________________________________________________________________________________
Exhibit 4.1
CREDIT AGREEMENT
among
FIBERNET TELECOM GROUP, INC.
as the Borrower,
THE INSTITUTIONS PARTY HERETO
FROM TIME TO TIME AS LENDERS,
as the Lenders,
DEUTSCHE BANK AG NEW YORK BRANCH,
as the Administrative Agent,
DEUTSCHE BANK SECURITIES INC.,
as the Co-Syndications Agent,
and
TORONTO DOMINION (TEXAS), INC.,
as the Co-Syndications Agent.
______________________________________
DEUTSCHE BANK SECURITIES INC.,
as the Lead Arranger
________________________________________
DATED AS OF APRIL 11, 2000
________________________________________________________________________________
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS.................................................................. 2
SECTION 1.1. DEFINED TERMS..................................................... 2
SECTION 1.2. ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS
UNDER AGREEMENT................................................... 26
SECTION 1.3. OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION........... 27
ARTICLE II. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS.................................. 28
SECTION 2.1. COMMITMENTS; MAKING OF LOANS; THE REGISTER; NOTES................. 28
SECTION 2.2. LETTERS OF CREDIT................................................. 32
SECTION 2.3. INTEREST ON THE LOANS............................................. 37
SECTION 2.4. FEES.............................................................. 39
SECTION 2.5. REPAYMENTS, PREPAYMENTS AND REDUCTIONS IN COMMITMENTS; GENERAL
PROVISIONS REGARDING PAYMENTS..................................... 40
SECTION 2.6. SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS............... 43
SECTION 2.7. INCREASED COSTS; TAXES; CAPITAL ADEQUACY.......................... 45
SECTION 2.8. OBLIGATION OF THE LENDERS TO MITIGATE............................. 49
ARTICLE III. CONDITIONS TO THE MAKING OF EXTENSIONS OF CREDIT........................... 50
SECTION 3.1. CONDITIONS PRECEDENT TO THE INITIAL LOAN AND INITIAL LETTER OF
CREDIT............................................................ 50
SECTION 3.2. CONDITIONS PRECEDENT TO SUBSEQUENT LOANS.......................... 55
SECTION 3.3. CONDITIONS PRECEDENT TO CONVERSION OF LOANS INTO TERM LOANS....... 55
ARTICLE IV. REPRESENTATIONS AND WARRANTIES.............................................. 57
SECTION 4.1. ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS AND
SUBSIDIARIES...................................................... 57
SECTION 4.2. AUTHORIZATION OF BORROWING, ETC................................... 58
SECTION 4.3. SOLVENCY.......................................................... 59
SECTION 4.4. FINANCIAL CONDITION............................................... 59
SECTION 4.5. NO MATERIAL ADVERSE EFFECT........................................ 59
SECTION 4.6. TITLE TO PROPERTIES; LIENS; REAL PROPERTY......................... 59
SECTION 4.7. LITIGATION; ADVERSE FACTS......................................... 60
SECTION 4.8. PAYMENT OF TAXES.................................................. 60
SECTION 4.9. PERFORMANCE OF AGREEMENTS; MATERIAL CONTRACTS..................... 60
SECTION 4.10. GOVERNMENTAL REGULATION........................................... 61
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SECTION 4.11. SECURITIES ACTIVITIES............................................. 61
SECTION 4.12. LABOR MATTERS..................................................... 61
SECTION 4.13. CERTAIN FEES...................................................... 61
SECTION 4.14. ENVIRONMENTAL PROTECTION.......................................... 61
SECTION 4.15. MATTERS RELATING TO COLLATERAL.................................... 62
SECTION 4.16. IMMUNITY.......................................................... 63
SECTION 4.17. ADDITIONAL MATTERS................................................ 63
ARTICLE V. BORROWERS' AFFIRMATIVE COVENANTS............................................. 64
SECTION 5.1. FINANCIAL STATEMENTS AND OTHER REPORTS............................ 64
SECTION 5.2. PERFORMANCE OF OBLIGATIONS; CONDUCT OF BUSINESS................... 68
SECTION 5.3. PROJECTIONS....................................................... 69
SECTION 5.4. EXISTENCE......................................................... 69
SECTION 5.5. PAYMENT OF OBLIGATIONS............................................ 69
SECTION 5.6. MAINTENANCE OF PROPERTIES; INSURANCE.............................. 69
SECTION 5.7. INSPECTION; LENDER MEETING........................................ 70
SECTION 5.8. COMPLIANCE WITH LAWS; GOVERNMENTAL ACTIONS AND RIGHTS OF WAY...... 70
SECTION 5.9. ENVIRONMENTAL MATTERS............................................. 71
SECTION 5.10. PAYMENT OF LIENS.................................................. 73
SECTION 5.11. FURTHER ASSURANCES................................................ 74
SECTION 5.12. USE OF PROCEEDS................................................... 76
SECTION 5.13. INTELLECTUAL PROPERTY............................................. 76
SECTION 5.14. COOPERATION WITH SYNDICATION...................................... 76
SECTION 5.15. INTEREST RATE PROTECTION.......................................... 76
ARTICLE VI. BORROWERS' NEGATIVE COVENANTS............................................... 77
SECTION 6.1. INDEBTEDNESS...................................................... 77
SECTION 6.2. LIENS AND RELATED MATTERS......................................... 78
SECTION 6.3. CHANGE OF OFFICE.................................................. 78
SECTION 6.4. CHANGE OF NAME.................................................... 79
SECTION 6.5. INVESTMENTS; JOINT VENTURES; FORMATION OF SUBSIDIARIES............ 79
SECTION 6.6. FINANCIAL COVENANTS............................................... 80
SECTION 6.7. RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND ACQUISITIONS.. 85
SECTION 6.8. SALES AND LEASE-BACKS............................................. 86
SECTION 6.9. SALE OR DISCOUNT OF RECEIVABLES................................... 86
SECTION 6.10. TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES..................... 86
SECTION 6.11. DISPOSAL OF SUBSIDIARY STOCK...................................... 87
SECTION 6.12. CERTAIN RESTRICTIONS ON CHANGES TO CHARTER DOCUMENTS.............. 87
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SECTION 6.13. CERTAIN RESTRICTIONS IN RESPECT OF MATERIAL CONTRACTS............. 87
SECTION 6.14. LIMITATIONS ON RESTRICTED ACTIONS................................. 88
SECTION 6.15. NATURE OF BUSINESS................................................ 88
SECTION 6.16. FISCAL YEAR....................................................... 88
SECTION 6.17. CURRENCY.......................................................... 88
SECTION 6.18. RESTRICTED PAYMENTS............................................... 88
SECTION 6.19. PLEDGED ACCOUNTS.................................................. 89
ARTICLE VII. EVENTS OF DEFAULT.......................................................... 89
SECTION 7.1. FAILURE TO MAKE PAYMENTS WHEN DUE................................. 89
SECTION 7.2. DEFAULT UNDER OTHER INDEBTEDNESS.................................. 89
SECTION 7.3. BREACH OF WARRANTY................................................ 89
SECTION 7.4. INVOLUNTARY BANKRUPTCY PROCEEDING, ETC............................ 90
SECTION 7.5. VOLUNTARY BANKRUPTCY PROCEEDING, ETC.............................. 90
SECTION 7.6. JUDGMENTS AND ATTACHMENTS......................................... 90
SECTION 7.7. DISSOLUTION....................................................... 90
SECTION 7.8. CHANGE IN CONTROL................................................. 90
SECTION 7.9. NON-PERFORMANCE OF CERTAIN COVENANTS AND OBLIGATIONS.............. 91
SECTION 7.10. IMPAIRMENT OF MATERIAL CONTRACT................................... 91
SECTION 7.11. DEFAULT UNDER OR TERMINATION OF MATERIAL CONTRACTS................ 91
SECTION 7.12. DEFAULT UNDER OR TERMINATION OF GOVERNMENTAL ACTIONS.............. 91
SECTION 7.13. FAILURE OF GUARANTY; REPUDIATION OF OBLIGATIONS................... 92
SECTION 7.14. CRIMINAL PROCEEDING............................................... 92
SECTION 7.15. ERISA............................................................. 92
SECTION 7.16. RECEIPT OF GOVERNMENTAL ACTIONS................................... 93
SECTION 7.17. INITIAL REMEDIES.................................................. 93
ARTICLE VIII. AGENTS.................................................................... 93
SECTION 8.1. APPOINTMENT....................................................... 93
SECTION 8.2. POWERS AND DUTIES; GENERAL IMMUNITY............................... 95
SECTION 8.3. REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL
OF CREDITWORTHINESS............................................... 96
SECTION 8.4. RIGHT TO INDEMNITY................................................ 96
SECTION 8.5. SUCCESSOR AGENTS.................................................. 97
SECTION 8.6. COLLATERAL DOCUMENTS AND SUBSIDIARY GUARANTIES.................... 97
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ARTICLE IX. MISCELLANEOUS............................................................... 98
SECTION 9.1. ASSIGNMENTS AND PARTICIPATIONS IN LOANS........................... 98
SECTION 9.2. EXPENSES.......................................................... 100
SECTION 9.3. INDEMNITY......................................................... 101
SECTION 9.4. SET-OFF; SECURITY INTEREST IN DEPOSIT ACCOUNTS.................... 102
SECTION 9.5. RATABLE SHARING................................................... 102
SECTION 9.6. AMENDMENTS AND WAIVERS............................................ 103
SECTION 9.7. INDEPENDENCE OF COVENANTS......................................... 104
SECTION 9.8. NOTICES........................................................... 104
SECTION 9.9. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS............ 105
SECTION 9.10. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE............. 105
SECTION 9.11. MARSHALING; PAYMENTS SET ASIDE.................................... 105
SECTION 9.12. SEVERABILITY...................................................... 106
SECTION 9.13. OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF THE LENDERS' RIGHTS.... 106
SECTION 9.14. HEADINGS.......................................................... 106
SECTION 9.15. GOVERNING LAW; ENTIRE AGREEMENT................................... 106
SECTION 9.16. SUCCESSORS AND ASSIGNS............................................ 107
SECTION 9.17. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.................... 107
SECTION 9.18. WAIVER OF JURY TRIAL.............................................. 107
SECTION 9.19. LIMITED RECOURSE.................................................. 108
SECTION 9.20. LIMITATION OF LIABILITY........................................... 108
SECTION 9.21. SATISFACTION...................................................... 108
SECTION 9.22. COUNTERPARTS; EFFECTIVENESS....................................... 109
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SCHEDULES
Schedule 1.1.A Permitted Investments
Schedule 1.1.B Permitted Liens
Schedule 2.1.A Lenders; Commitments
Schedule 3.1.A Pledged Accounts
Schedule 4.1.D Capital Structure
Schedule 4.1.E Options; Warrants
Schedule 4.2.C Governmental Actions
Schedule 4.6.B Real Property
Schedule 4.7 Litigation
Schedule 4.9.B Material Contracts
Schedule 4.12 Labor Matters
Schedule 4.14 Environmental Matters
Schedule 4.15.A Filings and Other Actions
Schedule 4.15.D Chief Executive Office
Schedule 4.17 Intellectual Property
Schedule 5.6.B Insurance
Schedule 6.1 Indebtedness
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EXHIBITS
Exhibit A Form of Assignment Agreement
Exhibit B Form of Certificate re: Non-Bank Status
Exhibit C Form of Closing Date Certificate
Exhibit D Form of Compliance Certificate
Exhibit E Form of Control Agreement
Exhibit F Form of Financial Officer's Certificate
Exhibit G Form of Loan/Letter of Credit Certificate
Exhibit H Form of Loan/Letter of Credit Request
Exhibit I Form of Notice of Continuation/Conversion
Exhibit J Form of Solvency Certificate
Exhibit K Form of Subsidiary Guaranty Agreement
Exhibit L Form of Subsidiary Pledge Agreement
Exhibit M Form of Subsidiary Security Agreement
Exhibit N Form of Note
Exhibit O Form of Legal Opinion of Mintz, Levin, Cohn,
Ferris, Glovsky and Popeo PC, New York and
Delaware counsel to the Borrower and its
Subsidiaries
Exhibit P Form of Warrant Agreement
Exhibit Q Form of Warrant Escrow Agreement
Exhibit R Form of Equity Registration Rights Joinder
Agreement
Exhibit S Form of Term Loan Conversion Certificate
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This CREDIT AGREEMENT (as amended, supplemented, amended and restated or
otherwise modified from time to time, this "Agreement"), is entered into as of
April 11, 2000, among FIBERNET TELECOM GROUP, INC., a Delaware corporation (the
"Borrower"), THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTIES HERETO AS
LENDERS (each individually referred to herein as a "Lender" and, collectively,
as the "Lenders"), DEUTSCHE BANK AG NEW YORK BRANCH ("DBAG"), as administrative
agent for the Lenders (in such capacity, the "Administrative Agent"), DEUTSCHE
BANK SECURITIES INC. ("DBS"), as co-syndications agent for the Lenders (in such
capacity, the "DBS Syndications Agent"), and TORONTO DOMINION (TEXAS), INC.
("TD"), as co-syndications agent for the Lenders (in such capacity, the "TD
Syndications Agent" and, together with the DBS Syndications Agent, the "Co-
Syndications Agents").
RECITALS
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A. The Borrower provides integrated telecommunications products and
services in tier-one major metropolitan service areas (the "System");
B. The Borrower desires that the Lenders extend the senior secured credit
facilities contemplated hereby to the Borrower to provide the financing
necessary to acquire Telecommunication Assets, make an investment in Devnet and
provide working capital for it and its Subsidiaries;
C. Subject to the terms and conditions of this Agreement and the other
Loan Documents, the Lenders are willing to extend such senior secured credit
facilities to the Borrower, the proceeds of which will be used to, among other
things, (i) fund the acquisition of Telecommunication Assets, (ii) make an
investment in Devnet in an aggregate amount not to exceed $3,000,000, (iii)
provide working capital for the Borrower and its Subsidiaries, and (iv) pay
certain fees and expenses incurred by the Borrower in connection with the
transactions contemplated hereby;
D. The Borrower desires to secure all of the Obligations hereunder and
under the other Loan Documents by granting to the Administrative Agent, for the
benefit of the Secured Parties, a perfected first priority security interest in
the Borrower's interests in (i) the Collateral and (ii) its Subsidiaries; and
E. In order to further secure and support the Borrower's obligations to
the Lenders under the Loan Documents, each Subsidiary of the Borrower will (i)
guaranty the Obligations pursuant a Subsidiary Guaranty Agreement and (ii) grant
to the Administrative Agent, for the benefit of the Secured Parties, a perfected
first priority security interest in each Subsidiary's interest in (a) the
Collateral and (b) its Subsidiaries.
AGREEMENT
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NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. DEFINED TERMS. Capitalized words and phrases used and not
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otherwise defined elsewhere in this Agreement shall have the following meanings:
"Accounts" means the securities accounts (as such term is defined in
the UCC) of the Borrower or any of its Subsidiaries pledged to the
Administrative Agent, for the benefit of the Secured Parties, by the
Borrower or any of its Subsidiaries in accordance with the terms of this
Agreement and the other Loan Documents.
"Adjusted Eurodollar Rate" means, for any Interest Rate Determination
Date with respect to an Interest Period for a Eurodollar Rate Loan, the
rate per annum appearing on Page 3750 of the Telerate Service (or on any
successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations
of interest rates applicable to dollar deposits in the London interbank
market) at approximately 11:00 a.m., London time, on such Interest Rate
Determination Date, at the rate for dollar deposits with a maturity
comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "Adjusted Eurodollar Rate"
for such Interest Rate Determination Date shall be the average rate
(rounded upwards, if necessary, to the next 1/16 of 1%) at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest
Period are offered by the principal New York office of Deutsche Bank AG,
New York Branch in immediately available funds in the London interbank
market at approximately 11:00 a.m., London Time, on such Interest Rate
Determination Date.
"Administrative Agent" is defined in the Preamble to this Agreement
and includes each of its successors and assigns.
"Affected Lender" has the meaning assigned to that term in Section
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2.6.C.
-----
"Affected Loans" has the meaning assigned to that term in Section
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2.6.C.
-----
"Affiliate", as applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under direct or indirect
common control with, that Person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as applied to any Person,
means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of that Person, whether
through the ownership of voting securities or by contract or otherwise.
Notwithstanding anything to the contrary herein, for the purposes of the
Loan Documents, no Agent nor any Affiliate thereof shall be an Affiliate of
the Borrower or any of its Subsidiaries.
"Agents" means the collective reference to the Administrative Agent,
the Securities Intermediary and the Co-Syndications Agents.
2
"Agreement" has the meaning assigned to that term in the Preamble to
this agreement.
"Applicable Margin" means, (a) from and after the Closing Date until
and including the date which is the twelve month anniversary thereof, 5.00%
for Base Rate Loans and 6.00% for Eurodollar Rate Loans, (b) after the date
which is the twelve month anniversary of the Closing Date until and
including the date which is the fifteen month anniversary thereof, 6.00%
for Base Rate Loans and 7.00% for Eurodollar Rate Loans, and (c) after the
date which is the fifteen month anniversary of the Closing Date until the
Maturity Date, 7.00% for Base Rate Loans and 8.00% for Eurodollar Rate
Loans.
"Applicable Percentage" means, with respect to any Lender, the
percentage of the total Commitments represented by such Lender's
Commitments or, with respect to any Lender and a given Class of
Commitments, the percentage of the total commitments of such Class
represented by such Lender's Commitments. If the Commitments have
terminated or expired, the Applicable Percentages shall be determined based
upon the Commitments most recently in effect prior to such termination or
expiration, giving effect to any assignments.
"Asset Sale" means the sale by the Borrower or any of its Subsidiaries
to any Person of (i) any of the stock of any of such Person's Subsidiaries,
(ii) substantially all of the assets of any division or line of business of
the Borrower or any of its Subsidiaries, or (iii) any other assets (whether
tangible or intangible) of the Borrower or any of its Subsidiaries (other
than any transfers or dispositions permitted by Section 6.7).
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"Assignment Agreement" means an Assignment Agreement in substantially
the form of Exhibit A annexed hereto.
---------
"Assignment Agreement (111 Eighth Avenue)" means that certain
Assignment and Assumption Agreement, dated as of April 11, 2000, between
the Borrower and FiberNet Equal Access, L.L.C. in respect of the 000 Xxxxxx
Xxxxxx lease.
"Assignment Agreement (Iaxis)" means that certain Assignment and
Assumption Agreement, dated as of April 11, 2000, among the Borrower,
FiberNet Equal Access, L.L.C. and Local Fiber, L.L.C. in respect of the
Iaxis contract.
"Assignment and Assumption Agreement (Master Purchase Agreement)"
means that certain Assignment and Assumption Agreement, dated as of April
11, 2000, between the Borrower and FiberNet Equal Access, L.L.C. in respect
of the Master Purchase Agreement.
"Assignment Agreement (Onsite)" means that certain Assignment and
Assumption Agreement, dated as of April 11, 2000, between the Borrower and
FiberNet Equal Access, L.L.C. in respect of the Onsite Access L.L.C.
contract.
"Available Cash" means, for any period, the sum of (i) unused
Commitments hereunder plus (ii) all amounts that would, in conformity with
GAAP, be included on a
3
consolidated balance sheet of the Borrower and its Subsidiaries as Cash and
Cash Equivalents.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"Base Rate" means, at any time, a rate per annum equal to the greater
of (i) the Prime Rate or (ii) the rate which is 1/2 of 1% in excess of the
Federal Funds Effective Rate. Any change in the Base Rate due to a change
in the Prime Rate or the Federal Funds Effective Rate shall be effective
from and including the effective date of such change in the Prime Rate or
the Federal Funds Effective Rate, as the case may be.
"Base Rate Loans" means Loans bearing interest at rates determined by
reference to the Base Rate as provided in Section 2.3.
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"Borrower" has the meaning assigned to that term in the Preamble to
this Agreement.
"Borrower Pledge Agreement" means the Borrower Pledge Agreement, dated
as of the date hereof, between the Borrower and the Administrative Agent,
for the benefit of the Secured Parties, in form and substance satisfactory
to the Administrative Agent.
"Borrower Security Agreement" means the Borrower Security Agreement,
dated as of the date hereof, between the Borrower and the Administrative
Agent, for the benefit of the Secured Parties, in form and substance
satisfactory to the Administrative Agent.
"Business Day" means (i) for all purposes other than as covered by
clauses (ii) and (iii) below, any day excluding Saturday, Sunday and any
day which is a legal holiday under the laws of the State of New York or is
a day on which banking institutions located in the State of New York are
authorized or required by law or other governmental action to close, (ii)
with respect to all notices, determinations, fundings and payments in
connection with the Adjusted Eurodollar Rate or any Eurodollar Rate Loans,
any day that is a Business Day described in clause (i) above and that is
also a day for trading by and between banks in Dollar deposits in the
London interbank market, and (iii) with respect to all notices,
determinations, fundings and payments in connection with Letters of Credit,
this definition also excludes any day on which banking institutions are
authorized or required by law or other governmental action to close in the
jurisdiction in which the Issuing Bank for such Letter of Credit is
located.
"Business Plan" means the business plan of the Borrower and its
Subsidiaries prepared by the management of the Borrower and delivered to
the Administrative Agent and the Lenders on or prior to the Closing Date,
which shall be reasonably satisfactory in form and substance to the
Administrative Agent and the Lenders.
"Capital Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee that,
in conformity with GAAP, is accounted for as a capital lease on the balance
sheet of that Person.
4
"Capital Lease Obligations" means, as applied to any Person, the
obligations of such Person to pay rent or other amounts under any Capital
Lease, the amount of which obligations at any time shall be the capitalized
amount thereof at such time determined in accordance with GAAP.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation,
any and all equivalent ownership interests in a Person other than a
corporation (including partnership interests in a partnership, member
interests in a limited liability company and beneficial interests in a
trust), and any and all warrants, options and other rights to purchase any
of the foregoing.
"Cash" means (i) money or (ii) currency.
"Cash Equivalents" means:
(i) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed
by the full faith and credit of the United States of America), in each case
maturing within one year from the date of acquisition thereof;
(ii) investments in commercial paper maturing within 365 days from
the date of acquisition thereof and having, at such date of acquisition, a
credit rating of at least A-1 from S&P or at least P-1 from Xxxxx'x;
(iii) investments in certificates of deposit, banker's acceptances
and time deposits maturing within 180 days from the date of acquisition
thereof;
(iv) money market mutual funds (including money market funds or
money market mutual funds for which the Securities Intermediary in its
individual capacity or any of its Affiliates is investment manager or
advisor or from which the Securities Intermediary in its individual
capacity or any of its Affiliates charges or collects fees and expenses for
services rendered) registered under the U.S. Investment Company Act of
1940, as amended, having a rating in the highest investment category by S&P
and Xxxxx'x; and
(v) fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (i) above and centered
into with a financial institution satisfying the criteria described in
clause (iii) above.
"Casualty Proceeds" means all payments received by the Administrative
Agent, the Borrower or any of its Subsidiaries from any insurer in respect
of any Event of Loss, but excluding business interruption insurance or
delayed opening of business insurance and payments in respect of liability
policies.
"Certificate re: Non-Bank Status" means a certificate substantially
in the form of Exhibit B annexed hereto delivered by a Lender to the
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Administrative Agent pursuant to Section 2.7.B.(iii).
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5
"Change in Control" means and shall be deemed to have occurred if (i)
there shall have occurred the sale, lease, transfer or other disposition,
in one or a series of related transactions, of (a) all or substantially all
of the assets of the Borrower and its Subsidiaries taken as a whole to any
"person" or "group" (within the meaning of Sections 13(d) and 14(d)(2) of
the Exchange Act) or (b) 20% or more of the Capital Stock of the Borrower
to any such "person" or "group"; (ii) during any period of twelve
consecutive months, individuals who at the beginning of such period
constituted the board of directors of the Borrower (together with any new
directors whose election by such board or whose nomination for election by
the shareholders of the Borrower was approved by a vote of a majority of
the directors then still in office who were either directors at the
beginning of such period or whose election or nomination for election was
previously so approved), cease for any reason to constitute a majority of
the board of directors of the Borrower then in office; (iii) the holders of
Capital Stock of the Borrower or any of its Subsidiaries shall approve any
plan or proposal for the liquidation or dissolution of the Borrower or any
such Subsidiary; (iv) the Borrower shall cease to own, directly or
indirectly, 100% of the voting and economic interests in FiberNet Telecom,
Inc.; (v) the Borrower shall cease to own, directly or indirectly, 100% of
the voting and economic interests in FiberNet Equal Access, L.L.C.; or (vi)
the Borrower shall cease to own, directly or indirectly, 100% of the voting
and economic interests in Local Fiber, L.L.C.
"Class" means, as applied to the Lenders, each of the Lenders having
Revolving Loan Exposure.
"Closing Date" means the date on which this Agreement shall have been
executed and delivered by the parties hereto and the conditions specified
in Section 3.1.A. are satisfied or waived as set forth in such Section.
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"Closing Date Certificate" means a certificate of a Responsible
Officer of the Borrower, substantially in the form of Exhibit C annexed
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hereto, delivered to the Administrative Agent and the Lenders by such
Responsible Officer on the Closing Date.
"Code" means the Internal Revenue Code of 1986, amendments thereto,
successor statutes, and regulations, rulings and guidance promulgated or
issued thereunder.
"Collateral" means, collectively, all of the real, personal and mixed
property (including Accounts and Capital Stock) in which Liens are
purported to be granted pursuant to the Collateral Documents as security
for the Obligations.
"Collateral Documents" means the Borrower Pledge Agreement, the
Borrower Security Agreement, each Subsidiary Guaranty Agreement, each
Subsidiary Pledge Agreement, each Subsidiary Security Agreement, each
Consent, each Control Agreement and all other instruments or documents
delivered by a Loan Party pursuant to this Agreement or any of the other
Loan Documents in order to grant to the Administrative Agent, for the
benefit of the Secured Parties, a Lien on any real, personal or mixed
property of that Loan Party as security for the Obligations.
6
"Commitment" means the commitment of a Lender to make Loans as set
forth in Section 2.1., and "Commitments" means such commitments of all the
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Lenders in the aggregate.
"Commitment Letter" means the Commitment Letter, dated as of April 11,
2000, among the Borrower, DBAG, Nortel Networks and Toronto Dominion (USA)
Securities, Inc.
"Compliance Certificate" means a certificate substantially in the form
of Exhibit D annexed hereto delivered to the Administrative Agent and the
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Lenders by the Borrower pursuant to Section 5.1.
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"Consent" means, individually or collectively, the Xxxxxx Street
Consent and the MFN Consent.
"Consolidated Capital Expenditures" means, as applied to any Person,
for any period, the aggregate of all expenditures by such Person and its
Subsidiaries for the acquisition or leasing (pursuant to a Capital Lease)
of fixed or capital assets or additions to equipment (including
replacements, capitalized repairs and improvements during such period)
which would be capitalized under GAAP on a consolidated cash flow statement
of such Person and its Subsidiaries.
"Consolidated Capitalization" means, for any period, the sum of (i)
the aggregate amount of cash equity contributed to the Borrower or any of
its Subsidiaries by any Person other than the Borrower or any such
Subsidiary, plus (ii) the gross value (as set forth on a consolidated
balance sheet of the Borrower and its Subsidiaries) of the irrevocable
right of use granted by Metromedia Fiber Network Services, Inc. in favor of
the Borrower or any of its Subsidiaries plus (iii) the Borrower's
Consolidated Total Debt, all as determined on a consolidated basis in
accordance with GAAP.
"Consolidated EBITDA" means, for any period, Consolidated Net Income
of such Person and its Subsidiaries for such period plus, without
duplication and to the extent reflected as a charge in the statement of
such Consolidated Net Income for such period, the sum of (i) income tax
expense, (ii) Consolidated Interest Expense of such Person and its
Subsidiaries, amortization or write-off of debt discount and debt issuance
costs and commissions, discounts and other fees and charges associated with
Indebtedness (including, in the case of the Borrower, the Loans and Letters
of Credit), (iii) depreciation and amortization expense, (iv) amortization
of intangibles (including goodwill) and organization costs and (v) any
other non-cash charges, and minus, to the extent included in the statement
of such Consolidated Net Income for such period, the sum of (a) interest
income (except to the extent deducted in determining Consolidated Interest
Expense), (b) any extraordinary, unusual or non-recurring income or gains
(including, whether or not otherwise includable as a separate item in the
statement of such Consolidated Net Income for such period, gains on the
sales of assets outside of the ordinary course of business) and (c) any
other non-cash income, all as determined on a consolidated basis; provided
that for purposes of calculating Consolidated EBITDA of the Borrower and
its Subsidiaries for any period, (i) the Consolidated EBITDA of any
7
Person or business acquired by the Borrower or its Subsidiaries during such
period shall be included on a pro forma basis for such period (assuming the
consummation of such acquisition and the incurrence or assumption of any
Indebtedness in connection therewith occurred on the first day of such
period) if the consolidated balance sheet of such acquired Person or
business and its consolidated Subsidiaries as at the end of the period
preceding the acquisition of such Person and the related consolidated
statements of income and stockholders' equity and of cash flows for the
period in respect of which Consolidated EBITDA is to be calculated (x) have
been previously provided to the Administrative Agent and the Lenders and
(y) either (1) have been reported on without a qualification arising out of
the scope of the audit by independent certified public accountants of
nationally recognized standing or (2) have been found acceptable by the
Administrative Agent and (ii) the Consolidated EBITDA of any Person or
business disposed of by the Borrower or its Subsidiaries during such period
shall be excluded for such period (assuming the consummation of such
disposition and the repayment of any Indebtedness in connection therewith
occurred on the first day of such period).
"Consolidated Fixed Charge Coverage Ratio" means, as at the last day
of any Fiscal Quarter, the ratio of (i) the Borrower's Consolidated EBITDA
for the two preceding Fiscal Quarters ended on such date multiplied by two
minus the aggregate amount actually paid by the Borrower and its
Subsidiaries in cash during such period on account of Consolidated Capital
Expenditures to (ii) Consolidated Fixed Charges for the period of the prior
four consecutive Fiscal Quarters ending on such date.
"Consolidated Fixed Charges" means, for any period, the sum (without
duplication) of (i) the Borrower's Consolidated Interest Expense for such
period, (ii) provision for cash income taxes made by the Borrower or any of
its Subsidiaries on a consolidated basis in respect of such period and
(iii) scheduled payments made during such period on account of principal of
Indebtedness of the Borrower or any of its Subsidiaries (including
scheduled principal payments in respect of the Loans).
"Consolidated Interest Coverage Ratio" means, as at the last day of
any Fiscal Quarter, the ratio of (i) Consolidated EBITDA of the Borrower
and its Subsidiaries for the two Fiscal Quarters ended on such date
multiplied by two to (ii) Consolidated Interest Expense of the Borrower and
its Subsidiaries for the period of the prior four consecutive Fiscal
Quarters ending on such date.
"Consolidated Interest Expense" means, for any period, total cash
interest expense (including that attributable to Capital Lease Obligations)
of such Person and its Subsidiaries for such period with respect to all
outstanding Indebtedness of such Person and its Subsidiaries (including all
commissions, discounts and other fees and charges owed by such Person with
respect to letters of credit and bankers' acceptance financing and net
costs of such Person under Interest Rate Agreements in respect of interest
rates to the extent such net costs are allocable to such period in
accordance with GAAP, determined on a consolidated basis in accordance with
GAAP).
"Consolidated Leverage Ratio" means, as at the last day of any Fiscal
Quarter, the ratio of (i) the Borrower's Consolidated Total Debt on such
day to (ii) the Borrower's
8
Consolidated EBITDA for the two preceding Fiscal Quarters ended on such
date multiplied by two.
"Consolidated Net Income" means, for any period, the consolidated net
income (or loss) of such Person and its Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP; provided, that
in calculating Consolidated Net Income of the Borrower and its consolidated
Subsidiaries for any Period, there shall be excluded (i) the income (or
deficit) of any Person accrued prior to the date it becomes a Subsidiary of
the Borrower or is merged into or consolidated with the Borrower or any of
its Subsidiaries, (ii) the income (or deficit) of any Person (other than a
Subsidiary of the Borrower) in which the Borrower or any of its
Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by the Borrower or such Subsidiary in the form
of dividends or similar distributions and (iii) the undistributed earnings
of any Subsidiary of the Borrower to the extent that the declaration or
payment of dividends or similar distributions by such Subsidiary is not at
the time permitted by the terms of any Contractual Obligation (other than
under any Loan Document) or Legal Requirement applicable to such
Subsidiary.
"Consolidated Total Debt" means, for any period, the aggregate
principal amount of all Indebtedness of the Borrower and its Subsidiaries
at such date, determined on a consolidated basis in accordance with GAAP.
"Contractual Obligation", as applied to any Person, means any
provision of any Security issued by that Person or of any material
indenture, mortgage, deed of trust, contract, undertaking, agreement or
other instrument to which that Person is a party or by which it or any of
its properties is bound or to which it or any of its properties is subject.
"Control Agreement" means each Control Agreement entered into by the
Administrative Agent, for the benefit of the Secured Parties, the bank or
other financial institution party thereto and the Borrower or a Subsidiary
of the Borrower, in each case in substantially the form of Exhibit E
---------
annexed hereto.
"Co-Syndications Agents" is defined in the Preamble to this Agreement
and includes each of their respective successors and assigns.
"DBAG" has the meaning assigned to such term in the Preamble to this
Agreement.
"DBS" has the meaning assigned to such term in the Preamble to this
Agreement.
"DBS Syndications Agent" has the meaning assigned to such term in the
Preamble to this Agreement and includes each of its successors and assigns.
"Debt Engagement Letter" means that certain Debt Engagement Letter,
dated April 11, 2000, among the Borrower, DBS and Toronto Dominion (USA)
Securities, Inc.
"Devnet" means Devnet, L.L.C., a Delaware limited liability company.
9
"Dollars" and the sign "$" mean the lawful money of the United States
of America.
"Eligible Assignee" means (A) (i) a commercial bank organized under
the laws of the United States or any state thereof; (ii) a savings and loan
association or savings bank organized under the laws of the United States
or any state thereof; (iii) a commercial bank organized under the laws of
any other country or a political subdivision thereof, provided that (x)
such bank is acting through a branch or agency located in the United States
or (y) such bank is organized under the laws of a country that is a member
of the Organization for Economic Cooperation and Development or a political
subdivision of such country; and (iv) any other entity which is an
"accredited investor" (as defined in Regulation D under the Securities Act)
which extends credit or buys loans as one of its businesses, including
insurance companies, mutual funds and lease financing companies; and (B)
any Lender and any Affiliate of any Lender, provided that neither the
Borrower nor any Affiliate of the Borrower shall be an Eligible Assignee.
"Employee Benefit Plan" means any "employee benefit plan" as defined
in Section 3(3) of ERISA which is or was maintained or contributed to by
the Borrower, any of its Subsidiaries or any of their respective ERISA
Affiliates.
"Environmental Claim" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or
other order or directive (conditional or otherwise), by any governmental
authority or any other Person, arising (i) pursuant to or in connection
with any actual or alleged violation of any Environmental Law, (ii) in
connection with any Hazardous Materials or any actual or alleged Hazardous
Materials Activity, or (iii) in connection with any actual or alleged
damage, injury, threat or harm to health, safety, natural resources or the
environment.
"Environmental Laws" means any and all current or future statutes,
ordinances, orders, rules, regulations, guidance documents, judgments,
Governmental Actions, or any other requirements of governmental authorities
relating to (i) environmental matters, including those relating to any
Hazardous Materials Activity, (ii) the generation, use, storage,
transportation or disposal of Hazardous Materials, or (iii) occupational
safety and health, industrial hygiene, land use or the protection of human,
plant or animal health or welfare, in any manner applicable to the Borrower
or any of its Subsidiaries or any Facility, including the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. (S) 9601
et seq.), the Hazardous Materials Transportation Act (49 U.S.C. (S) 1801 et
-- ---- --
seq.), the Resource Conservation and Recovery Act (42 U.S.C. (S) 6901 et
---- --
seq.), the Federal Water Pollution Control Act (33 U.S.C. (S) 1251 et
---- --
seq.), the Clean Air Act (42 U.S.C. (S) 7401 et seq.), the Toxic Substances
---- -- ----
Control Act (15 U.S.C. (S) 2601 et seq.), the Federal Insecticide,
-- ----
Fungicide and Rodenticide Act (7 U.S.C. (S)136 et seq.), the Occupational
-- ----
Safety and Health Act (29 U.S.C. (S) 651 et seq.), the Oil Pollution Act
-- ----
(33 U.S.C. (S) 2701 et seq.) and the Emergency Planning and Community
-- ----
Right-to-Know Act (42 U.S.C. (S) 11001 et seq.), each as amended or
-- ----
supplemented, any analogous present or future state or local statutes or
laws, and any regulations promulgated pursuant to any of the foregoing.
10
"Equity Registration Rights Joinder Agreement" means the Equity
Registration Rights Joinder Agreement, dated April 11, 2000, among the
Borrower, DBS, TD and each of the other signatories thereto, substantially
in the form of Exhibit R annexed hereto.
---------
"ERISA" means the Employee Retirement Income Security Act of 1974, 29
U.S.C. (S)(S) 1000 et seq., amendments thereto, successor statutes, and
-- ---
regulations or guidance promulgated thereunder.
"ERISA Affiliate" means, as applied to any Person, (i) any corporation
which is a member of a controlled group of corporations within the meaning
of Section 414(b) of the Code of which that Person is a member; (ii) any
trade or business (whether or not incorporated) which is a member of a
group of trades or businesses under common control within the meaning of
Section 414(c) of the Code of which that Person is a member; and (iii) any
member of an affiliated service group within the meaning of Section 414(m)
or (o) of the Code of which that Person, any corporation described in
clause (i) above or any trade or business described in clause (ii) above is
a member. Any former ERISA Affiliate of the Borrower or any of its
Subsidiaries shall continue to be considered an ERISA Affiliate of the
Borrower or such Subsidiary within the meaning of this definition with
respect to the period such entity was an ERISA Affiliate of the Borrower or
such Subsidiary and with respect to liabilities arising after such period
for which the Borrower or such Subsidiary could be liable under the Code or
ERISA.
"Escrow Agent" means Bankers Trust Company, in its capacity as Escrow
Agent (as defined in and under the Warrant Escrow Agreement), and its
successors and assigns.
"Eurodollar Rate Loans" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
Section 2.3.
-----------
"Event of Default" means each of the events or occurrences set forth
in Article VII.
-----------
"Event of Loss" means, with respect to any property or asset (tangible
or intangible, real or personal), any of the following: (i) any loss,
destruction or damage of such property or asset; (ii) any actual
condemnation, seizure or taking by exercise of the power of eminent domain
or otherwise of such property or asset, or confiscation of such property or
asset or the requisition of the use of such property or asset; or (iii) any
settlement in lieu of clause (ii) above.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"Facilities" means any and all real property (including all buildings,
fixtures or other improvements located thereon) now, hereafter or
heretofore owned, leased, operated or used by the Borrower or any of its
Subsidiaries or any of their respective predecessors or Affiliates.
"FDIC" means the Federal Deposit Insurance Corporation.
11
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average
of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is
not so published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by
the Administrative Agent.
"Fee Letter" means that certain Fee Letter, dated April 11, 2000,
among the Borrower, DBAG, DBS, Nortel Networks and TD.
"Financial Officer's Certificate" means a certificate substantially in
the form of Exhibit F annexed hereto delivered by the Borrower to the
---------
Administrative Agent pursuant to Section 3.1.Q.
-------------
"First Priority" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that such
Lien is the only Lien (other than Permitted Liens) to which such Collateral
is subject.
"Fiscal Year" means the fiscal year of the applicable Person, which,
for the Borrower and each of its Subsidiaries, begins on January 1 and ends
on December 31 of each calendar year, and "Fiscal Quarter" means a
corresponding fiscal quarter of such Person.
"Funding and Payment Office" means (i) the office of the
Administrative Agent located at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 or (ii) such other office of the Administrative Agent as may from
time to time hereafter be designated as such in a written notice delivered
by the Administrative Agent to the Borrower and each Lender.
"GAAP" means, subject to the limitations on the application thereof
set forth in Section 1.2., generally accepted accounting principles in the
------------
United States of America set forth in opinions and pronouncements of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity as may be
approved by a significant segment of the accounting profession in the
United States of America, in each case as the same are applicable to the
circumstances as of the date of determination.
"Governmental Action" means all permits, authorizations,
registrations, consents, approvals, determinations, decrees, waivers,
privileges, certifications, environmental clearances, notices and licenses
of any Governmental Instrumentality.
"Governmental Instrumentality" means any national, state or local
government (whether domestic or foreign), any political subdivision thereof
or any other governmental, quasi-governmental, judicial, public or
statutory instrumentality, authority, body, agency, bureau or entity
(including any zoning authority, the FDIC, the
12
Comptroller of the Currency or the Federal Reserve Board, any central bank
or any comparable authority) or any arbitrator with authority to bind a
party at law.
"Hazardous Materials" means (i) any chemical, material or substance at
any time defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely
hazardous waste," "acutely hazardous waste," "radioactive waste,"
"biohazardous waste," "pollutant," "toxic pollutant," "contaminant,"
"restricted hazardous waste," "infectious waste," "toxic substances," or
any other term or expression intended to define, list or classify
substances by reason of properties harmful to health, safety or the indoor
or outdoor environment (including harmful properties such as ignitability,
corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity,
"TCLP toxicity" or "EP toxicity" or words of similar import under any
applicable Environmental Laws); (ii) any oil, petroleum, petroleum fraction
or petroleum derived substance; (iii) any drilling fluids, produced waters
and other wastes associated with the exploration, development or production
of crude oil, natural gas or geothermal resources; (iv) any flammable
substances or explosives; (v) any radioactive materials; (vi) any asbestos-
containing materials; (vii) urea formaldehyde foam insulation; (viii)
electrical equipment which contains any oil or dielectric fluid containing
polychlorinated biphenyls; (ix) pesticides; and (x) any other chemical,
material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority or which may or could pose a hazard
to the health and safety of the owners, occupants or any Persons in the
vicinity of any Facility or to the indoor or outdoor environment.
"Hazardous Materials Activity" means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Materials,
including the use, manufacture, possession, storage, holding, presence,
existence, location, Release, threatened Release, discharge, placement,
generation, transportation, processing, construction, treatment, abatement,
removal, remediation, disposal, disposition or handling of any Hazardous
Materials, and any corrective action or response action with respect
thereto.
"Xxxxxx Street Consent" means that certain letter agreement, dated as
of April 7, 2000, by Xxxxxx Telegraph Associates in favor of the
Administrative Agent, for the benefit of the Lenders, in respect of that
certain Agreement of Lease between Xxxxxx Telegraph Associates and Local
Fiber, L.L.C.
"Included Taxes" has the meaning assigned to that term in Section
-------
2.7.B.
-----
"Indebtedness", as applied to any Person means, without duplication,
(i) all indebtedness of such Person for borrowed money, (ii) all
obligations of such Person for the deferred purchase price of property or
services (other than trade payables not overdue by more than 90 days
incurred in the ordinary course of such Person's business), (iii) all
obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (iv) all obligations of such Person created or arising
under any conditional sale or other title retention agreement with respect
to property acquired by such Person (unless the rights and remedies of the
seller or lender under such agreement in the event
13
of default are limited to repossession or sale of such property), (v) that
portion of obligations with respect to Capital Leases that is properly
classified as a liability on a balance sheet in conformity with GAAP, (vi)
all obligations, contingent or otherwise, of such Person under acceptance,
letter of guaranty, letter of credit or similar facilities, (vii) all
obligations of such Person to purchase, redeem, retire, defease or
otherwise make any cash payment in respect of any capital stock of or other
ownership or profit interest in such Person or any other Person or any
warrants, rights or options to acquire such capital stock, (viii) all
obligations of such Person in respect of Interest Rate Agreements, (ix) all
Indebtedness of others referred to in clauses (i) through (viii) above
guaranteed directly or indirectly in any manner by such Person, or in
effect guaranteed directly or indirectly by such Person through an
agreement (a) to pay or purchase such Indebtedness or to advance or supply
funds for the payment or purchase of such Indebtedness, (b) to purchase,
sell or lease (as lessee or lessor) property, or to purchase or sell
services, primarily for the purpose of enabling the debtor to make payment
of such Indebtedness or to assure the holder of such Indebtedness against
loss, (c) to supply funds to or in any other manner invest in the debtor
(including any agreement to pay for property or services irrespective of
whether such property is received or such services are rendered), or (d)
otherwise to assure a creditor against loss, and (x) all Indebtedness
referred to in clauses (i) through (viii) above secured by (or for which
the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property (including accounts and
contract rights) owned by such Person. All obligations under the Loan
Documents shall constitute Indebtedness.
"Indemnified Liabilities" has the meaning assigned to that term in
Section 9.3.
-----------
"Indemnitee" has the meaning assigned to that term in Section 9.3.
-----------
"Intellectual Property" means all patents, trademarks, tradenames,
copyrights, technology, know-how and processes used in or necessary for the
conduct of the business of the Borrower or any of its Subsidiaries that are
material to the condition (financial or otherwise), business or operations
of the Borrower or any of its Subsidiaries.
"Interest Payment Date" means (i) with respect to any Base Rate Loan,
each March 31, June 30, September 30 and December 31 of each year,
commencing on the first such date to occur after the Closing Date, and (ii)
with respect to any Eurodollar Rate Loan, the last day of each Interest
Period applicable to such Loan, provided that in the case of each Interest
Period of longer than three months, "Interest Payment Date" shall also
include each date that is three months, or an integral multiple thereof,
after the commencement of such Interest Period.
"Interest Period" has the meaning assigned to that term in Section
-------
2.3.B.
-----
"Interest Rate Agreement" means any interest rate protection or hedge
agreement, including any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement or other similar agreement or
arrangement.
14
"Interest Rate Determination Date" means, with respect to any Interest
Period, two Business Days prior to the first day of such Interest Period.
"Investment" means (i) any direct or indirect purchase or other
acquisition by the Borrower or any of its Subsidiaries of, or of a
beneficial interest in, any Securities of any other Person (including any
Subsidiary), (ii) any direct or indirect redemption, retirement, purchase
or other acquisition for value, by the Borrower or any of its Subsidiaries
from any Person, of any equity Securities of any Subsidiary of the
Borrower, or (iii) any direct or indirect loan, advance (other than
advances to employees for moving, entertainment and travel expenses,
drawing accounts and similar expenditures in the ordinary course of
business) or capital contribution by the Borrower or any of its
Subsidiaries to any other Person, including all indebtedness and accounts
receivable from that other Person that are not current assets or did not
arise from sales to that other Person in the ordinary course of business.
The amount of any Investment shall be the original cost of such Investment
plus the cost of all additions thereto, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs
with respect to such Investment.
"ISP98" has the meaning assigned to that term in Section 2.2.H.
-------------
"Issuing Bank" means DBAG, as the issuer of Letters of Credit
hereunder for the account of the Borrower, or any other Lender, Affiliate
of any Lender or other financial institution reasonably acceptable to the
Administrative Agent and the Borrower which may at any time issue a Letter
of Credit for the account of the Borrower under this Agreement. If there
is more than one Issuing Bank, all references to the "Issuing Bank" shall
be deemed to refer to each Issuing Bank or to all Issuing Banks, as the
context requires.
"Issuing Bank Fees" has the meaning assigned to that term in Section
-------
2.4.B.
-----
"Joint Venture" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership, limited liability company
or other legal form; provided that in no event shall any corporate
Subsidiary of any Person be considered to be a Joint Venture to which such
Person is a party.
"Lead Arranger" means DBS.
"Legal Requirements" means all laws, statutes, orders, decrees,
injunctions, licenses, permits, approvals, authorizations, agreements and
regulations of any Governmental Instrumentality having jurisdiction over
the matter in question.
"Lender" and "Lenders" means the persons identified as "Lenders" and
listed on the signature pages of this Agreement, together with their
successors and permitted assigns pursuant to Section 9.1.; provided that
------------
the term "Lenders", when used in the context of a particular Commitment,
shall mean the Lenders having that Commitment.
"L/C Facing Fees" has the meaning assigned to that term in Section
-------
2.4.B.
-----
15
"Letter of Credit Obligations" means the sum of the aggregate undrawn
amount of all Letters of Credit outstanding, plus the aggregate amount of
all drawings under Letters of Credit for which the Borrower has not
reimbursed the Issuing Bank.
"Letter of Credit" means any letter of credit issued under Section 2.3
-----------
and all amendments, renewals, extensions and replacements thereof.
"Letter of Credit Date" means the date of the issuance of any Letter
of Credit.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under
applicable law (including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement
to sell or give a security interest in and any filing of or agreement to
give any financing statement under the UCC).
"Loan Availability Period" means the period from and including the
Closing Date to and including the date which is 30 days prior to the
scheduled Maturity Date.
"Loan/Letter of Credit Certificate" means a certificate substantially
in the form of Exhibit G annexed hereto delivered by the Borrower to the
---------
Administrative Agent pursuant to Section 2.1.B(ii) with respect to a
-----------------
proposed Loan.
"Loan Commitment Termination Date" means the date which is the earlier
of (i) the date which is 30 days prior to the scheduled Maturity Date and
(ii) the date on which all of the Lenders' Commitments terminate or expire.
"Loan Date" means the date of the making of any Loan.
"Loan Documents" means this Agreement, the Notes, the Collateral
Documents, the LOC Documents, the Fee Letter, the Debt Engagement Letter,
the Equity Registration Rights Joinder Agreement, the Warrant Agreement,
the Warrant Escrow Agreement and all other agreements, certificates,
instruments or documents delivered by a Loan Party pursuant to any of the
Loan Documents.
"Loan Exposure" means, with respect to any Lender as of any date of
determination (i) prior to the termination of the Commitments, that
Lender's Commitment (including all drawn and undrawn portions thereof) and
(ii) after the termination of the Commitments, the aggregate outstanding
principal amount of the Loans of that Lender.
"Loan Party" means the Borrower and each of its Subsidiaries and any
Affiliate of the Borrower or any of its Subsidiaries which may hereafter
become a party to any Loan Document, and "Loan Parties" means all such
Persons, collectively.
"Loan/Letter of Credit Request" means a notice substantially in the
form of Exhibit H annexed hereto delivered by the Borrower to the
---------
Administrative Agent pursuant to Section 2.1.B. with respect to a proposed
--------------
Loan.
16
"Loans" shall be the collective reference to the loans made by the
Lenders to the Borrower pursuant to Section 2.1.A. and, if such loans are
--------------
converted pursuant to Section 2.1.F., the Term Loans.
--------------
"LOC Committed Amount" has the meaning assigned to that term in
Section 2.2.A.
-------------
"LOC Documents" means, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in
connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in application
or applicable only to such Letter of Credit) governing or providing for (i)
the rights and obligations of the parties concerned or at risk or (ii) any
collateral security for such obligations.
"Majority Lenders" means the Lenders having or holding more than 51%
of the sum of the aggregate Loans and unused Commitments of all the
Lenders.
"Margin Stock" has the meaning assigned to that term in Regulations T,
U and X of the Board of Governors of the Federal Reserve System as in
effect from time to time.
"Master Purchase Agreement" means that certain Master Purchase
Agreement, dated as of December 31, 1999, between the Borrower and Nortel
Networks.
"Material Adverse Effect" means (i) a material adverse effect on the
business, assets, revenues, operations, results of operations or condition
(financial or otherwise) of the Borrower and its Subsidiaries taken as a
whole, (ii) a material adverse effect on the ability of any Loan Party to
perform its obligations under the Loan Documents to which it is a party, or
(iii) a material adverse effect on the validity or enforceability of the
Loan Documents, the Liens granted under the Loan Documents or the Lenders'
rights and remedies under the Loan Documents.
"Material Contract" means any contract, lease or other agreement or
arrangement to which any Loan Party is a party (other than the Loan
Documents) (i) involving aggregate consideration payable to or by any Loan
Party in excess of $5,000,000, or (ii) which is otherwise material to the
business, assets, operations, results of operations or condition (financial
or otherwise) of the Borrower or any of its Subsidiaries, and without
limiting the foregoing, shall be deemed to include each of the agreements
or arrangements set forth in Schedule 4.9.B.
--------------
"Maturity Date" means October 11, 2001, unless (i) extended pursuant
to Section 2.1.F. or (ii) otherwise amended by the Borrower and the Lenders
--------------
in accordance with Section 9.6.
-----------
"MFN Consent" means that certain Consent and Agreement, dated as of
April 7, 2000, by Metromedia Fiber Network Services, Inc. in favor of the
Administrative Agent, for the benefit of the Lenders.
"Moody's" means Xxxxx'x Investors Service, Inc.
17
"Multiemployer Plan" means a "multiemployer plan" (as defined in
Section 4001(a)(3) of ERISA) to which any Loan Party or any ERISA Affiliate
has contributed within the past six years or with respect to which any Loan
Party may incur any liability.
"Net Asset Sale Proceeds" means the aggregate cash proceeds received
by the Borrower or any of its Subsidiaries in respect of any Asset Sale,
net of the direct costs relating to such Asset Sale (including legal,
accounting and investment banking fees and expenses, employee severance and
termination costs, any trade payables or similar liabilities related to the
assets sold and required to be paid by the seller as a result thereof and
sales, finders' or brokers' commissions), and any relocation expenses
incurred as a result thereof and taxes paid or payable as result thereof
(including any such taxes paid or payable by an owner of the Borrower or
any of its Subsidiaries) (after taking into account any available tax
credits or deductions and any tax sharing arrangements), amounts required
to be applied to the repayment of Indebtedness secured by a Lien which is
prior to the Lien under the Collateral Documents on the asset or assets
that are the subject of such Asset Sale, all distributions and other
payments required to be made to minority interest holders in a Subsidiary
or joint venture as a result of the Asset Sale and any reserve for
adjustment in respect of the sale price of such asset or assets or any
liabilities associated with the asset disposed of in such Asset Sale.
"Net Loss Proceeds" means the aggregate Casualty Proceeds received by
the Borrower or any of its Subsidiaries in respect of any Event of Loss,
including insurance proceeds, condemnation awards or damages awarded by any
judgment, net of the direct costs in recovery of such Net Loss Proceeds
(including legal, accounting, appraisal and insurance adjuster fees and
expenses) and any taxes paid or payable as a result thereof (including any
such taxes paid or payable by an owner of the Borrower or any of its
Subsidiaries) and amounts required to be applied to the repayment of
Indebtedness secured by a Lien (or amounts permitted by the terms of such
Indebtedness to be otherwise reinvested in the System to the extent so
reinvested) which is prior to the Liens of the Lenders under the Collateral
Documents on the asset or assets that are the subject of the Event of Loss.
"Net Proceeds" has the meaning assigned to that term in Section
-------
2.5.B(iv)(b).
------------
"Net Revenue" means, for any period, all revenue received by the
Borrower and any of its Subsidiaries, that would, in conformity with GAAP,
be included on the consolidated income statement of the Borrower as revenue
at such date.
"NOC" means any network operation center of the Borrower or any of its
Subsidiaries.
"Non-US Lender" has the meaning assigned to that term in Section
-------
2.7.B(iii).
----------
"Nortel Networks" means Nortel Networks Inc., a Delaware corporation.
"Notes" means (i) the promissory notes of the Borrower issued pursuant
to Section 2.1.E. on the Closing Date and (ii) any promissory notes issued
--------------
by the Borrower pursuant to Section 9.1.B. in connection with assignments
--------------
of the Loan Commitments or
18
Loans of any the Lenders, in each case substantially in the form of Exhibit
-------
N annexed hereto.
-
"Notice of Conversion/Continuation" means a notice substantially in
the form of Exhibit H annexed hereto delivered to the Administrative Agent
---------
pursuant to Section 2.3.D. with respect to a proposed conversion or
--------------
continuation of the applicable basis for determining the interest rate with
respect to the Loans specified therein.
"NPPE" means, for any period, all plant, property and equipment of the
Borrower and any of its Subsidiaries, determined on a consolidated basis in
accordance with GAAP, less accumulated depreciation in respect of such
plant, property and equipment.
"Obligations" means the collective reference to the Letter of Credit
Obligations and the unpaid principal of, and the accrued and unpaid
interest on, the Loans and all other obligations and liabilities of any
Loan Party to each Agent, the Lenders and the Issuing Bank (including each
Loan Party's liability for all interest that accrues after the maturity of
the Loans and all interest that accrues after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to any Loan Party whether or not a claim for post-
filing or post-petition interest is allowed in such proceeding), whether
direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter incurred, that may arise under, out of, or in
connection with, this Agreement, any other Loan Document (other than the
Warrant Agreement), any Interest Rate Agreement entered into by the
Borrower with any Lender pursuant to this Agreement or any other document
made, delivered or given in connection with this Agreement, any other Loan
Document (other than the Warrant Agreement) or any such Interest Rate
Agreement, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including all
fees and disbursements of counsel to each Agent, the Lenders and the
Issuing Bank that are required to be paid by the Borrower pursuant to the
terms of any such agreement), and all other obligations and liabilities of
any or all of the Loan Parties to each Agent, the Issuing Bank and/or any
Lender under this Agreement, or any other Loan Document (other than the
Warrant Agreement).
"Officer's Certificate" means a certificate executed on behalf of a
Person by a Responsible Officer thereof (in his capacity as such officer);
provided that every Officer's Certificate with respect to the compliance
with a condition precedent to the making of any Loans hereunder shall
include (i) a statement that the Responsible Officer making or giving such
Officer's Certificate has read such condition and any definitions or other
provisions contained in this Agreement relating thereto, (ii) a statement
that, in the opinion of such Responsible Officer, he is reasonably familiar
with the Borrower's assets, liabilities, operations and affairs and,
accordingly, is able to express an informed opinion as to whether or not
such condition has been complied with, and (iii) a statement as to whether,
in the opinion of the Responsible Officer, such condition has been complied
with in all material respects.
19
"Operating Lease" means, as applied to any Person, any lease
(including leases that may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) that is not a Capital Lease
other than any such lease under which that Person is the lessor.
"Other Taxes" has the meaning assigned to that term in Section 2.7.B.
-------------
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Code or Section
302 of ERISA.
"Permitted Investments" means Investments which are (i) Cash or Cash
Equivalents; (ii) accounts receivable created, acquired or made by any Loan
Party in the ordinary course of business; (iii) Investments consisting of
Capital Stock, obligations, securities or other property received by any
Loan Party in settlement of accounts receivable or in satisfaction of
judgments (each created in the ordinary course of business) from obligors
in the ordinary course of business; (iv) Investments existing as of the
Closing Date and set forth in Schedule 1.1.A; (v) to the extent permitted
--------------
under Section 6.7, Investments consisting of non-cash consideration
-----------
received by any Loan Party in any Asset Sales; (vi) to the extent
constituting Investments, transactions permitted under Section 6.18; (vii)
------------
Investments in Devnet that in the aggregate do not exceed $3,000,000; and
(viii) Investments in any other Person(s) that in the aggregate do not
exceed $500,000.
"Permitted Liens" means the following types of Liens, excluding (a)
any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Code
or by ERISA, (b) any such Lien relating to or imposed in connection with
any Environmental Claim, and (c) any such Lien expressly prohibited by any
applicable terms of any of the Collateral Documents, provided in each case
that such Liens do not secure Indebtedness for borrowed money (other than
Indebtedness of the nature described in clause (iv) of Section 6.1):
-----------
(i) Liens for taxes, assessments or governmental charges or claims
the payment of which is not, at the time, required by Section 5.5;
-----------
(ii) Liens deemed to exist in connection with Investments in
repurchase agreements permitted under Section 6.5;
-----------
(iii) Liens of sellers of goods to any Loan Party arising under
Article 2 of the UCC or similar provisions of applicable law in the
ordinary course of business, covering only goods sold and securing only the
unpaid purchase price for such goods and related expenses;
(iv) statutory Liens of landlords, statutory Liens of banks and
rights of set-off, statutory Liens of carriers, warehousemen, mechanics,
repairmen, workmen and materialmen, and other Liens imposed by law, in each
case incurred in the ordinary
20
course of business (a) for amounts not yet overdue or (b) for amounts that
are overdue and that (in the case of any such amounts overdue for a period
in excess of five days) are being contested in good faith by appropriate
proceedings, so long as (1) the Borrower maintains cash reserves sufficient
to discharge any such Lien, and (2) in the case of a Lien with respect to
any portion of the Collateral, such contest proceedings conclusively
operate to stay the sale of any portion of the Collateral on account of
such Lien;
(v) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance
and other types of social security (exclusive of obligations for the
payment of borrowed money), incurred in the ordinary course of business (a)
for amounts not yet overdue or (b) for amounts that are overdue and that
(in the case of any such amounts overdue for a period in excess of five
days) are being contested in good faith by appropriate proceedings, so long
as (1) the Borrower maintains cash reserves sufficient to discharge any
such Lien, and (2) in the case of a Lien with respect to any portion of the
Collateral, such contest proceedings conclusively operate to stay the sale
of any portion of the Collateral on account of such Lien;
(vi) leases or subleases granted to third parties in accordance with
any applicable terms of this Agreement and the Collateral Documents,
provided, that each such lease or sublease (a) is in the ordinary course of
business and is in connection with the provision of co-location services by
the Borrower or any of its Subsidiaries and (b) does not interfere in any
material respect with the ordinary conduct of the business of the Borrower
or any of its Subsidiaries;
(vii) easements, rights-of-way, restrictions, encroachments, and
other minor defects or irregularities in title, in each case which do not
and will not interfere in any material respect with the ordinary conduct of
the business of the Borrower or any of its Subsidiaries or result in a
material diminution in the value of any Collateral as security for the
Obligations;
(viii) any zoning or similar law or right reserved to or vested in any
governmental office or agency to control or regulate the use of any real
property;
(ix) Liens granted pursuant to the Collateral Documents;
(x) Without limiting any of the Borrowers obligation under Sections
--------
5.11 and 6.13, interests of landlords or any of their respective lenders in
---- ----
leases or co-location agreements entered into by the Borrower or any of its
Subsidiaries;
(xi) Liens existing as of the Closing Date and set forth on Schedule
--------
1.1.B, provided that no such Lien shall at any time be extended to or cover
-----
any asset or property other than the asset or property subject thereto on
the Closing Date;
(xii) Liens securing any Indebtedness renewing, refinancing or
extending Indebtedness secured by Liens permitted pursuant to clause (xi)
above on terms and conditions no less favorable to the applicable Loan
Party, provided that no such Lien
21
shall at any time be extended to or cover any asset or property other than
the asset or property subject to such prior Lien on the Closing Date;
(xiii) Liens securing any Indebtedness permitted under Section
-------
6.1(iv) or 6.1(v); and
------- ------
(xiv) other Liens securing indebtedness in an aggregate amount not to
exceed $1,000,000 at any time outstanding.
"Permitted Purpose" has the meaning assigned to that term in Section
-------
5.12.
----
"Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures,
associations, companies, trusts, banks, trust companies, land trusts,
business trusts or other organizations, whether or not legal entities, and
Governmental Instrumentalities.
"Potential Event of Default" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default.
"Prime Rate" means the rate that DBAG announces from time to time as
its Dollar prime lending rate, as in effect from time to time. The Prime
Rate is a reference rate and does not necessarily represent the lowest or
best rate actually charged to any customer. DBAG or any other Lender may
make commercial loans or other loans at rates of interest at, above or
below the Prime Rate.
"Pro Rata Share" means with respect to all payments, computations and
other matters relating to the Commitments or the Loans or the obligations
or unreimbursed drawings with respect to a Letter of Credit of any Lender,
the percentage obtained by dividing (x) the Loan Exposure of that Lender by
(y) the aggregate Loan Exposure of all the Lenders. The initial Pro Rata
Share of each Lender for purposes of each of clauses (i) and (ii) of the
preceding sentence is set forth opposite the name of that Lender in
Schedule 2.1.A annexed hereto.
--------------
"Proceedings" has the meaning assigned to that term in Section 5.1.
-----------
"Projections" means the financial projections regarding the Borrower
and its Subsidiaries prepared by the management of the Borrower and
delivered to the Administrative Agent and the Lenders on or prior to the
Closing Date, which shall be reasonably satisfactory in form and substance
to the Administrative Agent and the Lenders.
"Rating Agency" means S&P and Moody's together with any other
nationally recognized credit rating agency if either of such corporations
is not then currently rating the pertinent obligations.
"Register" has the meaning assigned to that term in Section 2.1.D(i).
----------------
22
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System, as in effect from time to time.
"Release" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials into the indoor or
outdoor environment (including the abandonment or disposal of any barrels,
containers or other closed receptacles containing any Hazardous Materials),
including the movement of any Hazardous Materials through the air, soil,
surface water or groundwater.
"Required Lenders" means the Lenders having or holding more than
662/3% of the sum of the aggregate Loans and unused Commitment of all the
Lenders.
"Responsible Officer" means, with respect to any matter and with
respect to any Person, the Chief Executive Officer, the President, any Vice
President, Assistant Vice President, Treasurer or Assistant Treasurer of
such Person.
"Restricted Payment" means (i) any dividend or other distribution,
direct or indirect, on account of any shares of any class of stock of the
Borrower now or hereafter outstanding, except a dividend or distribution
payable solely in shares of that class of stock to the holders of that
class (or the accretion of such dividends or distribution), (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of
stock of the Borrower now or hereafter outstanding, (iii) any payment made
to retire, or to obtain the surrender of, any outstanding warrants, options
or other rights to acquire shares of any class of stock of the Borrower now
or hereafter outstanding, and (iv) any payment or prepayment of principal
of, premium, if any, or cash interest on, or redemption, purchase,
retirement, defeasance (including covenant or legal defeasance), sinking
fund or similar payment with respect to Indebtedness permitted by this
Agreement to be incurred by the Borrower or any of its Subsidiaries and
which is subordinated in right of payment to the Loans.
"S&P" means Standard & Poor's Corporation.
"Secured Parties" means the Administrative Agent, the Co-Syndications
Agents, the Lenders, the Issuing Bank and any Lender or Affiliate of a
Lender party to an Interest Rate Agreement.
"Securities" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds,
debentures, notes, or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities" or any certificates of interest,
shares or participations in temporary or interim certificates for the
purchase or acquisition of, or any right to subscribe to, purchase or
acquire, any of the foregoing.
"Securities Act" means the Securities Act of 1933, as amended from
time to time, and any successor statute.
23
"Securities Intermediary" means Bankers Trust Company and includes
each of its permitted successors and assigns.
"Shareholder" means any Person who holds the Capital Stock of the
Borrower from time to time.
"Solvency Certificate" means a certificate substantially in the form
of Exhibit J annexed hereto delivered by the Borrower to the Administrative
---------
Agent pursuant to Section 3.1.W.
-------------
"Solvent" or "Solvency" means, with respect to any Person as of a
particular date, that on such date (i) such Person is able to realize upon
its assets and pay its debts and other liabilities, contingent obligations
and other commitments as they mature in the normal course of business, (ii)
such Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay as such debts and
liabilities mature in their ordinary course, (iii) such Person is not
engaged in a business or a transaction, and is not about to engage in a
business or a transaction, for which such Person's property or assets would
constitute unreasonably small capital after giving due consideration to the
prevailing practice in the industry in which such Person is engaged or is
to engage, (iv) the fair value of the property or assets of such Person is
greater than the total amount of liabilities, including contingent
liabilities, of such Person and (v) the present fair salable value of the
assets of such Person, as a going concern, is not less than the amount that
will be required to pay the probable liability of such Person on its debts
as they become absolute and matured. In computing the amount of contingent
liabilities at any time, it is intended that such liabilities will be
computed at the amount which, in light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be
expected to become an actual or matured liability.
"Subsidiary" means, with respect to any Person, (i) any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50 % of the total voting power of shares
of stock or other ownership interests entitled (without regard to the
occurrence of any contingency) to vote in the election of the Person or
Persons (whether directors, managers, trustees or other Persons performing
similar functions) having the power to direct or cause the direction of the
management and policies thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof and (ii) any
partnership or limited liability company of which more than 50% of such
entities' capital accounts, distribution rights, general or limited
partnership interests or membership interests are owned or controlled
directly or indirectly by such Person or one of more other Subsidiaries of
that Person or a combination thereof. Without limiting the generality of
the foregoing, FiberNet Telecom, Inc., FiberNet Equal Access, L.L.C. and
Local Fiber, L.L.C. are Subsidiaries of the Borrower.
"Subsidiary Guarantor" means each Subsidiary of the Borrower that
executes and delivers a Subsidiary Guaranty Agreement on the Closing Date
or from time to time thereafter pursuant to Section 6.5.B.
-------------
24
"Subsidiary Guaranty Agreement" means each Subsidiary Guaranty
Agreement executed and delivered by a Subsidiary of the Borrower, in each
case substantially in the form of Exhibit K annexed hereto.
---------
"Subsidiary Pledge Agreement" means each Subsidiary Pledge Agreement
executed and delivered by a Subsidiary of the Borrower, in each case
substantially in the form of Exhibit L annexed hereto.
---------
"Subsidiary Security Agreement" means each Subsidiary Security
Agreement executed and delivered by a Subsidiary of the Borrower, in each
case substantially in the form of Exhibit M annexed hereto.
---------
"System" has the meaning assigned to that term in the Recitals to this
Agreement.
"Tax" or "Taxes" means any present or future tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature and whatever called, by
whomsoever, on whomsoever and wherever imposed, levied, collected, withheld
or assessed, including interest, penalties and additions in connection
therewith; provided that "Tax on the overall net income" of a Person shall
be construed as a reference to a tax imposed by the jurisdiction in which
that Person is organized or in which that Person's principal office
(and/or, in the case of a Lender, its lending office) is located or in
which that Person (and/or, in the case of a Lender, its lending office) is
deemed to be doing business on all or part of the net income, profits or
gains (whether worldwide, or only insofar as such income, profits or gains
are considered to arise in or to relate to a particular jurisdiction, or
otherwise) of that Person (and/or, in the case of a Lender, its lending
office).
"TD" has the meaning assigned to such term in the Preamble to this
Agreement.
"TD Syndications Agent" has the meaning assigned to such term in the
Preamble to this Agreement and includes each of its successors and assigns.
"Telecommunications Assets" means all assets, rights (contractual or
otherwise) and properties, whether tangible or intangible, used or intended
for use in connection with the Telecommunications Business.
"Telecommunications Business" means, with respect to the Borrower and
its Subsidiaries, the business of (i) transmitting, or providing services
relating to the transmission of, voice, video or data through owned or
leased terrestrial or microwave transmission facilities which are a part of
the System and (ii) constructing, installing, maintaining, creating,
designing, developing, operating or marketing terrestrial or microwave
communications related network infrastructure, components, equipment,
software and other devices for use in the telecommunications business of
the Borrower or its Subsidiaries (as contemplated by the Business Plan) and
any other business or opportunity that is reasonably related or
complementary thereto.
"Term Loans" means any loan made by any Lender to the Borrower
pursuant to Section 2.1.A. which is converted into a term loan pursuant to
--------------
Section 2.1.F.
-------------
25
"Term Loan Conversion Certificate" means a certificate executed or
delivered by a Responsible Officer of the Borrower, in the form of Exhibit
-------
S annexed hereto.
-
"Term Loan Maturity Date" means October 11, 2004, unless otherwise
amended by the Borrower and the Lenders in accordance with Section 9.6.
-----------
"Tishman" means Tishman Speyer Properties, L.P., a Delaware limited
partnership.
"Tishman Licenses" means each of the licenses and agreements, dated as
of April 10, 2000, entered into by the Borrower or any of its Subsidiaries
with Tishman or an Affiliate thereof.
"Tishman Warrant Agreement" means that certain Warrant to Purchase
L.L.C. Units, dated as of August 7, 1997, between FiberNet Equal Access,
L.L.C. and Tishman.
"Total Utilization of Loan Commitments" means, as at any date of
determination, the aggregate principal amount of all outstanding Loans.
"Transaction Costs" means the fees, costs and expenses payable by the
Borrower or any of its Subsidiaries on or before the Closing Date in
connection with the transactions contemplated by the Loan Documents.
"UCC" means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.
"UCP" has the meaning assigned to that term in Section 2.2.H.
-------------
"Unadjusted Eurodollar Rate Component" has the meaning assigned to
that term in Section 5.15.
------------
"Warrant Agreement" means the Warrant Agreement, dated April 11, 2000
among the Borrower, DBS, TD and the Escrow Agent.
"Warrant Escrow Agreement" means the Warrant Escrow Agreement, dated
April 11, 2000, among the Borrower, DBS, TD and the Escrow Agent.
SECTION 1.2. ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS
------------------------------------------------------------------
UNDER AGREEMENT.
----------------
Except as otherwise expressly provided in this Agreement, all accounting
terms not otherwise defined herein shall have the meanings assigned to them in
conformity with GAAP. Without limiting the foregoing, financial statements and
other information required to be delivered by the Borrower or any of its
Subsidiaries to the Lenders pursuant to Sections 3.1. and 5.1. shall be prepared
------------- ----
in accordance with GAAP as in effect at the time of such preparation (and
delivered together with the reconciliation statements provided for in Section
-------
5.1). Calculations in connection with the definitions, covenants and other
---
provisions of this Agreement shall utilize
26
accounting principles and policies in conformity with those used to prepare the
financial statements referred to in Section 5.1.
-----------
SECTION 1.3. OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION.
--------------------------------------------------------
A. Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.
B. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms.
C. Any reference to any agreement or instrument shall be deemed to include
a reference to such agreement or instrument as assigned, amended, amended and
restated, supplemented or otherwise modified from time to time in accordance
with the terms of this Agreement.
D. The use in any of the Loan Documents of the word "include" or
"including," when following any general statement, term or matter, shall not be
construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or
matters, whether or not nonlimiting language (such as "without limitation" or
"but not limited to" or words of similar import) is used with reference thereto,
but rather shall be deemed to refer to all other items or matters that fall
within the broadest possible scope of such general statement, term or matter.
The word "will" shall be construed to have the same meaning and effect as the
word "shall."
E. References to "Sections" and "subsections" shall be to Sections and
subsections, respectively, of this Agreement unless otherwise specifically
provided.
F. References to "Articles" shall be to Articles of this Agreement unless
otherwise specifically provided.
G. The use in this Agreement of the words "herein," "hereof," and
"hereunder," and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof.
H. The use in this Agreement of the words "asset" and "property" shall be
construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.
I. This Agreement, the other Loan Documents and any documents or
instruments delivered pursuant hereto shall be construed without regard to the
identity of the party who drafted the various provisions of the same. Each and
every provision of this Agreement, the other Loan Documents and instruments and
documents entered into and delivered in connection therewith shall be construed
as though the parties participated equally in the drafting of the same.
Consequently, each of the parties acknowledges and agrees that any rule of
construction that a document is to be construed against the drafting party shall
not be applicable either to this
27
Agreement, or the other Loan Documents and instruments and documents entered
into and delivered in connection therewith.
ARTICLE II.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
SECTION 2.1. COMMITMENTS; MAKING OF LOANS; THE REGISTER; NOTES.
--------------------------------------------------
A. Commitments. Subject to the terms and conditions of this Agreement and
in reliance upon the representations and warranties of the Borrower herein set
forth, each Lender hereby severally agrees to make the Loans described in this
Section 2.1. Each Lender severally agrees to make revolving Loans to the
-----------
Borrower from time to time during the Loan Availability Period in an aggregate
amount not exceeding its Pro Rata Share of the aggregate amount of the
Commitments. The Borrower shall use the proceeds of any such Loans solely for
the purposes identified in Section 5.12. The amount of each Lender's Commitment
------------
is set forth opposite its name on Schedule 2.1.A annexed hereto and the
--------------
aggregate amount of the Commitments is $75,000,000; provided that the
Commitments of the Lenders shall be adjusted to give effect to any assignments
of the Commitments pursuant to Section 9.1.; and provided, further that the
------------
amount of the Commitments shall be reduced from time to time by the amount of
any reductions thereto made pursuant to Section 2.5. Each Lender's Commitment
------------
shall expire immediately and without further action on the Loan Commitment
Termination Date and no Loans (including Term Loans) shall be made after such
date. Amounts borrowed under this Section 2.1.A. and subsequently repaid or
--------------
prepaid may be reborrowed; provided, however, that the aggregate principal
amount of the Loans outstanding at any time, when taken together with the Letter
of Credit Obligations, may not exceed the aggregate amount of the Commitments.
Notwithstanding anything to the contrary herein, the Loans converted into Term
Loans pursuant to Section 2.1.F. which are repaid or prepaid subsequent to such
--------------
conversion may not be reborrowed.
B. Borrowing Mechanics. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of the
Borrower herein set forth, each Lender hereby severally agrees to make the Loans
described in Section 2.1.A., if, and only if, the borrowing mechanics set forth
--------------
as follows are satisfied:
(i) Loans shall be in an aggregate minimum amount of $1,000,000
and integral multiples of $200,000 in excess of that amount.
(ii) Whenever the Borrower desires that the Lenders make Loans
the Borrower shall deliver to the Administrative Agent a Loan/Letter of
Credit Request no later than 10:00 A.M. (New York City time) at least three
Business Days in advance of the proposed Loan Date (in the case of a
Eurodollar Rate Loan) or at least one Business Day in advance of the
proposed Loan Date (in the case of a Base Rate Loan). The Borrower may
request a Loan no more frequently than once per month.
(iii) Each Loan/Letter of Credit Request shall (a) specify (1)
the aggregate amount of the requested Loan, (2) the proposed Loan Date
(which may occur only on a Business Day), (3) whether any Loan shall be
Base Rate Loan or Eurodollar Rate Loan, and (4) in the case of any Loans
requested to be made as Eurodollar Rate
28
Loans, the initial Interest Period requested therefor, which shall be a
period contemplated by the definition of the term "Interest Period," and
(b) be accompanied by an accurate and complete Loan/Letter of Credit
Certificate.
(iv) The Borrower shall notify the Administrative Agent prior to
the making of any Loan in the event that any of the matters to which the
Borrower is required to certify in the applicable Loan/Letter of Credit
Request or Loan/Letter of Credit Certificate, as applicable, is no longer
accurate and complete as of the applicable Loan Date, and the acceptance by
the Borrower of the proceeds of any Loan shall constitute a re-
certification by the Borrower, as of the applicable Loan Date, as to the
matters to which the Borrower is required to certify in the applicable
Loan/Letter of Credit Request and Loan/Letter of Credit Certificate.
Except as otherwise provided in Sections 2.6.B. and 2.6.C., a Loan/Letter
--------------- ------
of Credit Request for a Eurodollar Rate Loan shall be irrevocable on and after
the related Interest Rate Determination Date, and a Loan/Letter of Credit
Request for a Base Rate Loan shall be irrevocable on and after the delivery of
such Loan/Letter of Credit Request to the Administrative Agent and, in each
case, the Borrower shall be bound to make a borrowing in accordance therewith.
C. Disbursement of Funds. All Loans under this Agreement shall be made by
the Lenders simultaneously and proportionately to their respective Pro Rata
Shares, it being understood that no Lender shall be responsible for any default
by any other Lender in that other Lender's obligation to make a Loan requested
hereunder nor shall the Commitment of any Lender to make the particular type of
Loan requested be increased or decreased as a result of a default by any other
Lender in that other Lender's obligation to make a Loan requested hereunder.
Promptly after receipt by the Administrative Agent of a Loan/Letter of Credit
Request pursuant to Section 2.1.B., the Administrative Agent shall notify each
--------------
Lender of the proposed borrowing. Each Lender shall make the amount of its Loan
available to the Administrative Agent not later than 12:00 Noon (New York City
time) on the applicable Loan Date, in immediately available funds in Dollars, at
the Funding and Payment Office. The Administrative Agent shall disburse the
proceeds of each Loan, all in accordance with and as more particularly described
in the Loan/Letter of Credit Request.
Unless the Administrative Agent shall have been notified by any Lender
prior to the Loan Date that such Lender does not intend to make available to the
Administrative Agent the amount of such Lender's share of such Loan requested on
such Loan Date, the Administrative Agent may assume that such Lender has made
such amount available to the Administrative Agent on such Loan Date and the
Administrative Agent may, in its sole discretion, but shall not be obligated to,
make available to the Borrower a corresponding amount on such Loan Date. If
such corresponding amount is not in fact made available to the Administrative
Agent by such Lender, the Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest thereon,
for each day from such Loan Date until the date such amount is paid to the
Administrative Agent, at the Federal Funds Effective Rate for the first three
Business Days and thereafter at the rate payable under this Agreement for Base
Rate Loans. If such Lender pays such amount to the Administrative Agent, then
such amount shall constitute such Lender's share of the Loan included in such
Loan. If such Lender does not
29
pay such corresponding amount forthwith upon the Administrative Agent's demand
therefor, the Administrative Agent shall promptly notify the Borrower and the
Borrower shall immediately pay such corresponding amount to the Administrative
Agent together with interest thereon, for each day from such Loan Date until the
date such amount is paid to the Administrative Agent, at the rate payable under
this Agreement for Base Rate Loans. Nothing in this Section 2.1.C. shall be
--------------
deemed to relieve any Lender from its obligation to fulfill its Commitments
hereunder or to prejudice any rights that the Borrower may have against any
Lender as a result of any default by such Lender hereunder.
D. The Register.
(i) The Administrative Agent shall maintain, at its address
referred to in Section 9.8., a register for the recordation of the names
------------
and addresses of the Lenders and the Commitments and Loans of each Lender
from time to time (the "Register"). The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and from
time to time upon reasonable prior notice.
(ii) The Administrative Agent shall record in the Register (a)
the Commitment and the Loans from time to time of each Lender, (b) the
amount of any principal or interest due and payable or to become due and
payable from the Borrower to each Lender hereunder, (c) each repayment or
prepayment in respect of the principal amount of the Loans of each Lender,
(d) the amount of any sum received by the Administrative Agent hereunder
for the account of the Lenders and each Lender's share thereof, (e) the
date of issuance, face amount and expiry date of each Letter of Credit and
the Issuing Bank with respect thereto and, (f) if applicable, the date and
amount of each Letter of Credit converted, in whole or in part, into a Loan
pursuant to Section 2.2. Any such recordation shall be conclusive and
-----------
binding on the Borrower and each Lender, absent manifest error; provided
that failure to make any such recordation, or any error in such
recordation, shall not affect any Lender's Commitments or Obligations in
respect of any applicable Loans.
(iii) Each Lender shall record on its internal records (including
the Notes held by such Lender) the amount of each Loan made by it and each
payment in respect thereof. Any such recordation shall be conclusive and
binding on the Borrower, absent manifest error; provided that failure to
make any such recordation, or any error in such recordation, shall not
affect any Lender's Commitments or Obligations in respect of any applicable
Loans or otherwise; and provided, further that in the event of any
inconsistency between the Register and any Lender's records, the
recordations in the Register shall govern.
(iv) The Administrative Agent and the Lenders shall deem and
treat the Persons listed as the Lenders in the Register as the holders and
owners of the corresponding Commitments and Loans listed therein for all
purposes hereof, and no assignment or transfer of any such Commitment or
Loans shall be effective, in each case unless and until an Assignment
Agreement effecting the assignment or transfer thereof shall have been
accepted by the Administrative Agent and recorded in the Register as
provided in Section 9.1. Prior to such recordation, all amounts owed with
-----------
respect to the
30
applicable Commitment or Loan shall be owed to the Lender listed in the
Register as the owner thereof, and any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is listed in the Register as a Lender shall be conclusive and
binding on any subsequent holder, assignee or transferee of the
corresponding Commitments or Loans.
E. Notes. The Borrower shall execute and deliver on the Closing Date and
on the date of any assignment or transfer of any Loan or Commitment to each
Lender who so requests (or to the Administrative Agent for that Lender) a Note
substantially in the form of Exhibit N annexed hereto to evidence that Lender's
---------
Loans, in the principal amount of that Lender's Commitment and with other
appropriate insertions.
The Administrative Agent may deem and treat the payee of any Note as the
owner thereof for all purposes hereof unless and until an Assignment Agreement
effecting the assignment or transfer thereof shall have been accepted by the
Administrative Agent as provided in Section 9.1. Any request, authority or
-----------
consent of any person or entity who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, assignee or transferee of that Note or of
any Note or Notes issued in exchange therefor.
F. Conversion to Term Loans.
(a) Conversion. On the Maturity Date, if (a) the entire
----------
principal amount of the Loans made pursuant to Section 2.1.A., and any
--------------
accrued and unpaid interest thereon and any unpaid fees and expenses in
respect thereof, has not been repaid in full in cash and (b) the conditions
precedent set forth in Section 3.3 shall have been satisfied, each
-----------
outstanding Loan made pursuant to Section 2.1.A. shall be converted to a
--------------
Term Loan.
(ii) Capitalization. All accrued and unpaid interest and
--------------
unpaid fees and expenses in respect of the Loans made pursuant to Section
-------
2.1.A. as of the Maturity Date shall be deemed to be capitalized to
------
principal as of the Maturity Date and the Term Loans converted therefor
shall be of a principal amount that includes such capitalized interest.
(iii) Interest. Each Term Loan shall initially bear interest
--------
at a rate per annum which is equal to the prevailing market rate in effect
as of the Maturity Date (which shall be determined by the Agents (other
than the Securities Intermediary) three Business Days prior to the Maturity
Date, after consultation with the Borrower). After the Maturity Date, the
interest rate applicable to the Term Loans shall increase by 0.50% per
annum every 90 days; provided, however, that notwithstanding anything to
the contrary in this Section 2.1.F., the interest rate applicable to the
--------------
Term Loans in effect at any time and from time to time shall not exceed 18%
per annum or be less than 14% per annum.
31
SECTION 2.2. LETTERS OF CREDIT.
------------------
A. Issuance of Letters of Credit. Subject to the terms and conditions
hereof and in reliance upon the representations and warranties set forth herein,
each Issuing Bank agrees to issue, and each Lender severally agrees to
participate in the issuance by the Issuing Bank of, standby Letters of Credit in
Dollars from time to time from the Closing Date until the date which is 30 days
prior to the Maturity Date as the Borrower may request, in a form acceptable to
the Issuing Bank; provided, however, that (i) the Letter of Credit Obligations
outstanding shall not at any time exceed $5,000,000 (the "LOC Committed Amount")
and (ii) the sum of the aggregate outstanding principal amount of Loans plus
Letter of Credit Obligations shall not at any time exceed the aggregate amount
of the Commitments. No Letter of Credit shall (a) have an original expiry date
more than one year from the date of issuance (provided that any such Letter of
Credit may contain customary "evergreen" provisions pursuant to which the expiry
date is automatically extended by a specific time period unless the Issuing Bank
gives notice of expiration or termination to the beneficiary of such Letter of
Credit at least a specified time period prior to the expiry date then in effect)
or (b) as originally issued or as extended, have an expiry date extending beyond
the Maturity Date. Each Letter of Credit shall comply with the related LOC
Documents. The issuance and expiry dates of each Letter of Credit shall be a
Business Day.
B. Notice and Reports.
(i) The request for the issuance of a Letter of Credit shall
be submitted by the Borrower to the Issuing Bank no later than 10:00 A.M.
(New York City time) at least two Business Days in advance of the proposed
Letter of Credit Date. The Borrower shall request the issuance of a Letter
of Credit no more frequently than once per month (and on the same day on
which any Loans requested in such month are requested). Each request for
the issuance of a Letter of Credit shall utilize the form of Loan/Letter of
Credit Request attached hereto as Exhibit H and shall (a) specify (1) the
---------
aggregate amount of the requested Letter of Credit and (2) the proposed
Letter of Credit Date, and (b) be accompanied by an accurate and complete
Loan/Letter of Credit Certificate.
(ii) The Issuing Bank shall, at least quarterly and more
frequently upon reasonable request, disseminate to each of the Lenders a
detailed report specifying the Letters of Credit which are then issued and
outstanding and any activity with respect thereto which may have occurred
since the date of the prior report, and including therein, among other
things, the beneficiary, the face amount and the expiry date, as well as
any payment or expirations which may have occurred.
(iii) The Administrative Agent and the Lenders shall deem and
treat the Persons listed as the Lenders in the Register as the holders and
owners of the corresponding Commitments and Letters of Credit listed
therein for all purposes hereof, and no assignment or transfer of any such
Commitment or Letters of Credit shall be effective, in each case unless and
until an Assignment Agreement effecting the assignment or transfer thereof
shall have been accepted by the Administrative Agent and recorded in the
Register as provided in Section 9.1. Prior to such recordation, all amounts
-----------
owed with respect to the applicable Commitment or Letter of Credit shall be
32
owed to the Lender listed in the Register as the owner thereof, and any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is listed in the Register as a Lender shall be
conclusive and binding on any subsequent holder, assignee or transferee of the
corresponding Commitments or Letters of Credit.
(iv) The Borrower shall notify the Administrative Agent prior to
the making of any Letter of Credit in the event that any of the matters to
which the Borrower is required to certify in the applicable Loan/Letter of
Credit Request or Loan/Letter of Credit Certificate, as applicable, is no
longer accurate and complete as of the applicable Loan Date, and the
acceptance by the Borrower of the issuance of the Letter of Credit shall
constitute a re-certification by the Borrower, as of the applicable Letter
of Credit Date, as to the matters to which the Borrower is required to
certify in the applicable Loan/Letter of Credit Request and Loan/Letter of
Credit Certificate.
C. Participation. Each Lender, upon issuance of a Letter of Credit, shall
be deemed to have purchased without recourse a participation interest from the
Issuing Bank in such Letter of Credit and the obligations arising thereunder and
any collateral relating thereto, in each case in an amount equal to its Pro Rata
Share of the obligations under such Letter of Credit and shall absolutely,
unconditionally and irrevocably assume and be obligated to pay to the Issuing
Bank and discharge when due its Pro Rata Share of the obligations arising under
such Letter of Credit. Without limiting the scope and nature of each Lender's
participation interest in any Letter of Credit, to the extent that the Issuing
Bank has not been reimbursed as required hereunder or under any such Letter of
Credit, each such Lender shall pay to the Issuing Bank its Pro Rata Share of
such unreimbursed drawing in same day funds on the day of notification by the
Issuing Bank of an unreimbursed drawing pursuant to the provisions of Section
-------
2.2.D. below. The obligation of each Lender to so reimburse the Issuing Bank
------
shall be absolute and unconditional and shall not be affected by the occurrence
of a Potential Event of Default, an Event of Default or any other occurrence or
event. Any such reimbursement shall not relieve or otherwise impair the
obligation of the Borrower to reimburse the Issuing Bank under any Letter of
Credit, together with interest as hereinafter provided.
D. Reimbursement. In the event of any drawing under any Letter of Credit,
the Issuing Bank shall promptly notify the Borrower. Unless the Borrower shall
immediately notify the Issuing Bank that the Borrower intends to otherwise
reimburse the Issuing Bank for such drawing, the Borrower shall be deemed to
have requested that the Lenders make a Revolving Loan in the amount of the
drawing as provided in Section 2.2.E. below on the related Letter of Credit, the
--------------
proceeds of which shall be used to satisfy the related reimbursement
obligations. The Borrower promises to reimburse the Issuing Bank on the day of
drawing under any Letter of Credit (either with the proceeds of a Loan obtained
hereunder or otherwise) in same day funds. If the Borrower shall fail to
reimburse the Issuing Bank as provided hereinabove, the unreimbursed amount of
such drawing shall bear interest at a per annum rate equal to 2.00% per annum in
excess of the interest rate otherwise payable under this Agreement for Base Rate
Loans. The Borrower's reimbursement obligations hereunder shall be absolute and
unconditional under all circumstances irrespective of any rights of setoff,
counterclaim or defense to payment the Borrower may claim or have against the
Issuing Bank, any Agent, the Lenders, the beneficiary of the Letter of Credit
drawn upon or any other Person, including any
33
defense based on any failure of the Borrower or any other Loan Party to receive
consideration or the legality, validity, regularity or unenforceability of the
Letter of Credit. The Issuing Bank will promptly notify the other Lenders of the
amount of any unreimbursed drawing and each Lender shall promptly pay to the
Administrative Agent for the account of the Issuing Bank, in Dollars and in
immediately available funds, the amount of such Lender's Pro Rata Share of such
unreimbursed drawing. Such payment shall be made on the day such notice is
received by such Lender from the Issuing Bank if such notice is received at or
before 1:00 P.M. (New York City time), and otherwise such payment shall be made
at or before 11:00 A.M. (New York City time) on the Business Day next succeeding
the day such notice is received. If such Lender does not pay such amount to the
Issuing Bank in full upon such request, such Lender shall, on demand, pay to the
Administrative Agent for the account of the Issuing Bank interest on the unpaid
amount during the period from the date of such drawing until such Lender pays
such amount to the Issuing Bank in full at a rate per annum equal to, if paid
within three Business Days of the date that such Lender is required to make
payments of such amount pursuant to the preceding sentence, the Federal Funds
Effective Rate and, thereafter, at a rate equal to the interest rate otherwise
payable under this Agreement for Base Rate Loans. Each Lender's obligation to
make such payment to the Issuing Bank, and the right of the Issuing Bank to
receive the same, shall be absolute and unconditional, shall not be affected by
any circumstance whatsoever and shall be without regard to the termination of
this Agreement or the Commitments hereunder, the existence of a Potential Event
of Default or Event of Default or the acceleration of the obligations of the
Borrower hereunder and shall be made without any offset, abatement, withholding
or reduction whatsoever. Simultaneously with the making of each such payment by
a Lender to the Issuing Bank, such Lender shall, automatically and without any
further action on the part of the Issuing Bank or such Lender, acquire a
participation interest in an amount equal to such payment (excluding the portion
of such payment constituting interest owing to the Issuing Bank) in the related
unreimbursed drawing portion of the Letter of Credit Obligation and in the
interest thereon and in the related LOC Documents, and shall have a claim
against the Borrower with respect thereto.
E. Repayment with Loans. On any day on which the Borrower shall have
requested, or been deemed to have requested, a Loan to reimburse a drawing under
a Letter of Credit, the Administrative Agent shall give notice to the Lenders
that a Loan has been requested or deemed requested by the Borrower to be made in
connection with a drawing under a Letter of Credit, in which case a Loan
comprised of Base Rate Loans (or Eurodollar Loans to the extent the Borrower has
complied with the procedures of Section 2.1.B. with respect thereto) shall be
--------------
immediately made to the Borrower by all Lenders in accordance with their Pro
Rata Shares and the proceeds thereof shall be paid directly to the Issuing Bank
for application to the respective Letter of Credit Obligations. Each such
Lender hereby irrevocably agrees to make its Pro Rata Share of each such Loan
immediately upon any such request or deemed request in the amount, in the manner
and on the date specified in the preceding sentence notwithstanding (i) the
amount of such borrowing may not comply with the minimum amount for advances of
Loans otherwise required hereunder, (ii) whether any conditions specified in
Section 3.2 are then satisfied, (iii) whether a Potential Event of Default or an
-----------
Event of Default then exists, (iv) failure for any such request or deemed
request for Loans to be made by the time otherwise required hereunder, (v)
whether the date of such borrowing is a date on which Loans are otherwise
permitted to be made hereunder or (vi) any termination of the Commitments
relating thereto immediately prior to or contemporaneously with such borrowing.
34
F. Designation of Subsidiary as Account Party. Notwithstanding anything
to the contrary set forth in this Agreement, a Letter of Credit issued hereunder
may contain a statement to the effect that such Letter of Credit is issued for
the account of any Subsidiary of the Borrower, provided that notwithstanding
such statement, the Borrower shall be the actual account party for all purposes
of this Agreement for such Letter of Credit and such statement shall not affect
the Borrower's reimbursement obligations hereunder with respect to such Letter
of Credit.
G. Renewal; Extension. The renewal or extension of any Letter of Credit
shall, for purposes hereof, be treated in all respects in the same manner as the
issuance of a new Letter of Credit hereunder.
H. Uniform Customs and Practices. The Issuing Bank may have the Letters
of Credit be subject to The Uniform Customs and Practice for Documentary Credits
(the "UCP") or the International Standby Practices 1998 (the "ISP98"), in either
case as published as of the date of issue by the International Chamber of
Commerce, in which case the UCP or the ISP98, as applicable, may be incorporated
therein and deemed in all respects to be a part thereof.
I. Indemnification; Nature of Issuing Bank's Duties.
(i) In addition to its other obligations under this Section
-------
2.2, the Borrower hereby agrees to pay, and protect, indemnify and save
---
each Lender harmless from and against, any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including
reasonable attorneys' fees) that such Lender may incur or be subject to as
a consequence, direct or indirect, of (a) the issuance of any Letter of
Credit or (b) the failure of such Lender to honor a drawing under a Letter
of Credit as a result of any act or omission, whether rightful or wrongful,
of any present or future de jure or de facto Governmental Action.
(ii) As between the Borrower and the Lenders (including the
Issuing Bank), the Borrower shall assume all risks of the acts, omissions
or misuse of any Letter of Credit by the beneficiary thereof. No Lender
(including the Issuing Bank) shall be responsible: (a) for the form,
validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for and
issuance of any Letter of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or
forged; (b) for the validity or sufficiency of any instrument transferring
or assigning or purporting to transfer or assign any Letter of Credit or
the rights or benefits thereunder or proceeds thereof, in whole or in part,
that may prove to be invalid or ineffective for any reason; (c) for errors,
omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not
they be in cipher; (d) for any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under a
Letter of Credit or of the proceeds thereof; and (e) for any consequences
arising from causes beyond the control of such Lender, including any
Governmental Action. None of the above shall affect, impair, or prevent the
vesting of the Issuing Bank's rights or powers hereunder, or otherwise
limit the indemnities provided for in Section 9.3 or in any of the LOC
-----------
Documents.
35
(iii) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by
any Lender (including the Issuing Bank), under or in connection with any
Letter of Credit or the related certificates, if taken or omitted in good
faith, shall not put such Lender under any resulting liability to the
Borrower or any other Loan Party. It is the intention of the parties that
this Agreement shall be construed and applied to protect and indemnify each
Lender (including the Issuing Bank) against any and all risks involved in
the issuance of the Letters of Credit, all of which risks are hereby
assumed by the Borrower (on behalf of itself and each of the other Loan
Parties), including any and all Governmental Action. No Lender (including
the Issuing Bank) shall, in any way, be liable for any failure by such
Lender or anyone else to pay any drawing under any Letter of Credit as a
result of any Government Action or any other cause beyond the control of
such Lender.
(iv) Nothing in this Section 2.2.I. is intended to limit the
-------------
reimbursement obligations of the Borrower contained in Section 2.2.D.
above. The obligations of the Borrower under this Section 2.2.I. shall
-------------
survive the termination of this Agreement. No act or omission of any
current or prior beneficiary of a Letter of Credit shall in any way affect
or impair the rights of the Lenders (including the Issuing Bank) to enforce
any right, power or benefit under this Agreement.
(v) Notwithstanding anything to the contrary contained in this
Section 2.2.I., the Borrower shall have no obligation to indemnify any
--------------
Lender (including the Issuing Bank) in respect of any liability incurred by
such Lender (a) arising out of the gross negligence or willful misconduct
of such Lender, as determined in a final judgment of a court of competent
jurisdiction, or (b) caused by such Lender's failure to pay under any
Letter of Credit after presentation to it of a request strictly complying
with the terms and conditions of such Letter of Credit, as determined in a
final judgment of a court of competent jurisdiction, unless such payment is
prohibited by any Legal Requirement.
J. Responsibility of Issuing Bank. It is expressly understood and agreed
that the obligations of the Issuing Bank hereunder to the Lenders are only those
expressly set forth in this Agreement and that the Issuing Bank shall be
entitled to assume that the conditions precedent set forth in Section 3.2 have
-----------
been satisfied as of the applicable Letter of Credit Date unless it shall have
been notified in writing by the Borrower that any such condition precedent has
not been satisfied; provided, however, that nothing set forth in this Section
-------
2.2 shall be deemed to prejudice the right of any Lender to recover from the
---
Issuing Bank any amounts made available by such Lender to the Issuing Bank
pursuant to this Section 2.2 in the event that it is determined by a court of
-----------
competent jurisdiction that the payment with respect to a Letter of Credit
constituted gross negligence or willful misconduct on the part of the Issuing
Bank.
K. Conflict with LOC Documents. In the event of any conflict between this
Agreement and any LOC Document (including any letter of credit application),
this Agreement shall control.
36
SECTION 2.3. INTEREST ON THE LOANS.
----------------------
A. Rate of Interest. Subject to the provisions of Sections 2.1.F.,
---------------
2.2.E., 2.6. and 2.7., each Loan shall bear interest on the unpaid principal
------------ ----
amount thereof from the date made through maturity (whether by acceleration or
otherwise) at a rate determined by reference to the Base Rate or the Adjusted
Eurodollar Rate. The applicable basis for determining the rate of interest with
respect to any Loan shall be selected by the Borrower initially at the time a
Loan/Letter of Credit Request is given with respect to such Loan pursuant to
Section 2.1.B., and the basis for determining the interest rate with respect to
--------------
any Loan may be changed from time to time pursuant to Section 2.3.D. If on any
--------------
day a Loan is outstanding with respect to which notice has not been delivered to
the Administrative Agent in accordance with the terms of this Agreement
specifying the applicable basis for determining the rate of interest, then for
that day that Loan shall bear interest determined by reference to the Base Rate.
Subject to the provisions of Sections 2.1.F., 2.3.E., 2.6. and 2.7., the
----------------------------- ----
Loans shall bear interest through maturity as follows:
(i) if a Base Rate Loan, then at the sum of the Base Rate plus
the Applicable Margin; or
(ii) if a Eurodollar Rate Loan, then at the sum of the Adjusted
Eurodollar Rate plus the Applicable Margin.
B. Interest Periods. In connection with each Eurodollar Rate Loan, the
Borrower may, pursuant to the applicable Loan/Letter of Credit Request or Notice
of Conversion/Continuation, as the case may be, select an interest period (each
an "Interest Period") to be applicable to such Loan, which Interest Period shall
be, at the Borrower's option, either a one, two, three or six month period;
provided that:
(i) the initial Interest Period for any Eurodollar Rate Loan
shall commence on the Loan Date in respect of such Loan, in the case of a
Loan initially made as a Eurodollar Rate Loan, or on the date specified in
the applicable Notice of Conversion/Continuation, in the case of a Loan
converted to a Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest Periods
applicable to a Eurodollar Rate Loan continued as such pursuant to a Notice
of Conversion/Continuation, each successive Interest Period shall commence
on the day on which the next preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day that
is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided that, if any Interest Period would
otherwise expire on a day that is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iv) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the
37
calendar month at the end of such Interest Period) shall, subject to clause
(iii) of this Section 2.3.B., end on the last Business Day of a calendar
month;
(v) no Interest Period with respect to any portion of the
Loans shall extend beyond the Maturity Date;
(vi) no Interest Period shall extend beyond a date on which the
Borrower is required to make a scheduled payment of principal of the Loans
or a permanent reduction of the Commitments is scheduled to occur unless
the sum of (a) the aggregate principal amount of Loans that are Base Rate
Loans plus (b) the aggregate principal amount of Loans that are Eurodollar
Rate Loans with Interest Periods expiring on or before such date plus (c)
the excess of the Commitments then in effect over the aggregate principal
amount of the Loans then outstanding equals or exceeds the principal amount
required to be paid on the Loans, or the permanent reduction of the
Commitments that is scheduled to occur, on such date;
(vii) there shall be no more than eight Interest Periods
outstanding at any time; and
(viii) in the event the Borrower fails to specify an Interest
Period for any Eurodollar Rate Loan in the applicable Loan/Letter of Credit
Request or Notice of Conversion/Continuation, the Borrower shall be deemed
to have selected an Interest Period of one month.
C. Interest Payments. Subject to the provisions of Section 2.3.E.,
--------------
interest on each Loan shall be payable in arrears on and to each Interest
Payment Date applicable to that Loan, upon any prepayment of that Loan (to the
extent accrued on the amount being prepaid) and at maturity (including final
maturity).
D. Conversion or Continuation. Subject to the provisions of Section 2.6.,
------------
the Borrower shall have the option (i) to convert at any time all or any part of
its outstanding Loans equal to $1,000,000 and integral multiples of $200,000 in
excess of that amount from Loans bearing interest at a rate determined by
reference to one basis to Loans bearing interest at a rate determined by
reference to an alternative basis or (ii) upon the expiration of any Interest
Period applicable to a Eurodollar Rate Loan, to continue all or any portion of
such Loan equal to $1,000,000 and integral multiples of $200,000 in excess of
that amount as a Eurodollar Rate Loan; provided, however, that a Eurodollar Rate
Loan may only be converted into a Base Rate Loan on the expiration date of an
Interest Period applicable thereto.
The Borrower shall deliver a Notice of Conversion/Continuation to the
Administrative Agent no later than 10:00 A.M. (New York City time) at least one
Business Day in advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). A Notice of Conversion/Continuation
shall specify (i) the proposed conversion/continuation date (which shall be a
Business Day), (ii) the amount and type of the Loan to be converted/continued,
(iii) the nature of the proposed conversion/continuation, (iv) in the case of a
conversion to, or a
38
continuation of, a Eurodollar Rate Loan, the requested Interest Period, and (v)
in the case of a conversion to, or a continuation of, a Eurodollar Rate Loan,
that no Potential Event of Default or Event of Default has occurred and is
continuing. Further, the submission by the Borrower of a Notice of
Conversion/Continuation shall constitute a re-certification by the Borrower, as
of the date of the proposed conversion/continuation, as to the matters to which
the Borrower certified to in the applicable Loan/Letter of Credit Request and
Loan/Letter of Credit Certificate.
Except as otherwise provided in Sections 2.6.B. and 2.6.C., a Notice of
--------------- ------
Conversion/Continuation for conversion to, or continuation of, a Eurodollar Rate
Loan shall be irrevocable on and after the related Interest Rate Determination
Date, and the Borrower shall be bound to effect a conversion or continuation in
accordance therewith.
E. Default Rate. Upon the occurrence and during the continuation of any
Event of Default, the outstanding principal amount of all Loans and, to the
extent permitted by applicable law, any interest payments thereon not paid when
due and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable upon
demand at a rate that is 2.00% per annum in excess of the interest rate
otherwise payable under this Agreement with respect to the applicable Loans (or,
in the case of any such fees and other amounts, at a rate which is 2.00% per
annum in excess of the interest rate otherwise payable under this Agreement for
Base Rate Loans); provided that, in the case of Eurodollar Rate Loans, upon the
expiration of the Interest Period in effect at the time any such increase in
interest rate is effective, such Eurodollar Rate Loans shall thereupon become
Base Rate Loans and shall thereafter bear interest payable upon demand at a rate
which is 2.00% per annum in excess of the interest rate otherwise payable under
this Agreement for Base Rate Loans. Payment or acceptance of the increased rates
of interest provided for in this Section 2.2.E. is not a permitted alternative
--------------
to timely payment and shall not constitute a waiver of any Event of Default or
otherwise prejudice or limit any rights or remedies of the Administrative Agent
or any Lender.
F. Computation of Interest. Interest on the Loans shall be computed on
the basis of a 360-day year, except that interest computed by reference to the
Base Rate at times when the Base Rate is based on the Prime Rate shall be
computed on the basis of a 365-day year (or 366 days in a leap year), and in
each case interest shall be payable for the actual number of days elapsed in the
period during which it accrues. In computing interest on any Loan, (i) the date
of the making of such Loan, (ii) the first day of an Interest Period applicable
to such Loan, (iii) with respect to a Base Rate Loan being converted from a
Eurodollar Rate Loan, the date of conversion of such Eurodollar Rate Loan to
such Base Rate Loan and (iv) the date of the conversion of the Loans made
pursuant to Section 2.1.A. to Term Loans, in each case shall be included, and
--------------
the date of payment of such Loan or the expiration date of an Interest Period
applicable to such Loan or, with respect to a Base Rate Loan being converted to
a Eurodollar Rate Loan, the date of conversion of such Base Rate Loan to such
Eurodollar Rate Loan, as the case may be, shall be excluded; provided that if a
Loan is repaid on the same day on which it is made, one day's interest shall be
paid on that Loan.
SECTION 2.4. FEES.
-----
A. Letter of Credit Fees.
39
(i) The Borrower agrees to pay to the Issuing Bank, for its own
account, on the date of issuance of any Letter of Credit, a facing fee
equal to 0.125% per annum on the initial face amount and stated duration of
each such Letter of Credit (the "L/C Facing Fee").
(ii) The Borrower shall also pay the customary charges, fees and
expenses of the Issuing Bank for the issuance, administration and
negotiation of each Letter of Credit (the "Issuing Bank Fees").
(iii) The Letter of Credit fees referred to in clause (i) above
shall be calculated on the basis of a 360-day year and the actual number of days
elapsed and shall be payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year, commencing on June 30, 2000.
B. Other Fees. The Borrower agrees to pay the fees in the amounts, and at
the times, separately agreed upon by the Borrower, DBAG, DBS, Nortel Networks
and TD in the Fee Letter.
SECTION 2.5. REPAYMENTS, PREPAYMENTS AND REDUCTIONS IN COMMITMENTS;
------------------------------------------------------
GENERAL PROVISIONS REGARDING PAYMENTS.
--------------------------------------
A. Scheduled Payments of Loans.
Subject to Section 2.1.F., on the Maturity Date, the entire remaining
--------------
unpaid principal amount of the Loans shall be due and payable. Notwithstanding
anything herein to the contrary, on the Term Loan Maturity Date the entire
remaining unpaid principal amount of the Loans shall be due and payable. The
Borrower shall make all such amounts due and payable available to the
Administrative Agent not later than 12:00 Noon (New York City time) on the
Maturity Date, in immediately available funds in Dollars, at the Funding and
Payment Office.
B. Prepayments and Unscheduled Reductions in Commitments.
(i) Voluntary Prepayments. The Borrower may, upon not less
---------------------
than three Business Day's prior written notice given to the Administrative
Agent by 12:00 Noon (New York City time) on the date required, at any time
and from time to time prepay, without premium or penalty, any Loan on any
Business Day in whole or in part in an aggregate minimum principal amount
of $1,000,000 and integral multiples of $200,000 in excess of that amount
(the amount due upon such prepayment being equal to the principal amount
being so prepaid plus accrued and unpaid interest thereon, plus with
respect to any Eurodollar Rate Loan not prepaid on the expiration of the
Interest Period applicable thereto, any amount payable pursuant to Section
-------
2.6.D). Notice of prepayment having been given as aforesaid, the principal
------
amount of the Loans specified in such notice shall become due and payable
on the prepayment date specified therein. Any such voluntary prepayment
shall be applied as specified in Section 2.5.C.
--------------
(ii) Voluntary Reductions of Commitments. The Borrower may,
-----------------------------------
upon not less than three Business Days' prior written notice, at any time
and from time to time
40
terminate in whole or permanently reduce in part, without premium or
penalty, the Commitments in an amount up to the amount by which the Loan
Commitments exceed the Total Utilization of Loan Commitments at the time of
such proposed termination or reduction; provided that any such partial
reduction of the Commitments shall be in an aggregate minimum amount of
$1,000,000 and integral multiples of $200,000 in excess of that amount. The
Borrower's notice to the Administrative Agent shall designate the date
(which shall be a Business Day) of such termination or reduction and the
amount of any partial reduction, and such termination or reduction of the
Commitments shall be effective on the date specified in the Borrower's
notice and shall reduce the Commitment of each Lender proportionately to
its Pro Rata Share.
(iii) Mandatory Reduction of Commitments. The Loans and the
----------------------------------
Commitments shall be reduced in the amounts and under the circumstances set
forth below, all such prepayments to be applied as set forth below or as
more specifically provided in Section 2.5.C.:
--------------
(a) Prepayments From Net Asset Sale Proceeds. Subject to
----------------------------------------
Section 2.5.B(iv) below, no later than the fifth Business Day following the
-----------------
date of receipt by the Borrower or any of its Subsidiaries of any Net Asset
Sale Proceeds in respect of any Asset Sale, the Commitments shall be
automatically reduced in an amount equal to such Net Asset Sale Proceeds.
(b) Prepayments Due to Issuance of Debt or Equity.
---------------------------------------------
Subject to Section 2.5.B(iv) below, on the fifth Business Day following the
-----------------
date of receipt by the Borrower or any of its Subsidiaries of the proceeds
(including Cash, real property or other property) (any such proceeds, net
of underwriting discounts and commissions and other reasonable costs and
expenses associated therewith, including reasonable legal fees and
expenses, being "Net Proceeds") from the incurrence of any debt by, or
issuance of any equity of, the Borrower or any of its Subsidiaries, the
Commitments shall be automatically reduced in an aggregate amount equal to
(i) 100% of the Net Proceeds in respect of any such debt incurrence (other
than those incurrences permitted pursuant to Section 6.1) and (ii) 100% of
-----------
the Net Proceeds in respect of any such equity issuance; provided, however,
that the Borrower or any of its Subsidiaries shall not be required to
utilize the first $26 million of the aggregate amount of such Net Proceeds
received in respect of any such equity issuance to permanently reduce the
Commitments hereunder.
(c) Prepayments from Receipt of Casualty Proceeds.
---------------------------------------------
Subject to Section 2.5.B(iv) below, on the fifth Business Day following the
-----------------
date of receipt by the Borrower or any of its Subsidiaries of any Casualty
Proceeds, the Commitments shall be automatically reduced in an amount equal
to 100% of such Casualty Proceeds; provided, however, that the obligations
of this Section 2.5.B.(iii)(c) shall not apply to the extent that such
----------------------
Casualty Proceeds are applied by the Borrower within twelve months of the
casualty event to the repair, replacement or restoration of the asset or
property so affected.
(iv) Calculations of Net Proceeds Amounts; Additional
------------------------------------------------
Prepayments Based on Subsequent Calculations. Concurrently with any
--------------------------------------------
prepayment of the Loans pursuant to this Section 2.5.B., the Borrower shall
--------------
deliver to the Administrative Agent an
41
Officer's Certificate executed by a Responsible Officer demonstrating the
calculation of the amount (the "Net Proceeds Amount") of the applicable Net
Asset Sale Proceeds, the applicable Net Proceeds, the applicable Casualty
Proceeds or other amounts, as the case may be, that gave rise to such
prepayment and/or reduction. In the event that the Borrower subsequently
determines that the actual Net Proceeds Amount was greater than the amount
set forth in such Officer's Certificate, the Commitments shall be
automatically reduced in an amount equal to the amount of such excess, and
the Borrower shall concurrently therewith deliver to the Administrative
Agent an Officer's Certificate executed by a Responsible Officer
demonstrating the derivation of the additional Net Proceeds Amount
resulting in such additional prepayment.
(v) Prepayments Due to Reductions or Restrictions of
------------------------------------------------
Commitments. The Borrower shall from time to time prepay the Loans to the
-----------
extent necessary so that the Total Utilization of Loan Commitments shall
not at any time exceed the Commitments then in effect (the amount due upon
such prepayment being equal to the principal amount being so paid, plus
accrued and unpaid interest thereon, plus, with respect to any Eurodollar
Rate Loan not prepaid on the expiration of the Interest Period applicable
thereto, any amount payable pursuant to Section 2.6.D.).
----------------
C. Application of Prepayments and Unscheduled Reductions of Loan
Commitments. Any voluntary prepayments pursuant to Section 2.5.B. shall be
-------------
applied as specified by the Borrower in the applicable notice of prepayment.
D. General Provisions Regarding Payments.
(i) Manner and Time of Payment. All payments by the Borrower
--------------------------
of principal, interest, fees, expenses and other Obligations hereunder and
under the Notes shall be made in Dollars in immediately available funds,
without defense, set-off or counterclaim, free of any restriction or
condition, and delivered to the Administrative Agent not later than 12:00
Noon (New York City time) on the date due at the Funding and Payment Office
for the account of the Lenders; funds received by the Administrative Agent
after that time on such due date shall be deemed to have been paid by the
Borrower on the next succeeding Business Day.
(ii) Application of Payments to Principal and Interest. All
-------------------------------------------------
payments in respect of the principal amount of any Loan shall include
payment of accrued interest on the principal amount being repaid or
prepaid, and all such payments shall be applied to the payment of interest
before application to the payment of principal.
(iii) Apportionment of Payments. Aggregate principal and
-------------------------
interest payments in respect of Loans shall be apportioned among all outstanding
Loans proportionately to the Lenders' respective Pro Rata Shares.
Notwithstanding the foregoing provisions of this Section 2.5.D(iii), if,
------------------
pursuant to the provisions of Section 2.6., any Notice of
------------
Conversion/Continuation is withdrawn as to any Affected Lender or if any
Affected Lender makes Base Rate Loans in lieu of its Pro Rata Share of any
Eurodollar Rate Loans, the Administrative Agent shall give effect thereto in
apportioning payments received thereafter.
42
(iv) Payments on Business Days. Whenever any payment to be made
-------------------------
hereunder shall be stated to be due on a day that is not a Business Day,
such payment shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of the payment of
interest hereunder or of the commitment fees hereunder, as the case may be.
(v) Notation of Payment. Each Lender agrees that before disposing of
-------------------
any Note held by it, or any part thereof (other than by granting
participations therein), that Lender will make a notation thereon of all
Loans evidenced by that Note and all principal payments previously made
thereon and of the date to which interest thereon has been paid; provided
that the failure to make (or any error in the making of) a notation of any
Loan made under such Note shall not limit or otherwise affect the
obligations of the Borrower hereunder or under such Note with respect to
any Loan or any payments of principal or interest on such Note.
SECTION 2.6. SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.
---------------------------------------------------
Notwithstanding any other provision of this Agreement to the contrary, the
following provisions shall govern with respect to Eurodollar Rate Loans as to
the matters covered:
A. Determination of Applicable Interest Rate. As soon as practicable after
10:00 A.M. (New York City time) on each Interest Rate Determination Date, the
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) the interest rate that
shall apply to the Eurodollar Rate Loans for which an interest rate is then
being determined for the applicable Interest Period and shall promptly give
notice thereof (in writing or by telephone confirmed in writing) to the Borrower
and each Lender.
B. Inability to Determine Applicable Interest Rate. In the event that the
Administrative Agent shall have determined (which determination shall be final,
conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans, that, by reason of
circumstances affecting the interbank Eurodollar market, adequate and fair means
do not exist for ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of Adjusted Eurodollar Rate, the
Administrative Agent shall on such date give notice (by telefacsimile or by
telephone confirmed in writing) to the Borrower and each Lender of such
determination, whereupon (i) no Loans may be made as, or converted to,
Eurodollar Rate Loans until such time as the Administrative Agent notifies the
Borrower and the Lenders that the circumstances giving rise to such notice no
longer exist and (ii) any Loan/Letter of Credit Request or Notice of
Conversion/Continuation given by the Borrower with respect to the Loans in
respect of which such determination was made shall be deemed to be made with
respect to Base Rate Loans.
C. Illegality or Impracticability of Eurodollar Rate Loans. In the event
that on any date any Lender shall have determined (which determination shall be
final, conclusive and binding upon all parties hereto but shall be made only
after consultation with the Borrower and the Administrative Agent) that the
making, maintaining or continuation of its Eurodollar Rate
43
Loans (i) has become unlawful as a result of compliance by such Lender in good
faith with any law, treaty, governmental rule, regulation, guideline or order
not in effect on the date such Person became a Lender (or would conflict with
any such treaty, governmental rule, regulation, guideline or order not having
the force of law even though the failure to comply therewith would not be
unlawful), or (ii) would cause such Lender material financial hardship as a
result of contingencies occurring after the date of this Agreement which
materially and adversely affect the interbank Eurodollar market or the position
of such Lender in that market, then, and in any such event, such Lender shall be
an "Affected Lender" and it shall on that day give notice (by telefacsimile or
by telephone confirmed in writing) to the Borrower and the Administrative Agent
of such determination (which notice the Administrative Agent shall promptly
transmit to each other Lender). Thereafter (a) the obligation of the Affected
Lender to make Loans as, or to convert Loans to, Eurodollar Rate Loans shall be
suspended until such notice shall be withdrawn by the Affected Lender (which
such Affected Lender shall do at the earliest practicable date), (b) to the
extent such determination by the Affected Lender relates to a Eurodollar Rate
Loan then being requested by the Borrower pursuant to a Loan/Letter of Credit
Request or a Notice of Conversion/Continuation, the Affected Lender shall make
such Loan as (or convert such Loan to, as the case may be) a Base Rate Loan, (c)
the Affected Lender's obligation to maintain its outstanding Eurodollar Rate
Loans (the "Affected Loans") shall be terminated at the earlier to occur of the
expiration of the Interest Period then in effect with respect to the Affected
Loans or when required by law, and (d) the Affected Loans shall automatically
convert into Base Rate Loans on the date of such termination. Except as provided
in the immediately preceding sentence, nothing in this Section 2.6.C. shall
--------------
affect the obligation of any Lender other than an Affected Lender to make or
maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in accordance
with the terms of this Agreement.
D. Compensation For Breakage or Non-Commencement of Interest Periods. The
Borrower shall compensate each Lender, upon written request by that Lender
(which request shall set forth the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities (including any interest paid by that
Lender to lenders of funds borrowed by it to make or carry its Eurodollar Rate
Loans and any loss, expense or liability sustained by that Lender in connection
with the liquidation or re-employment of such funds) which that Lender may
sustain: (i) if for any reason (other than a default by that Lender) a borrowing
of any Eurodollar Rate Loan does not occur on a date specified therefor in a
Loan/Letter of Credit Request, or a conversion to or continuation of any
Eurodollar Rate Loan does not occur on a date specified therefor in a Notice of
Conversion/Continuation, (ii) if any prepayment (including any prepayment
pursuant to Section 2.5.B) or other principal payment or any conversion of any
-------------
of its Eurodollar Rate Loans occurs on a date prior to the last day of an
Interest Period applicable to that Loan, (iii) if any prepayment of any of its
Eurodollar Rate Loans is not made on any date specified in a notice of
prepayment given by the Borrower, or (iv) as a consequence of any other default
by the Borrower in the repayment of its Eurodollar Rate Loans when required by
the terms of this Agreement.
E. Booking of Eurodollar Rate Loans. Any Lender may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of any of its branch
offices or the office of an Affiliate of that Lender.
44
F. Assumptions Concerning Funding of Eurodollar Rate Loans. Calculation of
all amounts payable to a Lender under this Section 2.6. and under Section 2.7.A.
------------ --------------
shall be made as though that Lender had actually funded each of its relevant
Eurodollar Rate Loans through the purchase of a Eurodollar deposit bearing
interest at the rate obtained pursuant to clause (i) of the definition of
Adjusted Eurodollar Rate in an amount equal to the amount of such Eurodollar
Rate Loan and having a maturity comparable to the relevant Interest Period and
through the transfer of such Eurodollar deposit from an offshore office of that
Lender to a domestic office of that Lender in the United States of America;
provided, however, that each Lender may fund each of its Eurodollar Rate Loans
in any manner it sees fit and the foregoing assumptions shall be utilized only
for the purposes of calculating amounts payable under this Section 2.6. and
------------
under Section 2.7.A.
--------------
SECTION 2.7. INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
-----------------------------------------
A. Compensation for Increased Costs and Taxes. Subject to the provisions
of Section 2.7.B. (which shall be controlling with respect to the matters
--------------
covered thereby), in the event that any Lender shall determine (which
determination shall, absent manifest error, be final, conclusive and binding
upon all parties hereto) that any law, treaty or governmental rule, regulation
or order, or any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law, treaty or
governmental rule, regulation or order), or any determination of a court or
governmental authority, in each case that becomes effective after the date
hereof, or compliance by such Lender with any guideline, request or directive
issued or made after the date hereof by any central bank or other governmental
or quasi-governmental authority (whether or not having the force of law):
(i) subjects such Lender (or its applicable lending office) to any
additional Tax (other than any Tax on the overall net income of such
Lender) with respect to this Agreement or any of its obligations hereunder
or any payments to such Lender (or its applicable lending office) of
principal, interest, fees or any other amount payable hereunder;
(ii) imposes, modifies or holds applicable any reserve (including any
marginal, emergency, supplemental, special or other reserve), special
deposit, compulsory loan, FDIC insurance or similar requirement against
assets held by, or deposits or other liabilities in or for the account of,
or advances or loans by, or other credit extended by, or any other
acquisition of funds by, any office of such Lender; or
(iii) imposes any other condition (other than with respect to a Tax
matter) on or affecting such Lender (or its applicable lending office) or
its obligations hereunder or the interbank Eurodollar market;
and the result of any of the foregoing is to increase the cost to such Lender of
agreeing to make, making or maintaining Loans hereunder or to reduce any amount
received or receivable by such Lender (or its applicable lending office) with
respect thereto, then, in any such case, the Borrower shall promptly pay to such
Lender, upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine)
45
as may be necessary to compensate such Lender for any such increased cost or
reduction in amounts received or receivable hereunder. Such Lender shall deliver
to the Borrower (with a copy to the Administrative Agent) a written statement
setting forth in reasonable detail the basis for calculating the additional
amounts owed to such Lender under this Section 2.7.A., which statement shall be
--------------
final, conclusive and binding upon all parties hereto absent manifest error.
B. Withholding of Taxes.
(i) Payments to Be Free and Clear. All sums payable by the Borrower
-----------------------------
under this Agreement and the other Loan Documents shall (except to the
extent required by law) be paid free and clear of, and without any
deduction or withholding on account of, any Tax (other than a Tax on the
overall net income of any Lender) (all such Taxes being hereinafter
collectively referred to as "Included Taxes").
(ii) Grossing-up of Payments. If the Borrower or any other Person is
-----------------------
required by law to make any deduction or withholding on account of any such
Included Tax from any sum paid or payable by the Borrower to the
Administrative Agent or any Lender under any of the Loan Documents:
(a) the Borrower shall notify the Administrative Agent of any
such requirement or any change in any such requirement as soon as the
Borrower becomes aware of it;
(b) the Borrower shall pay any such Included Tax before the date
on which penalties attach thereto, such payment to be made (if the
liability to pay is imposed on the Borrower) for its own account or (if
that liability is imposed on the Administrative Agent or such Lender, as
the case may be) on behalf of and in the name of the Administrative Agent
or such Lender;
(c) the sum payable by the Borrower in respect of which the
relevant deduction, withholding or payment is required shall be increased
to the extent necessary to ensure that, after the making of that deduction,
withholding or payment, the Administrative Agent or such Lender, as the
case may be, receives on the due date a net sum equal to what it would have
received had no such deduction, withholding or payment been required or
made; and
(d) within 30 days after paying any sum from which it is
required by law to make any deduction or withholding, and within 30 days
after the due date of payment of any Included Tax which it is required by
clause (b) above to pay, the Borrower shall deliver to the Administrative
Agent evidence satisfactory to the other affected parties of such
deduction, withholding or payment and of the remittance thereof to the
relevant taxing or other authority;
provided that no such additional amount shall be required to be paid to any
Lender under clause (c) above with respect to (and only to the extent of) any
deduction or withholding applicable as of the date hereof (in the case of each
Lender listed on the signature pages hereof) or the date of the Assignment
Agreement pursuant to which such Lender became a Lender (in the case of each
other Lender), in respect of payments to such Lender.
46
In addition, the Borrower agrees to pay any present or future stamp,
mortgage recording or documentary taxes or any other excise or property taxes,
charges or similar levies which arise from any payment made under this Agreement
or any of the other Loan Documents or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any of the
other Loan Documents (hereinafter referred to as "Other Taxes") and hold the
Administrative Agent and each Lender harmless from and against any and all
liabilities with respect to or resulting from any delay or omission (other than
to the extent attributable to such Lender) to pay such Other Taxes.
(iii) Evidence of Exemption from United States Withholding Tax.
--------------------------------------------------------
(a) Each Lender that is organized under the laws of any
jurisdiction other than the United States or any state or other political
subdivision thereof (for purposes of this Section 2.7.B.(iii) a "Non-US
-------------------
Lender") shall deliver to the Administrative Agent for delivery to the
Borrower, on or prior to the Closing Date (in the case of each Lender
listed on the signature pages hereof) or on or prior to the date of the
Assignment Agreement pursuant to which it becomes a Lender (in the case of
each other Lender), and at such other times as may be necessary in the
determination of the Borrower or the Administrative Agent (each in the
reasonable exercise of its discretion) (1) two original copies of Internal
Revenue Service Form 1001 or 4224 (or any successor forms), properly
completed and duly executed by such Lender, together with any other
certificate or statement of exemption required under the Code or the
regulations issued thereunder to establish that such Lender is not subject
to deduction or withholding of United States federal income tax with
respect to any payments to such Lender of principal, interest, fees or
other amounts payable under any of the Loan Documents or (2) if such Lender
is not a "bank" or other Person described in Section 881(c)(3) of the Code
and cannot deliver either Internal Revenue Service Form 1001 or 4224
pursuant to clause (1) above, a Certificate re: Non-Bank Status together
with two original copies of Internal Revenue Service Form W-8 (or any
successor form), properly completed and duly executed by such Lender,
together with any other certificate or statement of exemption or reduction
required under the Code or the regulations issued thereunder to establish
that such Lender is exempt from or entitled to a reduction in the amount of
the deduction or withholding of United States federal income tax with
respect to any payments to such Lender of interest payable under any of the
Loan Documents.
(b) Each Lender required to deliver any forms, certificates or
other evidence with respect to United States federal income tax withholding
matters pursuant to Section 2.7.B.(iii) hereby agrees, from time to time
-------------------
after the initial delivery by such Lender of such forms, certificates or
other evidence, whenever a lapse in time or change in circumstances renders
such forms, certificates or other evidence obsolete or inaccurate in any
material respect, that such Lender shall promptly (1) deliver to the
Administrative Agent for delivery to the Borrower two new original copies
of Internal Revenue Service Form 1001 or 4224, or a Certificate re: Non-
Bank Status and two original copies of Internal Revenue Service Form W-8,
as the case may be, properly completed and duly executed by such Lender,
together with any other certificate or statement of exemption or reduction
required in order to confirm or establish that such Lender is exempt from
or entitled to a reduction in the amount of the deduction or
47
withholding of United States federal income tax with respect to payments to
such Lender under the Loan Documents or (2) notify the Administrative Agent
and the Borrower of its inability to deliver any such forms, certificates
or other evidence.
(c) The Borrower shall not be required to pay any additional
amount to any Non-US Lender under clause (c) of Section 2.7.B.(ii) to the
------------------
extent any deduction or withholding is a result of such Lender's failure to
satisfy the requirements of clause (a) or (b)(1) of this Section
-------
2.7.B.(iii); provided that if such Lender shall have satisfied the
-----------
requirements of subsection Section 2.6.7.(iii)(a) on the Closing Date (in
----------------------
the case of each Lender listed on the signature pages hereof) or on the
date of the Assignment Agreement pursuant to which it became a Lender (in
the case of each other Lender), nothing in this Section 2.7.B.(iii)(c)
----------------------
shall relieve the Borrower of its obligation to pay any additional amounts
otherwise payable pursuant to clause (c) of Section 2.7.B.(ii) in the event
------------------
that, as a result of any change in any applicable law, treaty or
governmental rule, regulation or order, or any change in the
interpretation, administration or application thereof, such Lender is no
longer properly entitled to deliver forms, certificates or other evidence
at a subsequent date establishing the fact that such Lender is not subject
to withholding as described in Section 2.7.B.(iii).
-------------------
(d) The Borrower will indemnify the Administrative Agent and any
Lender for the full amount of Taxes or Other Taxes arising in connection
with payments made under this Agreement or any other Loan Document
(including any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 2.7.B. paid by the Administrative Agent or any
--------------
Lender or any of their respective Affiliates and any liability (including
penalties, additions to tax, interest and expenses) arising therefrom or
with respect thereto). Payment under this indemnification shall be made
within fifteen days from the date the Administrative Agent or any Lender or
any of their respective Affiliates makes written demand therefor; provided,
however, that the Borrower shall not be obligated to make payment to the
Lenders or the Administrative Agent (as the case may be) pursuant to this
Section 2.7.B.(iii) in respect of penalties, interest and other liabilities
-------------------
attributable to any Taxes or Other Taxes if (i) written demand therefor has
not been made by such Lender or the Administrative Agent within 60 days
from the date on which such Lender or the Administrative Agent received
written notice of the imposition of Taxes or Other Taxes by the relevant
taxing or governmental authority, but only to the extent such penalties,
interest and other similar liabilities are attributable to such failure or
delay by the Administrative Agent or the Lender in making such written
demand, (ii) such penalties, interest and other liabilities have accrued
after the Borrower had indemnified or paid an additional amount due as of
the date of such payment pursuant to this Section 2.7.B.(iii) or (iii) such
-------------------
penalties, interest and other liabilities are attributable to the gross
negligence or willful misconduct of the Lender or the Administrative Agent
or such Affiliates. After the Lender or the Administrative Agent (as the
case may be) has received written notice of the imposition of the Taxes or
Other Taxes which are subject to this Section 2.7.B.(iii), such Lender and
-------------------
the Administrative Agent will act in good faith to promptly notify the
Borrower of its obligations under this Agreement; provided, however, that
the failure to so act shall not, standing alone, affect the rights of the
Administrative Agent or the Lenders under this Section 2.7.B.(iii).
-------------------
48
C. Capital Adequacy Adjustment. If any Lender shall have determined that
the adoption, effectiveness, phase-in or applicability after the date hereof of
any law, rule or regulation (or any provision thereof) regarding capital
adequacy, or any change therein or in the interpretation or administration
thereof after the date hereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Lender (or its applicable lending office) with any guideline,
request or directive regarding capital adequacy (whether or not having the force
of law) of any such governmental authority, central bank or comparable agency,
has or would have the effect of reducing the rate of return on the capital of
such Lender or any corporation controlling such Lender as a consequence of, or
with reference to, such Lender's Loans or participations therein or other
obligations hereunder with respect to the Loans to a level below that which such
Lender or such controlling corporation could have achieved but for such
adoption, effectiveness, phase-in, applicability, change or compliance (taking
into consideration the policies of such Lender or such controlling corporation
with regard to capital adequacy), then from time to time, within five Business
Days after receipt by the Borrower from such Lender of the statement referred to
in the next sentence, the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender or such controlling corporation
on an after-tax basis for such reduction. Such Lender shall deliver to the
Borrower (with a copy to the Administrative Agent) a written statement, setting
forth in reasonable detail the basis of the calculation of such additional
amounts, which statement shall be conclusive and binding upon all parties hereto
absent manifest error.
SECTION 2.8. OBLIGATION OF THE LENDERS TO MITIGATE.
--------------------------------------
Each Lender agrees that, as promptly as practicable after the officer of
such Lender responsible for administering the Loans of such Lender becomes aware
of the occurrence of an event or the existence of a condition that would cause
such Lender to become an Affected Lender or that would entitle such Lender to
receive payments under Section 2.7., it will, to the extent not inconsistent
------------
with the internal policies of such Lender and any applicable legal or regulatory
restrictions, use reasonable efforts to (i) make, issue, fund or maintain the
Commitments of such Lender or the affected Loans of such Lender through another
lending office of such Lender or (ii) take such other measures as such Lender
may deem reasonable, if as a result thereof the circumstances which would cause
such Lender to be an Affected Lender would cease to exist or the additional
amounts which would otherwise be required to be paid to such Lender pursuant to
Section 2.7. would be materially reduced and if, as determined by such Lender in
------------
its sole discretion, the making, issuing, funding or maintaining of such
Commitments or Loans through such other lending office or in accordance with
such other measures, as the case may be, would not otherwise materially
adversely affect such Commitments or Loans or the interests of such Lender;
provided that such Lender will not be obligated to utilize such other lending
office pursuant to this Section 2.8. if such Lender would incur incremental
------------
expenses as a result of utilizing such other lending office as described in
clause (i) above. A certificate as to the amount of any such expenses payable
by the Borrower pursuant to this Section 2.8. (setting forth in reasonable
------------
detail the basis for requesting such amount) submitted by such Lender to the
Borrower (with a copy to the Administrative Agent) shall be conclusive and
binding absent manifest error.
49
ARTICLE III.
CONDITIONS TO THE MAKING OF EXTENSIONS OF CREDIT
SECTION 3.1. CONDITIONS PRECEDENT TO THE INITIAL LOAN AND INITIAL LETTER OF
--------------------------------------------------------------
CREDIT.
------
The obligations of the Administrative Agent and each Lender hereunder, and
the obligations of the Lenders to make the initial Loans or the Issuing Bank to
issue the initial Letter of Credit, whichever shall occur first, shall be
subject to the fulfillment or waiver by the Lenders of each of the following
conditions precedent:
A. Loan Documents. The Administrative Agent shall have received, with a
counterpart for each Lender, each of the following documents:
(i) this Agreement, duly executed and delivered by each of the
parties hereto;
(ii) the Notes, duly executed and delivered by the Borrower;
(iii) the Borrower Pledge Agreement, duly executed and delivered
by the Borrower and the Administrative Agent, together with (A) the stock
certificates representing all of the Capital Stock of FiberNet Telecom,
Inc. and (B) undated stock powers for each stock certificate representing
such Capital Stock, executed in blank and delivered by a duly authorized
officer of the Borrower;
(iv) a Subsidiary Pledge Agreement, duly executed and delivered
by FiberNet Telecom, Inc. and the Administrative Agent, together with (A)
the certificates representing all of the Capital Stock of FiberNet Equal
Access, L.L.C., and (B) undated transfer documents for each certificate
representing such Capital Stock, executed in blank and delivered by a duly
authorized officer of FiberNet Telecom, Inc.;
(v) a Subsidiary Pledge Agreement, duly executed and delivered
by FiberNet Telecom, Inc. and the Administrative Agent, together with (A)
the certificates representing all of the Capital Stock of Local Fiber,
L.L.C., and (B) undated transfer documents for each certificate
representing such Capital Stock, executed in blank and delivered by a duly
authorized officer of FiberNet Telecom, Inc.;
(vi) the Borrower Security Agreement, duly executed and
delivered by the Borrower and the Administrative Agent;
(vii) a Subsidiary Security Agreement, duly executed and
delivered by FiberNet Telecom, Inc. and the Administrative Agent;
(viii) a Subsidiary Security Agreement, duly executed and
delivered by FiberNet Equal Access, L.L.C. and the Administrative Agent;
(ix) a Subsidiary Security Agreement, duly executed and
delivered by Local Fiber, L.L.C. and the Administrative Agent;
50
(x) a Subsidiary Guaranty Agreement, duly executed and
delivered by FiberNet Telecom, Inc. and the Administrative Agent;
(xi) a Subsidiary Guaranty Agreement, duly executed and
delivered by FiberNet Equal Access, L.L.C. and the Administrative Agent;
(xii) a Subsidiary Guaranty Agreement, duly executed and
delivered by Local Fiber, L.L.C. and the Administrative Agent;
(xiii) a Control Agreement, duly executed and delivered by each
party thereto, for each of the Accounts set forth in Schedule 3.1.A.;
---------------
(xiv) the Xxxxxx Street Consent, duly executed and delivered by
each party thereto;
(xiv) the MFN Consent, duly executed and delivered by each
party thereto;
(xv) the Assignment Agreement (111 Eighth Avenue), duly
executed and delivered by each party thereto;
(xvi) the Assignment Agreement (Iaxis), duly executed and
delivered by each party thereto;
(xvii) the Assignment Agreement (Master Purchase Agreement),
duly executed and delivered by each party thereto;
(xviii) the Assignment Agreement (Onsite), duly executed and
delivered by each party thereto;
(xix) the Equity Registration Rights Joinder Agreement, duly
executed and delivered by each party thereto;
(xx) the Warrant Agreement, duly executed and delivered by
each party thereto;
(xxi) the Warrant Escrow Agreement, duly executed and delivered
by each party thereto;
(xxii) the Fee Letter, duly executed and delivered by each party
thereto; and
(xxiii) the Debt Engagement Letter, duly executed and delivered
by each party thereto.
B. Material Contracts. The Administrative Agent shall have received a true
and complete copy of each Material Contract, duly certified as such by a
Responsible Officer of the Borrower as of the Closing Date and as being in full
force and effect.
51
C. Legal Opinions. The Administrative Agent shall have received, with a
counterpart for each Lender, the legal opinion of Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo PC, New York and Delaware counsel to the Borrower and its
Subsidiaries, substantially in the form of Exhibit O. Such legal opinion shall
---------
be dated as of the Closing Date.
D. Security Interests (Recordings and Filings). Each of the documents and
instruments set forth in Schedule 4.15.A.(i) shall have been delivered to the
-------------------
Administrative Agent for recording or filing or (ii) shall have been recorded or
filed in the respective places or offices set forth in Schedule 4.15.A. and, in
----------------
each such case, any and all recording and filing fees with respect thereto shall
have been paid, and each of the other actions set forth in Schedule 4.15.A.
----------------
shall have been taken.
E. UCC Searches. The Administrative Agent shall have received searches of
UCC filings in the jurisdictions of the chief executive office of each Loan
Party and each jurisdiction where any Collateral is located or where a filing
would need to be made in order to perfect the Administrative Agent's security
interest in the Collateral, copies of the financing statements on file in such
jurisdictions and other evidence that the Administrative Agent may reasonably
require to confirm that no Liens exist as of the Closing Date other than
Permitted Liens.
F. No Violation of Law. The consummation of the transactions contemplated
by the Loan Documents shall not violate any Legal Requirements.
G. Financial Statements. The Administrative Agent shall have received, and
the Administrative Agent shall be reasonably satisfied with, accurate and
complete copies of the audited balance sheets of the Borrower and its
Subsidiaries for the Fiscal Year ending December 31, 1999.
H. Corporate Proceedings of the Borrower. The Administrative Agent shall
have received a copy of the resolutions, in form and substance reasonably
satisfactory to the Administrative Agent, of the Board of Directors of the
Borrower authorizing, among other things, (i) the execution, delivery and
performance of this Agreement and the other Loan Documents to which it is a
party, (ii) the execution, delivery and performance of the Material Contracts to
which it is a party that are in effect as of the Closing Date, (iii) the Loans
and Letters of Credit contemplated hereunder, (iv) the issuance of the Warrants
(as defined under the Warrant Agreement) under the Warrant Agreement and (v) the
granting by it of the Liens created pursuant to the Collateral Documents to
which it is a party, certified by the Secretary of the Borrower as of the
Closing Date, which certificate shall be in form and substance reasonably
satisfactory to the Administrative Agent and shall state that the resolutions
thereby certified (x) are accurate and complete and (y) are in full force and
effect as of the Closing Date.
I. Borrower Incumbency Certificate. The Administrative Agent shall have
received a certificate of the Borrower, dated as of the Closing Date, as to the
incumbency and signature of the officers of the Borrower executing any Loan
Document, in form and substance reasonably satisfactory to the Administrative
Agent, executed by the Chief Executive Officer or the President and the
Secretary or any Assistant Secretary of the Borrower.
52
J. Corporate Proceedings of Subsidiaries. The Administrative Agent shall
have received a copy of the resolutions, in form and substance reasonably
satisfactory to the Administrative Agent, of the Management Board and the
members (if necessary) of each Subsidiary of the Borrower, if any, authorizing,
among other things, (i) the execution, delivery and performance of the Loan
Documents to which such Subsidiary is a party, (ii) the execution, delivery and
performance of the Material Contracts to which such Subsidiary is a party that
are in effect as of the Closing Date and (iii) the granting by it of the Liens
created pursuant to the Collateral Documents to which such Subsidiary is a
party, certified by the Secretary of such Subsidiary as of the Closing Date,
which certificate shall be in form and substance reasonably satisfactory to the
Administrative Agent and shall state that the resolutions thereby certified (x)
are accurate and complete and (y) are in full force and effect as of the Closing
Date.
K. Subsidiary Incumbency Certificates. The Administrative Agent shall have
received a certificate of each Subsidiary, dated as of the Closing Date, as to
the incumbency and signature of the officers of such Subsidiary executing any
Loan Document, in form and substance reasonably satisfactory to the
Administrative Agent, executed by the Chief Executive Officer or the President
of such Subsidiary and the Secretary or any Assistant Secretary of such
Subsidiary.
L. Corporate Documents. The Administrative Agent shall have received
accurate and complete copies of the certificate or articles of incorporation,
certificate of formation, by-laws and limited liability company agreements (or
such other organizational and governing documents as may be in existence) of
each of the Borrower and each of its Subsidiaries, certified as of the Closing
Date as accurate and complete copies thereof by a Responsible Officer of such
Person.
M. Good Standing Certificates. The Administrative Agent shall have
received certificates of good standing, existence, foreign qualification or its
equivalent with respect to each Loan Party certified as of a date not more than
seven (7) days prior to the Closing Date by the appropriate Government
Instrumentality of (i) the state of jurisdiction of such Loan Party, (ii) with
respect to the Borrower, the State of New York, and (iii) each other
jurisdiction in which the failure to so qualify and be in good standing could
reasonably be expected to have a Material Adverse Effect.
N. Business Plan. The Administrative Agent shall have received, with a
copy for each Lender, a copy of the Business Plan.
O. Projections. The Administrative Agent shall have received, with a copy
for each Lender, a copy of the then current Projections.
P. Financial Officer's Certificate. The Administrative Agent shall have
received the Financial Officer's Certificate in the form of Exhibit F annexed
---------
hereto, dated as of the Closing Date and duly executed by the chief financial
officer or the treasurer of the Borrower. Such certificate shall include
certifications by the chief financial officer or the treasurer of the Borrower
that the Borrower is delivering (i) a true and complete copy of the financial
statements referred to in Section 3.1.G., which fairly presents in all material
-------------
respects the financial condition of the Borrower and each of its Subsidiaries at
the dates indicated and the results of their
53
operations and their cash flows for the periods indicated and (ii) a true and
complete copy of the Projections referred to in Section 3.1.O., prepared in
--------------
good faith and based on reasonable assumptions.
Q. Insurance. The Administrative Agent shall have received copies of
insurance policies or certificates of insurance of the Loan Parties evidencing
insurance meeting the requirements set forth in Section 5.6.B., including naming
--------------
the Administrative Agent as additional insured (in the case of liability
insurance) or sole loss payee (in the case of hazard insurance) on behalf of the
Lenders.
R. Governmental and Third-Party Consents. The Administrative Agent shall
have received evidence satisfactory to it that each consent, authorization,
clearance, notice and filing required to be made or obtained by or on behalf of
any Loan Party in connection with the consummation of the transactions
contemplated hereby have been made or obtained.
S. Representations and Warranties. All representations and warranties made
by the Borrower and each other Loan Party in any Loan Document shall be true and
correct in all material respects as of the Closing Date (unless any such
representation or warranty relates solely to an earlier date, in which case it
shall have been true and correct in all material respects as of such earlier
date).
T. No Potential Event of Default or Event of Default. No Potential Event
of Default or Event of Default shall have occurred and be continuing as of the
Closing Date.
U. Closing Date Certificate. The Administrative Agent shall have received
the Closing Date Certificate in the form of Exhibit C annexed hereto, dated as
---------
of the Closing Date and duly executed by a Responsible Officer of the Borrower,
stating that (i) all representations and warranties made by the Borrower in any
Loan Document are true and correct in all material respects as of the Closing
Date (unless any such representation or warranty relates solely to an earlier
date, in which case it shall have been true and correct in all material respects
as of such earlier date), (ii) to the best of such Responsible Officer's
knowledge, all representations and warranties made by each other Loan Party in
any Loan Document are true and correct in all material respects as of the
Closing Date (unless any such representation or warranty relates solely to an
earlier date, in which case it shall have been true and correct in all material
respects as of such earlier date), and (iii) no Potential Event of Default or
Event of Default shall have occurred and be continuing as of the Closing Date.
V. Solvency Certificate. The Administrative Agent shall have received the
Solvency Certificate in the form of Exhibit J annexed hereto, dated as of the
---------
Closing Date and duly executed by the Chief Financial Officer or Treasurer of
the Borrower, regarding the financial condition, solvency and related matters of
each of the Loan Parties.
W. Loan/Letter of Credit Request. The Administrative Agent shall have
received a properly completed Loan/Letter of Credit Request in accordance with
Section 2.1.B. or Section 2.2.B., as applicable, executed by a Responsible
------------- --------------
Officer of the Borrower.
54
X. Loan/Letter of Credit Certificate. The Administrative Agent shall have
received a properly completed Loan/Letter of Credit Certificate executed by a
Responsible Officer of the Borrower in accordance with Section 2.1.B. or Section
-------------- -------
2.2.B., as applicable, dated as of the applicable Loan Date or Letter of Credit
------
Date.
Y. Fees and Expenses. The Borrower shall have paid (or shall concurrently
pay) to each of the Lenders, the Agents and the Lead Arranger any and all fees,
expenses and costs relating to this Agreement, the Fee Letter, the other Loan
Documents and the transactions contemplated hereby and thereby which are due and
payable on the Closing Date.
Z. Satisfactory Documentation. All documentation received by the
Administrative Agent shall be reasonably satisfactory to the Administrative
Agent.
SECTION 3.2. CONDITIONS PRECEDENT TO SUBSEQUENT LOANS.
-----------------------------------------
The making of any Loan or the issuance of any Letter of Credit after the
Initial Loan or the initial Letter of Credit, whichever shall have occurred
first, shall be subject to the fulfillment, or waiver by the Lenders, of each of
the following conditions precedent, provided that any waiver granted by the
Lenders in respect of a Loan or the issuance of a Letter of Credit shall only be
effective in respect of such Loan or Letter of Credit, as the case may be, and
shall not, unless subsequently waived in respect of a subsequent Loan or Letter
of Credit, be effective as to any subsequent Loan or Letter of Credit:
A. Representations and Warranties. All representations and warranties
made by the Borrower and each other Loan Party in any Loan Document shall be
true and correct in all material respects as of the applicable Loan Date or
Letter of Credit Date, as the case may be (unless any such representation or
warranty relates solely to an earlier date, in which case it shall have been
true and correct in all material respects as of such earlier date).
B. No Potential Event of Default or Event of Default. No Potential Event
of Default or Event of Default shall have occurred and be continuing as of the
applicable Loan Date or Letter of Credit Date, as the case may be.
C. Loan/Letter of Credit Request. The Administrative Agent shall have
received a properly completed Loan/Letter of Credit Request in accordance with
Section 2.1.B. executed by a Responsible Officer of the Borrower.
--------------
D. Loan/Letter of Credit Certificate. The Administrative Agent shall have
received an accurate and complete Loan/Letter of Credit Certificate in
accordance with Section 2.1.B., dated as of the applicable Loan Date or Letter
--------------
of Credit Date, as the case may be, executed by a Responsible Officer of the
Borrower.
SECTION 3.3. CONDITIONS PRECEDENT TO CONVERSION OF LOANS INTO TERM LOANS.
------------------------------------------------------------
The conversion of the Loans to the Term Loans pursuant to Section 2.1.F,
-------------
shall be subject to the fulfillment, or waiver by the Lenders, of each of the
following conditions precedent:
55
A. Representations and Warranties. All representations and warranties
made by the Borrower and each other Loan Party in any Loan Document shall be
true and correct in all material respects as of the Maturity Date (unless any
such representation or warranty relates solely to an earlier date, in which case
it shall have been true and correct in all material respects as of such earlier
date).
B. No Potential Event of Default or Event of Default. No Potential Event
of Default or Event of Default shall have occurred and be continuing as of the
Maturity Date.
C. Security Interests (Recordings and Filings). Each of the documents and
instruments set forth in Schedule 4.15.A.(i) shall have been delivered to the
-------------------
Administrative Agent for recording or filing or (ii) shall have been recorded or
filed in the respective places or offices set forth in Schedule 4.15.A. and, in
----------------
each such case, any and all recording and filing fees with respect thereto shall
have been paid, and each of the other actions set forth in Schedule 4.15.A.
----------------
shall have been taken.
D. UCC Searches. The Administrative Agent shall have received searches of
UCC filings in the jurisdictions of the chief executive office of each Loan
Party and each jurisdiction where any Collateral is located or where a filing
would need to be made in order to perfect the Administrative Agent's security
interest in the Collateral, copies of the financing statements on file in such
jurisdictions and other evidence that the Administrative Agent may reasonably
require to confirm that no Liens exist as of the Maturity Date other than
Permitted Liens.
E. No Violation of Law. The consummation of the transactions contemplated
by the Loan Documents (including the conversion of the Loans to Term Loans)
shall not violate any Legal Requirements.
F. Term Loan Conversion Certificate. The Administrative Agent shall have
received the Term Loan Conversion Certificate in the form of Exhibit S annexed
---------
hereto, dated as of the Maturity Date and duly executed by a Responsible Officer
of the Borrower, stating that (i) all representations and warranties made by the
Borrower in any Loan Document are true and correct in all material respects as
of the Maturity Date (unless any such representation or warranty relates solely
to an earlier date, in which case it shall have been true and correct in all
material respects as of such earlier date), (ii) to the best of such Responsible
Officer's knowledge, all representations and warranties made by each other Loan
Party in any Loan Document are true and correct in all material respects as of
the Maturity Date (unless any such representation or warranty relates solely to
an earlier date, in which case it shall have been true and correct in all
material respects as of such earlier date), and (iii) no Potential Event of
Default or Event of Default shall have occurred and be continuing as of the
Maturity Date.
X. Xxxxxxxxxx Proxy. The Agents (other than the Securities Intermediary)
shall have received evidence satisfactory to them that Xx. Xxxxx Xxxxxxxxxx,
Xxxxxxxxxx Electrical Co., Xxxxxxxxxx Electrical Services, Inc., SMFS, Inc. and
any Affiliate thereof which owns or acquires any Capital Stock of the Borrower
shall have granted an irrevocable proxy(ies) to the Administrative Agent, for
the benefit of the Lenders, to vote all of their respective shares of Capital
Stock of the Borrower until such time as the Term Loans shall have been repaid
or prepaid in full in cash.
56
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and to make the
Loans, and to induce the Issuing Bank to issue the Letters of Credit, the
Borrower represents and warrants to the Administrative Agent, the Issuing Bank
and each Lender that, on the Closing Date, on each Loan Date and on each Letter
of Credit Date:
SECTION 4.1. ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS
------------------------------------------------------------
AND SUBSIDIARIES.
-----------------
A. Organization and Powers. The Borrower is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
The Borrower has all requisite corporate power and authority to own and operate
its properties, to carry on its business as now conducted and as proposed to be
conducted, to enter into the Loan Documents and the Material Contracts to which
it is a party and to carry out the transactions contemplated thereby.
B. Qualification and Good Standing. The Borrower and each of its
Subsidiaries is qualified to do business and is in good standing in the State of
New York and every other jurisdiction where its assets are located and wherever
necessary to carry out its business and operations, except, in the case of such
jurisdictions other than the State of New York, where the failure to be so
qualified or in good standing could not reasonably be expected to have a
Material Adverse Effect.
C. Ownership of the Borrower. The equity interests in the Borrower are
duly authorized, validly issued and fully paid and nonassessable and, as of the
Closing Date, none of such equity interests constitutes Margin Stock.
D. Subsidiaries. All of the Subsidiaries of the Borrower are identified
in Schedule 4.1.D annexed hereto, as such Schedule 4.1.D may be supplemented
-------------- --------------
from time to time pursuant to the provisions of Section 6.5. The equity
------------
interests of each of the Subsidiaries of the Borrower are identified in Schedule
--------
4.1.D. annexed hereto (as so supplemented) and such equity interests are duly
------
authorized, validly issued and fully paid and nonassessable and none of such
equity interests constitutes Margin Stock. Each of the Subsidiaries of the
Borrower identified in Schedule 4.1.D. annexed hereto (as so supplemented) is
---------------
(i) a corporation or limited liability company duly organized or formed, validly
existing and in good standing under the laws of its respective jurisdiction of
organization set forth therein, has all requisite corporate or limited liability
company power and authority to own and operate its properties and to carry on
its business as now conducted and as proposed to be conducted (including, all
activities in respect of the System), and (ii) is qualified to do business and
is in good standing in the State of New York and in every other jurisdiction
where its assets are located and wherever necessary to carry out its business
and operations, except where the failure to be so qualified and in good standing
could not reasonably be expected to have a Material Adverse Effect. Schedule
--------
4.1.D. annexed hereto (as so supplemented) completely and correctly sets forth
------
the ownership of each Subsidiary of the Borrower.
57
E. Rights to Acquire Equity. There are no options, warrants, convertible
securities or other rights to acquire any equity interests in the Borrower or
any of its Subsidiaries except as set forth as Schedule 4.1.E.
--------------
F. Conduct of Business. The Borrower and each of its Subsidiaries are
engaged only in the Telecommunications Business.
SECTION 4.2. AUTHORIZATION OF BORROWING, ETC.
--------------------------------
A. Authorization of Borrowing. The execution, delivery and performance of
the Loan Documents have been duly authorized by all necessary action on the part
of each Loan Party that is a party thereto.
B. No Conflict. The execution, delivery and performance by each of the
Borrower and each of its Subsidiaries of the Loan Documents and Material
Contracts to which it is a party and the consummation of the transactions
contemplated by the Loan Documents and the Material Contracts do not and will
not (i) violate any provision of (a) any Legal Requirement applicable to the
Borrower or any of its Subsidiaries, (b) the certificate or articles of
incorporation, certification of formation, by-laws or limited liability company
agreements (or any other organizational or governing document) of the Borrower
or any of its Subsidiaries or (c) any order, judgment or decree of any court or
agency or Governmental Instrumentality binding on the Borrower or any of its
Subsidiaries, (ii) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any Contractual Obligation of
the Borrower or any of its Subsidiaries, (iii) result in or require the creation
or imposition of any Lien upon any of the properties or assets of the Borrower
or any of its Subsidiaries (other than any Liens created under any of the Loan
Documents in favor of the Administrative Agent for the benefit of the Lenders),
or (iv) require any approval of stockholders or members of any Loan Party, or
any approval or consent of any Person under any Contractual Obligation of the
Borrower or any of its Subsidiaries except for such approvals or consents which
will be obtained on or before the Closing Date and which are disclosed in
writing to the Administrative Agent pursuant to Section 3.1.R.
-------------
C. Governmental Consents. Except as set forth in Schedule 4.2.C., the
---------------
execution, delivery and performance by the Borrower and each of its Subsidiaries
of the Loan Documents to which they are parties and the consummation of the
transactions contemplated by the Loan Documents do not and will not require any
registration with, consent or approval of, or notice to, or other action to,
with or by, any Governmental Instrumentality.
D. Binding Obligation. Each of the Loan Documents and Material Contracts
has been duly executed and delivered by the Borrower and each of its
Subsidiaries that are parties hereto or thereto, as applicable, and is the
legally valid and binding obligation of such Loan Parties, enforceable against
such Loan Parties in accordance with its respective terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable principles
relating to enforceability, whether brought in a proceeding in equity or at law.
58
SECTION 4.3. SOLVENCY.
---------
Both before and after giving effect to the transactions contemplated by
this Agreement, each Loan Party is and will be Solvent.
SECTION 4.4. FINANCIAL CONDITION.
--------------------
In the case of each financial statement and accompanying information
delivered by the Borrower hereunder, each such financial statement and
information shall have been prepared in conformity with GAAP and fairly present,
in all material respects, the financial position (on a consolidated and, where
applicable, consolidating basis) of the entities described in such financial
statements as at the respective dates thereof and the results of operations and
cash flows (on a consolidated and, where applicable, consolidating basis) of the
entities described therein for each of the periods then ended, subject, in the
case of any such unaudited financial statements, to changes resulting from audit
and normal year-end adjustments. Except for obligations under the Material
Contracts and the Loan Documents, the Borrower does not (and will not following
the funding of the initial Loans) have any contingent obligations, unmatured
liabilities, contingent liability or liability for taxes, long-term lease or
forward or long-term commitment that is not reflected in the foregoing financial
statements or the notes thereto and which in any such case is material in
relation to the business, operations, properties, assets, financial condition or
prospects of the Borrower and each of its Subsidiaries taken as a whole.
SECTION 4.5. NO MATERIAL ADVERSE EFFECT.
---------------------------
Since December 31, 1999, no development, event or change in respect of the
Borrower or any of its Subsidiaries and no development, event or change in
respect of the telecommunications market in which the Borrower or any of its
Subsidiaries is or will be conducting its business, has occurred that has caused
or evidences, either in any case or in the aggregate, a Material Adverse Effect.
SECTION 4.6. TITLE TO PROPERTIES; LIENS; REAL PROPERTY.
------------------------------------------
A. Title to Properties; Liens. The Borrower and each of its Subsidiaries
have (i) good marketable and insurable fee simple title to (in the case of fee
interests in real property), (ii) valid leasehold interests in (in the case of
leasehold interests in real or personal property), or (iii) good title to (in
the case of all other personal property), all of their respective material
properties and assets reflected in the financial statements referred to in
Section 4.4. or in the most recent financial statements delivered pursuant to
------------
Section 5.1., in each case except for assets disposed of since the date of such
------------
financial statements in the ordinary course of business or as otherwise
permitted under Section 6.7. Except as permitted by this Agreement and set
------------
forth on Schedule 6.2.A., all such properties and assets are held free and clear
---------------
of Liens.
B. Real Property. As of the Closing Date, Schedule 4.6.B. contains an
---------------
accurate and complete list of (i) all material properties owned by the Borrower
or any of its Subsidiaries and (ii) all material leases, subleases or
assignments of leases (together with all amendments, modifications, supplements,
renewals or extensions of any thereof) affecting real estate of properties owned
or leased by the Borrower or any of its Subsidiaries regardless of whether the
59
Borrower or such Subsidiary is the landlord or tenant (whether directly or as an
assignee or successor in interest) under such lease, sublease or assignment.
SECTION 4.7. LITIGATION; ADVERSE FACTS.
--------------------------
Except as set forth in Schedule 4.7, there are no actions, suits,
------------
proceedings, arbitrations or governmental investigations at law or in equity, or
before or by any arbitrator or Governmental Instrumentality, domestic or foreign
(including any Environmental Claims) that are, to the knowledge of the Borrower,
pending or threatened against or affecting the Borrower or any of its
Subsidiaries or any property of the Borrower or any of its Subsidiaries, which,
if adversely determined, could reasonably be expected to have a Material Adverse
Effect. Neither the Borrower nor any of its Subsidiaries (i) is in violation of
any applicable Legal Requirement (including Environmental Laws) or (ii) is
subject to or in default with respect to any final judgments, writs,
injunctions, decrees, rules or regulations of any court or any federal, state,
municipal or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which, with respect to any such violations
or defaults occurring after the Closing Date, could reasonably be expected to
have a Material Adverse Effect.
SECTION 4.8. PAYMENT OF TAXES.
-----------------
All tax returns and reports of the Borrower and each Subsidiary of the
Borrower required to be filed by any such Person have been timely filed, and all
taxes required to be paid with respect to such tax returns to be due and payable
and all material assessments, fees and other governmental charges upon the
Borrower and each Subsidiary of the Borrower and upon their respective
properties, assets, income, businesses and franchises which are due and payable
have been paid when due and payable. The Borrower knows of no proposed tax
assessment against the Borrower or any of its Subsidiaries which could
reasonably be expected to have a Material Adverse Effect that is not being
actively contested by the Borrower or such Subsidiary in good faith and by
appropriate proceedings and for which reserves or other appropriate provisions,
if any, as shall be required in conformity with GAAP shall not have been made or
provided therefor.
SECTION 4.9. PERFORMANCE OF AGREEMENTS; MATERIAL CONTRACTS.
----------------------------------------------
A. Neither the Borrower nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the material obligations,
covenants or conditions contained in any of its Material Contracts and no
condition exists that, with the giving of notice or the lapse of time or both,
would constitute such a default, or that would permit the counterparty to any
Material Contract to terminate the Material Contract to which it is a party.
B. Schedule 4.9.B contains an accurate and complete list of all the
--------------
Material Contracts in effect on the Closing Date. Except as described on
Schedule 4.9.B, to the knowledge of the Borrower, all such Material Contracts
--------------
are in full force and effect and no defaults currently exist thereunder.
60
SECTION 4.10. GOVERNMENTAL REGULATION.
------------------------
Neither the Borrower nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, or
the Interstate Commerce Act, nor is an "investment company" as defined in the
Investment Company Act of 1940, or subject to regulation under the Investment
Company Act of 1940, or under any other federal or state statute or regulation
which may limit its ability to incur Indebtedness or which may otherwise render
all or any portion of the Obligations unenforceable.
SECTION 4.11. SECURITIES ACTIVITIES.
----------------------
The Borrower is not engaged nor will it engage in the business of extending
credit for the purpose of "buying" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulations T, U and X of
the Board of Governors of the Federal Reserve System as now and from time to
time hereafter in effect. No portion of the proceeds of any Loan under this
Agreement will be used for "buying" or "carrying" any "margin stock" as so
defined or for any purpose which violates the provisions of the Regulations of
such Board of Governors.
SECTION 4.12. LABOR MATTERS.
--------------
Except as disclosed and described in Schedule 4.12, there are no collective
-------------
bargaining agreements or Multiemployer Plans covering the employees of a Loan
Party as of the Closing Date. No Loan Party is engaged in any unfair labor
practice that could reasonably be expected to have a Material Adverse Effect.
There is no strike, labor dispute, union organizing activity, slowdown or
stoppage pending or, to the best knowledge of the Borrower, threatened against
any Loan Party which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
SECTION 4.13. CERTAIN FEES.
-------------
No broker's or finder's fee or commission will be payable with respect to
this Agreement or any of the transactions contemplated hereby (other than fees
payable to the Lead Arranger, the Administrative Agent, the Co-Syndications
Agents, the Issuing Bank and the Lenders), and the Borrower hereby indemnifies
the Lead Arranger, the Administrative Agent, the Co-Syndications Agents, the
Issuing Bank and the Lenders against, and agrees that it will hold each of the
Lead Arranger, the Administrative Agent, the Co-Syndications Agents, the Issuing
Bank and the Lenders harmless from, any claim, demand or liability for any such
broker's or finder's fees alleged to have been incurred in connection herewith
or therewith and any expenses (including reasonable fees, expenses and
disbursements of counsel) arising in connection with any such claim, demand or
liability.
SECTION 4.14. ENVIRONMENTAL PROTECTION.
-------------------------
Except as set forth in Schedule 4.14 annexed hereto:
-------------
(i) neither the Borrower nor any of its Subsidiaries nor any of their
respective Facilities are subject to any outstanding written order, consent
decree or
61
settlement agreement with any Person relating to (a) any Environmental Law,
(b) any Environmental Claim, or (c) any Hazardous Materials Activity;
(ii) neither the Borrower nor any of its Subsidiaries has received
any letter or request for information under Section 104 of the
Comprehensive Environmental Response, Compensation, and Liability Act (42
U.S.C. (S) 9604) or any comparable state law;
(iii) there are and, to the Borrower's knowledge, have been, no
conditions, occurrences, or Hazardous Materials Activities on any Facility which
could reasonably be expected to form the basis of an Environmental Claim against
the Borrower or any of its Subsidiaries;
(iv) neither the Borrower nor any of its Subsidiaries nor, to the
Borrower's knowledge, any predecessor of the Borrower or any of its
Subsidiaries has filed any notice under any Environmental Law indicating
past or present treatment of Hazardous Materials at any Facility, and none
of the Borrower's or any of its Subsidiaries' operations involves the
generation, transportation, treatment, storage or disposal of hazardous
waste, as defined under 40 C.F.R. Parts 260-270 or any state equivalent;
and
(v) compliance with all current or reasonably foreseeable future
requirements pursuant to or under Environmental Laws could not,
individually or in the aggregate, reasonably be expected to give rise to a
Material Adverse Effect.
Notwithstanding anything in this Section 4.14. to the contrary, no event or
-------------
condition has occurred or is occurring with respect to the Borrower or any of
its Subsidiaries relating to any Environmental Law, any Release of Hazardous
Materials, or any Hazardous Materials Activity, including any matter disclosed
on Schedule 4.14 annexed hereto, which individually or in the aggregate has had
-------------
or could reasonably be expected to have a Material Adverse Effect.
SECTION 4.15. MATTERS RELATING TO COLLATERAL.
-------------------------------
A. Creation, Perfection and Priority of Liens. The execution and delivery
of the Collateral Documents by the Borrower and each of its Subsidiaries,
together with the actions taken on or prior to the date hereof pursuant to this
Section 4.15.A. or Schedule 4.15.A are effective to create in favor of the
--------------- ---------------
Administrative Agent for the benefit of the Secured Parties, as security for the
Obligations, a valid and perfected First Priority Lien on all of the Collateral,
and all filings and other actions necessary to perfect and maintain the
perfection and priority status of such Liens have been duly made or taken and
remain in full force and effect, other than the filing of any UCC financing
statements delivered to the Administrative Agent for filing (but not yet filed)
and the periodic filing of UCC continuation statements in respect of UCC
financing statements filed by or on behalf of the Administrative Agent.
B. Governmental Actions. No authorization, approval or other action by,
and no notice to or filing with, any Governmental Instrumentality is required
for either (i) the pledge or grant by the Borrower and each of its Subsidiaries
of the Liens purported to be created in favor of the Administrative Agent
pursuant to any of the Collateral Documents or (ii) the exercise by
62
the Administrative Agent of any rights or remedies in respect of any Collateral
(whether specifically granted or created pursuant to any of the Collateral
Documents or created or provided for by applicable law), except for filings or
recordings set forth in Schedule 4.15.A.
---------------
C. Absence of Third-Party Filings. Except such as may have been (i) filed
in favor of the Administrative Agent as contemplated by Section 4.15.A. or (ii)
---------------
filed to perfect a Lien permitted under Section 6.2., no effective UCC financing
------------
statement, fixture filing or other instrument similar in effect covering all or
any part of the Collateral is on file in any filing or recording office.
D. Chief Executive Office. As of the Closing Date, the "chief executive
office," "major executive office" and "principal place of business" of the
Borrower and its Subsidiaries are set forth in Schedule 4.15.D.
---------------
E. Information Regarding Collateral. All information supplied to the
Administrative Agent by or on behalf of the Borrower or any other Loan Party
with respect to any of the Collateral (in each case taken as a whole with
respect to any particular Collateral) is accurate and complete in all material
respects.
SECTION 4.16. IMMUNITY.
---------
Neither the Borrower nor any of its Subsidiaries is entitled to claim for
itself or any of its assets immunity from suit, execution, attachment or other
legal process in any proceeding in any jurisdiction in connection with any of
the Loan Documents to which it is a party.
SECTION 4.17. ADDITIONAL MATTERS.
-------------------
A. Disclosure. The written factual information furnished by (or based on
written information furnished by) the Borrower to the Lenders in connection with
the negotiation of the Loan Documents (excluding any financial projections and
other estimates or views of future circumstances), taken as a whole, does not
contain, as of the Closing Date, any untrue statements of material fact and does
not omit to state, as of the Closing Date, any material fact necessary in order
to make the statements contained therein, in light of the circumstances under
which they were made, not materially misleading (unless superseded or corrected
and disclosed in writing to the Administrative Agent prior to the Closing Date).
The Projections, when delivered by the Borrower to the Administrative Agent in
accordance with Section 3.1.O., shall have been prepared in good faith and shall
--------------
have been based on assumptions which were reasonable at the time prepared. The
updated Projections, when delivered in accordance with Section 5.3., shall have
------------
been, as of the date delivered to the Administrative Agent in accordance with
the terms hereof, prepared by the Borrower in good faith and shall have been
based on assumptions which were reasonable at the time prepared.
B. Licenses and Permits. Each Loan Party has obtained and holds in full
force and effect, free from burdensome restrictions, all Governmental Actions,
franchises, leases, qualifications, easements, rights of way and other rights
and approvals which are necessary for the operation of its business as presently
conducted, except where the failure to obtain such rights and approvals,
individually and in the aggregate, could not be reasonably expected to have a
Material Adverse Effect. No Loan Party is in violation of the terms or
conditions of any such
63
Governmental Action, franchise, lease, qualification, easement, right of way,
right or approval, which violation could reasonably be expected to have a
Material Adverse Effect.
C. Intellectual Property. Each Loan Party has obtained and holds in full
force and effect the Intellectual Property, free from burdensome restrictions,
which is necessary for the operation of its business as presently conducted
except for that Intellectual Property which the failure to own or license could
not reasonably expected to have a Material Adverse Effect. No product, process,
method, substance, part or other material presently sold or employed by any Loan
Party in connection with such business infringes any Intellectual Property owned
by any other Person, except as could not, individually and in the aggregate,
reasonably be expected to have a Material Adverse Effect. All of the material
Intellectual Property owned or used by any Loan Party as of the Closing Date is
set forth in Schedule 4.17. Upon the recordation or filing of the applicable
-------------
Loan Documents, all material Intellectual Property owned, licensed or used by
any Loan Party, other than Intellectual Property that is in the public domain
and Intellectual Property with respect to which a Loan Party has a license the
enforceable terms of which would prohibit the granting of a Lien by such Loan
Party, is or will be subject to a first priority perfected Lien in favor of the
Administrative Agent, for the benefit of the Secured Parties.
D. Year 2000. Any reprogramming required to permit the proper
functioning, in and following the year 2000, of the Borrower's and each of its
Subsidiaries' computer systems and equipment containing embedded microchips
(including systems and equipment supplied by others or with which the Borrower's
or any of its Subsidiaries' systems interface) which the Borrower or any of its
Subsidiaries possesses as of the date this representation is made or deemed made
and the testing of all such systems and equipment, as so reprogrammed, was
completed by January 1, 2000. The computer and management information systems of
the Borrower and each of its Subsidiaries are, and, with ordinary course
upgrading and maintenance, will continue to be, sufficient to permit the
Borrower and each of its Subsidiaries to conduct its business without causing a
Material Adverse Effect.
ARTICLE V.
BORROWERS' AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment and performance in full of
all of the Loans and other Obligations, the Borrower shall perform, and shall
cause each of its Subsidiaries to perform, all covenants set forth in this
Article V.
---------
SECTION 5.1. FINANCIAL STATEMENTS AND OTHER REPORTS.
---------------------------------------
The Borrower will, and will cause its Subsidiaries to, maintain a system of
accounting established and administered in accordance with sound business
practices to permit preparation of financial statements in conformity with GAAP.
The Borrower shall deliver to the Administrative Agent, with a copy for each
Lender, the following:
(i) Quarterly Financials: as soon as available and in any event
--------------------
within 45 days after the end of each of the first three Fiscal Quarters of
each Fiscal Year, the consolidated balance sheets of the Borrower and each
of its Subsidiaries as at the end of
64
such Fiscal Quarter and the related consolidated statements of income and
cash flows of the Borrower and each of its Subsidiaries for such Fiscal
Quarter and for the period from the beginning of the then current Fiscal
Year to the end of such Fiscal Quarter, setting forth in each case in
comparative form the corresponding figures for the corresponding periods of
the previous Fiscal Year and the corresponding figures from the Projections
for the current Fiscal Year, all in reasonable detail and certified by the
chief financial officer or treasurer of the Borrower, on behalf of the
Borrower, that they fairly present, in all material respects, the financial
condition of the Borrower and each of its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated, subject to changes resulting from audit and normal year-
end adjustments.
(ii) Year-End Financials: as soon as available and in any event 90
-------------------
days after the end of each such Fiscal Year,
(a) the consolidated balance sheets of the Borrower and each
of its Subsidiaries as at the end of such Fiscal Year and the related
consolidated and consolidating statements of income, stockholders' or
members' equity and cash flows of the Borrower and each of its Subsidiaries
for such Fiscal Year, setting forth in each case in comparative form the
corresponding figures for the previous Fiscal Year and the corresponding
figures from the Projections for the Fiscal Year covered by such financial
statements, all in reasonable detail and certified by the chief financial
officer or treasurer of the Borrower, on behalf of the Borrower, that they
fairly present, in all material respects, the financial condition of the
Borrower and each of its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods indicated;
and
(b) in the case of such consolidated financial statements
specified in paragraph (a) above, a report thereon of Xxxxxx Xxxxxxxx LLP
or of any other of the so-called "Big 5" independent certified public
accounting firms, which report shall be unqualified as to scope of audit,
shall express no doubts about the ability of the Persons covered thereby to
continue as a going concern, and shall state that such consolidated
financial statements fairly present, in all material respects, the
consolidated financial position of the Borrower and each of its
Subsidiaries, respectively, as at the dates indicated and the results of
their operations and their cash flows for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years (except
as otherwise disclosed in such financial statements) and that the
examination by such accountants in connection with such consolidated
financial statements has been made in accordance with generally accepted
auditing standards.
(iii) Officers' and Compliance Certificates: together with each
-------------------------------------
delivery of financial statements of the Borrower and each of its
Subsidiaries pursuant to paragraphs (i) and (ii) above, (a) an Officer's
Certificate executed by the chief financial officer or treasurer of the
Borrower stating that such officer, on behalf of the Borrower, has reviewed
the terms of this Agreement and has made, or caused to be made under its
supervision, a review in reasonable detail of the transactions and
condition of the Borrower and each of its Subsidiaries during the
accounting period covered by such
65
financial statements and that such review has not disclosed the existence during
or at the end of such accounting period, and that such officer does not have
knowledge of the existence as at the date of such Officer's Certificate, of any
condition or event that constitutes an Event of Default or a Potential Event of
Default, or, if any such condition or event existed or exists, specifying the
nature and period of existence thereof and what action the Borrower has taken,
is taking and proposes to take with respect thereto and (b) a Compliance
Certificate demonstrating in reasonable detail compliance during and at the end
of the applicable accounting periods with the restrictions contained in Article
-------
V and VI;
--------
(iv) Reconciliation Statements: if, as a result of any change in
-------------------------
accounting principles and policies from those used in the preparation of
the audited financial statements referred to in Section 4.4., the
------------
consolidated financial statements of the Borrower and each of its
Subsidiaries delivered pursuant to paragraphs (i) or (ii) of this Section
-------
5.1. will differ in any material respect from the consolidated financial
---
statements that would have been delivered pursuant to such paragraphs had
no such change in accounting principles and policies been made, then (a)
together with the first delivery of financial statements pursuant to
paragraph (i) or (ii) of this Section 5.1. following such change,
------------
consolidated financial statements of the Borrower and each of its
Subsidiaries for (y) the current Fiscal Year to the effective date of such
change and (z) the two full Fiscal Years immediately preceding the Fiscal
Year in which such change is made, in each case prepared on a pro forma
basis as if such change had been in effect during such periods, and (b)
together with each delivery of financial statements for the Borrower and
each of its Subsidiaries pursuant to paragraph (i) or (ii) of this Section
-------
5.1. following such change, a written statement of the chief financial
----
officer or treasurer of the Borrower setting forth the differences
(including any differences that would affect any calculations relating to
the financial covenants set forth in Section 6.6.) which would have
----
resulted if such financial statements had been prepared without giving
effect to such change;
(v) Accountants' Certification: together with each delivery of
--------------------------
consolidated financial statements pursuant to paragraph (ii) above, a
written statement by the independent certified public accountants giving
the report thereon (a) stating that their audit examination has included a
review of the terms of this Agreement and the other Loan Documents as they
relate to accounting matters, (b) stating whether, in connection with their
audit examination, any condition or event that constitutes an Event of
Default or Potential Event of Default has come to their attention and, if
such a condition or event has come to their attention, specifying the
nature and period of existence thereof; provided that such accountants
shall not be liable by reason of any failure to obtain knowledge of any
such Event of Default or Potential Event of Default that would not be
disclosed in the course of their audit examination, and (c) stating that
based on their audit examination nothing has come to their attention that
causes them to believe either or both that the information contained in the
certificates delivered therewith pursuant to paragraph (iv) above is not
correct or that the matters set forth in the Compliance Certificates
delivered therewith pursuant to clause (b) of paragraph (iii) above for the
applicable Fiscal Year are not stated in accordance with the terms of this
Agreement;
66
(vi) Accountants' Reports: promptly upon receipt thereof (unless
--------------------
restricted by applicable professional standards), copies of all reports or
"management letters" submitted to the Borrower or any of its Subsidiaries
by independent certified public accountants in connection with each annual,
interim or special audit of the financial statements of the Borrower and
each of its Subsidiaries made by such accountants, including any comment
letter submitted by such accountants to management in connection with their
annual audit;
(vii) SEC Filings, Press Releases and Other Financial Reports:
-------------------------------------------------------
promptly upon its becoming available, if ever, copies of (a) all financial
statements, reports, notices and proxy statements sent or made available
generally by the Borrower or any of its Subsidiaries to their security
holders, (b) all regular and periodic reports and all registration
statements (other than on Form S-8 or a similar form) and prospectuses, if
any, filed by the Borrower or any of its Subsidiaries with any securities
exchange or with the Securities and Exchange Commission or any governmental
or private regulatory authority and (c) all press releases and other
statements made available generally by the Borrower and any of its
Subsidiaries to the public concerning material developments in the business
of the Borrower and its Subsidiaries;
(viii) Events of Default, Etc.: promptly upon any officer of the
-----------------------
Borrower obtaining knowledge (a) of any condition or event that constitutes
an Event of Default or Potential Event of Default, or becoming aware that
any Lender has given any notice (other than to the Administrative Agent) or
taken any other action with respect to a claimed Event of Default or
Potential Event of Default, (b) that any Person has given any notice to the
Borrower or any of its Subsidiaries or taken any other action with respect
to a claimed default or event or condition of the type referred to in
Section 7.2., (c) of any condition or event that would be required to be
------------
disclosed in a current report filed by the Borrower with the Securities and
Exchange Commission on Form 8-K (Items 1, 2, 4, 5 and 6 of such Form as in
effect on the date hereof) if the Borrower was required to file such
reports under the Exchange Act, or (d) of the occurrence of any event or
change that has caused or evidences, either in any case or in the
aggregate, a Material Adverse Effect, an Officer's Certificate specifying
the nature and period of existence of such condition, event or change, or
specifying the notice given or action taken by any such Person and the
nature of such claimed Event of Default, Potential Event of Default,
default, event or condition, and what action the Borrower has taken, is
taking and proposes to take with respect thereto;
(ix) Litigation or Other Proceedings: (a) promptly upon any
-------------------------------
Responsible Officer of the Borrower obtaining knowledge of (1) the
institution of, or threat of, any action, suit, proceeding (whether
administrative, judicial or otherwise), governmental investigation or
arbitration against or affecting the Borrower or any of its Subsidiaries,
or any property of the Borrower or any of its Subsidiaries (collectively,
"Proceedings") not previously disclosed in writing by the Borrower to the
Lenders or (2) any development in any Proceeding that, in any case:
(a) if adversely determined, could reasonably be expected to
have a Material Adverse Effect;
67
(b) seeks to enjoin or otherwise prevent the consummation of, or
to recover any damages or obtain relief as a result of, the transactions
contemplated hereby; or
(c) if adversely determined, could materially adversely impact
the design, development, construction, or installation of the System;
written notice thereof together with such other information as may be
reasonably available to the Borrower or any of its Subsidiaries to enable
the Lenders and their counsel to evaluate such matters;
(x) ERISA Events: promptly upon becoming aware of the occurrence
------------
of or forthcoming occurrence of any event in connection with an Employee
Benefit Plan or Multiemployer Plan which has had or could reasonably be
expected to have a Material Adverse Effect, a written notice specifying the
nature of such event, what action the Borrower or any of its respective
ERISA Affiliates has taken, is taking or proposes to take with respect
thereto and, when known, any action taken or threatened by the Internal
Revenue Service, the Department of Labor or the PBGC with respect thereto;
(xi) Insurance: as soon as practicable and in any event by the
---------
last day of each Fiscal Year, a report in form and substance reasonably
satisfactory to the Administrative Agent outlining all insurance coverage
maintained as of the date of such report by the Borrower and its
Subsidiaries and all insurance coverage planned to be maintained by the
Borrower and its Subsidiaries in the immediately succeeding Fiscal Year;
(xii) Board of Directors: with reasonable promptness, written
------------------
notice of any change in the members of the Board of Directors or similar
governing body of the Borrower or any of its Subsidiaries, as applicable;
(xiii) New Subsidiaries: promptly upon any Person becoming a
----------------
Subsidiary of the Borrower, a written notice setting forth with respect to
such Person (a) the date on which such Person became a Subsidiary of the
Borrower and (b) all of the data required to be set forth in Schedule 4.1.D
--------------
annexed hereto with respect to all Subsidiaries of the Borrower (it being
understood that such written notice shall be deemed to supplement Schedule
--------
4.1.D annexed hereto for all purposes of this Agreement); and
-----
(xiv) Other Information: with reasonable promptness, such other
-----------------
information and data regarding the business, properties or financial
condition of, or compliance with the terms and conditions of the Loan
Documents by, the Borrower or any of its Subsidiaries as from time to time
may be reasonably requested by any Lender.
SECTION 5.2. PERFORMANCE OF OBLIGATIONS; CONDUCT OF BUSINESS.
------------------------------------------------
The Borrower shall, and shall cause each of its Subsidiaries to, perform in
all material respects all of its obligations under the terms of all Material
Contracts to which it is a party or by which it is bound, provided, that any
such Loan Party shall not be obligated to perform any such
68
obligation if such obligation or the nature of such performance is being
contested in good faith. The Borrower shall, and shall cause each of its
Subsidiaries to, operate and maintain its business in an efficient and business-
like manner in accordance with good telecommunications industry practice.
SECTION 5.3. PROJECTIONS.
------------
Within 30 days after the end of each Fiscal Year the Borrower shall deliver
a copy of updated Projections to the Administrative Agent. In addition, the
Borrower shall promptly notify the Administrative Agent of any material change
to the then current Projections.
SECTION 5.4. EXISTENCE.
----------
The Borrower shall, and shall cause each of its Subsidiaries to, do or
cause to be done all things necessary to preserve, renew and keep in full force
and effect its legal existence and take all reasonable action to maintain all
rights, licenses, privileges and franchises necessary in the normal conduct of
its business (including the development, operation and construction of the
System); provided that the foregoing shall not prohibit any merger,
consolidation, liquidation or dissolution permitted under Section 6.7.
------------
SECTION 5.5. PAYMENT OF OBLIGATIONS.
-----------------------
The Borrower shall, and shall cause each of its Subsidiaries to, pay at or
before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, including all taxes, assessments and
other governmental charges imposed upon it or any of its properties or assets or
in respect of any of its income, businesses or franchises before any penalty
accrues thereon, and all claims (including claims for labor, services, materials
and supplies) for sums that have become due and payable and that by law have or
may become a Lien upon any of its properties or assets, prior to the time when
any penalty or fine shall be incurred with respect thereto; provided that no
such charge or claim need be paid if it is being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted, so long as
such reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor.
SECTION 5.6. MAINTENANCE OF PROPERTIES; INSURANCE.
-------------------------------------
A. Maintenance of Properties. The Borrower shall, and shall cause each of
its Subsidiaries to, maintain or cause to be maintained in good repair, working
order and condition, ordinary wear and tear excepted, all material properties of
the Borrower and its Subsidiaries and from time to time will make or cause to be
made all appropriate repairs, renewals and replacements thereof except to the
extent that the Borrower or such Subsidiary, as applicable, determines in good
faith not to maintain, repair, renew or replace such property if such property
is no longer desirable in respect of the Borrower's or such Subsidiary's, as
applicable, business and the failure to do so is not disadvantageous in any
material respect to the Borrower and its Subsidiaries, taken as a whole.
B. Insurance. The Borrower shall, and shall cause each of Subsidiaries to, at
all times maintain, with financially sound and reputable insurers, in full force
and effect insurance
69
(including worker's compensation insurance, liability insurance, casualty
insurance and business interruption insurance) in such amounts, covering such
risks and liabilities and with such deductibles or self-insurance retentions as
are in accordance with normal industry practice or as otherwise required by the
Collateral Documents. The Administrative Agent shall be named as loss payee or
mortgagee, as its interest may appear, and/or additional insured with respect to
each such insurance providing coverage in respect of any Collateral, and, with
respect to any insurance policy that does not by its terms expire or terminate
on or before May 11, 2000, each provider of any such insurance shall agree, by
endorsement upon the policy or policies issued by it or by independent
instruments furnished to the Administrative Agent, that it will give the
Administrative Agent 30 days prior written notice before any such policy or
policies shall be materially altered or canceled, and that no act or default of
any Loan Party or any other Person shall affect the rights of the Administrative
Agent or the Lenders under such policy or policies. The present insurance
coverage of the Loan Parties is outlined as to carrier, policy number,
expiration date, type and amount on Schedule 5.6.B.
--------------
SECTION 5.7. INSPECTION; LENDER MEETING.
---------------------------
A. Inspection Rights. Upon reasonable notice and during normal business
hours and at the sole expense of the Lenders (or, if a Potential Event of
Default or an Event of Default exists, at the sole expense of the Borrower), the
Borrower shall, and shall cause each of its Subsidiaries to, permit
representatives appointed by the Administrative Agent, including independent
accountants, agents, representatives of certain Lenders, attorneys, and
appraisers, to visit and inspect its property, including its books and records,
its accounts receivable and inventory, its facilities and its other business
assets, and to make photocopies or photographs thereof and to write down and
record any information such representative obtains and shall permit the
Administrative Agent or its representatives to investigate and verify the
accuracy of information provided to the Administrative Agent or Lenders and to
discuss all such matters with the officers, employees and representatives of the
Borrower or such Subsidiary.
B. Lender Meeting. The Borrower shall, upon the request of the
Administrative Agent or the Majority Lenders, participate in a meeting of the
Administrative Agent and the Lenders once during each Fiscal Year to be held at
the Borrower's corporate offices (or at such other location as may be agreed to
by the Borrower and the Administrative Agent) at such time as may be agreed to
by the Borrower and the Administrative Agent.
SECTION 5.8. COMPLIANCE WITH LAWS; GOVERNMENTAL ACTIONS AND RIGHTS OF
--------------------------------------------------------
WAY.
----
A. Legal Requirements. The Borrower shall, and shall cause each of its
Subsidiaries to, comply in all material respects with all applicable Legal
Requirements (including all Environmental Laws, United States export laws and
regulations, and the Foreign Corrupt Practices Act of the United States, if
applicable).
B. Governmental Actions; Rights of Way. The Borrower shall, and shall
cause each of its Subsidiaries to, from time to time (i) file for and obtain all
Governmental Actions and private party rights of way, franchises, licenses,
consents and approvals as shall now or hereafter be necessary in the conduct of
the Borrower's and its Subsidiaries' business, and (ii) maintain,
70
retain, observe, keep in full force and effect and comply in all material
respects with the terms, conditions and provisions of all Governmental Actions
as shall now or hereafter be necessary under applicable laws.
SECTION 5.9. ENVIRONMENTAL MATTERS.
----------------------
A. Environmental Review and Investigation. The Borrower agrees that the
Administrative Agent may, following the occurrence of any event or the discovery
of any condition that the Administrative Agent or the Majority Lenders
reasonably believes has caused (or could reasonably be expected to cause) the
representations and warranties set forth in Section 4.14 to be untrue in any
------------
material respect, (i) retain, at the Borrower's expense, an independent
professional consultant to review any environmental audits, investigations,
analyses and reports relating to Hazardous Materials in respect of any Facility
prepared by or for the Borrower and (ii) conduct its own investigation of any
Facility and as to the compliance by the Borrower or any of its Subsidiaries
with the representations and warranties set forth in Section 4.14. For purposes
------------
of conducting such a review and/or investigation, the Borrower hereby grants to
the Administrative Agent and its agents, employees, consultants and contractors
the right to enter into or onto any portion of any Facility then owned, leased,
operated or used by the Borrower or any of its Subsidiaries and to perform such
tests on such property (including taking samples of soil, groundwater and
suspected asbestos-containing materials) as are reasonably necessary in
connection therewith. Any such investigation of any portion of any Facility
shall be conducted, unless otherwise agreed to by the Borrower and the
Administrative Agent, during normal business hours and, to the extent reasonably
practicable, shall be conducted so as not to interfere with the ongoing
operations at such portion of any Facility or to cause any damage or loss to any
property at such portion of the applicable Facility. The Borrower and the
Administrative Agent hereby acknowledge and agree that any report of any
investigation conducted at the request of the Administrative Agent pursuant to
this Section 5.9. will be obtained and shall be used by the Administrative Agent
------------
and the Lenders for the purposes of the Lenders' internal credit decisions, to
monitor the Loans and to protect the Lenders' security interests created by the
Collateral Documents. The Administrative Agent agrees to deliver a copy of any
such report to the Borrower with the understanding that the Borrower
acknowledges and agrees that (x) it will indemnify and hold harmless the
Administrative Agent and each Lender from any costs, losses or liabilities
relating to the Borrower's use of or reliance on such report, (y) neither the
Administrative Agent nor any Lender makes any representation or warranty with
respect to such report, and (z) by delivering such report to the Borrower,
neither the Administrative Agent nor any Lender is requiring or recommending the
implementation of any suggestions or recommendations contained in such report.
B. Environmental Disclosure. The Borrower shall deliver to the
Administrative Agent and the Lenders:
(i) Environmental Audits and Reports. As soon as practicable
--------------------------------
following receipt thereof, copies of all environmental audits,
investigations, analyses and reports of any kind or character, whether
prepared by personnel of the Borrower or any of its Subsidiaries or by
independent consultants, governmental authorities or any other Persons,
with respect to significant environmental matters at any portion of any
Facility or with respect to any Environmental Claims;
71
(ii) Notice of Certain Releases, Remedial Actions, Etc.
--------------------------------------------------
Promptly upon the occurrence thereof, written notice describing in
reasonable detail (a) any Release required to be reported to any federal,
state or local governmental or regulatory agency under any applicable
Environmental Laws, (b) any remedial action taken by the Borrower or any
other Person in response to (1) any Hazardous Materials Activities the
existence of which has a reasonable possibility of resulting in one or more
Environmental Claims having, individually or in the aggregate, a Material
Adverse Effect, or (2) any Environmental Claims that, individually or in
the aggregate, have a reasonable possibility of resulting in a Material
Adverse Effect;
(iii) Written Communications Regarding Environmental Claims,
------------------------------------------------------
Releases, Etc. As soon as practicable following the sending or receipt
--------------
thereof by the Borrower or any of its Subsidiaries, a copy of any and all
written communications with respect to (a) any Environmental Claims that,
individually or in the aggregate, have a reasonable possibility of giving
rise to a Material Adverse Effect, (b) any Release required to be reported
to any federal, state or local governmental or regulatory agency, and (c)
any request for information from any governmental agency that suggests such
agency is investigating whether the Borrower or any of its Subsidiaries may
be potentially responsible for any Hazardous Materials Activity;
(iv) Notice of Certain Proposed Actions Having Environmental
-------------------------------------------------------
Impact. Prompt written notice describing in reasonable detail (a) any
------
proposed acquisition of Securities, assets, or property by the Borrower or
any of its Subsidiaries that could reasonably be expected to (1) expose the
Borrower or any of its Subsidiaries to, or result in, Environmental Claims
that could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect or (2) affect the ability of the
Borrower or any of its Subsidiaries to maintain in full force and effect
all material Governmental Actions required under any Environmental Laws for
their respective operations and (b) any proposed action to be taken by the
Borrower or any of its Subsidiaries to modify current operations in a
manner that could reasonably be expected to subject the Borrower or any of
its Subsidiaries to any material additional obligations or requirements
under any Environmental Laws that could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect; and
(v) Other Information. With reasonable promptness, such other
-----------------
documents and information as from time to time may be reasonably requested
by the Administrative Agent in relation to any matters disclosed pursuant
to this Section 5.9.
------------
72
C. The Borrower's Actions Regarding Hazardous Materials Activities,
Environmental Claims and Violations of Environmental Laws.
(i) Remedial Actions Relating to Hazardous Materials Activities.
-----------------------------------------------------------
The Borrower shall promptly undertake, and shall cause each of its
Subsidiaries promptly to undertake, any and all investigations, studies,
sampling, testing, abatement, cleanup, removal, remediation or other
response actions necessary to remove, remediate, clean up or xxxxx any
Hazardous Materials Activity on, under or about any portion of the System
that is in violation of any Environmental Laws or that presents a material
risk of giving rise to an Environmental Claim. In the event the Borrower or
any of its Subsidiaries undertake any such action with respect to any
Hazardous Materials, the Borrower or such Subsidiary shall conduct and
complete such action in compliance with all applicable Environmental Laws
and in accordance with the policies, orders and directives of all federal,
state and local governmental authorities except when, and only to the
extent that, the Borrower's or such Subsidiary's liability with respect to
such Hazardous Materials Activity is being contested in good faith by the
Borrower or such Subsidiary.
(ii) Actions with Respect to Environmental Claims and Violations
-----------------------------------------------------------
of Environmental Laws. The Borrower shall promptly take, and shall cause
---------------------
each of its Subsidiaries promptly to take, any and all actions necessary to
(i) cure any material violation of applicable Environmental Laws by the
Borrower or its Subsidiaries and (ii) make an appropriate response to any
Environmental Claim against the Borrower or any of its Subsidiaries and
discharge any obligations it may have to any Person thereunder.
SECTION 5.10. PAYMENT OF LIENS.
-----------------
A. Removal by the Borrower. In the event that, notwithstanding the
covenants contained in Section 6.2., a Lien not otherwise permitted under
------------
Section 6.2. may encumber the Collateral or any portion thereof, the Borrower
------------
shall promptly discharge or cause to be discharged by payment to the lien holder
or lien claimant or promptly secure removal by bonding or deposit with the
county clerk or otherwise; provided that, compliance with the provisions of this
Section 5.10. shall not be deemed to constitute a waiver of the provisions of
-------------
Section 6.2. The Borrower shall exhibit to the Administrative Agent upon request
-----------
all receipts or other satisfactory evidence of payment, bonding, deposit of
taxes, assessments, Liens or any other item which may cause any such Lien to be
filed against the Collateral or any portion thereof of the Borrower or any of
its Subsidiaries. The Borrower and each of its Subsidiaries shall fully preserve
the Lien and the priority of each of the Collateral Documents without cost or
expense to the Administrative Agent or the Lenders.
B. Removal by the Agent. If the Borrower or any of its Subsidiaries fails
to promptly discharge, remove or bond off any such Lien or mechanics' or
materialmen's claim of lien as described above, which is not being contested by
either the Borrower or any of its Subsidiaries in good faith by appropriate
proceedings promptly instituted and diligently conducted, within 30 days after
the receipt by the Borrower or such Subsidiary of notice thereof, then the
Administrative Agent may, but shall not be required to, procure the release and
discharge of such Lien, mechanics' or materialmen's claim of lien and any
judgment or decree thereon, and in furtherance thereof may, in its sole
discretion, effect any settlement or
73
compromise with the lien holder or lien claimant or post any bond or furnish any
security or indemnity as the Administrative Agent, in its sole discretion, may
elect. In settling, compromising or arranging for the discharge of any Liens
under this subsection, the Administrative Agent shall not be required to
establish or confirm the validity or amount of the Lien. The Borrower agrees
that all costs and expenses expended or otherwise incurred pursuant to this
Section 5.10. (including reasonable attorneys' fees and disbursements) by the
-------------
Administrative Agent shall be paid by the Borrower in accordance with the terms
hereof.
SECTION 5.11. FURTHER ASSURANCES.
-------------------
A. Assurances. Without expense or cost to the Administrative Agent or the
Lenders, the Borrower shall, and shall cause each of its Subsidiaries to, from
time to time hereafter, execute, acknowledge, file, record, do and deliver all
and any further acts, deeds, conveyances, mortgages, deeds of trust, deeds to
secure debt, security agreements, hypothecations, pledges, charges, assignments,
financing statements and continuations thereof, notices of assignment,
transfers, certificates, assurances and other instruments as the Administrative
Agent may from time to time reasonably require in order to carry out more
effectively the purposes of this Agreement or the other Loan Documents,
including to subject any items of Collateral, intended to now or hereafter be
covered, to the Liens created by the Collateral Documents, to perfect and
maintain such Liens, and to assure, convey, assign, transfer and confirm unto
the Administrative Agent the property and rights hereby conveyed and assigned or
intended to now or hereafter be conveyed or assigned or which the Borrower or
any such Subsidiary may be or may hereafter become bound to convey or to assign
to the Administrative Agent or for carrying out the intention of or facilitating
the performance of the terms of this Agreement or any other Loan Document or for
filing, registering or recording this Agreement or any other Loan Document.
Promptly upon a reasonable request the Borrower shall, and shall cause each of
its Subsidiaries to, execute and deliver, and hereby authorizes the
Administrative Agent to execute and file in the name of the Borrower or such
Subsidiary, to the extent the Administrative Agent may lawfully do so, one or
more financing statements, chattel mortgages or comparable security instruments
to evidence more effectively the Liens of the Collateral Documents upon the
Collateral.
B. Specific Actions. Without limiting the generality of Section 5.11.A.,
---------------
(i) no later than seven Business Days prior to the Borrower or any of its
Subsidiaries opening any new Account, the Borrower shall notify the
Administrative Agent of the potential opening of such new Account and, upon the
request of the Administrative Agent, the Borrower or such Subsidiary, as
applicable, the Administrative Agent and the bank or financial institution with
whom such account will be opened shall enter into a Control Agreement with
respect to such Account on or prior to its opening and (ii) if the Borrower or
any of its Subsidiaries uses or establishes a NOC in a location different than
the location of the Borrower's NOC on the Closing Date, the Borrower shall, or
shall cause such Subsidiary to, grant to the Administrative Agent, for the
benefit of the Secured Parties, a first priority security interest in and lien
on the real property interests of the Borrower or such Subsidiary, as
applicable, comprising or directly related to any such NOC. With respect to
clause (ii), (a) such grant shall be effectuated through a deed of trust,
leasehold deed of trust, mortgage or any other document or instrument (and each
such document, when entered into, shall be deemed to be a Collateral Document
hereunder) reasonably requested by the Administrative Agent, in each case, in
form and substance satisfactory to the Administrative Agent, and (b) the
Borrower or such Subsidiary shall obtain a
74
lender's title insurance policy, in form and substance satisfactory to the
Administrative Agent, in respect of such real property.
C. Filing and Recording Obligations. The Borrower shall pay or cause to
be paid all filing, registration and recording fees and all expenses incident to
the execution and acknowledgment of a deed of trust, leasehold of deed of trust,
mortgage, leasehold mortgage, or any other Loan Document, including any
instrument of further assurance described in Section 5.11.A., and shall pay or
---------------
cause to be paid all mortgage recording taxes, transfer taxes, general
intangibles taxes and governmental stamp and other taxes, duties, imposts,
assessments and charges arising out of or in connection with the execution,
delivery, filing, recording or registration of any Collateral Document or any
other Loan Document, including any instrument of further assurance described in
Section 5.11.A., or by reason of its interest in, or measured by amounts payable
---------------
under, the Notes, any Collateral Document or any other Loan Document, including
any instrument of further assurance described in Section 5.11.A., and shall pay
---------------
all stamp taxes and other taxes required to be paid on the Notes or any other
Loan Document, but excluding in the case of each Lender and the Administrative
Agent, Taxes imposed on its income by a jurisdiction under the laws of which it
is organized or in which its principal executive office is located or in which
its applicable lending office for funding or booking its Loans hereunder is
located. If the Borrower fails to make or cause to be made any of the payments
described in the preceding sentence within 15 days after notice thereof from the
Administrative Agent (or such shorter period as is necessary to protect the loss
of or diminution in value of any Collateral by reason of tax foreclosure or
otherwise, as determined by the Administrative Agent in its sole discretion)
accompanied by documentation verifying the nature and amount of such payments,
the Administrative Agent may (but shall not be obligated to) pay the amount due
and the Borrower shall reimburse all amounts in accordance with the terms
hereof.
D. Costs of Defending and Upholding the Lien. The Administrative Agent
may, upon at least five days' prior notice to the Borrower, (i) appear in and
defend any action or proceeding, in the name and on behalf of the Administrative
Agent or the Lenders in which the Administrative Agent or any Lender is named or
which the Administrative Agent in its sole discretion determines is reasonably
likely to materially adversely affect the Collateral, any Collateral Document,
the Lien thereof or any other Loan Document and (ii) institute any action or
proceeding which the Administrative Agent reasonably determines should be
instituted to protect the interest or rights of the Administrative Agent and the
Lenders in the Collateral or under this Agreement, the Collateral Documents or
any other Loan Document. The Borrower agrees that all reasonable costs and
expenses expended or otherwise incurred pursuant to this subsection (including
reasonable attorneys' fees and disbursements) by the Administrative Agent shall
be paid by the Borrower or reimbursed to the Administrative Agent, as the case
may be, promptly after demand.
E. Costs of Enforcement. The Borrower agrees to bear and shall pay or
reimburse the Secured Parties in accordance with the terms of Section 9.2. for
------------
all reasonable sums, costs and expenses incurred by the Secured Parties
(including reasonable attorneys' fees and the expenses and fees of any receiver
or similar official) of or incidental to the collection of any of the
Obligations, any foreclosure (or transfer in lieu of foreclosure) of this
Agreement, any Collateral Document or any other Loan Document or any sale of all
or any portion of the Collateral.
75
SECTION 5.12. USE OF PROCEEDS.
----------------
The proceeds of the Loans hereunder shall be used solely to (i) provide for
working capital and general corporate needs of the Borrower, (ii) fund the
acquisition of Telecommunication Assets (or to make a loan or capital
contribution to any wholly-owned Subsidiary of the Borrower, the proceeds of
which will be used for the purposes set forth in clauses (i) and (ii) of this
Section 5.12), (iii) make an investment in Devnet in an aggregate amount not to
------------
exceed $3,000,000 and (iv) pay Transaction Costs (individually, a "Permitted
Purpose" and, collectively, the "Permitted Purposes"). Furthermore, the
Borrower shall use at least $18,750,000 (the "Nortel Networks Equipment Amount")
of the proceeds of the Loans hereunder to fund the purchase price (excluding
sales and use taxes and freight charges) of goods and services provided by
Nortel Networks under the Master Purchase Agreement; provided, that, the Nortel
Networks Equipment Amount shall be reduced from time to time by an amount equal
to any amount (up to $10,000,000) paid by the Borrower or any of its
Subsidiaries to Nortel Networks or a Subsidiary thereof in connection with any
purchase of goods and services which are provided by Nortel Networks or such
Subsidiary other than under the Master Purchase Agreement as long as no portion
of the Loans are used to finance such purchase.
The Letters of Credit shall be used only in the ordinary course of business
for and in connection with a Permitted Purpose.
SECTION 5.13. INTELLECTUAL PROPERTY.
----------------------
The Borrower shall not, and shall not permit any of its Subsidiaries to, do
any act, or omit to do any act, whereby any of its Intellectual Property may
lapse or become abandoned or dedicated to the public or unenforceable, unless
such lapse, abandonment, dedication or unenforceability could not reasonably be
expected to have a Material Adverse Effect. The Borrower shall take, and shall
cause each of its Subsidiaries to take, all reasonably necessary steps to
maintain and pursue any application (and to obtain the relevant registration)
filed with respect to, and to maintain any registration of, any material part of
its Intellectual Property, except where the failure to so maintain, obtain or
pursue could not reasonably be expected to have a Material Adverse Effect.
SECTION 5.14. COOPERATION WITH SYNDICATION.
-----------------------------
The Borrower shall use good faith efforts, and will cause its Subsidiaries
to use good faith efforts, to coordinate with the Co-Syndications Agents to
minimize the disruption and assist with the initial post-Closing Date
syndication of the Loans, if any.
SECTION 5.15. INTEREST RATE PROTECTION.
-------------------------
Within 180 days of the Closing Date, the Borrower shall maintain in effect
one or more Interest Rate Agreements with respect to the Loans, each such
Interest Rate Agreement to be for a term and in form and substance reasonably
satisfactory to the Administrative Agent, which Interest Rate Agreements shall
effectively limit the Unadjusted Eurodollar Rate Component (as hereinafter
defined) of the interest costs to the Borrower with respect to an aggregate
notional principal amount of not less than 50% of the aggregate principal amount
of the Loans outstanding from time to time (based on the assumption that such
notional principal amount was
76
a Eurodollar Rate Loan with an Interest Period of three months). For purposes of
this Section 5.15., the term "Unadjusted Eurodollar Rate Component" means that
-------------
component of the interest costs to the Borrower in respect of a Eurodollar Rate
Loan that is based upon the rate obtained pursuant to clause (i) of the
definition of Adjusted Eurodollar Rate.
SECTION 5.16. VALID EXISTENCE OF CERTAIN SUBSIDIARIES OF THE BORROWER.
-------------------------------------------------------
Within 45 days of the Closing Date, the Borrower shall deliver to the
Administrative Agent an opinion of legal counsel for FiberNet Equal Access,
L.L.C. and Local Fiber L.L.C. relating to FiberNet Equal Access, L.L.C. and
Local Fiber L.L.C., which legal opinion shall (i) be in the form of Exhibit O
---------
hereto and otherwise reasonably satisfactory to the Administrative Agent and
(ii) not be qualified in any respects by the noncompliance of FiberNet Equal
Access, L.L.C. or Local Fiber L.L.C. with Section 206 of the New York Limited
Liability Company Law.
ARTICLE VI.
BORROWERS' NEGATIVE COVENANTS
The Borrower covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment and performance in full of
all of the Loans and other Obligations, the Borrower shall perform, and shall
cause each of its Subsidiaries to perform all of the covenants set forth in this
Article VI.
-----------
SECTION 6.1. INDEBTEDNESS.
-------------
The Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:
(i) the Borrower and its Subsidiaries may become and remain
liable with respect to the Obligations;
(ii) the Borrower and its Subsidiaries may become and remain
liable with respect to any Indebtedness set forth in Schedule 6.1 (and
------------
renewals, refinancings and extensions thereof on terms and conditions no
less favorable to the Borrower or such Subsidiary, in a principal amount
not in excess of the principal balance outstanding thereon at the time of
such renewal, refinancing or extension and with a maturity date and
weighted average life no greater than the Indebtedness being refinanced);
(iii) the Borrower and its Subsidiaries may become liable with
respect to trade or other similar Indebtedness incurred in the ordinary course
of business and payable within sixty days;
(iv) the Borrower and its Subsidiaries may become liable with
respect to purchase money Indebtedness (including obligations in respect of
Capital Leases) hereafter incurred by the Borrower or any such Subsidiary
to finance the purchase of fixed assets not owned as of the date hereof,
provided, that (a) the aggregate amount of
77
such Indebtedness shall not exceed an aggregate principal amount of
$10,000,000 at any one time outstanding, (b) such Indebtedness when
incurred shall not exceed the purchase price of the asset(s) financed and
(c) any Lien securing such Indebtedness shall attach to the acquired assets
within 90 days after the acquisition there of;
(v) renewals, refinancings and extensions of any Indebtedness
permitted pursuant to clause (iv) above on terms and conditions no less
favorable to the Borrower or such Subsidiary and in a principal amount not
in excess of the principal balance outstanding thereon at the time of such
renewal, refinancing or extension;
(vi) the Borrower and its Subsidiaries may become liable with
respect to Indebtedness under, or constituting net exposure under, Interest
Rate Agreements entered into in accordance with Section 5.15; and
------------
(vii) the Borrower and its Subsidiaries may become liable with
respect to other Indebtedness with aggregate annual payments not to exceed
$1,000,000.
SECTION 6.2. LIENS AND RELATED MATTERS.
--------------------------
A. Prohibition on Liens. The Borrower shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly, create, incur, assume or permit
to exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of the Borrower or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the UCC of any State or under any similar recording or notice
statute, except Permitted Liens.
B. No Further Negative Pledges. The Borrower shall not, and shall not
permit any of its Subsidiaries to, enter into, assume or become subject to any
agreement prohibiting or otherwise restricting the creation or assumption of any
Lien upon its properties or assets for the purpose of securing the Obligations,
whether now owned or hereafter acquired, or requiring the grant of any security
for obligations relating to such agreement if security is given for the
Obligations, except (i) pursuant to this Agreement and the other Loan Documents,
and (ii) pursuant to customary restrictions and conditions contained in any
agreement relating to the sale of any Property permitted under Section 6.7,
-----------
pending the consummation of such sale.
SECTION 6.3. CHANGE OF OFFICE.
-----------------
The Borrower shall not, and shall not permit any of its Subsidiaries to,
change the location of its "principal place of business" or "chief executive
office" unless the Borrower shall have given the Administrative Agent at least
20 days' prior written notice thereof and all action reasonably requested by the
Administrative Agent to protect and perfect the Liens and security interests in
the Collateral shall have been taken.
78
SECTION 6.4. CHANGE OF NAME.
---------------
The Borrower shall not, and shall not permit any of its Subsidiaries to,
change its name unless the Borrower shall have given the Administrative Agent at
least 20 days' prior written notice thereof and all action reasonably requested
by the Administrative Agent to protect and perfect the Liens and security
interests in the Collateral shall have been taken.
SECTION 6.5. INVESTMENTS; JOINT VENTURES; FORMATION OF SUBSIDIARIES.
-------------------------------------------------------
A. Investments; Joint Ventures. The Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, make or own any
Investment in any Person, including any Joint Venture, or otherwise form or
create any Subsidiary (other than in accordance with Section 6.5.B.), except for
--------------
Permitted Investments.
B. Formation of Subsidiaries. The Borrower and its Subsidiaries shall not
create or acquire any new Subsidiary unless:
(i) the creation or acquisition of such new Subsidiary could
not reasonably be expected to have a Material Adverse Effect;
(ii) such new Subsidiary shall be or become a party to a
guaranty in substantially the form of the Subsidiary Guaranty Agreement
attached hereto as Exhibit K, with such modifications as the Administrative
---------
Agent may reasonably request or consent to;
(iii) the Borrower shall pledge, have pledged or cause or have
caused to be pledged to the Administrative Agent all of the outstanding shares
of Capital Stock or other ownership interests of such new Subsidiary owned
directly or indirectly by it, along with undated stock powers for such
certificates, executed in blank (or, if any such shares of Capital Stock or
other ownership interests are uncertificated, confirmation and evidence
satisfactory to the Administrative Agent that the security interest in such
uncertificated securities has been perfected by the Administrative Agent in
accordance with Article 8 of the UCC or any similar law which may be
applicable); in order to effect the foregoing, the Borrower (or any Subsidiary
thereof which is the direct owner of such new Subsidiary) shall either enter
into a pledge agreement in substantially the form of the Subsidiary Pledge
Agreement attached hereto as Exhibit L or, if it has already entered into such a
---------
pledge agreement, amend such pledge agreement in order to identify the Capital
Stock and other related collateral in respect of such new Subsidiary, and, in
the case of a Subsidiary incorporated or otherwise existing pursuant to the laws
of any jurisdiction other than the United States or any political subdivision
thereof, shall enter into a pledge agreement in form and substance reasonably
satisfactory to the Administrative Agent;
(iv) the Borrower shall, and shall cause the new Subsidiary to,
take such other actions (including entering into a security agreement in
substantially the form of the Subsidiary Security Agreement attached hereto
as Exhibit M) as the Administrative Agent may reasonably request in order
---------
to perfect a first priority security interest in favor
79
of the Administrative Agent in such types of collateral as were perfected
with respect to the Borrower and the other Subsidiaries of the Borrower;
(v) the Administrative Agent shall have received such opinions
of legal counsel for the Borrower relating to each of the matters
identified in clauses (ii), (iii), and (iv) above as the Administrative
Agent shall reasonably request, which legal opinions shall be in form and
substance reasonably satisfactory to the Administrative Agent; and
(vi) the Administrative Agent shall have received (a) certified
copies of such new Subsidiary's certificate or articles of incorporation,
together with a good standing certificate from the Secretary of State of
the jurisdiction of its incorporation and each other state in which such
Person is qualified as a foreign corporation to do business, each to be
dated a recent date prior to their delivery to the Administrative Agent,
(b) a copy of such new Subsidiary's by-laws (or other operating agreement
or governing document), certified by its corporate secretary or an
assistant secretary as of a recent date prior to their delivery to the
Administrative Agent and, (c) a certificate executed by the secretary or an
assistant secretary of such new Subsidiary certifying as to (1) the fact
that the attached resolutions of the Board of Directors or other governing
body of such new Subsidiary approving and authorizing the execution,
delivery and performance of any Loan Documents to which it is a party are
in full force and effect and have not been modified or amended and (2) the
incumbency and signatures of the officers of such new Subsidiary executing
any Loan Documents.
SECTION 6.6. FINANCIAL COVENANTS.
--------------------
Each of the financial covenants set forth in Sections 6.6.A. through 6.6.F.
--------------- ------
below shall only apply during the period from the Closing Date until the
Maturity Date.
A. Consolidated Total Debt to Consolidated Capitalization Ratio. For each
of the Fiscal Quarters ending on June 30, 2000 and September 30, 2000 the
Borrower shall not permit the ratio of the Borrower's Consolidated Total Debt to
Consolidated Capitalization as at the last day of each such Fiscal Quarter
(after giving effect to any incurrence of Indebtedness and any payment of
principal of Indebtedness on such day) to exceed 0.45 to 1.0. For each of the
Fiscal Quarters commencing on December 31, 2000, the Borrower shall not permit
the ratio of the Borrower's Consolidated Total Debt to Consolidated
Capitalization as at the last day of each such Fiscal Quarter (after giving
effect to any incurrence of Indebtedness and any payment of principal of
Indebtedness on such day) to exceed 0.45 to 1.0; provided, however, that if on
or before September 30, 2000 the Borrower shall not have received at least $15
million in proceeds from the issuance of equity, then the Borrower shall not
permit the ratio of the Borrower's Consolidated Total Debt to Consolidated
Capitalization as at the last day of each such Fiscal Quarter (after giving
effect to any incurrence of Indebtedness and any payment of principal of
Indebtedness on such day) to exceed 0.40 to 1.0.
B. Available Cash to Consolidated Interest Expense Ratio. As at the last
day of any Fiscal Quarter, the Borrower shall not permit the ratio of the
Borrower's Available Cash to Consolidated Interest Expense for such Fiscal
Quarter to be less than 3.0 to 1.0.
80
C. Minimum Cumulative Revenue. As at the last day of any Fiscal Quarter,
the Borrower shall not permit its cumulative Net Revenue for the period
commencing on January 1, 2000 and ending on the dates set forth below to be less
than the amounts set forth below:
=================================================
Date Minimum Cumulative
Revenue From January
1, 2000
(in Dollars)
-------------------------------------------------
June 30, 2000 2,134,000
-------------------------------------------------
September 30, 2000 8,088,100
-------------------------------------------------
December 31, 2000 16,919,700
-------------------------------------------------
March 31, 2001 25,158,500
-------------------------------------------------
June 30, 2001 35,108,500
-------------------------------------------------
September 30, 2001 46,435,700
=================================================
D. Minimum Cumulative Consolidated EBITDA. As at the last day of any Fiscal
Quarter, the Borrower shall not permit its cumulative Consolidated EBITDA for
the period commencing on January 1, 2000 and ending on the dates set forth below
to be less than the amounts set forth below:
==============================================
Date Minimum Cumulative
Consolidated EBITDA
From January 1, 2000
(in Dollars)
----------------------------------------------
June 30, 2000 (9,392,900)
----------------------------------------------
September 30, 2000 (9,163,300)
----------------------------------------------
December 31, 2000 (5,493,200)
----------------------------------------------
March 31, 2001 (3,922,300)
----------------------------------------------
June 30, 2001 (764,100)
----------------------------------------------
September 30, 2001 2,762,800
==============================================
E. Asset Coverage Ratio. As at the last day of any Fiscal Quarter (after
giving effect to any incurrence of Indebtedness and any payment of principal of
Indebtedness on such
81
day), the Borrower shall not permit the ratio of the Borrower's Consolidated
Total Debt to NPPE to exceed 0.80 to 1.0.
F. Maximum Capital Expenditures. As at the last day of any Fiscal Quarter,
the Borrower shall not permit its cumulative Consolidated Capital Expenditures
for the period commencing on January 1, 2000 and ending on the dates set forth
below to exceed the amounts set forth below:
===============================================
Date Maximum Cumulative
Consolidated Capital
Expenditures From
January 1, 2000
(in Dollars)
-----------------------------------------------
June 30, 2000 70,057,900
September 30, 2000 93,107,600
December 31, 2000 98,132,400
March 31, 2001 109,011,500
June 30, 2001 113,597,300
September 30, 2001 126,693,600
=================================================
If the Loans made pursuant to Section 2.1.A. are converted to Term Loans in
--------------
accordance with Section 2.1.F., each of the financial covenants set forth in
--------------
Sections 6.6.G. through 6.6.J. below shall apply during the period from the
--------------- ------
Maturity Date until the Term Loan Maturity Date.
G. Consolidated Leverage Ratio. As at the last day of any Fiscal Quarter,
the Borrower shall not permit the Consolidated Leverage Ratio to exceed the
ratio set forth below:
=================================================
Date Consolidated Leverage
Ratio
-------------------------------------------------
December 31, 2001 4.5 to 1.0
-------------------------------------------------
March 31, 2002 4.5 to 1.0
-------------------------------------------------
June 30, 2002 4.0 to 1.0
-------------------------------------------------
September 30, 2002 3.5 to 1.0
-------------------------------------------------
82
-------------------------------------------------
December 31, 2002 3.0 to 1.0
-------------------------------------------------
March 31, 2003 2.5 to 1.0
-------------------------------------------------
June 30, 2003 2.0 to 1.0
-------------------------------------------------
September 30, 2003 2.0 to 1.0
-------------------------------------------------
December 31, 2003 2.0 to 1.0
-------------------------------------------------
March 31, 2004 2.0 to 1.0
-------------------------------------------------
June 30, 2004 2.0 to 1.0
-------------------------------------------------
September 30, 2004 2.0 to 1.0
=================================================
H. Interest Coverage Ratio. As at the last day of any Fiscal Quarter, the
Borrower shall not permit the Consolidated Interest Coverage Ratio to exceed the
ratio set forth below:
=================================================
Date Consolidated Interest
Coverage Ratio
-------------------------------------------------
December 31, 2001 1.2 to 1.0
-------------------------------------------------
March 31, 2002 1.2 to 1.0
-------------------------------------------------
June 30, 2002 1.2 to 1.0
-------------------------------------------------
September 30, 2002 2.0 to 1.0
-------------------------------------------------
December 31, 2002 2.0 to 1.0
-------------------------------------------------
March 31,2003 2.0 to 1.0
-------------------------------------------------
June 30, 2003 2.0 to 1.0
-------------------------------------------------
September 30, 2003 2.0 to 1.0
-------------------------------------------------
December 31, 2003 2.0 to 1.0
-------------------------------------------------
March 31, 2004 2.0 to 1.0
-------------------------------------------------
June 30, 2004 2.0 to 1.0
-------------------------------------------------
September 30, 2004 2.0 to 1.0
-------------------------------------------------
83
I. Fixed Charge Coverage Ratio. The Borrower shall not permit the
Consolidated Fixed Charge Coverage Ratio to be less than the ratio of 1.10 to
1.0.
J. Maximum Capital Expenditures. As at the last day of any Fiscal Quarter,
the Borrower shall not permit its cumulative Consolidated Capital Expenditures
for the period commencing on January 1, 2000 and ending on the dates set forth
below to exceed the amounts set forth below:
=================================================
Date Maximum Cumulative
Consolidated Capital
Expenditures
From January 1, 2000
(In Dollars)
-------------------------------------------------
December 31, 2001 131,911,100
-------------------------------------------------
March 31, 2002 142,270,400
-------------------------------------------------
June 30, 2002 147,531,700
-------------------------------------------------
September 30, 2002 158,699,400
-------------------------------------------------
December 31, 2002 164,227,400
-------------------------------------------------
March 31, 2003 171,822,900
=================================================
June 30, 2003 175,950,900
=================================================
September 30, 2003 181,791,800
=================================================
December 31, 2003 185,476,600
=================================================
March 31, 2004 191,586,900
=================================================
June 30, 2004 196,353,200
=================================================
September 30, 2004 202,241,000
=================================================
84
SECTION 6.7. RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND
---------------------------------------------------
ACQUISITIONS.
-------------
The Borrower shall not, and shall not permit any of its Subsidiaries to,
alter the corporate, capital or legal structure of the Borrower or any of its
Subsidiaries, or enter into any transaction of merger or consolidation, or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease or sublease (as lessor or sublessor),
transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any part of its business, property or assets, whether now
owned or hereafter acquired, or acquire by purchase or otherwise all or
substantially all of the business, property or fixed assets of, or stock or
other evidence of beneficial ownership of, any Person or any division or line of
business of any Person, except:
(i) the Borrower and its Subsidiaries may dispose of obsolete,
worn out or surplus assets or assets no longer used or useful in the
business of the Borrower and any of its Subsidiaries in each case to the
extent made in the ordinary course of business, provided that either (i)
such disposal does not materially adversely affect any portion of the
Borrower's or such Subsidiary's business, as applicable, or (ii) prior to
or within twelve months following such disposal, any such property shall be
replaced with other property of substantially equal utility and a value at
least substantially equal to that of the replaced property when first
acquired and free from any security of any other Person, subject only to
Permitted Liens, and by such removal and replacement the Borrower and its
Subsidiaries shall be deemed to have subjected such replacement property to
the lien of the Collateral Documents in favor of the Secured Parties, as
applicable ;
(ii) the Borrower and its Subsidiaries may sell or otherwise
dispose of assets in transactions that do not constitute Asset Sales,
provided that the consideration received for such assets shall be in an
amount at least equal to the fair market value thereof; and provided,
further, that the Borrower and its Subsidiaries may not lease or sublease
to other Persons any portion of the Borrower's or any of its Subsidiaries'
interest in any of its Facilities, unless each such lease or sublease (a)
is made in the ordinary course of business and is in connection with the
provision of co-location services by the Borrower or any of its
Subsidiaries and (b) does not interfere in any material respect with the
ordinary conduct of the business of the Borrower or any of its
Subsidiaries; or
(iii) the Borrower or any of its Subsidiaries may sell, transfer,
lease or dispose of telecommunications capacity on the System, provided,
that each such sale, transfer, lease or disposition is on commercially
reasonable terms and is in the ordinary course of business (as reasonably
determined by the Borrower or any such Subsidiary).
Notwithstanding the foregoing provisions of this Section 6.7., each of the
------------
clauses in this Section 6.7. shall be subject to the additional proviso that no
------------
Event of Default or Potential Event of Default shall exist and be continuing at
the time of such transaction or would occur as a result of entering into such
transaction (or immediately after any renewal or extension thereof at the option
of the Borrower or any of its Subsidiaries). Further, the proceeds or the Net
Asset Sale Proceeds of any lease or transaction of the nature described in each
of the clauses to this Section 6.7. shall be applied in accordance with the
------------
provisions of Section 2.5.C.
-------------
85
SECTION 6.8. SALES AND LEASE-BACKS.
----------------------
The Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, become or remain liable as lessee or as a guarantor or
other surety with respect to any lease, whether an Operating Lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, (i) which the Borrower or any of its Subsidiaries has sold
or transferred or is to sell or transfer to any other Person or (ii) which the
Borrower or any of its Subsidiaries intends to use for substantially the same
purpose as any other property which has been or is to be sold or transferred by
the Borrower or any of its Subsidiaries to any Person in connection with such
lease.
SECTION 6.9. SALE OR DISCOUNT OF RECEIVABLES.
--------------------------------
The Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, sell with recourse, or discount or otherwise sell for
less than the face value thereof, any of its notes or accounts receivable.
SECTION 6.10. TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
----------------------------------------------
The Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction (including
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of equity Securities of the
Borrower or with any Affiliate of the Borrower or of any such holder, except:
(i) transactions that are on terms that are not less favorable
to the Borrower or such Subsidiary, as the case may be, than those that
might be obtained at the time from Persons who are not such a holder or
Affiliate as long as (a) the Borrower has delivered to the Administrative
Agent (1) with respect to any transaction involving an amount in excess of
$1,000,000 an Officers Certificate certifying that such transaction
complies with this Section 6.10. at the time such transaction is entered
------------
into, (2) with respect to any transaction involving an amount in excess of
$5,000,000 a resolution adopted by a majority of the disinterested non-
employee directors of the applicable Borrower or Subsidiary approving such
transaction and an Officers Certificate certifying that such transaction
complies with this Section 6.10. at the time such transaction is entered
------------
into and (b) with respect to any such transaction that involves aggregate
payments in excess of $10,000,000, either (1) an opinion as to the fairness
to the Borrower or applicable Subsidiary from a financial point of view
issued by a qualified independent accounting or appraisal firm of
nationally recognized standing at the time such transaction is entered into
or (2) the receipt of the prior written consent of the Majority Lenders;
(ii) any Material Contract in existence as of the Closing Date;
(iii) any employment, indemnification, noncompetition or
confidentiality agreement entered into by the Borrower or any of its
Subsidiaries with their employees or directors in the ordinary course of
business;
86
(iv) the payment of normal compensation, fees and reimbursement
of expenses of officers and directors of the Borrower and its Subsidiaries
who are not employees of the Borrower or its Subsidiaries; and
(v) transactions between or among the Borrower and any of its
wholly-owned direct or indirect Subsidiaries.
SECTION 6.11. DISPOSAL OF SUBSIDIARY STOCK.
-----------------------------
The Borrower shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly sell, assign, pledge or otherwise encumber or dispose of
any shares of Capital Stock or other equity Securities of any of the Borrower's
Subsidiaries.
SECTION 6.12. CERTAIN RESTRICTIONS ON CHANGES TO CHARTER DOCUMENTS.
-----------------------------------------------------
The Borrower shall not, and shall not permit any of its Subsidiaries to,
amend, supplement or otherwise modify, or permit the amendment, modification or
supplementation of its certificate or articles of incorporation, certificate of
formation or by-laws or other organizational documents (including any limited
liability company agreement) in a manner which is inconsistent with or violates
the terms of or could reasonably be expected to prevent compliance with any of
the terms of any Loan Document or any Material Contract or could reasonably be
expected to result in a Material Adverse Effect.
SECTION 6.13. CERTAIN RESTRICTIONS IN RESPECT OF MATERIAL CONTRACTS.
------------------------------------------------------
A. Termination, amendment or modification. The Borrower shall not, and
shall not permit any of its Subsidiaries to, agree to any amendment,
modification or termination of any Material Contract if any such amendment,
modification or termination could reasonably be expected to have a Material
Adverse Effect. In addition, the Borrower shall not, and shall not permit any of
its Subsidiaries to, assign or transfer any of its material rights or
obligations under any of the Material Contracts, other than an assignment or
transfer to the Borrower or a wholly-owned Subsidiary of the Borrower.
B. Security Interest in Material Contracts. The Borrower shall not, and
shall not permit any of its Subsidiaries to, enter into any Material Contract
(other than any of the Tishman Licenses) if such agreement (i) prohibits the
granting to the Administrative Agent or any Lender a lien thereon, (ii) does not
contain a consent by the counterparty thereto to the collateral assignment by
the Borrower or such Subsidiary of its right, title and interest in such
Material Contract in favor of the Administrative Agent, for the benefit of the
Secured Parties, or (iii) otherwise unreasonably restricts or inhibits the
Administrative Agent's or any Lender's ability to realize the benefit of any
lien on any of the Collateral.
C. Subsidiary to be the Party. The Borrower shall not enter into or have
assigned to it any Material Contract, nor shall the Borrower extend the term of
any Material Contract to which it is a party as of the Closing Date (for the
avoidance of doubt, only the Subsidiaries of the Borrower shall enter into
Material Contracts).
87
SECTION 6.14. LIMITATIONS ON RESTRICTED ACTIONS.
----------------------------------
Except as provided herein, the Borrower shall not, and shall not permit any
of its Subsidiaries to, create or otherwise cause or suffer to exist or become
effective any consensual encumbrance or restriction of any kind on the ability
of any of its Subsidiaries to (i) pay dividends or make any other distributions
on any of such Subsidiary's Capital Stock owned by the Borrower or any other
Subsidiary of the Borrower, (ii) repay or prepay any Indebtedness owed by any
such Subsidiary to the Borrower or any other Subsidiary of the Borrower, (iii)
make loans or advances to the Borrower, or (iv) transfer any of its property or
assets to the Borrower other than as provided herein or in the other Loan
Documents.
SECTION 6.15. NATURE OF BUSINESS.
---------------------
The Borrower shall not, and shall not permit any of its Subsidiaries to,
substantively alter the character or conduct of the business conducted by the
Borrower and each such Subsidiary as of the Closing Date, except as contemplated
by the Business Plan. The Borrower shall not, and shall not permit any of its
Subsidiaries to, conduct its business in, or expand the System to include, any
location other than New York City, New York or Chicago, Illinois, unless such
conduct or expansion is (i) consistent with the Business Plan (as the same may
be updated by the Borrower, upon the consent of all of the Lenders) and (ii)
approved by the Lenders; provided, however, that the Borrower or any of its
Subsidiaries may use up to $5,000,000 of the proceeds of the Loans in connection
with the acquisition of Telecommunications Assets located outside of or used in
connection with the provision of telecommunications services outside of New
York, New York or Chicago, Illinois without the consent of the Lenders.
SECTION 6.16. FISCAL YEAR.
------------
Neither the Borrower nor any of its Subsidiaries shall change the end of
its Fiscal Year from December 31.
SECTION 6.17. CURRENCY.
---------
The Borrower shall not, and shall not permit any of its Subsidiaries to,
enter into any contracts, agreements or other arrangements pursuant to which
payments may be rendered to the Borrower or any of its Subsidiaries in
currencies other than Dollars.
SECTION 6.18. RESTRICTED PAYMENTS.
--------------------
The Borrower shall not, and shall not permit any of its Subsidiaries to,
declare or make any Restricted Payment or any payment in connection with any tax
sharing arrangement except for (a) Restricted Payments by the Subsidiaries to
the Borrower, or to any parent of a Subsidiary that is, directly or indirectly,
wholly owned by the Borrower and (b) distributions by the Borrower or any of its
Subsidiaries in respect of its Capital Stock which are payable solely in
additional Capital Stock which is subject to a first priority Lien in favor of
the Administrative Agent.
88
SECTION 6.19. PLEDGED ACCOUNTS.
-----------------
The Borrower shall not, and shall not permit any of its Subsidiaries to,
have on deposit in or credited to any depository account or securities account
(each within the meaning of the UCC) (other than any Account) Cash or Cash
Equivalents in an aggregate amount at any one time outstanding in excess of
$600,000.
ARTICLE VII.
EVENTS OF DEFAULT
Each of the following events or occurrences set forth in Section 7.1
-----------
through 7.16 shall constitute an "Event of Default":
----
SECTION 7.1. FAILURE TO MAKE PAYMENTS WHEN DUE.
----------------------------------
The Borrower shall fail to pay any principal of any Loan when and as the
same shall become due and payable; or the Borrower shall fail to pay any
interest on any Loan or any fee payable under this Agreement or any other Loan
Document when and as the same shall become due and payable, and such failure
shall continue unremedied for a period of three days; or the Borrower or any of
its Subsidiaries shall fail to pay any other amount payable under this Agreement
or any other Loan Document when and as the same shall become due and payable,
and such failure shall continue unremedied for a period of five days; or
SECTION 7.2. DEFAULT UNDER OTHER INDEBTEDNESS.
---------------------------------
The Borrower or any of its Subsidiaries shall fail to pay when due any
principal of or interest on or any other amount payable in respect of one or
more items of Indebtedness (other than Indebtedness referred to in Section 7.1.)
------------
in an individual or aggregate principal amount of $1,000,000 or more beyond the
end of any grace period provided therefor; or (ii) shall breach or default in
its obligations with respect to any other material term of (a) one or more items
of Indebtedness in the individual or aggregate principal amounts referred to in
clause (i) above or (b) any loan agreement, mortgage, indenture or other
agreement relating to such item(s) of Indebtedness, if the effect of such breach
or default is to cause, or to permit the holder or holders of that Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause, that
Indebtedness to become or be declared due and payable prior to its stated
maturity or the stated maturity of any underlying obligation, as the case may be
(upon the giving or receiving of notice, lapse of time, both, or otherwise); or
SECTION 7.3. BREACH OF WARRANTY.
-------------------
Any representation or warranty made or deemed made by the Borrower or any
Loan Party in this Agreement, or in any other Loan Document to which it is a
party or in any certificate delivered by the Borrower or any Loan Party pursuant
to this Agreement or any other Loan Document shall prove to have been false or
misleading in any material respect as of the time made or deemed made and, in
respect of unintentional misrepresentations made or deemed made after the
Closing Date, if such representation is capable of being corrected as of a
subsequent date, such misrepresentation shall not have been corrected as of a
day within 30 days
89
(or if such misrepresentation could not reasonably be expected to have a
Material Adverse Effect, within 60 days) of any Loan Party becoming aware of
such misrepresentation; or
SECTION 7.4. INVOLUNTARY BANKRUPTCY PROCEEDING, ETC.
---------------------------------------
An involuntary proceeding shall be commenced or an involuntary petition
shall be filed seeking (i) liquidation, reorganization or other relief in
respect of (a) the Borrower or (b) any Subsidiary of the Borrower, or, in any
such case, its debts, or a substantial part of its assets, under any Federal,
state or foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect or (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for (1) the Borrower or (2) any
Subsidiary of the Borrower; or
SECTION 7.5. VOLUNTARY BANKRUPTCY PROCEEDING, ETC.
-------------------------------------
The Borrower or any Subsidiary of the Borrower shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation, reorganization
or other relief under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect, (ii) consent to the
institution of any proceeding or petition described in Section 7.4., (iii) apply
------------
for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for (a) the Borrower or (b) any
Subsidiary of the Borrower, or, in each such case, for a substantial part of its
assets, (iv) file an answer admitting the material allegations of a petition
filed against it in any such proceeding, (v) make a general assignment for the
benefit of creditors or (vi) take any action for the purpose of effecting any of
the foregoing; or
SECTION 7.6. JUDGMENTS AND ATTACHMENTS.
--------------------------
Any judgment (i) for the payment of money in an aggregate amount (not paid
or covered by insurance) in excess of $1,000,000 shall be entered or filed
against the Borrower or any of its Subsidiaries or any of their respective
assets and shall remain unpaid and undischarged, unvacated, unbonded or unstayed
for a period of 60 days (or in any event later than five days prior to the date
of any proposed sale of the respective assets thereunder), or (ii) shall be
entered in the form of an injunction or similar form of relief requiring
suspension or abandonment of the Telecommunications Business of the Borrower or
any of its Subsidiaries and such injunction or similar relief requiring
suspension or abandonment of the Telecommunications Business of the Borrower or
any of its Subsidiaries and such injunction or similar relief shall not have
been stayed, discharged or vacated within 60 days; or
SECTION 7.7. DISSOLUTION.
------------
Any order, judgment or decree shall be entered against the Borrower or any
of its Subsidiaries decreeing the dissolution or split up of the Borrower or any
of its Subsidiaries, as the case may be, and such order shall remain
undischarged or unstayed for a period in excess of 30 days; or
SECTION 7.8. CHANGE IN CONTROL.
------------------
A Change in Control shall have occurred; or
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SECTION 7.9. NON-PERFORMANCE OF CERTAIN COVENANTS AND OBLIGATIONS.
-----------------------------------------------------
(i) The Borrower or any other Loan Party shall fail to perform
(a) any of its negative covenants (including those set forth in Article VI
----------
of this Agreement) or agreements contained in any Loan Document to which it
is a party or (b) any of its registration rights obligations in favor of
any Lender under the Registration Rights Agreement (as defined in the
Equity Registration Rights Joinder Agreement); or
(ii) the Borrower or any other Loan Party shall fail to observe
or perform any covenant or agreement contained in this Agreement or any
other Loan Document to which it is a party (other than those specified in
Section 7.1. and 7.3. above or in clause (i) of this Section 7.9.), and
------------ ---- ------------
such failure in any case shall continue unremedied or unwaived for a period
of 30 days after the Borrower or such Loan Party receives written notice
thereof from the Administrative Agent; provided, however, if, with respect
to this clause (ii), (a) such failure cannot be cured within such 30 day
period despite the Borrower's or such Loan Party's best efforts to do so,
(b) such failure is susceptible of cure, (c) the Borrower or such other
Loan Party is continuously proceeding with diligence and in good faith to
cure such failure and (d) the existence of such failure has not had and
could not reasonably be expected to have a Material Adverse Effect, then
such 30 day cure period shall be extended to such date, not to exceed a 90
day cure period in the aggregate, as shall be necessary for the Borrower or
such other Loan Party to cure such failure; or
SECTION 7.10. IMPAIRMENT OF MATERIAL CONTRACT.
--------------------------------
Any Material Contract shall cease to be valid and binding and in full force
and effect; provided that, an Event of Default shall occur under this Section
only if the failure of such Material Contract to remain valid and binding and in
full force and effect could reasonably be expected to have a Material Adverse
Effect; or
SECTION 7.11. DEFAULT UNDER OR TERMINATION OF MATERIAL CONTRACTS.
---------------------------------------------------
Any of the Material Contracts shall terminate or be terminated or canceled
prior to its stated expiration date or the Borrower or any of its Subsidiaries
shall be in default (after the giving of any applicable notice and the
expiration of any applicable grace period) under any of the Material Contracts;
provided that a default under or termination or cancellation of any Material
Contracts shall constitute an Event of Default hereunder only if such default or
termination could reasonably be expected to have a Material Adverse Effect; or
SECTION 7.12. DEFAULT UNDER OR TERMINATION OF GOVERNMENTAL ACTIONS.
-----------------------------------------------------
The Borrower or any of its Subsidiaries shall fail to observe, satisfy or
perform, or there shall be a violation or breach of, any of the material terms,
provisions, agreements, covenants or conditions attaching to or under any
material Governmental Action held by the Borrower or any of its Subsidiaries, or
any such Governmental Action or any material provision thereof shall be
91
terminated or fail to be in full force and effect, or any Governmental
Instrumentality shall challenge or seek to revoke any such Governmental Action,
if such failure to observe, satisfy or perform, breach or termination or
challenge or revocation could reasonably be expected to have a Material Adverse
Effect; or
SECTION 7.13. FAILURE OF GUARANTY; REPUDIATION OF OBLIGATIONS.
------------------------------------------------
At any time after the execution and delivery thereof, (i) any material
provision of any Loan Document shall cease to be in full force and effect (other
than by reason of a release of Collateral thereunder in accordance with the
terms hereof or thereof, the satisfaction in full of the Obligations or any
other termination of a Loan Document in accordance with the terms hereof or
thereof) or any Loan Document shall be declared null and void by a Governmental
Instrumentality of competent jurisdiction, (ii) the Administrative Agent shall
not have or shall cease to have a valid and perfected First Priority Lien in the
Collateral for any reason, or (iii) any Loan Party shall contest the validity or
enforceability of any Loan Document in writing or deny in writing that it has
any further liability prior to the indefeasible payment in full of all
Obligations and the termination of all Commitments, including with respect to
future advances by the Lenders, under any Loan Document to which it is a party;
or
SECTION 7.14. CRIMINAL PROCEEDING.
--------------------
A criminal proceeding shall be commenced or a criminal indictment shall be
filed against the Borrower or any of its Subsidiaries, which proceeding or
indictment, if adversely determined, could reasonably be expected to have a
Material Adverse Effect.
SECTION 7.15. ERISA.
------
Any of the following events or conditions, if such event or condition could
reasonably be expected to have a Material Adverse Effect: (i) any "accumulated
funding deficiency," as such term is defined in Section 302 of ERISA and Section
412 of the Code, whether or not waived, shall exist with respect to any Plan, or
any lien shall arise on the assets of any Loan Party or any ERISA Affiliate in
favor of the PBGC or a Plan; (ii) an ERISA Event shall occur with respect to a
Single Employer Plan, which is, in the reasonable opinion of the Administrative
Agent, likely to result in the termination of such Plan for purposes of Title IV
of ERISA; (iii) an ERISA Event shall occur with respect to a Multiemployer Plan
or Multiple Employer Plan, which is, in the reasonable opinion of the
Administrative Agent, likely to result in (a) the termination of such Plan for
purposes of Title IV of ERISA, or (b) any Loan Party or any ERISA Affiliate
incurring any liability in connection with a withdrawal from, reorganization of
(within the meaning of Section 4241 of ERISA), or insolvency (within the meaning
of Section 4245 of ERISA) of such Plan; or (iv) any prohibited transaction
(within the meaning of Section 406 of ERISA or Section 4975 of the Code) or
breach of fiduciary responsibility shall occur which may subject any Loan Party
or any ERISA Affiliate to any liability under Sections 406, 409, 502(i), or
502(l) of ERISA or Section 4975 of the Code, or under any agreement or other
instrument pursuant to which any Loan Party or any ERISA Affiliate has agreed or
is required to indemnify any person against any such liability.
92
SECTION 7.16. RECEIPT OF GOVERNMENTAL ACTIONS.
--------------------------------
Local Fiber, L.L.C. shall have failed to (i) receive within 90 days of the
Closing Date any and all applicable Governmental Actions necessary to permit
Local Fiber, L.L.C. to (a) enter into and become a party to a Subsidiary
Guaranty Agreement, in the form attached hereto as Exhibit K without any
---------
modifications (other than any such modification which the Administrative Agent
may reasonably request) and (b) guaranty the Obligations hereunder until the
indefeasible payment and performance in full of each such Obligation or (ii)
enter into the Subsidiary Guaranty Agreement referred to in clause (i) above or
to have delivered any ancillary documentation (such as resolutions and opinions
of counsel) reasonably requested by the Administrative Agent with respect
thereto.
SECTION 7.17. INITIAL REMEDIES.
-----------------
Upon the occurrence of any Event of Default described in Section 7.4. or
------------
7.5., each of (i) the unpaid principal amount of and accrued interest on the
----
Loans and (ii) all other Obligations shall automatically become immediately due
and payable, without presentment, demand, protest or other requirements of any
kind, all of which are hereby expressly waived by the Borrower, and the
Commitments and obligation of each Lender to make any Loan or the Issuing Bank
to issue any Letter of Credit shall thereupon terminate. Upon the occurrence
and during the continuation of any other Event of Default, the Administrative
Agent may, and upon the written request or with the written consent of the
Majority Lenders shall, by written notice to the Borrower, declare all or any
portion of the amounts described in clauses (i) and (ii) above to be, and the
same shall forthwith become, immediately due and payable, and the Commitments
and obligation of each Lender to make any Loan or the Issuing Bank to issue any
Letter of Credit shall thereupon terminate. Any amounts described in clause
(ii) above, when received by the Administrative Agent, shall be held by the
Administrative Agent pursuant to a cash collateral arrangement reasonably
satisfactory to the Administrative Agent. Nothing herein shall limit the
Administrative Agent, for the benefit of the Secured Parties, to exercise any
other rights or remedies available to it or the Secured Parties at law or in
equity.
Furthermore, upon the occurrence of any Event of Default, the
Administrative Agent may direct the Borrower to pay (and the Borrower agrees
that upon receipt of such notice, or upon the occurrence of an Event of Default
under either Section 7.4. or 7.5 it shall immediately pay) to the Administrative
----------- ---
Agent additional cash, to be held by the Administrative Agent as cash
collateral, for the benefit of the Lenders, as additional security for the
Letter of Credit Obligations in respect of subsequent drawings under all then
outstanding Letters of Credit in an amount equal to the maximum aggregate amount
which may be drawn under all Letters of Credits then outstanding
ARTICLE VIII.
AGENTS
SECTION 8.1. APPOINTMENT.
------------
A. Appointment of Agents. (i) DBAG is hereby appointed administrative
agent, (ii) DBS and TD are hereby appointed co-syndications agents and (iii)
Bankers Trust Company is
93
hereby appointed securities intermediary, in each case under this Agreement and
under the other Loan Documents and each Lender hereby authorizes the
Administrative Agent to act as its agent in accordance with the terms of this
Agreement and the other Loan Documents, provided, that (i) the Co-Syndications
Agents shall collectively act as syndications agent with respect to all matters
related thereto and (ii) the Securities Intermediary shall act as securities
intermediary under each Control Agreement. The Agents each agree to act upon the
express conditions contained in this Agreement and the other Loan Documents, as
applicable. The provisions of this Section 8.1. are solely for the benefit of
the Agents and the Lenders; the Borrower shall have no rights as a third party
beneficiary of any of the provisions hereof. In performing its functions and
duties under this Agreement, the Agents shall act solely as an agent of the
Lenders and each Agent does not assume and shall not be deemed to have assumed
any obligation towards or relationship of agency or trust with or for the
Borrower or any of its Subsidiaries.
B. Appointment of Supplemental Agents. It is the purpose of this
Agreement and the other Loan Documents that there shall be no violation of any
law of any jurisdiction denying or restricting the right of banking corporations
or associations to transact business as agent or trustee in such jurisdiction.
It is recognized that in case of litigation under this Agreement or any of the
other Loan Documents, and in particular in case of the enforcement of any of the
Loan Documents, or in case the Administrative Agent deems that by reason of any
present or future law of any jurisdiction it may not exercise any of the rights,
powers or remedies granted herein or in any of the other Loan Documents or take
any other action which may be desirable or necessary in connection therewith, it
may be necessary that the Administrative Agent appoint an additional individual
or institution as a separate trustee, co-trustee, collateral agent or collateral
co-agent (any such additional individual or institution being referred to herein
individually as a "Supplemental Agent" and collectively as "Supplemental
Agents").
In the event that the Administrative Agent appoints a Supplemental Agent
with respect to any Collateral, (i) each and every right, power, privilege or
duty expressed or intended by this Agreement or any of the other Loan Documents
to be exercised by or vested in or conveyed to the Administrative Agent with
respect to such Collateral shall be exercisable by and vest in such Supplemental
Agent to the extent, and only to the extent, necessary to enable such
Supplemental Agent to exercise such rights, powers and privileges with respect
to such Collateral and to perform such duties with respect to such Collateral,
and every covenant and obligation contained in the Loan Documents and necessary
to the exercise or performance thereof by such Supplemental Agent shall run to
and be enforceable by either the Administrative Agent or such Supplemental
Agent, and (ii) the provisions of this Section 8.1. and of Sections 9.2. and
------------ -------------
9.3. that refer to the Administrative Agent shall inure to the benefit of such
----
Supplemental Agent and all references therein to the Administrative Agent shall
be deemed to be references to the Administrative Agent and/or such Supplemental
Agent, as the context may require.
Should any instrument in writing from the Borrower or any other Loan Party
be required by any Supplemental Agent so appointed for more fully and certainly
vesting in and confirming to it such rights, powers, privileges and duties, the
Borrower shall, or shall cause such Loan Party to, execute, acknowledge and
deliver any and all such instruments promptly upon request by the Administrative
Agent. In case any Supplemental Agent, or a successor thereto, shall die,
become incapable of acting, resign or be removed, all the rights, powers,
privileges and duties of such
94
Supplemental Agent, to the extent permitted by law, shall vest in and be
exercised by the Administrative Agent until the appointment of a new
Supplemental Agent.
SECTION 8.2. POWERS AND DUTIES; GENERAL IMMUNITY.
------------------------------------
X. Xxxxxx; Duties Specified. Each Lender irrevocably authorizes the
Administrative Agent to take such action on such Lender's behalf and to exercise
such powers, rights and remedies hereunder and under the other Loan Documents as
are specifically delegated or granted to the Administrative Agent by the terms
hereof and thereof, together with such powers, rights and remedies as are
reasonably incidental thereto. The Administrative Agent shall have only those
duties and responsibilities that are expressly specified in this Agreement and
the other Loan Documents. The Administrative Agent may exercise such powers,
rights and remedies and perform such duties by or through its agents or
employees. The Administrative Agent shall not have, by reason of this Agreement
or any of the other Loan Documents, a fiduciary relationship in respect of any
Lender; and nothing in this Agreement or any of the other Loan Documents,
expressed or implied, is intended to or shall be so construed as to impose upon
the Administrative Agent any obligations in respect of this Agreement or any of
the other Loan Documents except as expressly set forth herein or therein.
B. No Responsibility for Certain Matters. No Agent shall be responsible
to any Lender for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any other
Loan Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statements or in any
financial or other statements, instruments, reports or certificates or any other
documents furnished or made by any Agent to the Lenders or by or on behalf of
the Borrower to any Agent or any Lender in connection with the Loan Documents
and the transactions contemplated thereby or for the financial condition or
business affairs of the Borrower or any other Person liable for the payment of
any Obligations, nor shall any Agent be required to ascertain or inquire as to
the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained in any of the Loan Documents or as to the use
of the proceeds of the Loans or as to the existence or possible existence of any
Event of Default or Potential Event of Default. Anything contained in this
Agreement to the contrary notwithstanding, no Agent shall have any liability
arising from confirmations of the amount of outstanding Loans or the component
amounts thereof.
C. Exculpatory Provisions. None of the Agents nor any of their respective
officers, directors, employees or agents shall be liable to the Lenders for any
action taken or omitted by any such Agent under or in connection with any of the
Loan Documents except to the extent caused by such Agent's gross negligence or
willful misconduct. The Agents shall be entitled to refrain from any act or
the taking of any action (including the failure to take an action) in connection
with this Agreement or any of the other Loan Documents or from the exercise of
any power, discretion or authority vested in it hereunder or thereunder unless
and until such Agent shall have received instructions in respect thereof from
the Majority Lenders (or such other Lenders as may be required to give such
instructions under Section 9.6.) and, upon receipt of such instructions from the
------------
Majority Lenders (or such other Lenders, as the case may be), such Agent shall
be entitled to act or (where so instructed) refrain from acting, or to exercise
such power, discretion or authority, in accordance with such instructions.
Without limiting the
95
generality of the foregoing, (i) each Agent shall be entitled to rely, and shall
be fully protected in relying, upon any communication, instrument or document
believed by it to be genuine and correct and to have been signed or sent by the
proper person or persons, and shall be entitled to rely and shall be protected
in relying on opinions and judgments of attorneys (who may be attorneys for the
Borrower and its Subsidiaries), accountants, experts and other professional
advisors selected by it and (ii) no Lender shall have any right of action
whatsoever against any Agent as a result of such Agent acting or (where so
instructed) refraining from acting under this Agreement or any of the other Loan
Documents in accordance with the instructions of the Majority Lenders (or such
other Lenders as may be required to give such instructions under Section 9.6.).
------------
D. Agents Entitled to Act as Lender. The agencies hereby created shall in
no way impair or affect any of the rights and powers of, or impose any duties or
obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans or Letters of Credit, each Agent
shall have the same rights and powers hereunder as any other Lender and may
exercise the same as though it were not performing the duties and functions
delegated to it hereunder, and the term "Lender" or "the Lenders" or any similar
term shall, unless the context clearly otherwise indicates, include each Agent
in its individual capacity as a Lender. Each Agent and its Affiliates may accept
deposits from, lend money to and generally engage in any kind of banking, trust,
financial advisory or other business with the Borrower or any of its Affiliates
as if it were not performing the duties specified herein, and may accept fees
and other consideration from the Borrower for services in connection with this
Agreement and otherwise without having to account for the same to the Lenders.
SECTION 8.3. REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR
-----------------------------------------------------
APPRAISAL OF CREDITWORTHINESS.
------------------------------
Each Lender represents and warrants to the Agents and each other Lender
that it has made its own independent investigation of the financial condition
and affairs of the Borrower and its Subsidiaries in connection with the making
of the Loans hereunder and that it has made and shall continue to make its own
appraisal of the creditworthiness of the Borrower and its Subsidiaries. No
Agent shall have any duty or responsibility, either initially or on a continuing
basis, to make any such investigation or any such appraisal on behalf of the
Lenders or to provide any Lender with any credit or other information with
respect thereto, whether coming into its possession before the making of the
Loans or at any time or times thereafter, and no Agent shall have any
responsibility with respect to the accuracy of or the completeness of any
information provided to the Lenders.
SECTION 8.4. RIGHT TO INDEMNITY.
-------------------
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify each Agent, to the extent that each Agent shall not have been
reimbursed by the Borrower or any of its Subsidiaries, for and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including counsel fees and disbursements) or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by or asserted against any Agent in exercising its powers, rights and remedies
or performing its duties hereunder or under the other Loan Documents or
otherwise in its capacity as Agent in any way
96
relating to or arising out of this Agreement or the other Loan Documents;
provided that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from such Agent's gross negligence or
willful misconduct. If any indemnity furnished to any Agent for any purpose
shall, in the opinion of such Agent, be insufficient or become impaired, such
Agent may call for additional indemnity and cease, or not commence, to do the
acts indemnified against until such additional indemnity is furnished.
SECTION 8.5. SUCCESSOR AGENTS.
-----------------
Any Agent may resign at any time by giving 30 days' prior written notice
thereof to the Lenders and the Borrower, and any Agent may be removed at any
time with or without cause by an instrument or concurrent instruments in writing
delivered to the Borrower and the Agent and signed by the Required Lenders.
Upon any such notice of resignation or any such removal, the Required Lenders
shall have the right, upon five Business Days' notice to the Borrower, to
appoint a successor Agent (provided that such successor is or simultaneously
therewith becomes a Lender). Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, that successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring or removed Agent and the retiring or removed Agent shall be discharged
from its duties and obligations under this Agreement. After any retiring or
removed Agent's resignation or removal hereunder as Agent, the provisions of
this Article VIII. shall inure to its benefit as to any actions taken or omitted
-------------
to be taken by it while it was Agent under this Agreement.
SECTION 8.6. COLLATERAL DOCUMENTS AND SUBSIDIARY GUARANTIES.
-----------------------------------------------
Each Lender hereby further authorizes the Administrative Agent, on behalf
of and for the benefit of the Lenders, to enter into each Collateral Document as
secured party or beneficiary (as applicable), and each Lender agrees to be bound
by the terms of each Collateral Document; provided that the Administrative Agent
shall not (i) enter into or consent to any material amendment, modification,
termination or waiver of any provision contained in any Collateral Document or
(ii) release any Collateral (except as otherwise expressly permitted or required
pursuant to the terms of this Agreement or the applicable Collateral Document),
in each case without the prior consent of the Required Lenders (or, if required
pursuant to Section 9.6., all the Lenders); provided further, however, that,
------------
without further written consent or authorization from the Lenders, the
Administrative Agent may execute any documents or instruments necessary to (i)
release any Subsidiary from its Subsidiary Guaranty Agreement to the extent all
of the stock of such Subsidiary is sold in a transaction permitted under this
Agreement or otherwise consented to by the Required Lenders in accordance with
Section 9.6. and (ii) release any Lien encumbering any item of Collateral that
------------
is the subject of a sale or other disposition of assets permitted by this
Agreement or to which the Required Lenders have otherwise consented in
accordance with Section 9.6. Anything contained in any of the Loan Documents to
------------
the contrary notwithstanding, the Borrower, the Administrative Agent and each
Lender hereby agree that (X) no Lender shall have any right individually to
realize upon any of the Collateral under any Collateral Document, it being
understood and agreed that all powers, rights and remedies under the Collateral
Documents may be exercised solely by the Administrative Agent for the benefit of
the Lenders in accordance with the terms thereof, and (Y) in the event of a
foreclosure by the
97
Administrative Agent on any of the Collateral pursuant to a public or private
sale, the Administrative Agent or any Lender may be the purchaser of any or all
of such Collateral at any such sale and the Administrative Agent, as agent for
and representative of the Lenders (but not any Lender or the Lenders in its or
their respective individual capacities unless the Majority Lenders shall
otherwise agree in writing) shall be entitled, for the purpose of bidding and
making settlement or payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of the Obligations
as a credit on account of the purchase price for any collateral payable by the
Administrative Agent at such sale.
ARTICLE IX.
MISCELLANEOUS
SECTION 9.1. ASSIGNMENTS AND PARTICIPATIONS IN LOANS.
----------------------------------------
A. General. Subject to Section 9.1.B., any Lender shall have the right
--------------
at any time to (i) sell, assign or transfer to any Eligible Assignee, or (ii)
sell participations to any Eligible Assignee or, with the approval of the
Borrower (which shall not be unreasonably withheld or delayed) to any other
Person in, all or any part of its Commitments or any Loan or Loans made by it or
participations therein or any other interest herein or in any other Obligations
owed to it; provided that no such sale, assignment, transfer or participation
shall, without the consent of the Borrower, require the Borrower to file a
registration statement with the Securities and Exchange Commission or apply to
qualify such sale, assignment, transfer or participation under the securities
laws of any state; provided, further that no such sale, assignment or transfer
described in clause (i) above shall be effective unless and until an Assignment
Agreement effecting such sale, assignment or transfer shall have been accepted
by the Co-Syndications Agents and recorded by the Administrative Agent in the
Register as provided in Section 9.1.B.(ii). Except as otherwise provided in
------------------
this Section 9.1., no Lender shall, as between the Borrower and such Lender, be
------------
relieved of any of its obligations hereunder as a result of any sale, assignment
or transfer of, or any granting of participations in, all or any part of its
Commitments or the Loans or participations therein, or the other Obligations
owed to such Lender.
B. Assignments.
(i) Amounts and Terms of Assignments. Each Commitment, Loan,
--------------------------------
or participation therein, or other Obligation, may (a) be assigned in any
amount to another Lender, or to an Affiliate of the assigning Lender or
another Lender, with the giving of notice to the Borrower and the Co-
Syndications Agents or (b) be assigned in an aggregate amount of not less
than $5,000,000 (or such lesser amount as shall constitute the aggregate
amount of the Commitments, Loans, and participations therein, and other
Obligations of the assigning Lender) to any other Eligible Assignee with
the consent of the Borrower and the Co-Syndications Agents (which consent
shall not, in each such case, be unreasonably withheld or delayed). To the
extent of any such assignment in accordance with either clause (a) or (b)
above, the assigning Lender shall be relieved of its obligations with
respect to its Commitments, Loans, or participations therein, or other
Obligations or the portion thereof so assigned. The assignor or assignee to
each such assignment shall execute and deliver to the Co-Syndications
Agents, for its acceptance and recording in the Register, an Assignment
Agreement, together with a processing and
98
recordation fee of $3,500 (such fee to be shared equally by the Co-
Syndications Agents) and such forms, certificates or other evidence, if
any, with respect to United States federal income tax withholding matters
as the assignee under such Assignment Agreement may be required to deliver
to the Co-Syndications Agent pursuant to Section 2.6.B. Upon such
--------------
execution, delivery, acceptance and recordation, from and after the
effective date specified in such Assignment Agreement, (y) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment
Agreement, shall have the rights and obligations of a Lender hereunder and
(z) the assigning Lender thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment
Agreement, relinquish its rights (other than any rights which survive the
termination of this Agreement under Section 9.9.) and be released from its
------------
obligations under this Agreement (and, in the case of an Assignment
Agreement covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be
a party hereto). The Commitments hereunder shall be modified to reflect
the Commitment of such assignee and any remaining Commitment of such
assigning Lender and, if any such assignment occurs after the issuance of
Notes hereunder, the assigning Lender shall, upon the effectiveness of such
assignment or as promptly thereafter as practicable, surrender its
applicable Note to the Administrative Agent for cancellation, and thereupon
a new Note shall be issued to the assignee and to the assigning Lender,
substantially in the form of Exhibit N annexed hereto, with appropriate
---------
insertions, to reflect the new Commitments and/or outstanding Loans, as the
case may be, of the assignee and the assigning Lender.
(ii) Acceptance by Administrative Agent; Recordation in
--------------------------------------------------
Register. Upon its receipt of an Assignment Agreement executed by an
---------
assigning Lender and an assignee representing that it is an Eligible
Assignee, together with the processing and recordation fee referred to in
Section 9.1.B.(i) and any forms, cetificates or other evidence with respect
-----------------
to United States federal income tax withholding matters that such assignee
may be required to deliver to the Administrative Agent pursuant to Section
-------
2.7.B., the Co-Syndications Agents shall, if the Co-Syndications Agents
------
have consented to the assignment evidenced thereby (to the extent such
consent is required pursuant Section 9.1.B.(i)), (a) accept such Assignment
------------------
Agreement by executing a counterpart thereof as provided therein (which
acceptance shall evidence any required consent of the Co-Syndications
Agents to such assignment), (b) record the information contained therein in
the Register, and (c) give prompt notice thereof to the Borrower. The Co-
Syndications Agents shall maintain a copy of each Assignment Agreement
delivered to and accepted by them as provided in this Section 9.1.B.(ii).
------------------
C. Participations. The holder of any participation, other than an
Affiliate of the Lender granting such participation, shall not be entitled to
require such Lender to take or omit to take any action hereunder except action
directly affecting (i) the extension of the scheduled final maturity date of any
Loan allocated to such participation, (ii) a reduction of the principal amount
of or the rate of interest payable on any Loan allocated to such participation,
or (iii) releasing all or substantially all of the Collateral, and all amounts
payable by the Borrower hereunder (including amounts payable to such Lender
pursuant to Sections 2.6.D. and 2.7.) shall be determined as if such Lender had
--------------- ----
not sold such participation. The Borrower and each Lender
99
hereby acknowledge and agree that, solely for purposes of Sections 9.4. and
-------------
9.5., (a) any participation will give rise to a direct obligation of the
----
Borrower to the participant and (b) the participant shall be considered to be a
"Lender".
D. Assignments to Federal Reserve Banks. In addition to the assignments
and participations permitted under the foregoing provisions of this Section
-------
9.1., any Lender may assign and pledge all or any portion of its Loans, the
----
other Obligations owed to such Lender, and its Notes to any Federal Reserve Bank
as collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any operating circular issued by such Federal Reserve
Bank; provided that (i) no Lender shall, as between the Borrower and such
Lender, be relieved of any of its obligations hereunder as a result of any such
assignment and pledge and (ii) in no event shall such Federal Reserve Bank be
considered to be a "Lender" or be entitled to require the assigning Lender to
take or omit to take any action hereunder.
E. Information. Each Lender may furnish any information concerning the
Borrower and its Subsidiaries in the possession of that Lender from time to time
to assignees and participants (including prospective assignees and
participants).
F. Representations of the Lenders. Each Lender listed on the signature
pages hereof hereby represents and warrants that it will make its Loans for its
own account in the ordinary course of its business and without a view to
distribution of such Loans within the meaning of the Securities Act or the
Exchange Act or other federal or state securities laws (it being understood
that, subject to the provisions of this Section 9.1., the disposition of such
------------
Loans or any interests therein shall at all times remain within its exclusive
control). Each Lender that becomes a party hereto pursuant to an Assignment
Agreement shall be deemed to agree that the representations and warranties of
such Lender contained in such Assignment Agreement are incorporated herein by
this reference.
SECTION 9.2. EXPENSES.
---------
Whether or not the transactions contemplated hereby shall be consummated,
the Borrower agrees to pay promptly: (i) all the actual and reasonable costs and
expenses of negotiation, preparation, and execution of the Loan Documents and
any consents, amendments, waivers or other modifications thereto (whether or not
such costs were incurred prior to or after the Closing Date); (ii) all the costs
of furnishing all opinions by counsel for the Borrower and its Subsidiaries,
including any opinions requested by the Lenders as to any legal matters arising
hereunder and of the Borrower's or any of its Subsidiaries' performance of and
compliance with all agreements and conditions on its part to be performed or
complied with under this Agreement and the other Loan Documents including with
respect to confirming compliance with environmental, insurance and solvency
requirements; (iii) the reasonable fees, expenses and disbursements of counsel
to any Agent in connection with the negotiation, preparation, execution and
administration of the Loan Documents and any consents, amendments, waivers or
other modifications thereto and any other documents or matters requested by the
Borrower; (iv) all the actual costs and reasonable expenses of creating and
perfecting Liens in favor of the Administrative Agent on behalf of the Secured
Parties pursuant to any Collateral Document, including filing and recording
fees, expenses and taxes, stamp or documentary taxes, search fees, title
insurance premiums, and reasonable fees, expenses and disbursements of counsel
to the
100
Administrative Agent and of counsel providing any opinions that the
Administrative Agent may request in respect of the Collateral Documents or the
Liens created pursuant thereto; (v) all the actual costs and reasonable expenses
(including the reasonable fees, expenses and disbursements) of any auditors,
accountants or appraisers and any environmental or other consultants, advisors
and agents employed or retained by the Administrative Agent or any Supplemental
Agent; (vi) costs and expenses relating to the custody or preservation of any of
the Collateral; (vii) all other actual and reasonable costs and expenses
incurred by the Co-Syndications Agents in connection with the syndication of the
Commitments; and (viii) after the occurrence of an Event of Default, all costs
and expenses, including reasonable attorneys' fees (including allocated costs of
internal counsel) and costs of settlement, incurred by each Agent and the
Lenders in enforcing any Obligations of or in collecting any payments due from
any Loan Party hereunder or under the other Loan Documents by reason of such
Event of Default (including in connection with the sale of, collection from, or
other realization upon any of the Collateral or the enforcement of any guaranty)
or in connection with any refinancing or restructuring of the credit
arrangements provided under this Agreement in the nature of a "work-out" or
pursuant to any insolvency or bankruptcy proceedings.
SECTION 9.3. INDEMNITY.
----------
In addition to the payment of expenses pursuant to Section 9.2., whether or
------------
not the transactions contemplated hereby shall be consummated, the Borrower
agrees to defend, indemnify, pay and hold harmless each Agent, the Lead Arranger
and the Lenders, and the officers, directors, employees, agents and affiliates
of each Agent, the Lead Arranger and the Lenders (collectively, the
"Indemnitees"), from and against any and all Indemnified Liabilities (as
hereinafter defined); provided that the Borrower shall not have any obligation
to any Indemnitee hereunder with respect to any Indemnified Liabilities to the
extent such Indemnified Liabilities arise solely from the gross negligence or
willful misconduct of that Indemnitee as determined by a final judgment of a
court of competent jurisdiction.
As used herein, "Indemnified Liabilities" means, collectively, any and all
liabilities, obligations, losses, damages (including natural resource damages),
penalties, actions, judgments, suits, claims (including Environmental Claims),
costs (including the costs of any investigation, study, sampling, testing,
abatement, cleanup, removal, remediation or other response action necessary to
remove, remediate, clean up or xxxxx any Hazardous Materials Activity), expenses
and disbursements of any kind or nature whatsoever (including the reasonable
fees and disbursements of counsel for Indemnitees in connection with any
investigative, administrative or judicial proceeding commenced or threatened by
any Person, whether or not any such Indemnitee shall be designated as a party or
a potential party thereto, and any fees or expenses incurred by Indemnitees in
enforcing this indemnity), whether direct, indirect or consequential and whether
based on any federal, state or foreign laws, statutes, rules or regulations
(including securities and commercial laws, statutes, rules or regulations and
Environmental Laws), on common law or equitable cause or on contract or
otherwise, that may be imposed on, incurred by, or asserted against any such
Indemnitee, in any manner relating to or arising out of (i) this Agreement or
the other Loan Documents, the Material Contracts, or the transactions
contemplated hereby or thereby (including the Lenders' agreement to make the
Loans hereunder or the use or intended use of the proceeds thereof or the use or
intended use of any thereof, or any enforcement of any of the Loan Documents
(including any sale of, collection from, or other
101
realization upon any of the Collateral or the enforcement of any guaranty), (ii)
the statements contained in the commitment letters delivered by any Lender to
the Borrower with respect thereto, or (iii) any Environmental Claim or any
Hazardous Materials Activity relating to or arising from, directly or
indirectly, any past or present activity, operation, land ownership, or practice
of the Borrower or any of its Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in this Section 9.3. may be unenforceable in whole or in part
------------
because they are violative of any law or public policy, the Borrower shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by the Indemnitees or any of them.
SECTION 9.4. SET-OFF; SECURITY INTEREST IN DEPOSIT ACCOUNTS.
-----------------------------------------------
Subject to the last sentence of this Section 9.4., in addition to any
------------
rights now or hereafter granted under applicable law and not by way of
limitation of any such rights, upon the occurrence of any Event of Default each
Lender is hereby authorized by the Borrower at any time or from time to time,
without notice to the Borrower or to any other Person, any such notice being
hereby expressly waived, to set off and to appropriate and to apply any and all
deposits (general or special, including Indebtedness evidenced by certificates
of deposit, whether matured or unmatured, but not including trust accounts) and
any other Indebtedness at any time held or owing by that Lender to or for the
credit or the account of the Borrower against and on account of the obligations
and liabilities of the Borrower to that Lender under this Agreement and the
other Loan Documents, including all claims of any nature or description arising
out of or connected with this Agreement or any other Loan Document, irrespective
of whether or not (i) that Lender shall have made any demand hereunder or (ii)
the principal of or the interest on the Loans or any other amounts due hereunder
shall have become due and payable pursuant to Article VII. and although said
------------
obligations and liabilities, or any of them, may be contingent or unmatured.
The Borrower hereby further grants to the Administrative Agent and each Lender a
security interest in all deposits and accounts maintained with the
Administrative Agent or such Lender as security for the Obligations.
Notwithstanding anything to the contrary herein or in any other Loan Document,
the Lenders hereby agree among themselves that no Lender shall exercise any
right of setoff or banker's lien, collect any payments due from any Loan Party
hereunder or under any of the other Loan Documents, or otherwise exercise any of
their rights in respect of the Collateral hereunder or under any of the other
Loan Documents without the prior written consent of either the Administrative
Agent or the Required Lenders.
SECTION 9.5. RATABLE SHARING.
----------------
The Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of setoff or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, fees and other
amounts then due and owing to that Lender hereunder or under the other Loan
Documents (collectively, the "Aggregate Amounts
102
Due" to such Lender) which is greater than the proportion received by any other
Lender in respect of the Aggregate Amounts Due to such other Lender, then the
Lender receiving such proportionately greater payment shall (i) notify the
Administrative Agent and each other Lender of the receipt of such payment and
(ii) apply a portion of such payment to purchase participations (which it shall
be deemed to have purchased from each seller of a participation simultaneously
upon the receipt by such seller of its portion of such payment) in the Aggregate
Amounts Due to the other the Lenders so that all such recoveries of Aggregate
Amounts Due shall be shared by all the Lenders in proportion to the Aggregate
Amounts Due to them; provided that if all or part of such proportionately
greater payment received by such purchasing Lender is thereafter recovered from
such Lender upon the bankruptcy or reorganization of the Borrower or otherwise,
those purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such purchasing Lender ratably to the extent
of such recovery, but without interest. The Borrower expressly consents to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by the Borrower to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.
SECTION 9.6. AMENDMENTS AND WAIVERS.
-----------------------
No amendment, modification, termination or waiver of any provision of this
Agreement or of the Notes, and no consent to any departure by the Borrower
therefrom, shall in any event be effective without the written concurrence of
the Majority Lenders; provided that any such amendment, modification,
termination, waiver or consent which: (i) increases the amount of any of the
Commitments or reduces the principal amount of any of the Loans; (ii) changes in
any manner the definition of "Pro Rata Shares" or the definition of "Majority
Lenders" or the definition of "Required Lenders" (it being understood that, with
the consent of the Majority Lenders, additional extensions of credit pursuant to
this Agreement may be included in "Pro Rata Share" and the definition of
"Majority Lenders" and "Required Lenders" on substantially the same terms as the
Commitments and the Loans); (iii) changes in any manner any provision of this
Agreement which, by its terms, expressly requires the approval or concurrence of
all the Lenders; (iv) postpones the scheduled final maturity date of any of the
Loans; (v) postpones the date or reduces the amount of any scheduled payment
(but not prepayment) of principal of any of the Loans or any scheduled reduction
in Commitments; (vi) postpones the date on which any interest or any fees or
other amounts are payable; (vii) decreases the interest rate borne by any of the
Loans (other than any waiver of any increase in the interest rate applicable to
any of the Loans pursuant to Section 2.3.) or the amount of any fees or other
------------
amounts payable hereunder; (viii) increases the maximum duration of Interest
Periods permitted hereunder; (ix) releases any Subsidiary Guarantor from its
obligations under its Subsidiary Guaranty Agreement, other than in accordance
with the terms of the Loan Documents; (x) changes in any manner the provisions
contained in Section 9.1. or this Section 9.6.; (xi) releases any Lien (other
------------ -------------
than in accordance with the Financing Documents) granted in favor of the
Administrative Agent with respect to 15% or more of the aggregate fair market
value of the Collateral or (xii) permits the acquisition of any of the Capital
Stock of Devnet or substantially all of the assets of Devnet by the Borrower or
any of its Subsidiaries (unless any such acquisition is a Permitted Investment
pursuant to clause (vii) of the definition thereof) shall be effective only if
evidenced by a writing signed by all of the affected Lenders. In addition, (i)
no amendment, modification, termination or waiver of any
103
provision of any Note shall be effective without the written concurrence of the
Lender which is the holder of that Note and (ii) no amendment, modification,
termination or waiver of any provision of Article VIII. or of any other
-------------
provision of this Agreement which, by its terms, expressly requires the approval
or concurrence of the Administrative Agent shall be effective without the
written concurrence of the Administrative Agent. The Administrative Agent may,
but shall have no obligation to, with the concurrence of any Lender, execute
amendments, modifications, waivers or consents on behalf of that Lender. Any
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which it was given. No notice to or demand on the Borrower
in any case shall entitle the Borrower to any other or further notice or demand
in similar or other circumstances. Any amendment, modification, termination,
waiver or consent effected in accordance with this Section 9.6. shall be binding
------------
upon each Lender at the time outstanding, each future Lender and, if signed by
the Borrower, on the Borrower.
SECTION 9.7. INDEPENDENCE OF COVENANTS.
--------------------------
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
SECTION 9.8. NOTICES.
--------
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing
addressed to the respective party as set forth below and may be personally
served, telexed, or sent by telefacsimile, overnight courier service or United
States mail and shall be deemed to have been given: (a) if delivered in person,
when delivered; (b) if delivered by telecopy, on the date of transmission if
transmitted on a Business Day before 4:00 p.m. Eastern Standard Time or, if not,
on the next succeeding Business Day; (c) if delivered by overnight courier, two
days after delivery to such courier properly addressed; or (d) if delivered by
United States mail, three Business Days after deposit in the United States mail,
with postage prepaid and properly addressed; provided, however, that notices to
the Administrative Agent shall not be effective until received.
If to the Administrative Agent, the DBS Syndications Agent,
DBAG, or DBS:
Deutsche Bank AG New York Branch
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxx X. Xxxxxx
Telecopy: (000) 000-0000
If to TD Syndications Agent:
Toronto Dominion (Texas), Inc.
104
000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxx Xxxxx
Telecopy: (000) 000-0000
If to the Borrower:
FiberNet Telecom Group, Inc.
000 Xxxxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: President
Telecopy: (000) 000-0000
or to such other address as the party addressed shall have previously designated
by written notice to the serving party, given in accordance with this Section.
SECTION 9.9. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
-------------------------------------------------------
A. All representations, warranties, covenants and agreements made herein
and in the certificates or other instruments delivered in connection with or
pursuant to this Agreement shall be considered to have been relied upon by the
parties hereto and shall survive the execution and delivery of this Agreement
and the making of the Loans.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of the Borrower set forth in Sections 2.2.I., 2.6.D.,
-----------------------
2.7, 9.2., 9.3. and 9.4. and the agreements of the Lenders set forth in Sections
--- ---- ---- ---- --------
8.2.C., 8.4., and 9.5. shall survive the payment of the Loans and the
------ ---- ----
reimbursement of any amounts drawn thereunder, and the termination of this
Agreement.
SECTION 9.10. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
------------------------------------------------------
No failure or delay on the part of any Agent or any Lender in the exercise
of any power, right or privilege hereunder or under any other Loan Document
shall impair such power, right or privilege or be construed to be a waiver of
any default or acquiescence therein, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other power, right or privilege. All rights and remedies existing under
this Agreement and the other Loan Documents are cumulative to, and not exclusive
of, any rights or remedies otherwise available.
SECTION 9.11. MARSHALING; PAYMENTS SET ASIDE.
-------------------------------
Neither the Administrative Agent nor any Lender shall be under any
obligation to marshal any assets in favor of the Borrower or any other party or
against or in payment of any or all of the Obligations. To the extent that the
Borrower makes a payment or payments to the Administrative Agent or the Lenders
(or to the Administrative Agent for the benefit of the
105
Lenders), or the Administrative Agent or the Lenders enforce any security
interests or exercise their rights of setoff, and such payment or payments or
the proceeds of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, any other state or federal law, common law or any equitable
cause, then, to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and remedies therefor
or related thereto, shall be revived and continued in full force and effect as
if such payment or payments had not been made or such enforcement or setoff had
not occurred.
SECTION 9.12. SEVERABILITY.
-------------
In case any provision in or obligation under this Agreement or the Notes
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
SECTION 9.13. OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF THE LENDERS'
-------------------------------------------------------
RIGHTS.
-------
The obligations of the Lenders hereunder are several and no Lender shall be
responsible for the obligations or Commitments of any other Lender hereunder.
Nothing contained herein or in any other Loan Document, and no action taken by
the Lenders pursuant hereto or thereto, shall be deemed to constitute the
Lenders as a partnership, an association, a Joint Venture or any other kind of
entity. The amounts payable at any time hereunder to each Lender shall be a
separate and independent debt, and each Lender shall be entitled to protect and
enforce its rights arising out of this Agreement and it shall not be necessary
for any other Lender to be joined as an additional party in any proceeding for
such purpose.
SECTION 9.14. HEADINGS.
---------
Section and subsection headings contained in this Agreement are inserted
for convenience of reference only, shall not be deemed to be a part of this
Agreement for any purpose, and shall not in any way define or affect the
meaning, construction or scope of any of the provisions hereof.
SECTION 9.15. GOVERNING LAW; ENTIRE AGREEMENT.
--------------------------------
This Agreement shall be governed by, and shall be construed and enforced in
accordance with, the internal laws of the State of New York, without regard to
conflicts of laws principles (other than Sections 5-1401 and 5-1402 of the
General Obligations Law of the State of New York). This Agreement and the other
Loan Documents constitute the entire understanding among the parties hereto with
respect to the subject matter hereof and supersede any prior agreements, written
or oral, with respect thereto.
106
SECTION 9.16. SUCCESSORS AND ASSIGNS.
-----------------------
This Agreement shall be binding upon the parties hereto and their
respective successors and permitted assigns and shall inure to the benefit of
the parties hereto and the successors and permitted assigns of the Lenders (it
being understood that the Lenders' rights of assignment are subject to Section
-------
9.1.). Neither the Borrower's rights or obligations hereunder nor any interest
----
therein may be assigned or delegated by the Borrower without the prior written
consent of all the Lenders.
SECTION 9.17. CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
-----------------------------------------------
All judicial proceedings brought against any party hereto arising out of or
relating to this Agreement or any other Loan Document, or any obligations
thereunder, may be brought in any state or federal court of competent
jurisdiction in the State, County and City of New York. By executing and
delivering this Agreement or an Assignment Agreement, each party irrevocably
(i) accepts generally and unconditionally the nonexclusive
jurisdiction and venue of such courts;
(ii) waives any defense of forum non conveniens;
(iii) agrees that service of all process in any such proceeding
in any such court may be made by registered or certified mail, return
receipt requested, to its address provided in accordance with Section 9.8.
------------
or an Assignment Agreement;
(iv) with respect to the Borrower, agrees that service as
provided in clause
(iii) above is sufficient to confer personal jurisdiction over
the Borrower in any such proceeding in any such court, and otherwise
constitutes effective and binding service in every respect;
(v) with respect to the Borrower, agrees that Lenders retain
the right to serve process in any other manner permitted by law or to bring
proceedings against the Borrower in the courts of any other jurisdiction;
and
(vi) agrees that the provisions of this Section 9.17.
-------------
relating to jurisdiction and venue shall be binding and enforceable to the
fullest extent permissible under New York General Obligations Law Section
5-1402 or otherwise.
SECTION 9.18. WAIVER OF JURY TRIAL.
---------------------
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS BETWEEN
THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE
LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including contract claims, tort claims, breach of duty claims
107
and all other common law and statutory claims. Each party hereto acknowledges
that this waiver is a material inducement to enter into a business relationship,
that each has already relied on this waiver in entering into this Agreement, and
that each will continue to rely on this waiver in their related future dealings.
Each party hereto further warrants and represents that it has reviewed this
waiver with its legal counsel and that it knowingly and voluntarily waives its
jury trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION
-------
9.18. AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY
-----
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. In the event of litigation,
this Agreement may be filed as a written consent to a trial by the court.
SECTION 9.19. LIMITED RECOURSE.
-----------------
There shall be full recourse to the Borrower and its Subsidiaries for the
liabilities of the Borrower and its Subsidiaries under this Agreement and the
other Loan Documents, but in no event shall any holder of any equity interest in
the Borrower (or any officer or director of such holder or any officer or
director of the Borrower or any Subsidiary of the Borrower, in its capacity as
such) be personally liable or obligated for such liabilities of the Borrower and
its Subsidiaries except to the extent set forth in any Loan Document to which it
is a party.
SECTION 9.20. LIMITATION OF LIABILITY.
------------------------
No claim shall be made by the Borrower or any of its Affiliates against any
of the Agents, the Lead Arranger, any of the Lenders or any of their Affiliates,
directors, employees, attorneys or agents for any special, indirect,
consequential or punitive damages (whether or not the claim therefor is based on
contract, tort or duty imposed by law), in connection with, arising out of or in
any way related to the transactions contemplated by this Agreement, the other
Loan Documents, the Material Contracts or any act or omission or event occurring
in connection therewith, and the Borrower hereby waives, releases and agrees not
to xxx upon any such claim for any such damages, whether or not accrued and
whether or not known or suspected to exist in its favor.
SECTION 9.21. SATISFACTION.
------------
Upon the indefeasible payment (whether in Cash and/or other consideration
which is satisfactory to the Lenders in their sole discretion) and performance
in full of the Obligations, (i) each of the Collateral Documents and the
security interest created thereby shall terminate and (ii) upon written request
of the Borrower, the Administrative Agent shall execute and deliver to the
Borrower, at the Borrower's expense and without representation or warranty by or
recourse to the Administrative Agent or the Secured Parties, all certificates,
representations or evidences of the Pledged Shares (as defined in the Subsidiary
Pledge Agreements and the Borrower Pledge Agreement) together with all other
Pledged Collateral (as defined in the Subsidiary Pledge Agreements and the
Borrower Pledge Agreement) held by the Administrative Agent under any
108
of the Collateral Documents and such documents as the Borrower shall reasonably
request to evidence such termination, and the Borrower shall deliver to the
Administrative Agent a general release of all of the Administrative Agent's and
the Secured Parties' liabilities and Obligations under all Loan Documents and an
acknowledgment that the same have been terminated.
SECTION 9.22. COUNTERPARTS; EFFECTIVENESS.
----------------------------
This Agreement and any amendments, waivers, consents or supplements hereto
or in connection herewith may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by the Borrower and
the Administrative Agent of written or telephonic notification of such execution
and authorization of delivery thereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
109
IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to
be duly executed by their respective authorized representatives as of the day
and year first above written.
FIBERNET TELECOM GROUP, INC.,
as Borrower
By: /s/ Xxxxxxx X. Xxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxx
Title: President
DEUTSCHE BANK AG NEW YORK BRANCH, as
Administrative Agent
By: /s/ Xxx X. Xxxxxx
-----------------------------------------
Name: Xxx X. Xxxxxx
Title: Vice President
By: /s/ Xxxxxxxxx Xxxxxxx
-----------------------------------------
Name: Xxxxxxxxx Xxxxxxx
Title: Assistant Vice President
DEUTSCHE BANK SECURITIES INC., as
Co-Syndications Agent
By: /s/ Xxx X. Xxxxxx
-----------------------------------------
Name: Xxx X. Xxxxxx
Title: Vice President
By: /s/ Xxxxxxxxx Xxxxxxx
-----------------------------------------
Name: Xxxxxxxxx Xxxxxxx
Title: Assistant Vice President
TORONTO DOMINION (TEXAS), INC.,
as Co-Syndications Agent
[Credit Agreement-1]
By: /s/ Xxxx X. Xxxxx
-----------------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
[Credit Agreement-2]
LENDERS:
DEUTSCHE BANK AG NEW YORK BRANCH
By: /s/ Xxx X. Xxxxxx
-----------------------------------------
Name: Xxx X. Xxxxxx
Title: Vice President
By: /s/ Xxxxxxxxx Xxxxxxx
-----------------------------------------
Name: Xxxxxxxxx Xxxxxxx
Title: Assistant Vice President
NORTEL NETWORKS INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Director
TORONTO DOMINION (TEXAS), INC.
By: /s/ Xxxx X. Xxxxx
-----------------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
[Credit Agreement-3]
