and Gentlemen:
This opinion is rendered in connection with the Loan Agreement (the "Loan
Agreement") dated as of October 30, 2000, between Electric Lightwave, Inc. (the
"Borrower") and Citizens Communications Company, a Delaware Corporation (the
"Lender"), providing for loans to be made by Lender to Borrower in an aggregate
principal amount not exceeding $450,000,000. Terms defined in the Loan Agree-
ment are used herein as therein defined.
I am [We are] the General Counsel of the Borrower and, in that capacity in
connection with the foregoing, I [we] have examined the Loan Agreement and the
Notes. I [we] have also examined originals or copies, certified or otherwise
identified to my [our] satisfaction, of such documents, corporate records,
certificates of public officials and other instruments, and have conducted such
other investigations of fact and law, as I have deemed necessary or advisable
for purposes of this opinion.
Based on the foregoing, I am [we are] of the opinion that:
1. Borrower (a) is a corporation duly organized, validly existing
and in good standing under the laws of the state of its
incorporation, (b) has the requisite power and authority to own
its property and assets and to carry on its business as now
conducted and (c) is qualified to do business in every juris-
diction where such qualification is required, except where the
failure so to qualify would not have a Material Adverse Effect.
2. The execution, delivery and performance by the Borrower of the
Loan Agreement and the Note (a) have been duly authorized by all
necessary corporate action on the part of Borrower and do not and
will not require the consent or approval of shareholders of
Borrower, other than such consents as have been obtained, (b)
will not violate (i) any provision of law, statute, rule or
regulation or the Certificate of Incorporation or the By-Laws of
the Borrower or (ii) any order of any court or of any other agent
of government binding upon the Borrower (c) will not violate, be
in conflict with, result in a breach of or constitute (alone or
with notice or lapse of time or both) a default under any
indenture, agreement or other instrument to which the or any of
its properties or assets are or may be bound and will not result
in the creation or imposition of any lien, charge or encumbrance
of any nature whatsoever upon any property or assets of the
Borrower.
3. All consents or approvals of, or other actions by, any
governmental agency, authority or regulatory body required in
connection with the execution, delivery and performance by the
Borrower of the Loan Agreement and the Note have been duly
obtained and are in full force and effect, without amendment or
modification, and are not the subject of any pending or
threatened proceedings seeking to amend, modify, or rescind all
or any portion of the terms thereof, or any stay.
4. The Loan Agreement and the Note have been duly executed and
delivered by the Borrower and constitute legal, valid and binding
obligations of the Borrower stated to be a party thereto,
enforceable against the Borrower in accordance with their terms,
except as such enforceability may be limited by applicable
bankruptcy, reorganization, insolvency, moratorium and other laws
affecting the rights of creditors generally and general
principles of equity.
5. There are no actions, suits, or proceedings at law or in equity
or by or before any governmental instrumentality, regulatory
authority, or other agency pending or, to the best of my
knowledge, threatened against the Borrower (a) which involve the
Loan Agreement or any of the transactions contemplated thereby or
(b) which, if adversely determined, could reasonably be expected
to have a Material Adverse Effect, or (ii) impair in any respect
the validity or enforceability of, or the ability of any to
perform its obligations under, the Loan Agreement or the Note.
6. The Borrower is not in violation of any law, or in default with
respect to any judgment, writ, injunction, decree, rule, or
regulation of any court or governmental agency or
instrumentality, where such violation or default could have (i) a
Material Adverse Effect, or (ii) impair in any respect the
validity or enforceability of, or the ability the Borrower to
perform its obligations under, the Loan Agreement or the Notes.
7. The Borrower is not an "investment company" as defined in or
subject to regulation under the Investment Company Act of 1940,
as amended.
Very truly yours,
DZR
