Exhibit 10.47.1
-----------------------------------------------------------------------------------------------------------------------
LESSOR NTFC CAPITAL CORPORATION OR ITS Supplier: NORTEL NETWORKS
AFFILIATE, SUCCESSOR OR ASSIGN MASTER LEASE AGREEMENT
-----------------------------------------------------------------------------------------------------------------------
LESSEE ITC/\ DELTACOM COMMUNICATIONS, INC., AN ALABAMA CORPORATION CONTACT Xxxx Xxxxxxx
AND INTERSTATE FIBERNET, INC., A DELAWARE CORPORATION (EACH
A "LESSEE") TITLE
-----------------------------------------------------------------------------------------------------------------------
ADDRESS TELEPHONE NUMBER FACSIMILE NUMBER MASTER LEASE AGREEMENT NO.
1791 X.X. Xxxxxxx Drive
-----------------------------------------------------------------------------------------------------------------------
CITY COUNTY/PROVINCE STATE/COUNTRY ZIP CODE CORPORATION PROPRIETORSHIP PARTNERSHIP OTHER
Xxxx Xxxxx Xxxxxxx 00000
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
TERMS AND CONDITIONS (THE FOLLOWING 9 PAGES, THE DEFINITIONS ANNEX AND THE
FINANCIAL COVENANTS AND REPORTING REQUIREMENTS ANNEX CONTAIN
TERMS AND CONDITIONS WHICH ARE ALSO A PART OF THIS AGREEMENT)
1. LEASE: Subject to the terms of this Agreement, from the Closing Date to
December 29, 2001, Lessor shall purchase and lease to Lessee certain
telecommunications optical and switching equipment along with any related
equipment, software, and installation and other services ("EQUIPMENT") described
in any Equipment Schedule ("SCHEDULE") executed from time to time by Lessor and
a Lessee that makes reference to this Master Lease Agreement ("AGREEMENT") up to
a maximum aggregate purchase price of forty million dollars ($40,000,000). There
will only be one Lessee for any given Schedule and any given item of Equipment
or Software. This Agreement shall be incorporated into each Schedule. When
computer programs and related documentation are furnished with the Equipment,
and a non-exclusive license and/or sublicense (collectively, "SOFTWARE") is
granted to Lessee in an agreement with the Suppliers identified on a Schedule,
Lessor, to the extent permitted, grants Lessee a similar non-exclusive
sublicense to use the Software only in conjunction with the Equipment for so
long as the Equipment is leased hereunder (collectively, the Purchase Agreement
dated effective as of November 8, 2000 (the "Purchase Agreement") by and between
Nortel Networks and Lessee and any other Supplier document, agreement or
arrangement for Software or Equipment, "Supplier Agreements"). The Equipment and
Software include, but are not limited to, all leased additions, attachments and
accessions thereto that are leased hereunder and all replacements thereof
(collectively, "SYSTEM"). Any reference to "LEASE" shall mean with respect to
each System, this Agreement, a Schedule, an Acceptance Certificate, any riders,
amendments and addenda thereto including the Financial Covenant and Reporting
Requirements Annex and the Definitions Annex, both of which are attached hereto
and made a part hereof, and any other documents as may from time to time be made
a part thereof. Terms not defined herein shall have the meanings set out in any
Schedule.
2. PRICE OF SYSTEM: The "PRICE" of each System shall be as set forth in the
Schedule, and shall exclude all other costs, including sales or other taxes
included in the Supplier Agreement as part of the purchase price, unless
approved by Lessor. All Systems must be obtained from the Supplier or provided
through its approved OEM arrangement, including its Subsidiaries and Affiliates,
and other Suppliers approved by Lessor. The amount of the Price attributable to
freight, installation, maintenance and other services subject to a Lease shall
not exceed an amount equal to twenty percent (20%) of the Price relative to the
Lease.
Lessee shall pay all reasonable fees, charges and expenses of Lessor (including,
without limitation, the reasonable fees, charges and expenses of Lessor's
counsel) arising in connection with the structuring of this Agreement and all
Leases contemplated herein and in connection with the negotiation, drafting,
preparation, execution and/or delivery of this Agreement and any Schedules and
all related documents regardless of the commencement of any Lease; provided
however, if this Agreement or any Lease is not consummated by Lessor other than
as a result of Lessee's failure to satisfy all conditions precedent, Lessor
shall bear the associated costs. Lessee shall also pay all closing costs
including reasonable legal fees and charges, as well as stamp or other recording
costs and related taxes or charges, filing fees, costs and expenses of Lessor.
Such fees, charges and expenses contemplated in this paragraph shall not exceed
fifty thousand dollars ($50,000).
3. CONDITIONS PRECEDENT TO CLOSING: The "CLOSING DATE" is the date falling on
or before December 31, 2000 upon which all of the following conditions precedent
are met to Lessor's reasonable satisfaction or waived by Lessor:
(a) Lessee and Lessor shall have executed this Agreement and other
documentation contemplated herein.
(b) Lessor shall have received a copy of the detailed consolidated
business plan of ITC/\DeltaCom, Inc. and its Subsidiaries certified as being
true and complete in form satisfactory to Lessor.
(c) Lessor shall have received a certificate of Lessee in form and
substance satisfactory to Lessor and signed by a responsible officer of Lessee,
attaching (where appropriate) and certifying as true and complete (i) copies of
the organizational documents of Lessee (ii) copies of board minutes showing that
all action taken by Lessee relative to this Agreement, and the other Lease
Documents have been duly authorized, and (iii) the names, true signatures and
incumbency of the responsible officers of Lessee authorized to execute and
deliver this Agreement, any Schedule and the other Lease Documents.
(d) Lessor shall have received from Lessee a certificate certifying
that (i) all representations and warranties set out in Section 13 are true and
correct as at the date of such certificate, (ii) there has not been any material
adverse change in Lessee's business, operations, financial condition, or
prospects since September 30, 2000, and (iii) no Event of Default or event
which, with the giving of notice or passage of time or both would constitute an
Event of Default, has occurred or is continuing.
(e) Lessee shall execute and deliver to Lessor any UCC financing
statements reasonably requested by Lessor.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(f) Lessor shall have received certificates of insurance as required by
Section 16.
(g) Lessor shall have received an opinion of counsel in Alabama and
Delaware with respect to such matters as Lessor may request and an opinion of
counsel which confirms that Lessee has all licenses and permits necessary for
Lessee to carry on its business in the jurisdictions of its major operations.
(h) Acknowledgment, Consent, and Waiver/Release Agreement is in form
and substance satisfactory to Lessor.
(i) Landlord's waiver is in form and substance satisfactory to Lessor.
(j) Lessee shall deliver to Lessor executed Supplier Agreements and all
documents, agreements and arrangements between Lessor and any Supplier shall be
in form and substance satisfactory to Lessor.
(k) Lessor shall have received all other documents, instruments,
certifications, reports, and proceedings which Lessor shall reasonably request
and have completed due diligence satisfactory to Lessor.
All of the foregoing shall be in a form and substance satisfactory to
Lessor and its counsel.
4. CONDITIONS PRECEDENT TO EACH LEASE: The following conditions must be met to
Lessor's satisfaction prior to Lessor's purchase and lease of any Equipment and
sublicense of any Software pursuant to a Lease:
(a) Lessee shall have executed and delivered to Lessor a fully executed
Schedule and an Acceptance Certificate with respect to such Schedule no later
than one year from the Closing Date.
(b) Lessor shall have received from Lessee a certificate certifying (i)
all matters certified in the certificate delivered pursuant to Section 3(c)
remain true and correct and all agreements and documents attached thereto remain
true and complete copies; (ii) all representations and warranties set out in
Section 13 are true and correct in all material respects as at the date of such
certificate; (iii) no Event of Default or event which, with the giving of notice
or passage of time or both, would constitute an Event of Default has occurred or
is continuing; and (iv) compliance with the Financial Covenants and Reporting
Requirements Annex (and attaching to such certificate evidence of such
compliance).
(c) Lessor, in its reasonable opinion shall determine that there has
not been a material adverse change in Lessee's business, operations, financial
condition, or prospects since the date specified in Section 3(d).
(d) No Event of Default or event which, with the giving of notice or
passage of time or both would constitute an Event of Default shall have occurred
and be continuing under any Lease.
(e) Lessor shall have received an opinion of counsel from Lessee's
counsel as to the perfection of Lessor's security interest in the equipment in
each of the jurisdictions in which it is to be located as well as the
jurisdictions of incorporation of the respective Lessee.
(f) Lessor shall have received an opinion of counsel in Alabama and
Delaware with respect to such matters as Lessor may request and an opinion of
counsel which confirms that Lessee has all licenses and permits necessary for
Lessee to carry on its business in the jurisdictions of its major operations;
provided however, that for the first funding under the first Leases, Lessee
shall deliver to Lessor within ten (10) days of the Closing Date an executed
copy of the legal opinion of J. Xxxxxx Xxxxxx, Esq. , as General Counsel to the
Lessees or of regulatory counsel acceptable to Lessor, that as of the Closing
Date, "To [my/our] knowledge and belief, after due inquiry, each of Interstate
FiberNet, Inc. and ITC/\DeltaCom Communications, Inc., have obtained all
telecommunications permits and authorizations required by federal law and the
law of each state in which Interstate FiberNet, Inc. and ITC/\DeltaCom
Communications, Inc. operates its business, except where the failure to obtain
or maintain such permits or authorizations would not reasonably be expected to
have a Material Adverse Effect (as defined in the Master Lease Agreement dated
December ___, 2000, among each of Interstate FiberNet, Inc. and ITC/\DeltaCom
Communications, Inc., as Lessees, and NTFC Capital Corporation, as Lessor)."
(g) Landlord's waiver in form and substance satisfactory to Lessor if
Equipment is to be delivered and installed in locations in respect of which a
Landlord's waiver has not previously been delivered to Lessor hereunder.
(h) Lessor shall receive UCC financing statements, insurance
certificates, secretary certificates and all other documents, instruments,
certifications, reports, and proceedings which Lessor shall reasonably request;
provided however, that for the first funding under the first Leases, Lessee
shall deliver to Lessor (or its designated representative) within five (5) days
of the Closing Date executed copies of all of the Financing Statements (as
defined in the legal opinion of Xxxxx & Xxxxxxx, Lessee's special counsel, dated
the Closing Date, and addressed to Lessor).
(i) Lessee shall deliver to Lessor executed Supplier Agreements (to the
extent not previously delivered) and all documents, agreements and arrangements
between Lessor and any Supplier shall be in form and substance satisfactory to
Lessor.
2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(i) Lessee represents, warrants and covenants that (i) the Leases are
Capitalized Leases (as defined in the Senior Credit Agreement and for purposes
of Section 5.02(b)(iii) of the Senior Credit Agreement), (ii) Lessee has not,
and by this Schedule will not, exceed the requirements of Section 5.02(b)(iii)
of the Senior Credit Agreement.
(j) Lessee shall deliver to Lessor an accountant certification that the
Leases qualify as Capitalized Leases (as defined in the Senior Credit Agreement
and for purposes of Section 5.02(b)(iii) of the Senior Credit Agreement).
All of the foregoing shall in form and substance be reasonably satisfactory to
Lessor and its counsel.
5. ASSIGNMENTS BY LESSEE: Upon Lessee's execution of a Schedule relative to a
Lease, Lessee assigns to Lessor its rights to receive title and to exercise all
warranties with respect to the Equipment and any non-exclusive sublicense to use
the Software described in the Supplier Agreement but no other right thereunder.
In consideration of such an assignment and subject to the terms and conditions
herein, Lessor agrees to pay to the Supplier the Price for the System set forth
in the Schedule, but not to perform any other obligation under the Supplier
Agreement. Unless Lessee exercises its Purchase Option as set forth in the
applicable Schedule, Lessee hereby assigns to Lessor all of Lessee's
then-remaining rights pursuant to the applicable Supplier Agreement effective
upon the termination or expiration of the Term (as set forth in the applicable
Schedule) for any reason.
6. TERM: If all other conditions precedent to a Lease have been met, the Term
for the System described on each Schedule shall commence on the date Lessee
accepts the System as set forth in an Acceptance Certificate ("COMMENCEMENT
DATE"), and continue for sixty (60) whole months ("TERM"), the first such full
month commencing on the fifteenth day of the month following the Commencement
Date. Lessee shall, by giving written notice to Lessor not less than one hundred
twenty (120) days prior to the expiration date of the Term (the "NOTIFICATION
DATE"), elect to (a) purchase all the Equipment from Lessor for one dollar
($1.00) (the "PURCHASE OPTION"), or (b) return all the Equipment to Lessor in
good condition and working order as contemplated under the Lease Documents (the
"RETURN OPTION"). At least fifteen (15) days but not more than thirty (30) days
prior to the Notification Date, Lessor shall give Lessee written notice
reminding Lessee of the existence of the preceding Lease provision.
7. RENT, PAYMENT, APPLICATION OF FEE, LATE CHARGES, AND PREPAYMENT: The Rent
set forth in a Schedule is determined by multiplying the Lease Rate Factor set
forth in the Schedule by the Price set forth in the Schedule. The Lease Rate
Factor for a Schedule shall be calculated by applying an interest rate to the
amount funded under a Schedule. The interest rate will be determined by adding
400 basis points to the published yield on Five (5) Year Constant Maturity
United States Treasury Notes as reported in Federal Reserve Statistical Release
H.15(519) ("TREASURY YIELD"), as published by the Board of Governors of the
Federal Reserve System, or any successor publication by the Board of Governors
of the Federal Reserve System, three (3) business days prior to the Commencement
Date with respect to that Schedule.
Lessee shall pay to Lessor all Rent during the Term of the Lease plus such
additional amounts as are due Lessor under the Lease. Rent shall be paid as
designated in the applicable Schedule in arrears on the first day of each
Payment Period beginning with the second Payment Period ("RENT PAYMENT DATE").
Lessee shall pay to Lessor, on demand, interim Rent prorated daily based on a
360-day year for each day from and including the Commencement Date to and
including the fifteenth (15th) day of the month following the Commencement Date.
Whenever any payment of Rent or other amount is not made within ten (10) days
after the date when due, Lessee agrees to pay (as a fee to offset Lessor's
collection and administrative expenses) one and one-half percent (1 1/2%) of
each such overdue amount (consistent with and not in addition to the Default
Rate), but not exceeding the lawful maximum, if any. All payments shall be
payable to Lessor in U.S. dollars at Lessor's address set forth in Section 11 of
the Schedule or such other place as Lessor directs in writing.
Without the prior written consent of Lessor, Lessee shall not be permitted to
prepay Rent with respect to any Lease until after the third (3rd) anniversary of
the applicable Commencement Date unless a Change in Control of Lessee has
occurred, in which case, prepayment of Rent by Lessee for any Lease shall be
permitted after the second (2nd) anniversary of the applicable Commencement
Date. Any such prepayment shall be made with respect to all, but not less than
all, Equipment covered by a given Lease and shall occur on a Payment Date after
ninety (90) days irrevocable written notice to Lessor.
8. DELIVERY: All transportation, delivery and installation costs (unless
included in the Price) are the sole responsibility of Lessee. As between Lessee
and Lessor, Lessee assumes all risk of loss and damage if the Supplier fails to
deliver or delays in the delivery of any System, or if any System is
unsatisfactory for any reason.
9. NET LEASE: Lessee's obligations under each Lease are absolute, unconditional
and non-cancelable and shall not be subject to any delay, reduction, setoff,
defense, counterclaim or recoupment for any reason including any failure of any
System, or any misrepresentation of any supplier, manufacturer, installer,
vendor or distributor. Lessor is not responsible for the delivery, installation,
maintenance or operation of any System.
10. SUPPLIER AND THIRD PARTY WARRANTIES: Except as set forth in Section 5,
Supplier and other third-party warranties, if any, remain with Lessee. Lessee
agrees to pursue any warranty claim directly against such third party and shall
not pursue any such claim against Lessor. Lessee shall continue to pay Lessor
all amounts payable under any Lease under any and all circumstances.
11. QUIET ENJOYMENT: Lessor shall not interfere with Lessee's quiet enjoyment
and use of the System during the Term if no Event of Default has occurred and is
continuing.
12. TAXES AND FEES: Lessee shall promptly reimburse Lessor as additional Rent,
or shall pay directly, if so requested by Lessor, all license and registration
fees, sales, use, personal property taxes and all other taxes and charges
imposed by any federal, state, or local
3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
governmental or taxing authority, relating to the purchase, ownership, leasing,
or use of the System during the Term or the Rent whether such taxes are assessed
against Lessor or Lessee excluding, however, all taxes computed upon the net
income of Lessor.
13. REPRESENTATION AND WARRANTIES: In addition to the other representations and
warranties contained in any Lease or other instrument, agreement, report,
certification or other document delivered by Lessee to Lessor, Lessee hereby
represents and warrants to Lessor as follows:
(a) Lessee is a duly organized corporation, validly existing and in
good standing under the laws of the state of its formation. Lessee is duly
qualified to do business and is in good standing in any jurisdiction where
failure to be so qualified would reasonably be expected to have a Material
Adverse Effect.
(b) Lessee has all requisite right, power and authority to execute and
deliver to perform its obligations under this Agreement, any Lease entered into
pursuant to this Agreement and all related Lease documents (collectively, "LEASE
DOCUMENTS"). Lessee's execution, delivery and performance of the Lease Documents
have been duly and validly authorized by all necessary proceedings on the part
of Lessee.
(c) All Lease Documents have been or will be duly and validly executed
and delivered by Lessee and constitute, or when executed and delivered will
constitute, the legal, valid and binding obligations of Lessee enforceable in
accordance with the terms hereof and thereof, except as limited by bankruptcy,
insolvency, reorganization or other similar laws or equitable principles.
(d) No authorization, consent, approval, license, exemption or other
action by, and no legislation, qualification, declaration or filing with any
Governmental Authority is or will be necessary in connection with the execution
and delivery of the Lease Documents, consummation of the transactions herein
contemplated, performance of or compliance by Lessee with the terms and
conditions hereof or thereof or the legality, validity and enforceability hereof
or thereof where the failure to obtain such consent could reasonably be expected
to have a Material Adverse Effect.
(e) The execution and delivery of the Lease Documents, the consummation
of the transactions contemplated herein and the performance of or compliance
with the terms and conditions hereof or thereof by Lessee do not and will not
(i) violate any applicable law including any rule, order, injunction, writ,
decree or award; (ii) conflict with or result in the termination of or a
material breach of or a default under any governing document of Lessee or any
agreement or instrument to which Lessee is a party or by which Lessee or its
properties is bound, including, without limitation, any Supplier Agreements; or
(iii) result in the creation or imposition of any lien upon any property (now
owned or hereafter acquired) of Lessee except as otherwise contemplated by this
Agreement and any Schedule hereto.
(f) Lessees have furnished to Lessor the consolidated financial
statements of ITC/\DeltaCom, Inc. and its Subsidiaries for the period ending
September 30, 2000, and, if applicable, the related statements of income and
retained earnings and cash flow for the fiscal period then ended. Such financial
statements (including the notes thereto) present fairly the financial condition
of Lessee and its Subsidiaries (if any) on a consolidated basis as of the end of
such fiscal period and the results of its operations and the cash flow for the
fiscal period then ended, all in conformity with GAAP applied on a basis
consistent with that of the preceding fiscal period. The projections in the form
of the business plan referred to in Section 3(b) and pro forma financial
statements delivered by Lessee to Lessor were prepared in good faith, based on
reasonable assumptions. From December 31, 1999, the business of Lessee has been
conducted only in the ordinary and usual course, consistent with past practices,
and there has been no material adverse change in the business, operations,
financial condition, or prospects of Lessee, individually, or Lessee and its
Subsidiaries taken as a whole.
(g) No event has occurred and is continuing and no condition exists
which would constitute an Event of Default. Lessee is not in violation of any
term of its organizational documents. No default or event, which with the giving
of notice or the passage of time would be a default, has occurred under any
Supplier Agreements or any other material agreement or instruments to which it
or any Subsidiary is a party or by which its or any Subsidiary's properties are
bound. Lessee has fully and timely performed all its material obligations
thereunder. The right, title and interest of Lessee thereunder is not subject to
any defense, offset, counterclaim or claim, and none of the foregoing has been
asserted or alleged against Lessee with respect to any of the Supplier
Agreements and with respect to such other material agreements or instruments
except in respect of such defaults, defenses, offsets, counterclaims and claims
that would not have a Material Adverse Effect.
(h) All authorizations, consents, approvals, and licenses necessary or
desirable for the conduct of the business of Lessee and its Subsidiaries have
been obtained and are in full force and effect except where the failure to
obtain such authorizations, consents, approvals and licenses would not
reasonably be expected to have a Material Adverse Effect.
(i) No suits, actions or proceedings are pending or to Lessee's
knowledge threatened by or before any Governmental Authority against Lessee or
any of its Subsidiaries and there is no claim that is or would be subject to
disclosure under the AICPA Statement on Contingent Liabilities against or
affecting Lessee or any of its Subsidiaries.
(j) Lessee has paid all required taxes and discharged its liabilities
with respect thereto as and when due except in the case of taxes and liabilities
being contested in good faith by appropriate proceedings and in respect of which
all appropriate reserves have been made in the accounts of Lessee.
(k) Lessee has made and keeps books, records and accounts which are
reasonably detailed, and accurately and fairly reflect (or in the case of
financial books, records and accounts, fairly present) its transactions and
dispositions of its assets.
4
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(l) No representation or warranty made by Lessee in any Lease
Documents, or any Subsidiary in any Guaranty, and no statement made by Lessee in
any financial statement, business plan, certificate, report, exhibit or document
furnished by Lessee to Lessor pursuant to or in connection with this Agreement
is false or misleading as of the date made in any material respect (including by
omission of material information necessary to make such representation, warranty
or statement not misleading).
(m) Lessee owns or possesses the right to use all patents, trademarks,
service marks, trade names, copyrights, know-how, franchises, software and
Software licenses, free from restrictions, which are necessary for the operation
of its business except where the failure to own or possess the right to use any
of the foregoing could not reasonably be expected to have a Material Adverse
Effect.
(n) The provisions of each Lease are, or will be, when executed and
delivered by Lessee, effective to create in favor of Lessor a legal, valid and
enforceable security interest in the right, title, estate and interest of Lessee
in each System and, when the recordings and filings with the appropriate
Governmental Authority in the jurisdiction in which the System is from time to
time located are made, will create a perfected security interest in all right,
title, estate and interest of Lessee in each System subject to each Lease, prior
and superior to all other liens, and enforceable against creditors of and
purchasers from Lessee.
(o) The places where records of Lessee concerning the Systems are
located are at Anniston, Alabama and West Point, Georgia.
(p) Lessee and its Subsidiaries are in compliance with all
environmental laws, regulations, rules, ordinances, permits, orders, and other
requirements applicable to Lessee and its Subsidiaries and their respective
operations and the real or personal property owned, leased or operated by Lessee
and its Subsidiaries, including without limitation, all such laws governing use
of real property or the employment, generation, use, storage, disposal or
transportation of toxic or hazardous substances or wastes where any
non-compliance could reasonably be expected to have a Material Adverse Effect.
Lessee has not received notice of, and is not aware of, any violations or
alleged violations, or any liability or asserted liability, under any such
environmental laws, with respect to Lessee, its Subsidiaries, or their
respective businesses or their respective properties where any such violation
could reasonably be expected to have a Material Adverse Effect.
(q) Lessee is a wholly owned Subsidiary of Interstate FiberNet, Inc., a
Delaware corporation, a wholly owned Subsidiary of ITC/\ Deltacom, Inc., a
Delaware corporation.
(r) Lessee represents, warrants and covenants that (i) the Leases are
Capitalized Leases (as defined in the Senior Credit Agreement and for purposes
of Section 5.02(b)(iii) of the Senior Credit Agreement), (ii) Lessee has not,
and by this Schedule will not, exceed the requirements of Section 5.02(b)(iii)
of the Senior Credit Agreement and (iii) no Event of Default (as defined in the
Senior Credit Agreement) has occurred and is continuing,
14. COVENANTS: (a) AFFIRMATIVE COVENANTS. In addition to other covenants set
forth herein, Lessee hereby agrees that from the date hereof until all amounts
owing to Lessor under all Leases are irrevocably paid in full, Lessee shall keep
and perform fully each and all of the following covenants.
(i) Lessee shall maintain its existence as a corporation. Lessee
shall qualify and remain qualified and in good standing in each jurisdiction in
which failure to receive or retain such qualification would have a Material
Adverse Effect on the business, operations or financial condition of Lessee
individually or Lessee and its Subsidiaries taken as a whole.
(ii) Lessee shall comply (and shall procure that its Subsidiaries
shall comply) in all respects with all laws and regulations applicable to
Lessee, its Subsidiaries, or their respective properties (including, without
limitation, any applicable employee benefit law, and tax law, securities law,
product safety law, occupational safety or health law, communications and
utilities law, environmental protection or pollution control law, and hazardous
waste or toxic substances management, handling or disposal law); provided
however, Lessee shall not be deemed to be in violation of this Section as a
result of any failure to comply if such failure would not result in fines,
penalties, injunctive relief or other civil or criminal liabilities in excess of
$250,000 or if the failure would not have a Material Adverse Effect.
(iii) Lessee shall (and shall procure that its Subsidiaries shall) at
all times obtain and maintain in force all authorizations, permits, consents,
approvals, licenses, franchises, exemptions and other action by, and all
registrations, qualification, designations, declarations and other filings with,
any Governmental Authority necessary in connection with execution and delivery
of this Agreement, consummation of the transactions herein or therein
contemplated, performance of or compliance with the terms and condition hereof
or thereof or to ensure the legality, validity and enforceability hereof or
thereof or to carry out its business and the business of its Subsidiaries;
provided that Lessee shall not be deemed to be in violation of this Section as a
result of any failure to comply which would not have a Material Adverse Effect.
(iv) Lessee shall pay any required taxes and discharge its
liabilities as and when due except for taxes and liabilities being contested in
good faith by appropriate proceedings and in respect of which appropriate
reserves have been made in the accounts of Lessee.
(v) Lessee shall comply in all material respects with the terms of
the Supplier Agreements and all other material agreements or instruments to
which it is a party or by which it or any of its properties are bound.
5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(vi) Lessee shall obtain the written consent of Lessor prior to the
publication or use by Lessee of any advertising, sales promotion, press releases
or other publicity matters in which Lessor's name or logos of Lessor are
mentioned or can be reasonably inferred.
(vii) Lessee shall, promptly upon Lessee becoming aware thereof, give
Lessor written notice of the following together with, in each case, a written
statement of a responsible officer of Lessee setting forth the details thereof
and any action with respect thereto taken or contemplated to be taken by Lessee:
(A) the occurrence of any Event of Default or any event which, with
the giving of notice or passage of time or both, would constitute an Event of
Default;
(B) any Material Adverse Effect on Lessee, individually or Lessee
and its Subsidiaries taken as a whole;
(C) any material change in (including a termination of or default
under) any of the Supplier Agreements and any material default by Lessee or any
of its Subsidiaries under any other agreement or instrument to which Lessee or
its Subsidiary is a party, or by which Lessee, its Subsidiary, or any of their
respective properties may be bound, if such agreement or instrument or the
consequences of such default would result in a Material Adverse Effect;
(D) any lien asserted against any of the Systems, any material
change in the composition of the Systems, or the occurrence of any other event
which would have a material adverse effect on the value of the System or on
Lessor's interest therein; and
(E) within 15 days thereof, the establishment or acquisition of any
Material Subsidiary of Lessee or a Subsidiary of Lessee becoming a Material
Subsidiary or the acquisition or purchase of all or substantially all of the
business, assets, customers or operations of any other entity.
(viii) Lessee shall use best efforts to obtain Landlord Waivers in any
instance where such has been requested by Lessor as a condition precedent but
which has not been obtained prior to Closing or funding, respectively.
(b) NEGATIVE COVENANTS. In addition to the other negative covenants set
forth herein, Lessee hereby agrees that from the date hereof until all amounts
owing to Lessor under all Leases are irrevocably paid in full, Lessee shall keep
and perform fully each and all of the following covenants.
(i) Lessee shall not terminate any Supplier Agreements with respect
to any Equipment or Software without the prior written consent of Lessor,
consent not to be unreasonably withheld.
(ii) Lessee shall not change its name or without giving Lessor at
least thirty (30) days advance written notice of such change, and ensuring that
any steps that Lessor may deem necessary to continue the perfection and priority
of Lessor's security interest in any System shall have been taken.
(iii) Lessee shall not, directly or indirectly, consolidate with or
merge with or into, any Person without in each case the written prior consent of
Lessor, consent not to be unreasonably withheld.
(iv) Lessee shall not change the fiscal year end of Lessee from
December 31, except with the prior written consent of Lessor, which consent
shall not be unreasonably withheld or delayed.
(v) Lessee shall not amend, restate or otherwise modify, directly or
indirectly, or violate any terms of any of the Supplier Agreements without the
prior written consent of Lessor, which consent shall not be unreasonably
withheld or delayed.
(vi) Lessee shall not engage in any other material transaction or
material series of related transactions with or for the benefit of any Affiliate
of Lessee except for such transactions that are disclosed in writing to Lessor
and that are on terms no more favorable to such Affiliate than would have been
obtainable in an arm's length transaction with a Person who is not an Affiliate.
15. DISCLAIMER OF WARRANTIES AND DAMAGES: LESSEE ACKNOWLEDGES THAT (A) THE SIZE,
DESIGN, AND CAPACITY OF EACH SYSTEM AND THE MANUFACTURER AND SUPPLIER THEREOF
HAVE BEEN SELECTED BY LESSEE; (B) LESSOR IS NOT A MANUFACTURER, SUPPLIER,
DEALER, DISTRIBUTOR OR INSTALLER OF ANY SYSTEM; (C) NO MANUFACTURER OR SUPPLIER
OR ANY OF THEIR REPRESENTATIVES IS AN AGENT OF LESSOR OR AUTHORIZED TO WAIVE OR
ALTER ANY TERM OR CONDITION OF ANY LEASE; AND (D) EXCEPT FOR LESSOR'S WARRANTY
OF QUIET ENJOYMENT SET FORTH IN SECTION 11, LESSOR HAS NOT MADE, AND DOES NOT
HEREBY MAKE, ANY REPRESENTATION, WARRANTY OR COVENANT, WRITTEN OR ORAL,
STATUTORY, EXPRESS OR IMPLIED, AS TO ANY MATTER WHATSOEVER INCLUDING, WITHOUT
LIMITATION, THE DESIGN, QUALITY, CAPACITY, MATERIAL, WORKMANSHIP, OPERATION,
CONDITION, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, HIDDEN OR LATENT
DEFECTS, OR AS TO ANY PATENT, COPYRIGHT OR TRADEMARK INFRINGEMENT. AS BETWEEN
LESSEE AND LESSOR, LESSEE LEASES EACH SYSTEM "AS IS, WHERE IS, WITH ALL FAULTS."
LESSOR SHALL HAVE NO LIABILITY TO LESSEE OR ANY THIRD PARTY FOR ANY SPECIAL,
DIRECT, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY SORT INCLUDING,
WITHOUT LIMITATION, DAMAGES FOR PERSONAL INJURY, LOSS OF PROFITS OR SAVINGS,
LOSS OF USE, OR ANY OTHER DAMAGES, WHETHER BASED ON STRICT LIABILITY OR
NEGLIGENCE, WHETHER RESULTING FROM USE OF A SYSTEM OR OTHERWISE, EXCEPT FOR
DIRECT, SPECIFIC DAMAGES FOR LESSOR'S BREACH OF A LEASE OR FOR PERSONAL INJURY
OR PROPERTY DAMAGE TO THE EXTENT CAUSED BY LESSOR'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.
6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
ARTICLE 2A OF THE UCC MAY APPLY TO A LEASE AND LESSEE MAY HAVE CERTAIN RIGHTS
THEREUNDER. IF SO, LESSEE ACKNOWLEDGES THAT SUCH A LEASE IS A FINANCE LEASE AS
DEFINED IN UCC SS.2A-103. TO THE EXTENT PERMITTED BY LAW, LESSEE HEREBY WAIVES,
BUT NOT WITH REGARD TO ANY SUPPLIER AND THEIR SUCCESSORS AND ASSIGNS, ANY RIGHTS
OR REMEDIES LESSEE MAY HAVE AGAINST LESSOR UNDER UCC XX.XX. 2A-508 THROUGH 522
INCLUDING, WITHOUT LIMITATION, RIGHTS OF REJECTION, REVOCATION, CANCELLATION,
RETENTION OF SECURITY INTERESTS, AND RECOVERY FOR BREACH OF WARRANTY.
16. INSURANCE: At its expense, Lessee shall keep each System insured against all
risks of loss and damage for an amount equal to the installed replacement cost
of such System with Lessor named as a loss payee. Lessee shall also maintain
comprehensive general liability insurance, with Lessor named as an additional
insured. All insurance policies shall be with an insurer having a rating of "B+"
or better by A.M. Best Company, Inc., and be in such form, amount and
deductibles as are reasonably satisfactory to Lessor. Each such policy must
state by endorsement that the insurer shall give Lessor not less than thirty
(30) days prior written notice of any amendment, renewal or cancellation thereof
as it relates to a Lease or a System. Lessee shall, upon request, furnish to
Lessor satisfactory evidence that such insurance coverage is in effect. Lessee
may self insure for such coverages only with Lessor's prior written consent.
17. CASUALTY: If any System, in whole or in part, is lost, stolen, damaged or
destroyed, or is taken in any condemnation or similar proceeding (an "EVENT OF
Loss"), Lessee shall notify Lessor in writing within ten (10) days of such Event
of Loss. Lessee shall, at its option (a) promptly place the affected Equipment
and Software in good condition and working order, (b) promptly replace the
affected item with like equipment or software in good condition and transfer
clear title and any sublicense to Lessor, or (c) pay to Lessor, within thirty
(30) days of the Event of Loss, an amount equal to the SLV for such affected
Equipment or Software plus any other unpaid amounts then due under the Lease. If
an Event of Loss occurs as to part of a System for which the SLV is paid, a
prorata amount of Rent shall xxxxx from the date the SLV payment is received by
Lessor. Upon payment of the SLV, title to the applicable Equipment and the
sublicense to the applicable Software shall pass to Lessee with no warranties,
subject to the rights, if any, of the insurer.
If Lessor receives any insurance proceeds and Lessee elects not to repair or
replace, Lessor shall apply such proceeds toward the payment of the SLV with any
remaining sums to be delivered to Lessee.
18. INDEMNITY: Lessee shall indemnify Lessor against, and hold Lessor harmless
from, and covenants to defend Lessor against, any and all losses, claims, liens,
encumbrances, suits, damages, and liabilities (and all costs and expenses
including, without limitation, reasonable attorneys' fees) related to the Lease
including, without limitation, the selection, purchase, delivery, ownership,
condition, use, operation of a System, or violation of a Software sublicense, or
arising by operation of law (excluding any of the foregoing to the extent caused
by the gross negligence or willful misconduct of Lessor). Lessee shall assume
full responsibility for or, at Lessor's sole option, reimburse Lessor for the
defense thereof. This Section shall survive the termination of the Lease but not
longer than the applicable statute of limitations.
19. DEFAULT: Any of the following shall constitute an Event of Default: (a)
Lessee fails to pay any Rent or other amount when due under a Lease that is not
paid within ten (10) days of such failure; (b) a breach of any terms of any
Guaranty has occurred, (c) any representation or warranty made by Lessee herein
or in any Lease, or by any of Lessee's Subsidiaries in any Guaranty or any other
related document or any statement made by Lessee or any Subsidiary of Lessee in
any financial statement, certificate, report, exhibit or document furnished by
Lessee to Lessor pursuant to this Agreement or any Guaranty proves to have been
untrue, incomplete, false or misleading in any material respect as of the time
when made or repeated (including by omission of material information necessary
to make such representation, warranty or statement not misleading) and such
untruth, incompleteness, falsity, misleading statement or omission is not
corrected or remedied to the satisfaction of Lessor within thirty (30) days
after the giving or repeating of such representation or warranty; (d) Lessee
defaults in the performance or observance of any condition, indemnification or
covenant contained herein or in any Lease and such default continues for a
period of thirty (30) days thereafter; (e) Lessee makes or attempts to make a
Transfer without Lessor's prior written consent; (f) Lessee dissolves or ceases
to do business as a going concern; (g) Lessee sells, transfers or otherwise
disposes of, in one or a series of transactions, all or a material portion of
its assets, whether now owned or hereafter acquired, or the percentage ownership
of the stock and other equity interests of Lessee beneficially owned by
Interstate FiberNet, Inc. is less than one hundred percent (100%), or a Change
in Control with respect to Lessee occurs, or any transaction is entered into
which would constitute a Change in Control without Lessor's prior written
consent; (h) Lessee or any other Subsidiary of Lessee becomes insolvent, makes
an assignment for the benefit of creditors, files a voluntary petition or has an
involuntary petition filed or action commenced against it under the United
States Bankruptcy Code or any similar federal or state law and in respect of an
involuntary petition such petition is not dismissed on or before 60 days after
the filing thereof; (i) Lessee fails to perform in all material respects its
obligations under any other lease or agreement with Lessor after the expiration
of any applicable cure or grace periods, (j) a default, or event or condition,
which with the notice or lapse of time or both would become an event of default,
occurs that gives a creditor of Lessee or any of its Subsidiaries the right to
declare an event of default (howsoever defined) and/or accelerate payment with
respect of any obligation of Lessee or any of its Subsidiaries for borrowed
money in excess of $250,000 (including capitalized or operating lease
obligations), (k) any of the Supplier Agreements is terminated by Lessee for any
reason whatsoever without the prior written consent of Lessor, consent not to be
unreasonably withheld, or (l) a lien, whether voluntary or involuntary, is
attached to all or any part of the System by any Person other than Lessor
(unless such lien is adequately bonded in an amount and on terms satisfactory to
Lessor within 10 days).
20. REMEDIES: If an Event of Default has occurred, Lessor shall have the right
to exercise one or more of the following remedies set forth below in addition to
any other rights and remedies it may have under any Lease and under law. Lessor
may (a) terminate and/or declare an Event of Default under any Lease or other
agreement with Lessee, (b) recover from Lessee all Rent and any and all amounts
then due and unpaid and (c) recover from Lessee all Rent and other amounts to
become due, by acceleration or otherwise (plus, if the System is not returned in
accordance with Section 9 of the applicable Schedule, an amount equal to the
Estimated FMV). The amounts described in subsection (c) shall be present valued
using the Discount Rate. The amounts set forth in subsections (b) and (c) above
shall be the agreed upon damages ("LESSOR'S LOSS"). Lessor may also charge
Lessee interest on Lessor's Loss from the date of the Event of Default until
paid
7
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
at the rate of one and one-half percent (1 1/2%) per month, but in no event more
than the maximum rate permitted by law ("DEFAULT RATE"); demand Lessee return
any System to Lessor in the manner provided in Section 9 of the Schedule; and
take possession of, render unusable, or disable any System wherever located,
with or without demand or notice or any court order or any process by law.
Upon repossession or return of a System, Lessor shall have the right to sell,
lease or otherwise dispose of the System, with or without notice and by public
or private sale, and shall apply the proceeds thereof, if any, toward Lessor's
Loss but only after deducting from such proceeds (a) in the case of any
reletting of the System, the rent due for any period beyond the scheduled
expiration of the Lease; (b) in the case of sale, the Estimated FMV; and (c) all
reasonable expenses incurred by Lessor in repossessing, refurbishing and
remarketing of the System and in enforcing any remedy including, without
limitation, reasonable attorneys' fees and court costs. If the net proceeds
available after the permitted deductions are less than Lessor's Loss, Lessee
shall pay Lessor any deficiency. No right or remedy is exclusive of any other
provided herein or permitted by law or equity. All rights and remedies shall be
cumulative and may be enforced concurrently or individually from time to time.
21. ASSIGNMENT: Lessor may, without notice to or the consent of Lessee, sell,
assign, grant a security interest in, or pledge its interest in all or a portion
of a System and/or a Lease and any amounts payable hereunder to any third party
("ASSIGNEE"). Lessee shall, if directed, pay all Rent and other amounts due to
Assignee free from any claim or counterclaim, defense or other right which
Lessee may have against Lessor. Lessor shall be relieved of its future
obligations under the Lease as a result of such assignment if Lessor assigns to
Assignee its interest in the System and Assignee assumes Lessor's future
obligations. WITHOUT LESSOR'S PRIOR WRITTEN CONSENT, LESSEE SHALL NOT ASSIGN,
SUBLEASE, TRANSFER, PLEDGE, MORTGAGE OR OTHERWISE ENCUMBER ("TRANSFER") ANY
SYSTEM OR ANY LEASE OR ANY OF ITS RIGHTS THEREIN OR OBLIGATIONS THEREUNDER OR
PERMIT ANY XXXX, XXXX OR ENCUMBRANCE THEREON. Any non-consensual Transfer by
Lessee shall be void ab initio. No Transfer shall relieve Lessee of any of its
obligations under a Lease.
22. JURISDICTION, GOVERNING LAW AND WAIVER OF JURY TRIAL: THIS AGREEMENT AND
EACH LEASE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK. BOTH PARTIES
WAIVE ALL RIGHTS TO A JURY TRIAL TO THE EXTENT PERMITTED BY LAW. Lessee hereby
submits for the benefit of Lessor to the jurisdiction of the state and federal
courts in the State of New York in connection with all action and proceeding
arising under or in connection with any of this Agreement and the Leases.
23. MISCELLANEOUS: (a) Any failure of Lessor to require strict performance by
Lessee, or any waiver by Lessor of any provision of a Lease, shall not be
construed as a consent to or waiver of any other breach of the same or of any
other provision. (b) If there is more than one Lessee, the obligations of each
Lessee are joint and several. (c) Lessee agrees to execute and deliver within
ten (10) days of its receipt of a written request therefor, any documents
necessary, in Lessor's reasonable opinion, to evidence the intent of a Lease,
and/or to protect Lessor's interest in a System. Lessee appoints Lessor as its
attorney-in-fact for the sole purpose of executing and delivering any UCC
financing statements. (d) If any provision shall be held to be invalid or
unenforceable, the validity and enforceability of the remaining provisions shall
not in any way be affected or impaired. (e) In the event Lessee fails to pay or
perform any obligations under a Lease, upon giving Lessee ten (10) days prior
written notice, Lessor may, at its option, pay or perform such obligation.
Lessee shall reimburse Lessor for any payment made or expense reasonably
incurred by Lessor in connection therewith together with interest thereon
accruing until paid at the Default Rate not to exceed the maximum rate permitted
by law. (f) Time is of the essence in each Lease. (g) Lessee shall pay Lessor
all reasonable costs and expenses, including reasonable attorneys' and
collection fees, incurred by Lessor in enforcing the terms and conditions of a
Lease or in protecting Lessor's rights and interests in a Lease or a System. (h)
LESSOR INTENDS TO COMPLY WITH ALL APPLICABLE LAWS, INCLUDING THOSE CONCERNING
THE REGULATION OF INTEREST. Therefore, no lease charge, late charge, fee or
interest, if applicable, is intended to exceed the maximum amount permitted to
be charged or collected by applicable law. If one or more of such charges exceed
such maximum, then such charges will be reduced to the legally permitted maximum
charge and any excess charge will be used to reduce the future Rent and/or the
Price of the System or refunded. (i) Each Lease may be executed by one or more
of the parties on any number of separate counterparts (which may be originals or
copies sent by facsimile transmission), each of which counterparts shall be an
original. At Lessor's election, any executed Lease document may be transmitted
by Lessee to Lessor by facsimile transmission. If Lessor executes that faxed
document, the parties intend that the faxed signature of Lessee constitute an
original signature and that the faxed document containing the signatures
(original or faxed) of the parties is binding on the parties. (j) Unless
explicitly otherwise agreed to in a Lease, if Lessee is required to pay Lessor
any amount other than Rent or the SLV, Lessee agrees to pay such amounts within
ten (10) days of its receipt of an invoice, request and/or demand therefor. (k)
Each Lease constitutes the entire agreement between Lessor and Lessee with
respect to the subject matter thereof and supersedes all previous writings and
understandings between Lessee and Lessor relative to a System and the lease
thereof. (l) No agent, employee, or representative of Lessor has any authority
to bind Lessor to any representation or warranty concerning any System and,
unless such representation or warranty is specifically included in a Lease, it
shall not be enforceable by Lessee against Lessor. (m) References to agreements,
documents or instruments hereunder shall include, where the context so requires,
references to such agreements, documents and instruments as amended,
supplemented or varied from time to time (where applicable in accordance with
the terms of this Agreement).
24. CONFIDENTIALITY: Lessee agrees that it will obtain Lessor's prior written
consent before using or generating any press release, advertisement, publicity
materials or other publication in which the name or logo of Lessor is used or
may be reasonably inferred, and will not distribute any such materials in the
absence of such prior written consent.
Lessor and Lessee agree to treat the terms of this Agreement and any information
provided by either in connection with this Agreement or any Leases as
confidential, use such information solely for the purposes of this Agreement and
any Leases, and not, without the prior written consent of the other party,
disclose, or cause to be disclosed such information. The foregoing shall not
apply: (a) to information received by a party that is or becomes generally
available to the public other than as a result of a breach by such party of this
Section 25; (b) to information that is hereafter lawfully acquired by a party on
a non-confidential basis from a source that is not providing such information in
violation of a confidentiality or similar agreement to any person; (c) to
information known to such party prior to receipt thereof
8
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
from the other party; (d) to disclosure of information to advisors and
affiliates of Lessee or Lessor or to the Supplier; and (e) to disclosure of
information pursuant to a court order or a requirement of law or regulation.
[The remainder of this page is intentionally left blank.]
9
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
EXCEPT AS OTHERWISE PROVIDED IN SECTION 7 OF THIS AGREEMENT AND SECTIONS 2 AND
8 OF A SCHEDULE, ANY MODIFICATIONS, AMENDMENTS OR WAIVERS TO A LEASE SHALL
BE EFFECTIVE ONLY IF MUTUALLY AGREED UPON IN A WRITING, DULY
EXECUTED BY AUTHORIZED REPRESENTATIVES OF THE PARTIES.
--------------------------------------------------------------------------------
NTFC CAPITAL CORPORATION, ITC/\ DELTACOM COMMUNICATIONS, INC.,
AS LESSOR AS LESSEE
BY /s/ Xxxxx X. Xxxxxxxxx BY /s/ Xxxx Xxxxxxx
--------------------------------------- ----------------------------------
AUTHORIZED REPRESENTATIVE AUTHORIZED REPRESENTATIVE
PRINT NAME Xxxxx X. Xxxxxxxxx PRINT NAME Xxxx Xxxxxxx
------------------------------- --------------------------
TITLE Sr. Vice President DATE 12/29/00 TITLE SNR VP CFO DATE 12/29/00
-------------------- ---------- ------------ -----------
-----------------------------------------
INTERSTATE FIBERNET, INC.,
AS LESSEE
BY /s/ Xxxx Xxxxxxx
---------------------------------------
AUTHORIZED REPRESENTATIVE
PRINT NAME Xxxx Xxxxxxx
-------------------------------
TITLE SNR VP CFO DATE 12/29/00
------------ ------------------
SIGNATURE PAGE TO MASTER LEASE AGREEMENT
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Lessor NTFC Capital Corporation or its affiliate, successor or assign
Definitions Annex
--------------------------------------------------------------------------------
Lessee ITC/\DeltaCom Communications, Inc. and Agreement No.
Interstate FiberNet, Inc.
(each a "Lessee")
================================================================================
Contemporaneously with entering into the Agreement referenced above, Lessor and
Lessee hereby agree to the following:
"Affiliate" means any Person, any second Person directly or indirectly
controlling, controlled by, or under common control with that Person, or related
to such Person by blood, marriage or adoption. A Person shall be deemed to
control another Person if such first person possesses, directly or indirectly,
the power to direct, or to cause the direction of, the management and policies
of such other Person, whether through ownership of voting securities, by
contract or otherwise. "Affiliates" shall also include any owners.
"AICPA" means the American Institute of Certified Public Accountants or any
organization, agency or instrumentality succeeding to its function.
"Capital Lease" means any lease of any property (whether real, personal or
mixed) by Lessee or any Subsidiary of Lessee that, in accordance with GAAP,
would be required to be classified and accounted for as a capital lease on a
balance sheet of Lessee or any Subsidiary of Lessee.
"Capital Lease Obligation" means with respect to any Capital Lease of
Lessee or any Subsidiary of Lessee, the amount of the obligation of Lessee
thereunder that, in accordance with GAAP, would appear on a balance sheet of
such Lessee or any Subsidiary of Lessee in respect of such Capital Lease.
"Change in Control" means for any Person, an occurrence whereupon the
shareholders controlling, directly or indirectly, a majority of the voting power
of the Stock of such Person as of the Closing Date, fail, in the aggregate, to
own or control, directly or indirectly, Stock representing more voting power
than any other Person or group, within the meaning of Regulation 13D under the
Securities Exchange Act of 1934 as amended.
"Closing Date" has the meaning set out in Section 3 of the Agreement.
"Commencement Date" has the meaning set out in Section 6 of the Agreement.
"Default Rate" has the meaning set out in Section 20 of the Agreement.
"Discount Rate" means five percent (5%) per annum or, if such rate is not
permitted by law, then the lowest permitted rate. "EBITDA" means, for any
period, the sum of consolidated net income (excluding extraordinary gains and
losses, any income derived from sources which are disputing amounts payable to
Lessee or any Subsidiary of Lessee), plus depreciation, amortization, Interest
Expense, and provision for income taxes, less Interest Income of Lessee and its
Subsidiaries.
"Equipment" has the meaning set out in Section 1 of the Agreement.
"Estimated FMV" means, with respect to any Equipment and Software, Lessor's
reasonable estimate of the installed fair market value of the affected Equipment
and/or Software at the end of the applicable Term.
"Event of Default" means any of the events set out in Section 19 of the
Agreement.
"Event of Loss" has the meaning set out in Section 17 of the Agreement.
"GAAP" means generally accepted accounting principles in the United States
of America (as such principles may change from time to time) applied on a
consistent basis (except for changes in application in which Lessee's
independent certified public accountants concur), applied both to classification
of items and amounts.
"Governmental Authority" means any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
"Guaranty" means any unconditional, continuing guaranty of payment and
performance of all of Lessee's obligations in form and substance satisfactory to
Lessor.
"Installation Site" means, with respect to a System or part thereof under a
Lease, the meaning set out with respect thereto in the applicable Schedule.
"Interest Expense" means, for any period, the aggregate amount of interest,
interest rate hedging costs and accrued fees (excluding upfront or closing fees)
paid or payable during such period by Lessee, Lessee Parent and its Subsidiaries
and any guarantor(s) in respect of Total Debt.
"Interest Income" means, for any period, the aggregate amount of interest
earned during such period on cash, cash equivalents or interest bearing
marketable investment grade securities with maturities of three months or less
from issue held by Lessee and its Subsidiaries free of any claims or
encumbrances.
"JCO" means, with respect to a System, a job change order.
"Lease" has the meaning set out in Section 1 of the Agreement.
"Lease Documents" has the meaning set out in Section 13(b) of the
Agreement.
"Lease Rate Factor" means, with respect to a Lease, the meaning set out
with respect thereto in the applicable Schedule.
"Lessee Parent" means Interstate FiberNet, Inc., a Delaware corporation or
its Affiliate, successor or assign.
"Lessor's Loss" has the meaning set out in Section 20 of the Agreement.
"Material Adverse Effect" means a material adverse effect on, or material
adverse change in, in all cases whether attributable to a single event or an
aggregation of circumstances or events, (i) the business, operations, financial
condition or prospects of Lessee, individually, or Lessee and its Subsidiaries
taken as a whole, (ii) the ability of Lessee to perform its obligations under
any Lease, or (iii) Lessor's ability to enforce the rights and remedies granted
under any Lease or Lease Document or any Guaranty.
"Notification Date" has the meaning set out in Section 6 of the Agreement.
"Payment Period" means, with respect to a Lease, the meaning set out with
respect thereto in the applicable Schedule.
"Person" means any individual, corporation, limited liability company,
partnership, business or other trust, unincorporated association, joint venture,
joint-stock company, Governmental Authority or any other entity.
"Price" has the meaning set out in Section 2 of the Agreement.
"Product Computing Loads" means, with respect to a Lease, the meaning set
out with respect thereto in the applicable schedule.
"Ratio of Total Debt to Total Contributed Equity" means (i) Total Debt
divided by (ii) Total Contributed Equity.
"Rent" means, with respect to a Lease, the meaning set out with respect
thereto in the applicable Schedule.
"Rent Payment Date" has the meaning set out in Section 7 of the Agreement.
"Reporting Date" means each of the dates set out in Schedule 1 to the
Financial Covenant and Reporting Requirements Annex.
"Rolling Twelve Month Period" means the current month end plus the
preceding eleven months.
"Schedule" has the meaning set out in Section 1 of the Agreement.
"SLV" means, with respect to any Equipment and Software, an amount
determined by Lessor to be equal to all future Rent with respect thereto from
the last Rent Payment date for which Rent has been paid to the end of the
applicable Term plus an amount equal to the Estimated FMV, discounted to present
value at the Discount Rate.
"Software" has the meaning set out in Section 1 of the Agreement.
"Stock" means all shares, options, warrants, general or limited partnership
or membership interests or other equivalents (regardless of how designated) of
or in a corporation, partnership, limited liability company or equivalent
entity, whether voting or nonvoting, including common stock, preferred stock or
any other "equity security" (as such term is defined in Rule 3a11-1 of the
General Rules and Regulations promulgated by the
--------------------------------------------------------------------------------
2
--------------------------------------------------------------------------------
Securities and Exchange Commission under the Securities Exchange Act of 1934, as
amended), but shall not mean any such instruments issued as dividends or
accreted value on issued and outstanding equity securities.
"Subsidiary" means any corporation or other entity that is an Affiliate of
such Person and of which shares of stock or equity interests having ordinary
voting power with respect to the election of one or more directors or other
managers of such corporation are at the time directly or indirectly owned or
controlled by such Person (regardless of any contingency which does or may
suspend or dilute the voting rights of such class).
"Supplier" means Nortel Networks and such other entities identified as a
supplier in a Schedule acceptable to Lessor.
"Supplier Agreement" has the meaning set out in Section 1 of the Agreement.
"System" has the meaning set out in Section 1 of the Agreement.
"Term" has the meaning set out in Section 6 of the Agreement.
"Total Contributed Equity" means all cash proceeds received by Lessee from
the sale or issuance of its Stock, net of all brokers', underwriter's and
advisors' fees and all other costs and expenses, including legal and printing
expenses, incurred in connection with any such transaction.
"Total Debt" means all (i) secured or unsecured indebtedness and guaranties
of Lessee and its Subsidiaries plus (ii) liabilities secured by liens on
property of Lessee and its Subsidiaries, including Capital Lease obligations,
plus (iii) liabilities of Lessee under the Leases.
"Transfer" has the meaning set out in Section 21 of the Agreement.
"Treasury Yield" has the meaning set out in Section 7 of the Agreement.
"UCC" means the Uniform Commercial Code in effect in the applicable
jurisdiction.
[The remainder of this page is intentionally left blank.]
--------------------------------------------------------------------------------
3
--------------------------------------------------------------------------------
NTFC CAPITAL CORPORATION, ITC/\DELTACOM COMMUNICATIONS, INC.
as Lessor as Lessee
BY /s/ Xxxxx X. Xxxxxxxxx BY /s/ Xxxx Xxxxxxx
--------------------------------------- --------------------------------
Authorized Representative Authorized Representative
PRINT NAME Xxxxx X. Xxxxxxxxx PRINT NAME Xxxx Xxxxxxx
------------------------------- ------------------------
TITLE Sr. Vice President DATE 12/29/00 TITLE SNR VP CFO DATE 12/29/00
-------------------- ---------- ------------ -----------
--------------------------------------------------------------------------------
INTERSTATE FIBERNET, INC.
as Lessee
BY /s/ Xxxx Xxxxxxx
--------------------------------
Authorized Representative
PRINT NAME Xxxx Xxxxxxx
------------------------
TITLE SNR VP CFO DATE 12/29/00
------------ -----------
--------------------------------------------------------------------------------
SIGNATURE PAGE TO DEFINITIONS ANNEX
--------------------------------------------------------------------------------
LESSOR NTFC CAPITAL CORPORATION OR ITS AFFILIATE, FINANCIAL COVENANTS AND
SUCCESSOR OR ASSIGN REPORTING REQUIREMENTS
ANNEX
--------------------------------------------------------------------------------
LESSEE ITC/\DELTACOM COMMUNICATIONS, INC. AND AGREEMENT NO.
INTERSTATE FIBERNET, INC.
(EACH A "LESSEE")
================================================================================
Contemporaneously with entering into the Agreement referenced above, Lessor and
Lessee hereby agree to the following covenants in addition to those set forth in
the Agreement:
1. FINANCIAL COVENANTS. (a) Lessee shall observe for the benefit of Lessor the
negative covenants set forth in Section 5.02(b)-(p) of the $160,000,000 Credit
Agreement dated as of April 5, 2000 (the "SENIOR CREDIT AGREEMENT"), and
Sections 4.03, 4.04, 4.05 and 4.10 of the 11% Senior Note Indenture dated as of
June 3, 1997 (the "INDENTURE"), in effect as attached hereto. Capitalized terms
contained in the Senior Credit Agreement and the Indenture shall have the
meanings set forth therein.
2. REPORTING REQUIREMENTS. Lessee agrees to furnish to Lessor the following
financial reports from the date hereof until all amounts owing to Lessor under
any Lease are irrevocably paid in full:
(a) As soon as practicable, and in any event within ninety (90) days
after the close of each fiscal year of Lessee, Lessee shall furnish or
cause to be furnished to Lessor a consolidated statement of income,
cash flow and retained earnings of Lessee and its Subsidiaries for such
fiscal year and the consolidated balance sheet of Lessee and its
Subsidiaries as of the close of such fiscal year, and notes to each,
all in reasonable detail. The consolidated statements and balance sheet
must be certified (without qualification) by independent certified
public accountants selected by Lessee and reasonably satisfactory to
Lessor. In addition, if requested by Lessor, Lessee shall furnish
consolidating work papers for the statements of income and balance
sheet of Lessee and an unaudited statement of all consolidating
eliminations.
(b) Within forty-five (45) days after the last business day of each
quarter (other than the last quarter of each fiscal year), Lessee shall
furnish to Lessor unaudited consolidated statements of income, cash
flow and retained earnings for Lessee and its Subsidiaries for such
month and for the period from the beginning of Lessee's then fiscal
year to the end of such quarter, and an unaudited consolidated balance
sheet of Lessee and its Subsidiaries of the end of such quarter, all in
reasonable detail certified by a responsible officer of Lessee as
presenting fairly the financial position of Lessee and its Subsidiaries
as of the end of such quarter and the results of its operations and the
changes in their financial position for such quarter.
(c) As soon as practical, Lessee shall provide Lessor with such other
information as Lessor may reasonably request concerning the business,
operations, financial condition and prospects of Lessee and its
Subsidiaries.
3. GAAP. Unless otherwise noted, the compliance with all financial covenants
shall be computed using GAAP and all financial statements prepared in accordance
with GAAP and on a consolidated basis, applied in a manner consistent with that
of the most recent audited financial statements furnished to Lessor, subject to
year end audit adjustments, unless otherwise noted.
4. COMPLIANCE CERTIFICATES. Concurrently with the delivery by Lessee to Lessor
of the financial reports as required by Section 2 of this Annex, Lessee shall
deliver to Lessor a certificate dated as of the end of each reporting period,
signed on behalf of Lessee by a responsible officer of Lessee (i) stating that
as of the date thereof no Event of Default has occurred and is continuing or
exists, or if an Event of Default has occurred and is continuing or exists,
specifying in detail the nature and period of existence thereof and any action
with respect thereto taken or contemplated to be taken by Lessee; (ii) stating
that the signer has personally reviewed all Leases and that such certificate is
based on an examination made by or under the supervision of the signer
sufficient to assure that such certificate is accurate; and (iii) calculating
and certifying Lessee's compliance with the financial covenants set forth in
Section 1 of this Annex.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NTFC CAPITAL CORPORATION, ITC/\DELTACOM COMMUNICATIONS, INC.,
AS LESSOR AS LESSEE
BY /s/ Xxxxx X. Xxxxxxxxx BY /s/ Xxxx Xxxxxxx
----------------------------------- --------------------------------------
AUTHORIZED REPRESENTATIVE AUTHORIZED REPRESENTATIVE
PRINT NAME Xxxxx X. Xxxxxxxxx PRINT NAME Xxxx Xxxxxxx
--------------------------- ------------------------------
TITLE Sr. Vice Pres. DATE 12/29/00 TITLE SNR VP CFO DATE 12/29/00
---------------- ------------ ------------------ -------------
--------------------------------------------------------------------------------
INTERSTATE FIBERNET, INC., AS LESSEE
By /s/ Xxxx Xxxxxxx
--------------------------------------
Authorized Representative
Print Name Xxxx Xxxxxxx
------------------------------
Title SNR VP CFO Date 12/29/00
----------------- --------------
SIGNATURE PAGE TO FINANCIAL COVENANTS AND REPORTING REQUIREMENTS ANNEX
STM/183573.6
17317.00180
--------------------------------------------------------------------------------
